Edgar Filing: CITIGROUP INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

Commission file number 1-9924

Citigroup Inc.

(Exact name of registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)		52-1568099 (I.R.S. Employer Identification No.)
399 Park Avenue, New York, NY (Address of principal executive offices)		10022 (Zip code)
(212) 559-1000 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date:

Common stock outstanding as of March 31, 2014: 3,037,785,008

Available on the web at www.citigroup.com

Inside Cover Page

CITIGROUP INC FIRST QUARTER 2014— FORM 10-Q



OVERVIEW	2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
Executive Summary	4
Summary of Selected Financial Data	7
SEGMENT AND BUSINESS—INCOME (LOSS) AND REVENUES	9
CITICORP	11
Global Consumer Banking	12
North America Regional Consumer Banking	14
EMEA Regional Consumer Banking	16
Latin America Regional Consumer Banking	18
Asia Regional Consumer Banking	20
Institutional Clients Group	22
Corporate/Other	26
CITI HOLDINGS	27
BALANCE SHEET REVIEW	29
OFF-BALANCE-SHEET ARRANGEMENTS	33
CAPITAL RESOURCES	34
Current Regulatory Capital Standards
Basel III
Regulatory Capital Standards Developments
Tangible Common Equity, Tangible Book Value Per Share and Book Value Per Share
MANAGING GLOBAL RISK	48
Table of Contents—Credit, Market (Including Funding and Liquidity), Country and Cross-Border Risk Sections	49
FAIR VALUE ADJUSTMENTS FOR DERIVATIVES AND FAIR VALUE OPTION LIABILITIES	92
CREDIT DERIVATIVES	94
INCOME TAXES	96
DISCLOSURE CONTROLS AND PROCEDURES	97
DISCLOSURE PURSUANT TO SECTION 219 OF THE IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT	97
FORWARD-LOOKING STATEMENTS	98
FINANCIAL STATEMENTS AND NOTES TABLE OF CONTENTS	100
CONSOLIDATED FINANCIAL STATEMENTS	101
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	109
LEGAL PROCEEDINGS	219
UNREGISTERED SALES OF EQUITY, PURCHASES OF EQUITY SECURITIES, DIVIDENDS	220

OVERVIEW

Citigroup’s history dates back to the founding of Citibank in 1812. Citigroup’s original corporate predecessor was incorporated in 1988 under the laws of the State of Delaware. Following a series of transactions over a number of years, Citigroup Inc. was formed in 1998 upon the merger of Citicorp and Travelers Group Inc.

Citigroup is a global diversified financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management. Citi has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions.

Citigroup currently operates, for management reporting purposes, via two primary business segments: Citicorp, consisting of Citi’s Global Consumer Banking businesses and Institutional Clients Group; and Citi Holdings, consisting of businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp businesses. For a further description of the business segments and the products and services they provide, see “Citigroup Segments” below, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 3 to the Consolidated Financial Statements.

Throughout this report, “Citigroup,” “Citi” and “the Company” refer to Citigroup Inc. and its consolidated subsidiaries.

This Quarterly Report on Form 10-Q should be read in conjunction with Citigroup’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the U.S. Securities and Exchange Commission (SEC) on March 3, 2014 (2013 Annual Report on Form 10-K). Additional information about Citigroup is available on Citi’s website at www.citigroup.com. Citigroup’s recent annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy statements, as well as other filings with the SEC, are available free of charge through Citi’s website by clicking on the “Investors” page and selecting “All SEC Filings.” The SEC’s website also contains current reports, information statements, and other information regarding Citi at www.sec.gov.

Certain reclassifications, including a realignment of certain businesses, have been made to the prior periods’ financial statements to conform to the current period’s presentation. For information on certain recent such reclassifications, see “Citigroup Segments” below and Note 3 to the Consolidated Financial Statements.

As described above, Citigroup is managed pursuant to the following segments:

* Effective in the first quarter of 2014, certain business activities within the ICG segment were realigned and aggregated as Banking and Markets and Securities Services. The change was due to the realignment of the management structure within the ICG segment and had no impact on any total segment-level information. For additional information, see Citi’s Form 8-K furnished with the SEC on April 2, 2014 and Note 3 to Notes to Consolidated Financial Statements.

The following are the four regions in which Citigroup operates. The regional results are fully reflected in the segment results above.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

First Quarter of 2014—Steady Progress on Execution Priorities and Strategy Despite Continued Challenging Operating Environment

Citi’s results for the first quarter of 2014 continued to reflect a challenging operating environment. Compared to the prior-year period, results reflected significantly lower mortgage origination volumes in North America, an uncertain macro environment which negatively impacted fixed income markets within the Institutional Clients Group (ICG), and ongoing spread compression globally. Citi expects these factors will continue to negatively affect the operating environment and Citi’s results during the remainder of 2014. In addition, legal and related expenses remained elevated in the first quarter of 2014 as Citi continues to work through its “legacy” legal issues within Citi Holdings. Legal and related expenses are likely to remain elevated during the remainder of 2014 as Citi works through these and other issues. For a more detailed discussion of these and other risks that could impact Citi’s businesses, results of operations and financial condition during 2014, see “Risk Factors” in Citi’s 2013 Annual Report on Form 10-K.

Despite these challenges, Citi made progress on its execution priorities, including:


•	Efficient resource allocation, including disciplined expense management: during the first quarter of 2014, Citi benefitted from savings resulting from its previously-announced repositioning actions, efforts to simplify and streamline the organization as well as improved productivity.

•

Continued focus on the wind down of Citi Holdings and getting Citi Holdings closer to “break even”: Citi Holdings’ assets declined by $35 billion, or 23%, from the prior-year period, and the net loss was reduced by approximately 65%. Citi also was able to resolve certain legacy legal issues relating to private-label securitization representation and warranty repurchase claims (see discussion below).


•	Utilization of deferred tax assets (DTAs): Citi reduced its DTAs by approximately $1.1 billion during the first quarter of 2014 (for additional information, see “Income Taxes” below).

While making progress on its execution priorities during the quarter, on March 26, 2014, the Federal Reserve Board announced that it objected to the capital plan submitted by Citi as part of the 2014 Comprehensive Capital Analysis and Review (CCAR), meaning Citi will not be able to increase its return of capital to shareholders as it had requested. Citi will be permitted, however, to continue with its current capital actions through the first quarter of 2015 (a $1.2 billion common stock repurchase program and a common stock dividend of $0.01 per share per quarter, subject to Board of

Directors’ approval). Citi is committed to addressing the Federal Reserve Board’s concerns, expectations and requirements and, at this time, is focused on the 2015 CCAR process. See also “Risk Factors—Business and Operational Risks” in Citi’s 2013 Annual Report on Form 10-K.

First Quarter of 2014 Summary Results

Citigroup

Citigroup reported first quarter net income of $3.9 billion or $1.23 per diluted share, compared to $3.8 billion or $1.23 per share in the first quarter of 2013. Results in the first quarter of 2014 included a credit valuation adjustment (CVA) on derivatives (counterparty and own-credit), net of hedges, and debt valuation adjustment (DVA) on Citi’s fair value option debt of $7 million ($4 million after-tax), compared to a negative $319 million (negative $198 million after-tax) in the first quarter of 2013. Results in the first quarter of 2014 also included a $210 million tax charge, recorded in Corporate/Other, related to corporate tax reforms enacted in two states. These reforms lowered marginal tax rates, resulting in a reduction in Citigroup’s state deferred tax assets (for additional information on the impact of these reforms on Citi’s DTAs and effective tax rate during the current quarter, see “Income Taxes” below).

Excluding CVA/DVA in both periods and the tax item in the first quarter of 2014, Citi reported net income of $4.1 billion in the first quarter of 2014, or $1.30 per diluted share, compared to $4.0 billion, or $1.29 per share, in the prior-year period. The year-over-year increase was driven by lower operating expenses and lower net credit losses, partially offset by lower revenues and a higher effective tax rate (for additional information, see “Income Taxes” below).

Citi’s revenues, net of interest expense, were $20.1 billion in the first quarter of 2014, down 1% versus the prior-year period. Excluding CVA/DVA, revenues were $20.1 billion, down 2% from the first quarter of 2013, as revenues in Citicorp declined 5% while Citi Holdings revenues increased 58% compared to the prior-year period. Net interest revenues of $11.8 billion were 1% higher than in the prior-year period, principally driven by lower funding costs in Citi Holdings. Excluding CVA/DVA, non-interest revenues were $8.4 billion, down 6% from the prior-year period, principally driven by lower revenues in ICG and North America Regional Consumer Banking (RCB) in Citicorp, partially offset by higher non-interest revenues in Citi Holdings.

Operating Expenses

Citigroup expenses decreased 1% versus the prior-year period to $12.1 billion, driven by efficiency savings and the overall decline in Citi Holdings assets, partially offset by higher regulatory and compliance costs, legal and related expenses and repositioning charges in the current quarter. Citi incurred

legal and related costs of $945 million (compared to $710 million in the prior-year period) and repositioning charges of $211 million (compared to $148 million in the prior-year period). Excluding legal and related costs, repositioning charges and the impact of foreign exchange translation into U.S. dollars for reporting purposes (FX translation), which lowered reported expenses by approximately $170 million in the first quarter of 2014 as compared to the prior-year period, operating expenses were $11.0 billion compared to $11.3 billion in the prior-year period. Citi expects its repositioning charges in the second quarter of 2014 will remain elevated, due in part to the acceleration of its restructuring efforts in Korea.

Citicorp’s expenses were $10.6 billion, down 2% from the prior-year period, primarily reflecting efficiency savings, partially offset by higher regulatory and compliance costs, legal and related costs and repositioning charges in the current quarter. Citi Holdings’ expenses increased 2% versus the prior-year period to $1.5 billion, primarily due to higher legal and related expenses, partially offset by the continued decline in assets and the resulting decline in operating expenses.

