2017 Annual Report
Citi's Value Proposition: A Mission of Enabling Growth and Progress
What You Can Expect From Us & What We Expect From Ourselves
Citi's mission is to serve as a trusted partner to our clients by responsibly providing financial services that enable growth and economic progress. Our core activities are safeguarding assets, lending money, making payments and accessing the capital markets on behalf of our clients. We have 200 years of experience helping our clients meet the world's toughest challenges and embrace its greatest opportunities. We are Citi, the global bank — an institution connecting millions of people across hundreds of countries and cities.
We protect people's savings and help them make the purchases — from everyday transactions to buying a home — that improve the quality of their lives. We advise people on how to invest for future needs, such as their children's education and their own retirement, and help them buy securities such as stocks and bonds.
We work with companies to optimize their daily operations, whether they need working capital, to make payroll or export their goods overseas. By lending to companies large and small, we help them grow, creating jobs and real economic value at home and in communities around the world. We provide financing and support to governments at all levels, so they can build sustainable infrastructure, such as housing, transportation, schools and other vital public works.
These capabilities create an obligation to act responsibly, do everything possible to create the best outcomes, and prudently manage risk. If we fall short, we will take decisive action and learn from our experience.
We strive to earn and maintain the public's trust by constantly adhering to the highest ethical standards. We ask our colleagues to ensure that their decisions pass three tests: they are in our clients' interests, create economic value, and are always systemically responsible. When we do these things well, we make a positive financial and social impact in the communities we serve and show what a global bank can do.
In billions of dollars, except per-share amounts, ratios and direct staff
|Global Consumer Banking Net Revenues||$32.7||$31.5||$32.3|
|Institutional Clients Group Net Revenues||35.7||33.2||33.3|
|Corporate/Other Net Revenues||3.1||5.1||10.8|
|Total Net Revenues||$71.5||$69.9||$76.4|
|Diluted EPS — Net Income1||5.33||4.72||5.40|
|Diluted EPS — Income from Continuing Operations1||5.37||4.74||5.42|
|Citigroup Stockholders' Equity||200.7||225.1||221.9|
|Basel III Ratios — Full Implementation|
|Common Equity Tier 1 Capital||12.4%||12.6%||12.1%|
|Tier 1 Capital||14.1%||14.2%||13.5%|
|Return on Assets1||0.84%||0.82%||0.95%|
|Return on Common Equity1||7.0%||6.6%||8.1%|
|Book Value per Share||$70.62||$74.26||$69.46|
|Tangible Book Value per Share||60.16||64.57||60.61|
|Common Shares Outstanding (millions)||2,569.9||2,772.4||2,953.3|
|Total Payout Ratio1||117.5%||77.1%||36.0%|
|Direct Staff (thousands)||209||219||231|
Letter to Shareholders
Dear Fellow Shareholders:
When we look back at 2017 from the vantage point of a few years from now, I am confident we will point to it as a year Citi decisively emerged from a prolonged period of simplification and restructuring into a new era of sustainable client-led growth.
The growth we are driving today is sustainable, balanced and less exposed to predictable and unpredictable risks than in the past. It is not going to come from acquiring competitors, entering new territories, or expanding into ancillary businesses that don't fit our strategy. It is going to come from serving our consumer and institutional clients with distinction. It is going to come from earning and keeping clients' trust and safeguarding their security. And it is going to come from being seen as an indisputably strong and stable company that takes as much justifiable pride in the positive impacts we have on society as in our financial achievements.
That is the context in which, on Investor Day in July 2017 — our first in nine years — I reiterated our conviction that with our restructuring complete, we had crossed an inflection point. From 2017 forward, the decisions we made to focus our franchise, invest in our capabilities and improve our client experience are bearing fruit in the form of a more compelling value proposition, accelerating growth and improved returns for shareholders. Our overriding goal is to combine the positive impact of an improving macroeconomic environment with even stronger business performance to consistently deliver higher returns on capital and increased return of capital to our shareholders through 2020 and beyond.
