For Immediate Release
    Citigroup Inc. (NYSE: C)
    April 14, 2014

    Citigroup Reports First Quarter 2014 Earnings per Share of $1.23; $1.30 Excluding CVA/DVA1 and Tax Item2

    Net Income of $3.9 Billion; $4.1 Billion Excluding CVA/DVA and Tax Item Revenues of $20.1 Billion
     
    Net Interest Margin Increased to 2.90%
     
    Net Credit Losses of $2.4 Billion Declined 15% Versus Prior Year Period
     
    Loan Loss Reserve Release of $673 Million Versus $650 Million in Prior Year
     
    Reduced Deferred Tax Assets by Approximately $1.1 Billion
     
    Estimated Basel III Tier 1 Common Ratio of 10.4%3
    Estimated Basel III Supplementary Leverage Ratio of 5.6%4
     
    Book Value per Share Increased to $66.25
    Tangible Book Value per Share5 Increased to $56.40
     
    Citigroup Deposits of $966 Billion Grew 3% Versus Prior Year Period
     
    Citicorp Loans of $575 Billion Grew 7% Versus Prior Year Period
     
    Citi Holdings Assets of $114 Billion Declined 23% from Prior Year Period and Represented 6% of Total Citigroup Assets at Quarter End

    New York – Citigroup Inc. today reported net income for the first quarter 2014 of $3.9 billion, or $1.23 per diluted share, on revenues of $20.1 billion. This compared to net income of $3.8 billion, or $1.23 per diluted share, on revenues of $20.2 billion for the first quarter 2013.

    CVA/DVA was $7 million ($4 million after-tax) in the first quarter, compared to negative $319 million (negative $198 million after-tax) in the prior year period. First quarter 2014 results 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. Excluding CVA/DVA, first quarter revenues of $20.1 billion were down 2% from the prior year period. Excluding CVA/DVA and the tax item, first quarter 2014 earnings were $1.30 per diluted share, representing a 1% increase from prior year earnings of $1.29 per diluted share.

    Michael Corbat, Chief Executive Officer of Citi, said, "Despite a quarter that was difficult for our company, we delivered strong results. Both our consumer and institutional businesses performed well and we grew both loans and deposits while holding the line on our expenses. We reduced our deferred tax assets more than any other quarter since the crisis and drove Citi Holdings closer to break even.

    "$4 billion in net income helped generate $6 billion in regulatory capital during the quarter and increased our estimated Tier 1 Common ratio to 10.4% on a Basel III basis. Very cognizant of our shareholders desire to see a sustainable return of capital, we are engaged with the Fed to better understand their expectations regarding the CCAR process. We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach. I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal," Mr. Corbat concluded.

    Read the full press release with tables.

    Citigroup
    Citigroup revenues of $20.1 billion in the first quarter 2014 declined 1% from the prior year period. Excluding CVA/DVA in both periods, revenues declined 2% from the prior year period. This decrease was driven by a 5% decline in Citicorp revenues, primarily due to a decline in Fixed Income Markets revenues in Institutional Clients Group (ICG) and lower U.S. mortgage refinancing activity in North America Global Consumer Banking (GCB), which was partially offset by higher Citi Holdings revenues.

    Citigroup's net income rose to $3.9 billion in the first quarter 2014 from $3.8 billion in the prior year period. Excluding the impact of CVA/DVA in both periods and the tax item in the first quarter 2014, Citigroup net income increased 4% versus the prior year period driven by lower expenses and lower net credit losses, partially offset by the lower revenues and a higher effective tax rate. Operating expenses of $12.1 billion were 1% lower than the prior year period, 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. Operating expenses in the first quarter 2014 included $945 million of legal and related expenses, compared to $710 million in the prior year period, and $211 million of repositioning charges, compared to $148 million in the prior year period. Citigroup's cost of credit in the first quarter 2014 was $2.0 billion, a decrease of 20% from the prior year period, primarily reflecting a $439 million improvement in net credit losses. Excluding CVA/DVA in both periods and the tax item in the first quarter 2014, Citi's effective tax rate was 31% in the current quarter compared to a 29% rate in the prior year period.

    Citigroup's 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% of total loans, at the end of the prior year period. The $673 million net release of loan loss reserves in the current quarter compared to a $650 million release in the prior year period. Citigroup asset quality continued to improve as total non-accrual assets fell to $9.0 billion, a 19% reduction compared to the first quarter 2013. Corporate non-accrual loans declined 35% to $1.6 billion, while consumer non-accrual loans declined 14% to $7.0 billion.