Credit Costs and Allowance for Loan Losses

Citi’s total provisions for credit losses and for benefits and claims of $2.0 billion declined 20% from the first quarter of 2013. Net credit losses of $2.4 billion were down 15% versus the prior-year period. Consumer net credit losses declined 19% to $2.3 billion, reflecting improvements in the North America mortgage portfolio within Citi Holdings, as well as North America Citi-branded cards in Citicorp. Corporate net credit losses increased to $145 million from $45 million in the prior-year period. Corporate net credit losses in the first quarter of 2014 included approximately $113 million of incremental net credit losses related to the Pemex supplier program in Mexico (for additional information, see “Institutional Clients Group” below).

The net release of allowance for loan losses and unfunded lending commitments was $673 million in the first quarter of 2014, compared to a $650 million release in the prior-year period. Citicorp’s net reserve release increased 10% to $328 million, primarily due to a higher reserve release in ICG, partially offset by a lower reserve release in North America RCB. Citi Holdings’ net reserve release decreased 2% to $345 million, substantially all of which related to the North America mortgage portfolio.

Citigroup’s total allowance for loan losses was $18.9 billion at quarter end, or 2.87% of total loans, compared to $23.7 billion, or 3.70%, at the end of the prior-year period. The decline in the total allowance for loan losses reflected the continued wind down of Citi Holdings and overall continued improvement in the credit quality of the loan portfolios.

The Consumer allowance for loan losses was $16.5 billion, or 4.29% of total Consumer loans, at quarter end, compared to $20.9 billion, or 5.32% of total loans, at March 31, 2013. Total non-accrual assets fell to $9.0 billion, a 19% reduction compared to March 31, 2013. Corporate non-accrual loans declined 35% to $1.6 billion, while Consumer non-accrual loans declined 14% to $7.0 billion, both reflecting the continued improvement in credit trends.

Capital

Citi continued to grow its regulatory capital during the first quarter of 2014, primarily through net income and a further reduction of its DTAs. Citigroup’s estimated Tier 1 Capital and Tier 1 Common ratios under Basel III were 11.1% and 10.5% as of March 31, 2014, respectively, compared to 9.6% and 9.3% as of March 31, 2013. Citigroup’s estimated Basel III Supplementary Leverage ratio for the first quarter of 2014 was 5.6%. For additional information on Citi’s estimated Basel III Tier 1 Common ratio, Supplementary Leverage ratio and related components, see “Capital Resources” below.

Citicorp

Citicorp net income decreased 8% from the prior-year period to $4.2 billion. CVA/DVA, recorded in the ICG, was negative $7 million (negative $4 million after-tax) in the first quarter of 2014, compared to negative $310 million (negative $192 million after-tax) in the prior-year period (for a summary of CVA/DVA by business within ICG for the first quarters of 2014 and 2013, see “Institutional Clients Group” below).

Excluding CVA/DVA and the tax item described above, Citicorp’s net income was $4.4 billion, down 8% from the prior-year period, as lower revenues were partially offset by lower operating expenses and lower cost of credit.

Citicorp revenues, net of interest expense, decreased 3% from the prior-year period to $18.7 billion. Excluding CVA/DVA, Citicorp revenues were $18.7 billion in the first quarter of 2014, down 5% from the prior-year period. Global Consumer Banking (GCB) revenues of $9.3 billion declined 5% versus the prior-year period. North America RCB revenues declined 6% to $4.8 billion, driven by lower mortgage origination revenues in retail banking due to the significant decline in U.S. mortgage refinancing activity as well as ongoing spread compression, partially offset by higher revenues in Citi retail services, reflecting the impact of the Best Buy portfolio acquisition. North America RCB average deposits of $171 billion grew 4% year-over-year and average retail loans of $45 billion grew 4%. Average card loans of $111 billion increased 4%, and purchase sales of $56 billion increased 5% versus the prior-year period. For additional information on the results of operations of North America RCB for the first quarter of 2014, see “Global Consumer Banking—North America Regional Consumer Banking” below.

International GCB revenues (consisting of Asia RCB, Latin America RCB and EMEA RCB) decreased 3% versus the prior-year period to $4.5 billion. Excluding the impact of FX translation, international GCB revenues rose 3% from the prior-year period, driven by 5% revenue growth in Latin America RCB and 1% growth in Asia RCB, partially offset by a 2% decline in EMEA RCB (for the impact of FX translation on the first quarter of 2014 results of operations for each of EMEA RCB, Latin America RCB, and Asia RCB, see the table accompanying the discussion of each respective business’ results of operations below). This growth in international RCB revenues, excluding the impact of FX translation, mainly reflected volume growth in Latin America RCB and growth in fees in Asia RCB, partially offset by continued spread

compression as well as the market exits in EMEA RCB, the impact of regulatory changes in certain markets and the ongoing repositioning of Citi’s franchise in Korea. For additional information on the results of operations of EMEA RCB, Latin America RCB and Asia RCB for the first quarter of 2014, see “Global Consumer Banking” below.

Year-over-year, international GCB average deposits were unchanged, while average retail loans increased 8%, investment sales increased 2%, average card loans increased 3%, and international card purchase sales increased 4%, all excluding the impact of FX translation as well as approximately $2.8 billion of Credicard loans in Brazil, which was moved to discontinued operations in Corporate/Other in the second quarter of 2013.

ICG revenues were $9.2 billion in the first quarter of 2014, down 4% from the prior-year period. Excluding CVA/DVA, ICG revenues were $9.2 billion, or 7% lower than the prior-year period. Banking revenues of $4.1 billion increased 1% from the prior-year period, primarily reflecting growth in corporate lending and private bank revenues, partially offset by lower investment banking revenues. Investment banking revenues decreased 10% versus the prior-year period, driven by a 19% decline in debt underwriting revenues to $578 million and a 14% decline in advisory revenues to $175 million, partially offset by 20% growth in equity underwriting revenues to $299 million. Private bank revenues, excluding CVA/DVA, increased 6% to $668 million from the prior-year period, driven by growth in investments and capital market products. Corporate lending revenues increased 28% to $398 million, including $17 million of mark-to-market losses on hedges related to accrual loans compared to a $24 million loss in the prior-year period. Excluding the mark-to-market impact on hedges related to accrual loans, corporate lending revenues rose 24% versus the prior-year period to $415 million as higher loan balances and lower funding costs were partially offset by lower loan yields. Treasury and trade solutions revenues increased 1% versus the prior-year period as growth in fees and volumes were partially offset by the ongoing impact of spread compression globally.

Markets and securities services revenues of $5.2 billion, excluding CVA/DVA, declined 12% from the prior-year period. Fixed income markets revenues of $3.9 billion, excluding CVA/DVA, declined 18% from the prior-year period, reflecting the uncertain global macro environment as well as strong performance in the prior-year period in securitized products and local markets rates and currencies. Equity markets revenues of $883 million, excluding CVA/DVA, were up 13% versus the prior-year period, driven by improved derivatives revenues. Securities services revenues declined 1% to $561 million versus the prior-year period reflecting lower net interest revenue, partially offset by an increase in assets under custody and overall customer activity. For additional information on the results of operations of ICG for the first quarter of 2014, see “Institutional Clients Group” below.

Corporate/Other revenues increased to $141 million from $6 million in the prior-year period, mainly reflecting higher investment revenues and hedging activities. For additional

information on the results of operations of Corporate/Other for the first quarter of 2014, see “Corporate/Other” below.

Citicorp end-of-period loans increased 7% versus the prior-year period to $575 billion, with 2% growth in Consumer loans and 12% growth in Corporate loans.

Citi Holdings

Citi Holdings’ net loss was $284 million in the first quarter of 2014 compared to a net loss of $804 million in the first quarter of 2013. The improvement in the net loss was due to higher revenues and lower net credit losses, partially offset by the increase in expenses driven by higher legal and related costs.

Citi Holdings’ revenues increased 61% to $1.5 billion from the prior-year period. Excluding CVA/DVA ($14 million in the current quarter, compared to a negative $9 million in the prior-year period), Citi Holdings revenues increased 58% to $1.4 billion from the prior-year period. Net interest revenues increased 20% year-over-year to $903 million, largely driven by lower funding costs. Non-interest revenues, excluding CVA/DVA, increased to $539 million from $161 million in the prior-year period, driven by the absence of repurchase reserve builds for representation and warranty claims in the first quarter of 2014, as well as higher levels of mark-to-market gains and a gain on a debt transaction that Citi does not expect to recur in future periods. For additional information on the results of operations of Citi Holdings for the first quarter of 2014, see “Citi Holdings” below.

Citi Holdings’ assets were $114 billion, 23% below the prior-year period, and represented approximately 6% of Citi’s total GAAP assets and 17% of its estimated risk-weighted assets under Basel III (based on the “Advanced Approaches” for determining risk-weighted assets).

RESULTS OF OPERATIONS

SUMMARY OF SELECTED FINANCIAL DATA—PAGE 1

Citigroup Inc. and Consolidated Subsidiaries



	First Quarter
In millions of dollars, except per-share amounts and ratios	2014		2013			% Change
Net interest revenue	$	11,759	$	11,630		1	%
Non-interest revenue	8,365		8,618			(3	)
Revenues, net of interest expense	$	20,124	$	20,248		(1	)%
Operating expenses	12,149		12,288			(1	)
Provisions for credit losses and for benefits and claims	1,974		2,459			(20	)
Income from continuing operations before income taxes	$	6,001	$	5,501		9	%
Income taxes	2,050		1,570			31
Income from continuing operations	$	3,951	$	3,931		1	%
Income (loss) from discontinued operations, net of taxes ⁽¹⁾	37		(33		)	NM
Net income before attribution of noncontrolling interests	$	3,988	$	3,898		2	%
Net income attributable to noncontrolling interests	45		90			(50	)
Citigroup’s net income	$	3,943	$	3,808		4	%
Less:
Preferred dividends-Basic	$	124	$	4		NM
Dividends and undistributed earnings allocated to employee restricted and deferred shares that contain nonforfeitable rights to dividends, applicable to Basic EPS	62		72			(14	)%
Income allocated to unrestricted common shareholders for Basic EPS	$	3,757	$	3,732		1	%
Income allocated to unrestricted common shareholders for diluted EPS	$	3,757	$	3,732		1
Earnings per share
Basic
Income from continuing operations	$	1.22	$	1.24		(2	)%
Net income	1.24		1.23			1
Diluted
Income from continuing operations	$	1.22	$	1.24		(2	)%
Net income	1.23		1.23			—
Dividends declared per common share	0.01		0.01			—

Statement continues on the next page, including notes to the table.