On an operating basis, our 2017 financial results strongly support the strategy we presented on Investor Day. Yet as a consequence of the passage of tax reform legislation in the U.S. in the fourth quarter of 2017, we took a one-time, noncash charge of $22.6 billion, resulting in a net loss on a reporting basis for the year of $6.8 billion. Having put that onetime charge behind us, however, we can now focus on the positive impacts of tax reform for us and our clients. A lower tax rate leads to higher net income, which, combined with a multi-billion-dollar reduction in our tangible common equity, will have a powerful positive impact on our returns. We estimate the impact of tax reform should drive our Return on Tangible Common Equity (ROTCE) up by 200 basis points or more. On a symbolic level, reducing the value of our Deferred Tax Assets (DTA) — our remaining remnant of the financial crisis — indelibly marks not just the end of a year, but the end of an era.
The solid growth we achieved in our core consumer and institutional businesses came from a more focused country presence in consumer and a more selective client base in institutional, each of which is roughly half the size it was at its peak. We have continued to execute on investments to streamline our infrastructure and drive further growth in targeted areas including our Mexico, U.S. Cards, Treasury and Trade Solutions, Equities and Investment Banking franchises.
In Global Consumer Banking, which serves more than 100 million consumer clients in 19 markets in three regions — Asia, Mexico and the U.S. — total revenues were up 4 percent over 2016. From a product perspective, Global Retail Banking grew loans and assets under management as we continued to shrink our physical footprint. Global Cards also delivered good growth, driven by higher loan and purchase sales volumes in all three regions.
Our Institutional Clients Group delivered an impressive performance, driving total revenues up 7 percent. Banking revenues were higher across our franchise, from our backbone Treasury and Trade Solutions to Investment Banking, the Private Bank and Corporate Lending. In our Markets and Securities Services segment, a weaker performance in Fixed Income and Equities compared to the more robust trading environment in 2016 was offset by growth in Securities Services. Once again we demonstrated the value of balance across and within our businesses.
Investor Day 2017 Citi hosted our first Investor Day in nine years on July 25. It was an opportunity to engage directly with investors and share the progress we've made as a firm, as well as our objectives going forward. The core message was that we've crossed an inflection point as a firm. Topics included the momentum we're seeing in our businesses, our competitive advantages and the confidence we have in our strategy.
Excluding the impact of tax reform, our 2017 net income of $15.8 billion was nearly $1 billion — or 6 percent — higher than our 2016 net income. On this basis, earnings per share rose to $5.33, up 13 percent over the prior year, including a benefit from share repurchases. We also made progress toward the targets we introduced on Investor Day. Due to strong expense management, we delivered a full-year Efficiency Ratio of 58 percent, a more than 150 basis point improvement from 2016. We increased our Return on Assets to 84 basis points. And we achieved a ROTCE of 8.1 percent, including the impact of our DTA. And excluding the impact of our disallowed DTAs, our ROTCE rose to 9.6 from 9 percent in 2016, showing progress toward the 10 percent target we talked about on Investor Day.
With regard to improving the return of capital to our shareholders, the solid results we achieved on our Comprehensive Capital Analysis and Review (CCAR) "stress test" again enabled the planned return of $19 billion during the current CCAR cycle. That laid the foundation for us to reduce our outstanding share count by over 200 million and return over $17 billion of capital to shareholders in 2017 through common share repurchases and dividends. We announced our intention to return — subject to regulatory approval — at least an additional $40 billion of capital to shareholders over the next two 2018 and 2019 CCAR cycles. The Federal Reserve and the Federal Deposit Insurance Corporation found no deficiencies or shortcomings in our 2017 Resolution Plan. Both milestones underscored the progress we made in 2017 toward our longstanding goal of being an indisputably strong and stable institution.
I would like to put these results in the broader context of a mindset shift we see as critical to sustaining these positive trends and trajectories into an uncertain future. We cannot control the macroeconomic or interest rate environment. But we can and must control the impacts our decisions and actions have on our clients' experience of their interactions and engagements with us.
We know our clients' expectations for seamless experiences are rising by the day. In response to that reality, our consumer bank launched three times as many digital features in 2017 as we did in 2016, driving double-digit growth in digital and mobile clients worldwide.
In our institutional business, Citi's online banking platform CitiDirect BE® was ranked # 1 for the twelfth consecutive year in the 2017 Greenwich Associates Digital Banking Benchmarking study. We partnered with Nasdaq on the rollout of a pioneering application of blockchain and distributed ledger technology to facilitate and automate payment processing. Our Treasury and Trade Solutions business, which provides cash management and trade finance services to multinational corporations and public sector clients worldwide, also launched a host of digital offerings designed to make our global network, the world's largest money mover, even more of a competitive advantage than it is today.