    Citigroup's capital levels and book value per share increased versus the prior year period. As of quarter end, book value per share was $66.25 and tangible book value per share was $56.40, 6% and 8% increases, respectively, versus the prior year period. At quarter end, Citigroup's estimated Basel III Tier 1 Common ratio was 10.4%, up from 9.3% in the prior year period, driven by growth in retained earnings and deferred tax asset (DTA) utilization, partially offset by an increase in risk-weighted assets. During the first quarter of 2014, Citigroup added approximately $56 billion of operational risk risk-weighted assets as part of its transition to Basel III "advanced approaches" effective in the second quarter 2014. Citigroup reduced its DTA by approximately $1.1 billion in the first quarter 2014. Citigroup's estimated Basel III Supplementary Leverage ratio for the first quarter 2014 was 5.6%.

    Citicorp
    Citicorp revenues of $18.7 billion in the first quarter 2014 declined 3% from the prior year period. CVA/DVA, reported within ICG, was negative $7 million in the first quarter 2014, compared to negative $310 million in the prior year period. Excluding CVA/DVA, revenues were down 5% from the first quarter 2013, reflecting declines in both GCB and ICG revenues of 5% and 7%, respectively. Corporate/Other revenues were $141 million versus $6 million in the prior year period.

    Citicorp net income decreased 8% from the prior year period to $4.2 billion. CVA/DVA, reported within ICG, was negative $4 million (after-tax) in the first quarter 2014, compared to negative $192 million (after-tax) in the prior year period. Excluding CVA/DVA and the tax item in the first quarter 2014, net income declined 8% compared to the prior year period, as the lower revenues were partially offset by lower expenses and lower cost of credit.

    Citicorp operating expenses decreased 2% from the prior year period to $10.6 billion primarily reflecting efficiency savings, partially offset by higher regulatory and compliance costs, legal and related expenses and repositioning charges in the current quarter.

    Citicorp cost of credit of $1.6 billion in the first quarter 2014 declined 4% from the prior year period. The decline reflected both a 1% decline in net credit losses as well as a higher net loan loss reserve release, which increased 10% versus the prior year period. Citicorp's consumer loans 90+ days delinquent declined 1% from the prior year period to $2.9 billion, and the 90+ days delinquency ratio decreased 4 basis points to 0.99% of loans.

    Citicorp end of period loans grew 7% versus the prior year period to $575 billion, with 12% growth in corporate loans to $279 billion and 2% growth in consumer loans to $296 billion. The growth in consumer loans reflected the acquisition of Best Buy's U.S. credit card portfolio in the third quarter 2013.

    Global Consumer Banking
    GCB revenues of $9.3 billion declined 5% from the prior year period, as significantly lower U.S. mortgage refinancing activity and continued spread compression globally more than offset the impact of the Best Buy portfolio acquisition and ongoing volume growth in most international businesses.

    GCB net income declined 6% versus the prior year period to $1.7 billion, reflecting the decline in revenues, partially offset by lower expenses, lower cost of credit and a lower effective tax rate. Operating expenses declined 3% versus the prior year period, reflecting ongoing efficiency savings, partially offset by volume-related growth and the impact of the Best Buy acquisition.

    North America GCB revenues declined 6% to $4.8 billion versus the prior year period driven mainly by lower retail banking revenues, partially offset by higher retail services revenues. Retail banking revenues declined 28% to $1.1 billion from the first quarter 2013, primarily reflecting the lower U.S. mortgage refinancing activity as well as ongoing spread compression, partially offset by 4% growth in average deposits and 4% growth in average loans. Citi-branded cards revenues were roughly flat versus the prior year period at $2.0 billion, reflecting improvement in net interest spreads and growth in purchase sales, offset by a 3% decline in average loans. Citi retail services revenues increased 8% to $1.6 billion, reflecting the impact of the Best Buy portfolio acquisition.

    North America GCB net income was $1.0 billion, 5% lower than the first quarter 2013, driven by the decline in revenues and a reduction in loan loss reserve releases, partially offset by lower operating expenses, a decline in net credit losses and a lower effective tax rate. Operating expenses declined by 3% versus the prior year period to $2.4 billion, reflecting ongoing cost reduction initiatives and the repositioning of the mortgage business resulting from the decline in refinancing activity, partially offset by the impact of the Best Buy portfolio acquisition.

    North America GCB credit quality continued to improve as net credit losses of $1.1 billion decreased 12% versus the prior year period. Net credit losses improved in Citi-branded cards (down 15% to $587 million), Citi retail services (down 5% to $481 million) and in retail banking (down 36% to $35 million) versus the prior year period. Delinquency rates improved in Citi-branded cards and Citi retail services versus the prior year period and ended the quarter at close to historically low levels. The reserve release in the first quarter 2014 was $269 million, $101 million lower than in the first quarter 2013.