SUMMARY OF SELECTED FINANCIAL DATA—PAGE 2



Citigroup Inc. and Consolidated Subsidiaries
	First Quarter
In millions of dollars, except per-share amounts, ratios and direct staff	2014			2013			% Change
At March 31:
Total assets	$	1,894,736		$	1,881,734		1	%
Total deposits	966,263			933,762			3
Long-term debt	222,747			234,326			(5	)
Citigroup common stockholders’ equity	201,244			190,222			6
Total Citigroup stockholders’ equity	208,462			193,359			8
Direct staff (in thousands)	248			257			(4	)
Ratios
Return on average assets	0.85		%	0.82		%
Return on average common stockholders’ equity ⁽²⁾	7.8			8.2
Return on average total stockholders’ equity ⁽²⁾	7.8			8.1
Efficiency ratio	60			61
Tier 1 Common ⁽³⁾	14.59		%	N/A
Tier 1 Capital⁽³⁾	14.59			N/A
Total Capital⁽³⁾	17.30			N/A
Tier 1 Leverage ⁽⁴⁾	8.87			N/A
Estimated Basel III Tier 1 Common ⁽⁵⁾	10.47		%	9.34		%
Estimated Basel III Tier 1 Capital ⁽⁵⁾	11.12			9.58
Estimated Basel III Total Capital ⁽⁵⁾	12.53			12.25
Estimated Basel III Supplementary Leverage Ratio ⁽⁵⁾	5.61			N/A
Citigroup common stockholders’ equity to assets	10.62		%	10.11		%
Total Citigroup stockholders’ equity to assets	11.00			10.28
Dividend payout ratio ⁽⁶⁾	0.8			0.8
Book value per common share	$	66.25		$	62.51		6	%
Ratio of earnings to fixed charges and preferred stock dividends	2.57x			2.23x


(1)	Discontinued operations include Credicard, Citi Capital Advisors and Egg Banking credit card business. See Note 2 to the Consolidated Financial Statements for additional information on Citi’s discontinued operations.


(2)	The return on average common stockholders’ equity is calculated using net income less preferred stock dividends divided by average common stockholders’ equity. The return on average total Citigroup stockholders’ equity is calculated using net income divided by average Citigroup stockholders’ equity.


(3)	The capital ratios reflect the capital (numerator) as derived under the transition provisions of the final U.S. Basel III rules, which became effective January 1, 2014, and risk-weighted assets (denominator) as derived under the Basel I credit risk and Basel II.5 market risk capital rules.


(4)	The leverage ratio represents Tier 1 Capital divided by quarterly adjusted average total assets.


(5)	Citi’s estimated Basel III ratios and related components as of March 31, 2014 are based on the final U.S. Basel III rules, and with full implementation assumed for capital components; and the estimated Basel III risk-weighted assets are based on the “advanced approaches” for determining total risk-weighted assets.

(6) Dividends declared per common share as a percentage of net income per diluted share.

N/A Not available.

SEGMENT AND BUSINESS—INCOME (LOSS) AND REVENUES

The following tables show the income (loss) and revenues for Citigroup on a segment and business view:

CITIGROUP INCOME



	First Quarter						% Change
In millions of dollars	2014			2013			% Change
Income (loss) from continuing operations
CITICORP
Global Consumer Banking
North America	$	1,020		$	1,074		(5	)%
EMEA	15			1			NM
Latin America	311			356			(13	)
Asia	381			394			(3	)
Total	$	1,727		$	1,825		(5	)%
Institutional Clients Group
North America	$	1,289		$	1,256		3	%
EMEA	779			654			19
Latin America	341			472			(28	)
Asia	556			688			(19	)
Total	$	2,965		$	3,070		(3	)%
Corporate/Other	$	(458	)	$	(165	)	NM
Total Citicorp	$	4,234		$	4,730		(10	)%
Citi Holdings	$	(283	)	$	(799	)	65	%
Income from continuing operations	$	3,951		$	3,931		1	%
Discontinued operations	$	37		$	(33	)	NM
Net income attributable to noncontrolling interests	45			90			(50	)%
Citigroup’s net income	$	3,943		$	3,808		4	%

NM Not meaningful

CITIGROUP REVENUES



	First Quarter				% Change
In millions of dollars	2014		2013		% Change
CITICORP
Global Consumer Banking
North America	$	4,783	$	5,110	(6	)%
EMEA	347		368		(6	)
Latin America	2,268		2,308		(2	)
Asia	1,895		1,960		(3	)
Total	$	9,293	$	9,746	(5	)%
Institutional Clients Group
North America	$	3,558	$	3,577	(1	)%
EMEA	2,782		2,753		1
Latin America	1,102		1,223		(10	)
Asia	1,792		2,038		(12	)
Total	$	9,234	$	9,591	(4	)%
Corporate/Other	$	141	$	6	NM
Total Citicorp	$	18,668	$	19,343	(3	)%
Citi Holdings	$	1,456	$	905	61	%
Total Citigroup net revenues	$	20,124	$	20,248	(1	)%

NM Not meaningful

CITICORP

Citicorp is Citigroup’s global bank for consumers and businesses and represents Citi’s core franchises. Citicorp is focused on providing best-in-class products and services to customers and leveraging Citigroup’s unparalleled global network, including many of the world’s emerging economies. Citicorp is physically present in approximately 100 countries, many for over 100 years, and offers services in over 160 countries and jurisdictions. Citi believes this global network provides a strong foundation for servicing the broad financial services needs of its large multinational clients and for meeting the needs of retail, private banking, commercial, public sector and institutional clients around the world.

Citicorp consists of the following operating businesses: Global Consumer Banking (which consists of Regional Consumer Banking in North America, EMEA, Latin America and Asia) and Institutional Clients Group (which includes Banking and Markets and Securities Services). Citicorp also includes Corporate/Other. At March 31, 2014, Citicorp had approximately $1.8 trillion of assets and $937 billion of deposits, representing 94% of Citi’s total assets and 97% of Citi’s total deposits, respectively.



	First Quarter
In millions of dollars except as otherwise noted	2014			2013			% Change
Net interest revenue	$	10,856		$	10,877		—	%
Non-interest revenue	7,812			8,466			(8	)
Total revenues, net of interest expense	$	18,668		$	19,343		(3	)%
Provisions for credit losses and for benefits and claims
Net credit losses	$	1,920		$	1,948		(1	)%
Credit reserve build (release)	(305		)	(317		)	4
Provision for loan losses	$	1,615		$	1,631		(1	)%
Provision for benefits and claims	53			63			(16	)
Provision for unfunded lending commitments	(23		)	18			NM
Total provisions for credit losses and for benefits and claims	$	1,645		$	1,712		(4	)%
Total operating expenses	$	10,605		$	10,771		(2	)%
Income from continuing operations before taxes	$	6,418		$	6,860		(6	)%
Income taxes	2,184			2,130			3
Income from continuing operations	$	4,234		$	4,730		(10	)%
Income (loss) from discontinued operations, net of taxes	37			(33		)	NM
Noncontrolling interests	44			85			(48	)
Net income	$	4,227		$	4,612		(8	)%
Balance sheet data (in billions of dollars)
Total end-of-period (EOP) assets	$	1,781		$	1,733		3	%
Average assets	1,773			1,734			2
Return on average assets	0.97		%	1.08		%
Efficiency ratio (Operating expenses/Total revenues)	57			56
Total EOP loans	$	575		$	539		7
Total EOP deposits	937			868			8

NM Not meaningful

GLOBAL CONSUMER BANKING

Global Consumer Banking (GCB) consists of Citigroup’s four geographical Regional Consumer Banking (RCB) businesses that provide traditional banking services to retail customers through retail banking, commercial banking, Citi-branded cards and Citi retail services. GCB is a globally diversified business with 3,601 branches in 36 countries around the world as of March 31, 2014. For the three months ended March 31, 2014, GCB had approximately $397 billion of average assets and $330 billion of average deposits.

GCB’s overall strategy is to leverage Citi’s global footprint and seek to be the preeminent bank for the emerging affluent and affluent consumers in large urban centers. As of March 31, 2014, Citi had consumer banking operations in 121, or 81%, of the world’s top 150 cities. In credit cards and in certain retail markets, Citi serves customers in a somewhat broader set of segments and geographies. Consistent with its overall strategy, Citi intends to continue to optimize its branch footprint and further concentrate its presence in major metropolitan areas.



	First Quarter						% Change
In millions of dollars except as otherwise noted	2014			2013			% Change
Net interest revenue	$	7,056		$	7,166		(2	)%
Non-interest revenue	2,237			2,580			(13	)
Total revenues, net of interest expense	$	9,293		$	9,746		(5	)%
Total operating expenses	$	5,190		$	5,352		(3	)%
Net credit losses	$	1,786		$	1,909		(6	)%
Credit reserve build (release)	(218		)	(340		)	36
Provision (release) for unfunded lending commitments	(3		)	15			NM
Provision for benefits and claims	53			63			(16	)
Provisions for credit losses and for benefits and claims	$	1,618		$	1,647		(2	)%
Income from continuing operations before taxes	$	2,485		$	2,747		(10	)%
Income taxes	758			922			(18	)
Income from continuing operations	$	1,727		$	1,825		(5	)%
Noncontrolling interests	8			5			60
Net income	$	1,719		$	1,820		(6	)%
Balance Sheet data (in billions of dollars)
Average assets	$	397		$	400		(1	)%
Return on average assets	1.76		%	1.86		%
Efficiency ratio	56			55
Total EOP assets	$	398		$	403		(1	)
Average deposits	330			330			—
Net credit losses as a percentage of average loans	2.45		%	2.70		%
Revenue by business	.
Retail banking	$	4,017		$	4,532		(11	)%
Cards ⁽¹⁾	5,276			5,214			1
Total	9,293			9,746			(5	)%
Income from continuing operations by business
Retail banking	$	436		$	667		(35	)%
Cards ⁽¹⁾	1,291			1,158			11
Total	$	1,727		$	1,825		(5	)%

(Table continues on next page.)



Foreign Currency (FX) Translation Impact
Total revenue-as reported	$	9,293	$	9,746		(5	)%
Impact of FX translation ⁽²⁾	—		(247		)
Total revenues-ex-FX	$	9,293	$	9,499		(2	)%
Total operating expenses-as reported	$	5,190	$	5,352		(3	)%
Impact of FX translation ⁽²⁾	—		(140		)
Total operating expenses-ex-FX	$	5,190	$	5,212		—	%
Total provisions for LLR & PBC-as reported	$	1,618	$	1,647		(2	)%
Impact of FX translation ⁽²⁾	—		(51		)
Total provisions for LLR & PBC-ex-FX	$	1,618	$	1,596		1	%
Net income-as reported	$	1,719	$	1,820		(6	)%
Impact of FX translation ⁽²⁾	—		(32		)
Net income-ex-FX	$	1,719	$	1,788		(4	)%


(1)	Includes both Citi-branded cards and Citi retail services.


(2)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the first quarter of 2014 average exchange rates for all periods presented.

NM Not meaningful

NORTH AMERICA REGIONAL CONSUMER BANKING

North America Regional Consumer Banking (NA RCB) provides traditional banking and Citi-branded cards and Citi retail services to retail customers and small- to mid-size businesses in the U.S. NA RCB’s 962 retail bank branches as of March 31, 2014 are largely concentrated in the greater metropolitan areas of New York, Los Angeles, San Francisco, Chicago, Miami, Washington, D.C., Boston, Philadelphia, Dallas, Houston, San Antonio and Austin.

At March 31, 2014, NA RCB had approximately 12.1 million customer accounts, $45.0 billion of retail banking loans and $172.6 billion of deposits. In addition, NA RCB had approximately 112.2 million Citi-branded and Citi retail services credit card accounts, with $109.1 billion in outstanding card loan balances.



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Net interest revenue	$	4,186		$	4,151		1	%
Non-interest revenue	597			959			(38	)
Total revenues, net of interest expense	$	4,783		$	5,110		(6	)%
Total operating expenses	$	2,431		$	2,495		(3	)%
Net credit losses	$	1,103		$	1,255		(12	)%
Credit reserve build (release)	(271		)	(370		)	27
Provisions for benefits and claims	6			14			(57	)
Provision for unfunded lending commitments	2			—			—	%
Provisions for credit losses and for benefits and claims	$	840		$	899		(7	)%
Income from continuing operations before taxes	$	1,512		$	1,716		(12	)%
Income taxes	492			642			(23	)
Income from continuing operations	$	1,020		$	1,074		(5	)%
Noncontrolling interests	1			—			—
Net income	$	1,019		$	1,074		(5	)%
Balance Sheet data (in billions of dollars)
Average assets	$	178		$	176		1	%
Return on average assets	2.32		%	2.47		%
Efficiency ratio	51			49
Average deposits	$	171		$	164		4
Net credit losses as a percentage of average loans	2.87		%	3.40		%
Revenue by business
Retail banking	$	1,139		$	1,573		(28	)%
Citi-branded cards	2,019			2,026			—
Citi retail services	1,625			1,511			8
Total	$	4,783		$	5,110		(6	)%
Income from continuing operations by business
Retail banking	$	17		$	212		(92	)%
Citi-branded cards	566			432			31
Citi retail services	437			430			2
Total	$	1,020		$	1,074		(5	)%

NM Not meaningful

1Q14 vs. 1Q13

Net income decreased 5%, mainly driven by lower revenues and lower loan loss reserve releases, partially offset by lower expenses and net credit losses as well as a lower effective tax rate due to changes in state and local taxes.

Revenues decreased 6% primarily due to lower retail banking revenues, partially offset by higher retail services revenues. Retail banking revenues of $1.1 billion declined 28% due to lower mortgage origination revenues driven by significantly lower U.S. mortgage refinancing activity due to higher interest rates, partially offset by a sale-leaseback gain (approximately $70 million) related to the sale and leaseback of 90 Citibank, N.A. branches in California during the current quarter. In addition, retail banking continued to experience ongoing spread compression in the deposit portfolios within the consumer and commercial banking businesses. Partially offsetting the spread compression was growth in average deposits (4%), average commercial loans (9%) and average retail loans (4%). While Citi believes mortgage revenues have broadly stabilized, retail banking revenues will likely continue to be negatively impacted during the remainder of 2014 by the lower mortgage origination revenues and spread compression in the deposit portfolios.

Cards revenues increased 3%. In Citi-branded cards, revenues were unchanged at $2.0 billion as higher purchase sales (4% increase from the prior-year period) and continued improvement in net interest spreads (reflecting higher yields, as promotional balances continued to represent a smaller percentage of the portfolio total, as well as lower funding costs) were offset by a 3% decline in average loans. Citi-branded cards net interest revenue was unchanged, as the higher net interest spreads were offset by the decline in average loans, reflecting the continued emphasis on reducing promotional balances and increased payment rates. Citi-branded cards non-interest revenue declined 2% due to higher affinity rebates.

Citi retail services revenues increased 8% primarily due to an increase in net interest revenues driven by the Best Buy portfolio acquisition in September 2013, partially offset by continued declines in non-interest revenue driven by improving credit and the resulting impact on contractual partner payments. Citi retail services net interest revenues increased 10% driven by a 19% increase in average loans, primarily due to the Best Buy acquisition, and lower funding costs, partially offset by the continued decline in net interest spreads due to the higher percentage of promotional balances within the portfolio, which Citi expects could continue in the near term. Purchase sales in retail services increased 9% from the prior-year period, driven by the acquisition of the Best Buy portfolio.

Expenses decreased 3%, reflecting ongoing cost reduction initiatives, partially offset by an increase in retail services expenses due to the impact of the Best Buy portfolio acquisition. Ongoing cost reduction initiatives included the repositioning of the mortgage business due to the decline in mortgage refinancing activity, as well as ongoing rationalization of the branch footprint, including reducing the number of overall branches.

Provisions decreased 7%, as lower net credit losses in the Citi-branded cards and Citi retail services portfolios were partially offset by lower loan loss reserve releases ($271 million in the first quarter of 2014 compared to $370 million in the prior-year period), primarily related to cards, as well as reserve builds for new loans originated in the Best Buy portfolio. Citi expects loan loss reserve releases in the cards portfolios to continue in the near term, but likely at lower levels than prior periods as net credit losses have generally stabilized in these portfolios.

EMEA REGIONAL CONSUMER BANKING

EMEA Regional Consumer Banking (EMEA RCB) provides traditional banking and Citi-branded card services to retail customers and small- to mid-size businesses, primarily in Central and Eastern Europe and the Middle East. The countries in which EMEA RCB has the largest presence are Poland, Russia and the United Arab Emirates.

At March 31, 2014, EMEA RCB had 161 retail bank branches with approximately 3.3 million customer accounts, $5.8 billion in retail banking loans, $13.3 billion in deposits, and 2.1 million Citi-branded card accounts with $2.4 billion in outstanding card loan balances.



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Net interest revenue	$	231		$	246		(6	)%
Non-interest revenue	116			122			(5	)
Total revenues, net of interest expense	$	347		$	368		(6	)%
Total operating expenses	$	315		$	353		(11	)%
Net credit losses	$	11		$	29		(62	)%
Credit reserve build (release)	—			(11		)	100
Provision for unfunded lending commitments	—			1			(100	)
Provisions for credit losses	$	11		$	19		(42	)%
Income (loss) from continuing operations before taxes	$	21		$	(4	)	NM
Income taxes (benefits)	6			(5		)	NM
Income (loss) from continuing operations	$	15		$	1		NM
Noncontrolling interests	5			3			67	%
Net income (loss)	$	10		$	(2	)	NM
Balance Sheet data (in billions of dollars)
Average assets	$	9		$	10		(10	)%
Return on average assets	0.45		%	(0.08		)%
Efficiency ratio	91			96
Average deposits	$	13		$	13		—
Net credit losses as a percentage of average loans	0.57		%	1.47		%
Revenue by business
Retail banking	$	214		$	215		—	%
Citi-branded cards	133			153			(13	)
Total	$	347		$	368		(6	)%
Income (loss) from continuing operations by business
Retail banking	$	(7	)	$	(13	)	46	%
Citi-branded cards	22			14			57
Total	$	15		$	1		NM
Foreign Currency (FX) Translation Impact
Total revenues-as reported	$	347		$	368		(6	)%
Impact of FX translation ⁽¹⁾	—			(13		)
Total revenues-ex-FX	$	347		$	355		(2	)%
Total operating expenses-as reported	$	315		$	353		(11	)%
Impact of FX translation ⁽¹⁾	—			(12		)
Total operating expenses-ex-FX	$	315		$	341		(8	)%
Provisions for credit losses-as reported	$	11		$	19		(42	)%
Impact of FX translation ⁽¹⁾	—			(3		)
Provisions for credit losses-ex-FX	$	11		$	16		(31	)%
Net income (loss)-as reported	$	10		$	(2	)	NM
Impact of FX translation ⁽¹⁾	—			3
Net income (loss)-ex-FX	$	10		$	1		NM


(1)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the first quarter of 2014 average exchange rates for all periods presented.