    International GCB revenues declined 3% versus the first quarter 2013 to $4.5 billion on a reported basis. On a constant dollar basis,6 international GCB revenues were up 3% versus the first quarter 2013 driven by growth in Latin America and Asia, partially offset by a decline in EMEA. In constant dollars, revenues in Latin America increased 5% to $2.3 billion as volume growth more than offset spread compression, and in Asia, revenues increased 1% to $1.9 billion as fee revenue growth was partially offset by the ongoing impact of regulatory changes as well as continued franchise repositioning in Korea. In EMEA, revenues declined 2% in constant dollars to $347 million, primarily due to the previously-announced market exits over the past year.

    International GCB net income declined 6% from the prior year period to $700 million on a reported basis and declined 2% in constant dollars. On a constant dollar basis, higher expenses and higher credit costs more than offset the higher revenues. Operating expenses in the first quarter 2014 increased 2% in constant dollars (decreased 3% on a reported basis) driven by investments and increased regulatory and compliance costs, partially offset by efficiency savings, while credit costs increased 12% versus the prior year (increased 4% on a reported basis) driven by portfolio growth and seasoning.

    International GCB credit quality remained largely stable. On a reported basis, net credit losses rose 4% to $683 million, primarily reflecting the impact of portfolio growth as well as portfolio seasoning in Latin America. The international net credit loss rate was 1.98% of average loans in the first quarter 2014, compared to 1.93% in the prior year period (excluding Credicard loans of $3.2 billion in first quarter 2013).

    Institutional Clients Group
    ICG revenues declined 4% from the prior year period to $9.2 billion. Excluding the impact of the negative $7 million of CVA/DVA in the first quarter 2014 (compared to negative $310 million in the prior year period), revenues were $9.2 billion, 7% lower than the prior year period, primarily reflecting a decline in Fixed Income Markets and Investment Banking revenues, partially offset by higher Equity Markets, Corporate Lending and Private Bank revenues.

    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 increased 6% to $668 million from the prior year period (excluding $3 million of CVA/DVA, versus negative $1 million in the first quarter 2013), driven by growth in investments and capital markets 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.7 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 negative $10 million of CVA/DVA, versus negative $309 million in the first quarter 2013) declined 12% from the prior year period. Fixed Income Markets revenues of $3.9 billion in the first quarter 2014 (excluding negative $26 million of CVA/DVA) declined 18% from the prior year period, reflecting the uncertain global macro environment as well as strong performance in the prior year in securitized products and local markets rates and currencies. Equity Markets revenues of $883 million (excluding $16 million of CVA/DVA) were up 13% versus the prior year period, driven by improved derivatives revenues. Securities Services revenues declined 1% versus the prior year period reflecting lower net interest revenue, partially offset by an increase in assets under custody and overall customer activity.

    ICG net income was $2.9 billion in the first quarter 2014. Excluding CVA/DVA, net income declined 8% to $2.9 billion from the prior year period, primarily reflecting the decline in revenues, partially offset by a decline in operating expenses and lower credit costs. Operating expenses declined 2% to $5.0 billion due to reduced headcount and lower incentive compensation, partially offset by higher regulatory and compliance costs, legal and related expenses and repositioning charges in the current quarter.

    ICG average loans grew 12% versus the prior year period to $272 billion while deposits increased 10% to $574 billion.

    Citi Holdings
    Citi Holdings revenues in the first quarter 2014 increased 61% versus the prior year period to $1.5 billion. Revenues in the first quarter 2014 included CVA/DVA of $14 million (compared to negative $9 million in the prior year period). Excluding CVA/DVA, Citi Holdings revenues increased 58% to $1.4 billion primarily driven by the absence of repurchase reserve builds for representation and warranty claims in the first quarter 2014, as well as higher levels of mark-to-market gains, lower funding costs versus the prior year period and a one-time gain on a debt transaction. As of the end of the quarter, total Citi Holdings assets were $114 billion, 23% below the prior year period, and represented approximately 6% of total Citigroup assets.

    Citi Holdings net loss was $284 million in the first quarter 2014 compared to a net loss of $804 million in the prior year period, driven by the higher revenues and lower net credit losses. Net credit losses decreased by 44% or $411 million from the prior year period, primarily driven by improvements in the North America mortgage portfolio. Expenses increased by 2% from the prior year period reflecting higher legal and related costs versus the prior year period ($784 million in the current quarter compared to $646 million in the prior year period).

    Citi Holdings allowance for credit losses was $6.1 billion at the end of the first quarter 2014, or 6.76% of loans, compared to $9.4 billion, or 8.73% of loans, in the prior year period. 90+ days delinquent consumer loans in Citi Holdings decreased 28% to $2.7 billion, or 3.28% of loans.