NM	Not meaningful

The discussion of the results of operations for EMEA RCB below excludes the impact of FX translation for all periods presented. Presentation of the results of operations, excluding the impact of FX translation, are non-GAAP financial measures. Citi believes the presentation of EMEA RCB’s results excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of certain of these metrics to the reported results, see the table above.

1Q14 vs. 1Q13

Net income of $10 million compared to net income of $1 million in the prior-year period as lower expenses and lower net credit losses were partially offset by lower revenues, primarily due to the sales of Citi’s consumer operations in Turkey and Romania during 2013.

Revenues decreased 2%, mainly driven by the lower revenues resulting from the sales of the consumer operations referenced above, partially offset by higher volumes in core markets, particularly in Russia and Poland. Net interest revenue decreased 2%, due to continued spread compression in cards and a 13% decrease in average cards loans, primarily due to the sales of the consumer operations in Turkey and Romania, partially offset by growth in average retail loans of 11%. Interest rate caps on credit cards, particularly in Poland, and the continued low interest rate environment were the main contributors to the lower net interest spreads. Citi expects continued regulatory changes, including caps on interchange rates, and spread compression to continue to negatively impact revenues in EMEA RCB during the remainder of 2014. Non-interest revenue decreased 2%, mainly reflecting lower revenues due to the sales of the consumer operations in Turkey and Romania, partially offset by higher investment fees due to an increase in the sale of higher spread products. Cards purchase sales decreased 14% and average deposits decreased 1%, each due to the sales of the consumer operations in Turkey and Romania. Excluding the impact of these divestitures, cards purchase sales increased 11% and average deposits increased 11%.

Expenses declined 8%, primarily due to repositioning savings from the sales of the consumer operations in Turkey and Romania, partially offset by continued investment spending on new internal operating platforms and higher volume-related expenses.

Provisions declined 31% due to a 59% decrease in net credit losses largely resulting from the sales of the consumer operations in Turkey and Romania, partially offset by the absence of a loan loss reserve release in the current quarter. Net credit losses also continued to reflect stabilizing credit quality and Citi’s strategic move toward lower-risk customers.

To date, ongoing political tensions in Russia and the Ukraine have not had a material impact on the results of operations of EMEA RCB, although future developments, including the imposition of any additional sanctions against Russian entities, business sectors, individuals or otherwise, could negatively impact the business. For additional information on Citi’s exposures in these countries, see “Managing Global Risk—Country and Cross-Border Risk” below.

LATIN AMERICA REGIONAL CONSUMER BANKING

Latin America Regional Consumer Banking (Latin America RCB) provides traditional banking and Citi-branded card services to retail customers and small- to mid-size businesses, with the largest presence in Mexico and Brazil. Latin America RCB includes branch networks throughout Latin America as well as Banco Nacional de Mexico, or Banamex, Mexico’s second-largest bank, with nearly 1,600 branches. As part of its ongoing repositioning efforts, in April 2014, Citi signed an agreement to sell its consumer business in Honduras. The sale, which is subject to regulatory approval, includes approximately $480 million of assets and is expected to close in the second half of 2014.

At March 31, 2014, Latin America RCB had 1,940 retail branches, with approximately 31.9 million customer accounts, $30.2 billion in retail banking loans and $48.0 billion in deposits. In addition, the business had approximately 9.1 million Citi-branded card accounts with $11.7 billion in outstanding loan balances.



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Net interest revenue	$	1,505		$	1,542		(2	)%
Non-interest revenue	763			766			—
Total revenues, net of interest expense	$	2,268		$	2,308		(2	)%
Total operating expenses	$	1,314		$	1,341		(2	)%
Net credit losses	$	469		$	419		12	%
Credit reserve build (release)	56			38			47
Provision (release) for unfunded lending commitments	(1		)	—			—
Provision for benefits and claims	47			49			(4	)
Provisions for loan losses and for benefits and claims (LLR & PBC)	$	571		$	506		13	%
Income from continuing operations before taxes	$	383		$	461		(17	)%
Income taxes	72			105			(31	)
Income from continuing operations	$	311		$	356		(13	)%
Noncontrolling interests	2			2			—
Net income	$	309		$	354		(13	)%
Balance Sheet data (in billions of dollars)
Average assets	$	80		$	86		(7	)%
Return on average assets	1.57		%	1.75		%
Efficiency ratio	58			58
Average deposits	$	46		$	46		—
Net credit losses as a percentage of average loans	4.58		%	4.19		%
Revenue by business
Retail banking	$	1,498		$	1,544		(3	)%
Citi-branded cards	770			764			1
Total	$	2,268		$	2,308		(2	)%
Income from continuing operations by business
Retail banking	$	205		$	228		(10	)%
Citi-branded cards	106			128			(17	)
Total	$	311		$	356		(13	)%
Foreign Currency (FX) Translation Impact
Total revenues-as reported	$	2,268		$	2,308		(2	)%
Impact of FX translation ⁽¹⁾	—			(145		)
Total revenues-ex-FX	$	2,268		$	2,163		5	%
Total operating expenses-as reported	$	1,314		$	1,341		(2	)%
Impact of FX translation ⁽¹⁾	—			(83		)
Total operating expenses-ex-FX	$	1,314		$	1,258		4	%
Provisions for LLR & PBC-as reported	$	571		$	506		13	%
Impact of FX translation ⁽¹⁾	—			(33		)
Provisions for LLR & PBC-ex-FX	$	571		$	473		21	%
Net income-as reported	$	309		$	354		(13	)%
Impact of FX translation ⁽¹⁾	—			(17		)
Net income-ex-FX	$	309		$	337		(8	)%


(1)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the first quarter of 2014 average exchange rates for all periods presented.

NM Not Meaningful

The discussion of the results of operations for Latin America RCB below excludes the impact of FX translation for all periods presented. Presentation of the results of operations, excluding the impact of FX translation, are non-GAAP financial measures. Citi believes the presentation of Latin America RCB’s results excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of certain of these metrics to the reported results, see the table above.

1Q14 vs. 1Q13

Net income decreased 8% as higher credit costs and higher expenses were partially offset by higher revenues.

Revenues increased 5%, primarily due to volume growth in retail banking and cards, partially offset by continued spread compression and slower overall economic growth across the region, including in Mexico, which Citi expects will continue during the remainder of 2014. Net interest revenue increased 4% due to increased volumes, partially offset by spread compression. Non-interest revenue increased 5%, primarily due to higher fees from increased business volumes in retail and cards as well as a gain on sale (approximately $40 million) related to Citi’s partial sale of its indirect investment in Banco de Chile during the current quarter. Retail banking revenues increased 3% as average loans increased 8%, investment sales increased 14% and average deposits increased 5%. Cards revenues increased 8% as average loans increased 9% and purchase sales increased 5%, excluding the impact of Credicard (see Note 2 to the Consolidated Financial Statements). This increase in overall cards revenues was partially offset by the lower economic growth and slowing cards purchase sales in Mexico due to the previously-disclosed fiscal reforms enacted in 2013, which included higher income and other taxes and negatively impacted consumer behavior. Citi expects these trends as well as spread compression could continue to negatively impact revenues in Latin America RCB.

Expenses increased 4% due to increased investment spending as well as compliance and volume-related costs, partially offset by efficiency savings.

Provisions increased 21%, primarily due to higher net credit losses as well as a higher loan loss reserve build. Net credit losses increased 20%, driven primarily by Mexico cards and, to a lesser extent, the personal loan portfolio, as the portfolios continued to season. In addition, Mexico fiscal reforms (as discussed above) negatively impacted card delinquencies in Mexico across the industry. The continued impact of the fiscal reforms and economic slowdown in Mexico could cause net credit losses in Latin America RCB to remain elevated. Any further deterioration in Citi’s Mexican homebuilders clients could also result in higher net credit losses, although any losses related to those homebuilder clients should be charged against existing loan loss reserves as of March 31, 2014, and thus should be neutral to overall cost of credit. The loan loss reserve build increased 63%, primarily due to portfolio growth and seasoning.

For information on the impact, and potential future impacts, to Latin America RCB results of operations from foreign exchange controls in certain countries, see “Managing Global Risk—Country and Cross-Border Risk—Cross-Border Risk” below.

ASIA REGIONAL CONSUMER BANKING

Asia Regional Consumer Banking (Asia RCB) provides traditional banking and Citi-branded card services to retail customers and small- to mid-size businesses, with the largest Citi presence in Korea, Singapore, Australia, Hong Kong, Taiwan, India, Japan, Malaysia, Indonesia, Thailand and the Philippines.

At March 31, 2014, Asia RCB had 538 retail branches, approximately 16.9 million customer accounts, $73.4 billion in retail banking loans and $103.0 billion in deposits. In addition, the business had approximately 16.4 million Citi-branded card accounts with $18.6 billion in outstanding loan balances. Consistent with its strategy to concentrate its consumer banking operations in major metropolitan areas and focus on high quality consumer segments, Citi continues to reposition its consumer franchise in Korea and has announced that it will close approximately 30% of its branches in the country.



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Net interest revenue	$	1,134		$	1,227		(8	)%
Non-interest revenue	761			733			4
Total revenues, net of interest expense	$	1,895		$	1,960		(3	)%
Total operating expenses	$	1,130		$	1,163		(3	)%
Net credit losses	$	203		$	206		(1	)%
Credit reserve build (release)	(3		)	3			NM
Provision for unfunded lending commitments	(4		)	14			NM
Provisions for loan losses	$	196		$	223		(12	)%
Income from continuing operations before taxes	$	569		$	574		(1	)%
Income taxes	188			180			4
Income from continuing operations	$	381		$	394		(3	)%
Noncontrolling interests	—			—			—
Net income	$	381		$	394		(3	)%
Balance Sheet data (in billions of dollars)
Average assets	$	130		$	128		2	%
Return on average assets	1.19		%	1.25		%
Efficiency ratio	60			59
Average deposits	$	101		$	107		(6	)
Net credit losses as a percentage of average loans	0.91		%	0.94		%
Revenue by business
Retail banking	$	1,166		$	1,200		(3	)%
Citi-branded cards	729			760			(4	)
Total	$	1,895		$	1,960		(3	)%
Income from continuing operations by business
Retail banking	$	221		$	240		(8	)%
Citi-branded cards	160			154			4
Total	$	381		$	394		(3	)%
Foreign Currency (FX) Translation Impact
Total revenues-as reported	$	1,895		$	1,960		(3	)%
Impact of FX translation ⁽¹⁾	—			(89		)
Total revenues-ex-FX	$	1,895		$	1,871		1	%
Total operating expenses-as reported	$	1,130		$	1,163		(3	)%
Impact of FX translation ⁽¹⁾	—			(45		)
Total operating expenses-ex-FX	$	1,130		$	1,118		1	%
Provisions for loan losses-as reported	$	196		$	223		(12	)%
Impact of FX translation ⁽¹⁾	—			(15		)
Provisions for loan losses-ex-FX	$	196		$	208		(6	)%
Net income-as reported	$	381		$	394		(3	)%
Impact of FX translation ⁽¹⁾	—			(18		)
Net income-ex-FX	$	381		$	376		1	%


(1)	Reflects the impact of foreign exchange (FX) translation into U.S. dollars at the first quarter of 2014 average exchange rates for all periods presented.


NM	Not meaningful

The discussion of the results of operations for Asia RCB below excludes the impact of FX translation for all periods presented. Presentation of the results of operations, excluding the impact of FX translation, are non-GAAP financial measures. Citi believes the presentation of Asia RCB’s results excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of certain of these metrics to the reported results, see the table above.

1Q14 vs. 1Q13

Net income increased 1%, primarily due to lower credit costs and slightly higher revenues, partially offset by higher expenses.

Revenues increased 1%, as higher non-interest revenue, primarily due to growth in fees resulting from the previously-announced distribution agreement with AIA Group Limited (AIA) was partially offset by lower net interest revenue. Net interest revenue declined 2%, primarily driven by regulatory changes, continued spread compression and the ongoing repositioning of the franchise in Korea. While Citi continues to reposition its franchise in Korea, including the previously-announced branch closures, Citi believes revenues in Korea have broadly stabilized as of the end of the current quarter. Non-interest revenue increased 7%, mainly driven by the increased revenues from the AIA distribution agreement, which Citi expects should continue. This increase was partially offset by a 7% decline in investment sales volume due to investor sentiment, reflecting overall market uncertainty.

Average retail deposits declined 2% resulting from continued efforts to rebalance the deposit portfolio mix. Average retail loans increased 7% (11% excluding Korea). Cards purchase sales grew 6%, with growth in certain markets, including China, India, Hong Kong and Singapore. While certain markets in the region, including China, India, Malaysia and the Philippines, experienced revenue growth during the quarter, Citi expects spread compression and regulatory changes in several markets across the region will continue to have a negative impact on Asia RCB revenues during the remainder of 2014.

Expenses increased 1%, as investment spending, particularly in China cards, was partially offset by efficiency and repositioning savings. As discussed in the “Executive Summary” above, Citi believes repositioning charges in Asia RCB could be higher in the second quarter of 2014, largely due to the acceleration of its repositioning efforts in Korea.

Provisions decreased 6%, as loan loss reserve releases were partially offset by higher net credit losses, primarily reflecting the impact of one counterparty in the commercial portfolio.

INSTITUTIONAL CLIENTS GROUP

Institutional Clients Group (ICG) provides corporate, institutional, public sector and high-net-worth clients around the world with a full range of wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance and securities services. ICG transacts with clients in both cash instruments and derivatives, including fixed income, foreign currency, equity and commodity products. ICG’s international presence is supported by trading floors in 75 countries and a proprietary network in over 95 countries and jurisdictions. At March 31, 2014, ICG had approximately $1 trillion of assets and $574 billion of deposits, while two of its businesses, securities services and issuer services, managed $14.7 trillion of assets under custody.

ICG revenue is generated primarily from fees and spreads associated with these activities. ICG earns fee income for assisting clients in clearing transactions, providing brokerage and investment banking services and other such activities. Revenue generated from these activities is recorded in Commissions and fees and Investment banking. In addition, as a market maker, ICG facilitates transactions, including holding product inventory to meet client demand, and earns the differential between the price at which it buys and sells the products. These price differentials and the unrealized gains and losses on the inventory are recorded in Principal transactions. ICG interest income earned on inventory and loans held less interest paid to customers on deposits is recorded as Net interest revenue. Revenue is also generated from transaction processing and assets under custody and administration.

Previously, ICG was composed of Securities and Banking and Transaction Services. Effective in the first quarter of 2014, certain business activities within Securities and Banking and Transaction Services were realigned and aggregated as Banking and Markets and Securities Services within the ICG segment. The change was due to the realignment of the management structure within the ICG segment and had no impact on any total segment-level information. For additional information, see “Overview” above.

INSTITUTIONAL CLIENTS GROUP



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Commissions and fees	$	1,110		$	1,136		(2	)%
Administration and other fiduciary fees	638			681			(6	)
Investment banking	957			1,085			(12	)
Principal transactions	2,606			2,472			5
Other	87			361			(76	)%
Total non-interest revenue	$	5,398		$	5,735		(6	)%
Net interest revenue (including dividends)	3,836			3,856			(1	)
Total revenues, net of interest expense	$	9,234		$	9,591		(4	)%
Total operating expenses	$	4,994		$	5,079		(2	)%
Net credit losses	$	134		$	39		NM
Provision (release) for unfunded lending commitments	(20		)	3			NM
Credit reserve (release)	(87		)	23			NM
Provisions for credit losses	$	27		$	65		(58	)%
Income from continuing operations before taxes	$	4,213		$	4,447		(5	)%
Income taxes	1,248			1,377			(9	)
Income from continuing operations	$	2,965		$	3,070		(3	)%
Noncontrolling interests	26			50			(48	)
Net income	$	2,939		$	3,020		(3	)%
Average assets (in billions of dollars)	$	1,058		$	1,070		(1	)%
Return on average assets	1.13		%	1.14		%
Efficiency ratio	54			53
Revenues by region
North America	$	3,558		$	3,577		(1	)%
EMEA	2,782			2,753			1
Latin America	1,102			1,223			(10	)
Asia	1,792			2,038			(12	)
Total	$	9,234		$	9,591		(4	)%
Income from continuing operations by region
North America	$	1,289		$	1,256		3	%
EMEA	779			654			19
Latin America	341			472			(28	)
Asia	556			688			(19	)
Total	$	2,965		$	3,070		(3	)%
Average loans by region (in billions of dollars)
North America	$	107		$	91		18	%
EMEA	57			53			8
Latin America	40			38			5
Asia	68			60			13
Total	$	272		$	242		12	%
EOP deposits by business (in billions of dollars)
Treasury and trade solutions	381			335			14
All other ICG businesses	193			189			2
Total	$	574		$	524		10	%

ICG Revenue Details—Excluding CVA/DVA



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Investment banking revenue details
Advisory	$	175		$	204		(14	)%
Equity underwriting	299			250			20
Debt underwriting	578			713			(19	)
Total investment banking	$	1,052		$	1,167		(10	)%
Treasury and trade solutions	1,948			1,926			1
Corporate lending - excluding gain/(loss) on loan hedges (see below)	415			335			24
Private bank	668			629			6
Total Banking revenues (ex-CVA/DVA and gain/(loss) on loan hedges)	$	4,083		$	4,057		1	%
Corporate lending - gain/(loss) on loan hedges ⁽¹⁾	$	(17	)	$	(24	)	29	%
Total Banking revenues (ex-CVA/DVA and including gain/(loss) on loan hedges)	$	4,066		$	4,033		1	%
Fixed income markets	$	3,850		$	4,687		(18	)%
Equity markets	883			779			13
Securities services	561			566			(1	)
Other	(119		)	(164		)	27
Total Markets and securities services (ex-CVA/DVA)	$	5,175		$	5,868		(12	)%
Total ICG (ex-CVA/DVA)	$	9,241		$	9,901		(7	)%
CVA/DVA (excluded as applicable in lines above)	(7		)	(310		)	98	%
Fixed income markets	$	(26	)	$	(293	)	91	%
Equity markets	16			(16		)	NM
Private bank	3			(1		)	NM
Total Revenues, net of interest expense	$	9,234		$	9,591		(4	)%

NM Not meaningful


(1)	Hedges on accrual loans reflect the mark-to-market on credit derivatives used to economically hedge the corporate loan accrual portfolio. The fixed premium costs of these hedges is netted against the corporate lending revenues to reflect the cost of credit protection.

The discussion of the results of operations for ICG below excludes the impact of CVA/DVA as well as the impact of gains/(losses) on hedges on accrual loans for all periods presented. Presentation of the results of operations, excluding the impact of these items, are non-GAAP financial measures. Citi believes the presentation of ICG’s results excluding the impact of these items is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of these metrics to the reported results, see the table above.

1Q14 vs. 1Q13

Net income decreased 8%, primarily driven by lower revenues, partially offset by lower expenses and lower credit costs.


•	Revenues decreased 7%, reflecting lower revenues in fixed income markets and investment banking, partially offset by higher revenues in equity markets, corporate lending and the private bank. Citi expects revenues in ICG will likely continue to reflect the overall market environment.

•

Investment banking revenues decreased 10%, primarily reflecting a decline in overall investment banking wallet share due to timing of transactions and lower issuance volume. Debt underwriting revenues decreased 19%, in-line with market activity, driven by lower loan and bond underwriting fees. Advisory revenues decreased 14%, reflecting an acceleration of M&A deals into the fourth quarter of 2013. Equity underwriting revenues increased 20%, driven by increased market activity.

•

Treasury and trade solutions revenues increased 1%, as higher balances and fee growth was partially offset by the ongoing impact of spread compression globally. End-of-period deposit balances increased 14% (for additional information, see “Managing Global Risk—Market Risk—Funding and Liquidity Risk” below) and average trade loans increased 18%, including the impact of the consolidation of approximately $7 billion of trade loans during the second quarter of 2013.