    Citigroup will host a conference call today at 11 a.m. (EDT). A live webcast of the presentation, as well as financial results and presentation materials, will be available at http://www.citigroup.com/citi/investor. Dial-in numbers for the conference call are as follows: (866) 516-9582 in the U.S. and Canada; (973) 409-9210 outside of the U.S. and Canada. The conference code for both numbers is 11338423.

    Citi
    Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides 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, transaction services, and wealth management.

    Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

    Additional financial, statistical, and business-related information, as well as business and segment trends, is included in a Quarterly Financial Data Supplement. Both this earnings release and Citigroup's First Quarter 2014 Quarterly Financial Data Supplement are available on Citigroup's website at www.citigroup.com.

    Certain statements in this release are "forward-looking statements" within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors, including the precautionary statements included in this document and those contained in Citigroup's filings with the U.S. Securities and Exchange Commission, including without limitation the "Risk Factors" section of Citigroup's 2011 Annual Report on Form 10-K.

    Click here for the complete press release and summary financial information.

    1 Credit valuation adjustments (CVA) on derivatives (counterparty and own-credit), net of hedges, and debt valuation adjustments (DVA) on Citigroup's fair value option debt. See Appendix A. Citigroup's results of operations, excluding the impact of CVA/DVA, are non-GAAP financial measures. Citigroup believes the presentation of its results of operations excluding the impact of CVA/DVA provides a more meaningful depiction of the underlying fundamentals of its businesses impacted by CVA/DVA. For a reconciliation of these measures to reported results, see Appendix B.

    2 First quarter 2014 results 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. Citigroup's results of operations, excluding this tax item, are non-GAAP financial measures. Citigroup believes the presentation of its results of operations excluding this item provides a more meaningful depiction of the underlying fundamentals of its businesses. For a reconciliation of these measures to reported results, see Appendix B.

    3 First quarter 2014 estimated Basel III Tier 1 Common ratio includes approximately $56 billion of additional operational risk-weighted assets related to Citigroup's transition to Basel III "advanced approaches" effective in the second quarter 2014. For additional information, please see Citigroup's press release dated February 21, 2014 on its Investor Relations website. Citigroup's estimated Basel III Tier 1 Common ratio and related components are non-GAAP financial measures. Citigroup believes this ratio and its components provide useful information to investors and others by measuring Citigroup's progress against future regulatory capital standards. Citigroup's estimated Basel III Tier 1 Common ratio and related components are based on its current interpretation, expectations and understanding of the final U.S. Basel III rules and are subject to, among other things, ongoing regulatory review, regulatory approval of Citi's credit, market and operational risk models, additional refinements, modifications or enhancements (whether required or otherwise) to Citi's models and further implementation guidance in the U.S. For the calculation of Citigroup's estimated Basel III Tier 1 Common ratio, see Appendix D.

    4 Citigroup's estimated Basel III Supplementary Leverage ratio (SLR) and related components are non-GAAP financial measures. Citigroup believes this ratio and its components provide useful information to investors and others by measuring Citigroup's progress against future regulatory capital standards. Citi's estimated Basel III SLR, as calculated under the final U.S. Basel III rules, represents the average for the quarter of the three monthly ratios of Tier 1 Capital to Total Leverage Exposure (i.e., the sum of the ratios calculated for January, February and March, divided by three). Total Leverage Exposure is the sum of: (1) the carrying value of all on-balance sheet assets less applicable Tier 1 Capital deductions; (2) the potential future exposure on derivative contracts; (3) 10% of the notional amount of unconditionally cancellable commitments; and (4) the notional amount of certain other off-balance sheet exposures (e.g., other commitments and contingencies). Citigroup's estimated Basel III SLR and related components are based on its current interpretation, expectations and understanding of the final U.S. Basel III rules and are subject to, among other things, ongoing regulatory review, Citi's continued review and implementation of the final U.S. Basel III SLR rules and any changes to those rules and further implementation guidance in the U.S.

    5 Tangible book value per share is a non-GAAP financial measure. Citi believes this ratio provides useful information as it is a capital adequacy metric used by investors and industry analysts. For a reconciliation of this measure to reported results, see Appendix E.

    6 Results of operations excluding the impact of FX translation (constant dollar basis) are non-GAAP financial measures. Citigroup believes the presentation of its results of operations excluding the impact of FX translation is a more meaningful depiction of the underlying fundamentals of its businesses impacted by FX translation. For a reconciliation of these measures to reported results, see Appendix C.

    7 Hedges on accrual loans reflect the mark-to-market on credit derivatives used to hedge the corporate loan portfolio. The fixed premium cost of these hedges is included (netted against) the core lending revenues to reflect the cost of the credit protection. Results of operations excluding the impact of gain/(loss) on loan hedges, are non-GAAP financial measures. Citigroup believes the presentation of its results of operations excluding the impact of gain/(loss) on loan hedges is a more meaningful depiction of the underlying fundamentals of its businesses.