•	Corporate lending revenues increased 24%, as higher loan balances and lower funding costs were partially offset by lower loan yields. Citi expects that demand for Corporate loans may remain episodic, as many of its target Corporate loan clients remain highly liquid.


•	Private bank revenues increased 6% due to growth in managed investments, including the impact of higher client assets under management, and capital markets products, particularly structured products. Revenue growth in lending and deposits, primarily driven by growth in client volumes, was largely offset by continued spread compression.

•

Fixed income markets revenues decreased 18%, primarily reflecting the uncertain emerging market and macroeconomic environment, as well as strong performance in the prior-year period in securitized products and local markets rates and currencies. Local markets performance decreased as a result of the volatile market environment and purposefully lower risk levels. G10 rates decreased as a result of lower client volumes. Securitized products results declined, particularly in North America, due to lower investor demand compared to the prior-year period, which benefited from a positive spread environment and investor appetite for structured products. Improved credit-related products results

reflected increased high grade and distressed flow trading, which was partially offset by declines in emerging markets credit products.


•	Equity markets revenues increased 13%, primarily due to improved derivatives as well as strong corporate client flows. Cash trading performance was unchanged as growth in North America was offset by declines in Asia.


•	Securities services revenues decreased 1% reflecting lower net interest revenue due to a reduction in deposits and ongoing spread compression, partially offset by an increase in volumes, assets under custody and overall client activity. Citi expects spread compression will continue to negatively impact securities services net interest revenues in the near term.

Expenses decreased 2%, primarily reflecting reduced headcount and the impact of lower performance-based compensation, partially offset by increased regulatory and compliance costs, higher legal and related costs and higher repositioning charges.

Provisions decreased 58%, primarily reflecting higher loan loss reserve releases and an improvement in the provision for unfunded lending commitments in the Corporate loan portfolio. Included in ICG credit costs in the current quarter was approximately $165 million of incremental credit costs related to the Petróleos Mexicanos (Pemex) supplier program (for additional information, see Citi’s Form 8-K filed with the SEC on February 28, 2014 and “Institutional Clients Group— Transaction Services” in Citi’s 2013 Annual Report on Form 10-K). The vast majority of the credit costs were associated with Citi’s direct exposure to Oceanografia S.A. de C.V. (OSA) (as previously disclosed, approximately $33 million) and uncertainty about Pemex’s obligation to pay Citi for a portion of the accounts receivable Citi validated with Pemex as of year-end 2013 (approximately $113 million). The remaining incremental credit costs was associated with an additional supplier to Pemex within the Pemex supplier program that was found to have similar issues.

To date, ongoing political tensions in Russia and the Ukraine have not had a material impact on the results of operations of ICG, although future developments, including the imposition of any additional sanctions against Russian entities, business sectors, individuals or otherwise, could negatively impact the business. For additional information on Citi’s exposures in these countries, see “Managing Global Risk—Country and Cross-Border Risk” below.

CORPORATE/OTHER

Corporate/Other includes unallocated global staff functions (including finance, risk, human resources, legal and compliance), other corporate expenses and unallocated global operations and technology expenses, Corporate Treasury and discontinued operations. At March 31, 2014, Corporate/Other had approximately $323 billion of assets, or 17% of Citigroup’s total assets, consisting primarily of Citi’s liquidity portfolio (approximately $111 billion of cash and cash equivalents and $156 billion of liquid available-for-sale securities). For additional information, see “Balance Sheet Review” and “Managing Global Risk—Market Risk—Funding and Liquidity” below.



	First Quarter						% Change
In millions of dollars	2014			2013			% Change
Net interest revenue	$	(36	)	$	(145	)	75	%
Non-interest revenue	177			151			17	%
Total revenues, net of interest expense	$	141		$	6		NM
Total operating expenses	$	421		$	340		24	%
Provisions for loan losses and for benefits and claims	—			—			—	%
Loss from continuing operations before taxes	$	(280	)	$	(334	)	16	%
Benefits for income taxes	178			(169		)	NM
Loss from continuing operations	$	(458	)	$	(165	)	NM
Income (loss) from discontinued operations, net of taxes	37			(33		)	NM
Net loss before attribution of noncontrolling interests	$	(421	)	$	(198	)	NM
Noncontrolling interests	10			30			(67	)%
Net loss	$	(431	)	$	(228	)	(89	)%

1Q14 vs. 1Q13

The net loss increased $203 million to $431 million, primarily due to the $210 million tax charge in the current quarter (see “Executive Summary” above) and higher expenses, partially offset by higher revenues.

Revenues increased $135 million, driven by higher investment revenues and hedging gains.

Expenses increased 24%, largely driven by higher legal and related costs.

CITI HOLDINGS

Citi Holdings contains businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp businesses. As of March 31, 2014, Citi Holdings assets were approximately $114 billion, a decrease of 23% year-over-year and 3% from December 31, 2013. The decline in assets of $3 billion from December 31, 2013 primarily consisted of net pay-downs. Also as of March 31, 2014, Consumer assets in Citi Holdings were approximately $101 billion, or approximately 89% of Citi Holdings assets. Of the Consumer assets, approximately $71 billion, or 70%, consisted of North America residential mortgages (residential first mortgages and home equity loans), including Consumer mortgages originated by Citi’s legacy CitiFinancial North America business (approximately $11 billion, or 16%, of the $71 billion as of March 31, 2014).

As of March 31, 2014, Citi Holdings represented approximately 6% of Citi’s GAAP assets and 17% of its estimated risk-weighted assets under Basel III (based on the “Advanced Approaches” for determining risk-weighted assets).



	First Quarter						% Change
In millions of dollars, except as otherwise noted	2014			2013			% Change
Net interest revenue	$	903		$	753		20	%
Non-interest revenue	553			152			NM
Total revenues, net of interest expense	$	1,456		$	905		61	%
Provisions for credit losses and for benefits and claims
Net credit losses	$	519		$	930		(44	)%
Credit reserve build (release)	(341		)	(347		)	2
Provision for loan losses	$	178		$	583		(69	)%
Provision for benefits and claims	155			168			(8	)
Provision (release) for unfunded lending commitments	(4		)	(4		)	—
Total provisions for credit losses and for benefits and claims	$	329		$	747		(56	)%
Total operating expenses	$	1,544		$	1,517		2	%
Loss from continuing operations before taxes	$	(417	)	$	(1,359	)	69	%
Benefits for income taxes	(134		)	(560		)	76
Loss from continuing operations	$	(283	)	$	(799	)	65	%
Noncontrolling interests	1			5			(80	)
Citi Holdings net loss	$	(284	)	$	(804	)	65	%
Total revenues, net of interest expense (excluding CVA/DVA)
Total revenues-as reported	1,456			905			61
CVA/DVA	14			(9		)	NM
Total revenues-excluding CVA/DVA	$	1,442		$	914		58	%
Balance sheet data (in billions of dollars)
Average assets	$	115		$	153		(25	)%
Return on average assets	(1.00		)%	(2.13		)%
Efficiency ratio	106			168
Total EOP assets	$	114		$	149		(23	)%
Total EOP loans	90			108			(17	)
Total EOP deposits	29			66			(56	)

NM Not meaningful

The discussion of the results of operations for Citi Holdings below excludes the impact of CVA/DVA for all periods presented. Presentation of the results of operations, excluding the impact of CVA/DVA, are non-GAAP financial measures. Citi believes the presentation of Citi Holdings’ results excluding the impact of CVA/DVA is a more meaningful depiction of the underlying fundamentals of the business. For a reconciliation of these metrics to the reported results, see the table above.

1Q14 vs. 1Q13

The net loss decreased by 63% to $292 million, primarily due to higher revenues and lower net credit losses.

Revenues increased 58%, primarily driven by the absence of residential mortgage repurchase reserve builds for representation and warranty claims in the current quarter as well as higher levels of mark-to-market gains versus the prior-year period, lower funding costs and a gain on a debt transaction (approximately $75 million). Net interest revenues increased 20%, primarily due to the lower funding costs. Non-interest revenues increased by $378 million, primarily driven by the absence of the repurchase reserve builds as well as the higher levels of mark-to-market gains and the gain on the debt transaction, which Citi does not expect to recur in future periods.

Expenses increased 2%, primarily due to higher legal and related costs ($784 million compared to $646 million in the prior-year period) driven largely by legacy private-label securitization and other mortgage-related issues (including approximately $100 million in incremental accruals related to the settlement to resolve certain private-label securitization claims announced in the first quarter of 2014 (for additional information, see Note 25 to the Consolidated Financial Statements)). Excluding legal and related costs, expenses declined 13% versus the prior-year period driven by the continued decline in assets and the resulting decline in operating expenses.

Provisions decreased 56%, driven by a 44% decline in net credit losses primarily due to improvements in North America mortgages and overall lower asset levels. Loan loss reserve releases decreased 2% to $345 million, substantially all of which related to the North America mortgage portfolio.

Japan Consumer Finance

In 2008, Citi decided to exit its Japan Consumer Finance business and has liquidated approximately 92% of the portfolio since that time. While the portfolio has been significantly reduced, Citi continues to monitor various aspects of this legacy business relating to the charging of “gray zone” interest, including customer defaults, refund claims and litigation, as well as financial, legislative, regulatory, judicial and other political developments. Gray zone interest represents interest at rates that are legal but for which claims may not be enforceable. For additional information, see “Citi Holdings” in Citi’s 2013 Annual Report on Form 10-K.

At March 31, 2014, Citi’s reserves related to customer refunds in the Japan Consumer Finance business were $454 million, compared to $434 million at December 31, 2013. The increase in the reserve primarily resulted from a reserve build of $73 million due to a decline in customer refund claims that was less than previously expected, offset by payments made to customers.

Citi continues to monitor and evaluate developments relating to the charging of gray zone interest and the potential impact to both currently and previously outstanding loans in this legacy business as well as its reserves related thereto. The potential amount of losses and their impact on Citi is subject to significant uncertainty and continues to be difficult to predict.

BALANCE SHEET REVIEW

The following sets forth a general discussion of the changes in certain of the more significant line items of Citi’s Consolidated Balance Sheet. For additional information on Citigroup’s liquidity resources, including its deposits, short-term and long-term debt and secured financing transactions, see “Managing Global Risk—Market Risk—Funding and Liquidity” below.



In billions of dollars	March 31, 2014		December 31, 2013		March 31, 2013		EOP 1Q14 vs. 4Q13 Increase (decrease)			% Change		EOP 1Q14 vs. 1Q13 Increase (decrease)			% Change
Assets
Cash and deposits with banks	$	204	$	199	$	174	$	5		3	%	$	30		17	%
Federal funds sold and securities borrowed or purchased under agreements to resell	263		257		270		6			2		(7		)	(3	)
Trading account assets	278		286		308		(8		)	(3	)	(30		)	(10	)
Investments	313		309		305		4			1		8			3
Loans, net of unearned income and allowance for loan losses	645		646		623		(1		)	—		22			4
Other assets	192		183		202		9			5		(10		)	(5	)
Total assets	$	1,895	$	1,880	$	1,882	$	15		1	%	$	13		1	%
Liabilities
Deposits	$	966	$	968	$	934	$	(2	)	—	%	$	32		3	%
Federal funds purchased and securities loaned or sold under agreements to repurchase	191		204		222		(13		)	(6	)	(31		)	(14	)
Trading account liabilities	124		109		120		15			14		4			3
Short-term borrowings	59		59		48		—			—		11			23
Long-term debt	223		221		234		2			1		(11		)	(5	)
Other liabilities	122		113		129		9			8		(7		)	(5	)
Total liabilities	$	1,685	$	1,674	$	1,687	$	11		1	%	$	(2	)	—	%
Total equity	210		206		195		4			2		15			8
Total liabilities and equity	$	1,895	$	1,880	$	1,882	$	15		1	%	$	13		1	%

ASSETS

Cash and Deposits with Banks

Cash and deposits with banks is composed of both Cash and due from banks and Deposits with banks. Cash and due from banks includes (i) cash on hand at Citi’s domestic and overseas offices, and (ii) non-interest-bearing balances due from banks, including non-interest-bearing demand deposit accounts with correspondent banks, central banks (such as the Federal Reserve Bank), and other banks or depository institutions for normal operating purposes. Deposits with banks includes interest-bearing balances, demand deposits and time deposits held in or due from banks (including correspondent banks, central banks and other banks or depository institutions) maintained for, among other things, normal operating and regulatory reserve requirement purposes.

During the first quarter of 2014, cash and deposits with banks increased 3% sequentially driven by growth in retained earnings and lower net trading account assets (as discussed below). Year-over-year, cash and deposits with banks increased 18%, primarily driven by deposit growth mainly in Institutional Clients Group (ICG) as well as Corporate/Other where Citi issued tenored time deposits to further diversify its funding sources. For further information on Citi’s deposits, see

“Managing Global Risk—Market Risk—Funding and Liquidity” below.

Average cash balances were $205 billion in the first quarter of 2014, compared to $204 billion in the fourth quarter of 2013 and $163 billion in the prior year period.

Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell (Reverse Repos)

Federal funds sold consist of unsecured advances to third parties of excess balances in reserve accounts held at the Federal Reserve Bank. Citi’s federal funds sold were not significant for the periods presented.

Reverse repos and securities borrowed increased 2% quarter-over-quarter, primarily due to a change in the asset mix in the businesses in Markets and securities services within ICG. Reverse repos and securities borrowed decreased 3% versus the first quarter of 2013, primarily due to a reduction in trading activity in Markets and securities services.

For further information regarding these balance sheet categories, see Note 10 to the Consolidated Financial Statements.

Trading Account Assets

Trading account assets declined 3% during the first quarter of 2014 and 10% versus the first quarter of 2013 due to reduced inventory held in the businesses in Markets and securities services within ICG. Average trading account assets were $234 billion in the first quarter of 2014, compared to $239 billion in the fourth quarter of 2013 and $265 billion in the first quarter of 2013.

For further information on Citi’s trading account assets, see Note 12 to the Consolidated Financial Statements.

Investments

Investments increased 3% year-over-year as Citi maintained a liquid balance sheet with a well-diversified and high quality portfolio. The growth was predominantly due to a $10 billion or 11% increase in U.S. government securities and a $3 billion or 4% increase in high quality foreign sovereign debt securities.

For further information on Citi’s Investments, see Note 13 to the Consolidated Financial Statements.

Loans

Loans represent the largest asset category of Citi’s balance sheet. Citi’s total loans, net of unearned income, were $664 billion at March 31, 2014, compared to $665 billion at December 31, 2013 and $643 billion at March 31, 2013. The discussion of loans throughout this section excludes a $6 billion impact of foreign exchange translation versus the prior year period as well as approximately $2.8 billion of Credicard loans in Brazil, which was moved to discontinued operations in Corporate/Other in the second quarter of 2013.

Excluding these items, Citi’s loans increased 4% from the prior year period and remained relatively stable quarter-over-quarter, as loan growth within both Consumer and Corporate loans within Citicorp continued to outpace the ongoing wind-down of Citi Holdings. At the end of the first quarter of 2014, Consumer and Corporate loans represented 58% and 42%, respectively, of Citi’s total loans.

Citicorp loans increased 9% from the prior year period, with growth in both the Consumer and Corporate loan portfolios. Consumer loans grew 5% from the prior year period. In North America, Consumer loans grew 4% from the prior year period, primarily reflecting the addition of the approximately $7 billion of credit card loans as a result of the acquisition of the Best Buy portfolio in the third quarter of 2013. Internationally, Consumer loans increased 6% from the prior year period, led by growth in Mexico, China, Singapore and Hong Kong.

Corporate loans grew 12% from the prior year period, with 12% growth in Asia, 11% growth in Latin America, and 17% growth in North America (including the consolidation of the $7 billion trade loan portfolio in the second quarter of 2013). Within the Corporate segment, traditional corporate lending balances increased 8% from the prior year period, as extended commitments were funded and new loans were originated for target clients. Citi expects demand for new Corporate loan commitments may remain episodic, as many of its target clients remain highly liquid. In treasury and trade solutions in Banking within ICG, loans grew 14% from the

prior year period, with growth in each region reflecting strong originations in trade finance throughout the year. Private bank loans in Banking within ICG grew by 16% from the prior year period, led by growth in Asia and North America.

Citi Holdings loans declined 17% year-over-year, due to continued run-off and asset sales.

During the first quarter of 2014, average loans of $659 billion yielded an average rate of 6.9%, compared to $659 billion and 7.0% in the fourth quarter of 2013 and $643 billion and 7.2% in the first quarter of 2013.

For further information on Citi’s loan portfolios, see generally “Managing Global Risk—Credit Risk” and “— Country Risk” below as well as Note 14 to the Consolidated Financial Statements.

Other Assets

Other assets consist of brokerage receivables, goodwill, intangibles and mortgage servicing rights, in addition to other assets (including, among other items, loans held-for-sale, deferred tax assets, equity-method investments, interest and fees receivable, premises and equipment, certain end-user derivatives in a net receivable position, repossessed assets and other receivables).

Other assets increased 4% sequentially primarily due to increased brokerage receivables driven by normal business fluctuations. Year-over-year, other assets declined 5% primarily due to a reduction in loans held-for-sale.

LIABILITIES

Deposits

For a discussion of Citi’s deposits, see “Managing Global Risk —Market Risk—Funding and Liquidity” below.

Federal Funds Purchased and Securities Loaned or Sold Under Agreements to Repurchase (Repos)

Federal funds purchased consist of unsecured advances of excess balances in reserve accounts held at the Federal Reserve Bank from third parties. Citi’s federal funds purchased were not significant for the periods presented.

Repos decreased 6% sequentially and 14% from the prior year period, primarily driven by a reduction in trading positions in the Markets and securities services businesses within ICG.

For further information on Citi’s secured financing transactions, see “Managing Global Risk—Market Risk—Funding and Liquidity” below. See also Note 10 to the Consolidated Financial Statements for additional information on these balance sheet categories.

Trading Account Liabilities

Trading account liabilities increased by 14% sequentially and 3% versus the prior year period, predominantly due to an increase in short positions in the Markets and securities services businesses within ICG. Average trading account liabilities were $72 billion during the first quarter of 2014, compared to $66 billion in the fourth quarter of 2013 and $72 billion in the first quarter of 2013.

For further information on Citi’s trading account liabilities, see Note 12 to the Consolidated Financial Statements.

Debt

For information on Citi’s long-term and short-term debt borrowings, see “Managing Global Risk—Market Risk—Funding and Liquidity” below and Note 17 to the Consolidated Financial Statements.

Other Liabilities

Other liabilities consist of brokerage payables and other liabilities (including, among other items, accrued expenses and other payables, deferred tax liabilities, certain end-user derivatives in a net payable position, and reserves for legal claims, taxes, repositioning, unfunded lending commitments, and other matters).

Other liabilities increased 8% sequentially, and decreased 5% from the prior year period, each due to changes in the levels of brokerage payables driven by normal business fluctuations.

Segment Balance Sheet⁽¹⁾



In millions of dollars	Global Consumer Banking		Institutional Clients Group		Corporate/Other and Consolidating Eliminations⁽²⁾		Subtotal Citicorp		Citi Holdings		Citigroup Parent Company- Issued Long-Term Debt and Stockholders’ Equity⁽³⁾		Total Citigroup Consolidated
Assets
Cash and deposits with banks	$	17,597	$	74,526	$	111,435	$	203,558	$	842	$	—	$	204,400
Federal funds sold and securities borrowed or purchased under agreements to resell	4,981		257,586		—