All the innovations we launched, crucial to serving clients with distinction, would not have stood a chance of gaining traction or acceptance with clients if they required reassurance that our reputation or values were sound. Fortunately, the strong foundation we have built, based on a culture of competence, compliance and control precedes us. On a number of occasions in 2017, I had an opportunity to reaffirm those core values as events transpired to make taking a stand not just right but necessary.
On the third day of January, in response to a newly-released Executive Order on Immigration in the U.S., I wrote to my roughly 210,000 Citi colleagues in nearly 100 countries where we open our doors every day to remind them that our diversity is a value not just fundamental to our present and future, but — given our globality — a real competitive advantage for our firm.
To accelerate progress on this important front, I asked at least one of my direct reports to co-lead each of our newlyestablished Affinity Groups — including Pride, Black Heritage, Asian Heritage, and Citi Salutes, dedicated to veterans' support — with another senior Citi leader. I wrote and said to my colleagues as I made that announcement that while I know we have more work to do, our track record at getting difficult things done makes me confident that we will get to where we need to go.
In honor of our 12th annual Global Community Day, I joined my colleagues to plant trees, organize the library and install computers at a primary school outside Mexico City. I felt just as much pride in the project as I did in the fact that I was joining over 100,000 others as they revitalized parks, served and collected food to those in need, and in so many other ways volunteered to serve our communities.
Citigroup - Key Capital Metrics
Our commitment to support the communities we serve was sorely tested by the devastation wrought by hurricanes Harvey and Irma, which in rapid succession swept through Texas, Florida and the Caribbean. In those and other areas impacted by natural disasters in 2017, including Mexico City, which suffered a massive earthquake, and Southeast Asia, hit hard by flooding, hundreds of our people went to extraordinary lengths to support and protect their colleagues, clients and communities. Working closely with local and global nonprofits, including the American Red Cross, in all those stricken communities our rapid response efforts provided funds, necessities and volunteer contributions to those in urgent need of relief. My Citi colleagues delivered 22 tons of food and supplies to colleagues and communities across Puerto Rico in the wake of the storms. Over a two-week period after Irma and Harvey, we further supported the Red Cross by enabling it to re-route phone calls to specially trained agents in our Hagerstown, Maryland call center, who assisted 1,800 individuals in search of emergency support or family members.
The vast human and property losses those destructive storms left in their wake were powerful reminders of the extreme weather many more places are experiencing as a result of global warming. With extreme weather events becoming more common, enhancing resiliency is a key objective of our efforts to finance vital infrastructure in partnership with public sector agencies and entities worldwide.
2017 Citicorp Net Revenues1
Three years ago, we established a new Environmental Finance goal with a ten-year target to finance and facilitate $100 billion in environmental finance activity and we are on track to meet it several years early. In February 2017 we announced a new goal to obtain 100 percent of our global energy needs through renewable sources by 2020.
In October, when we opened our new plaza and entrance to our Global Headquarters in New York City, we highlighted the many sustainability features incorporated into our plans as the reason we are targeting 388 Greenwich Street for a LEED Platinum designation, the U.S. Green Building Council's highest sustainability certification.
2017 was also the year when the Citi Foundation's groundbreaking Pathways to Progress program, which in its first phase connected 100,000 young people in ten U.S. cities to skills, jobs and career opportunities, went global. Now, the program is targeting 500,000 at-risk youth to be reached worldwide by 2020. The Foundation's $100 million investment in Pathways is the largest single philanthropic commitment in its history.
In conclusion, a word I used more than once at our Investor Day to describe how I feel about where we are today and where we are going is "pride." The Citi of today and tomorrow is a place all our colleagues are proud to work for and all our clients can be proud to work with. I am grateful to you for standing with us. Looking back on the decisions we made to prudently grow, and the decision you made to invest with us, I hope you share my conviction and belief that our best days and years are to come.
Michael L. Corbat
Chief Executive Officer, Citigroup Inc.
Global Consumer Banking
Citi's Global Consumer Bank (GCB), one of the world's leading digital banks, serves as a trusted partner to more than 100 million customers in 19 markets worldwide.
A global leader in credit cards, wealth management and commercial banking, the Global Consumer Bank is a compelling franchise: a globally recognized brand; strong competitive positions in a mix of developed and emerging markets; best-in-class value propositions; high-quality target clients; leading digital capabilities; and disciplined credit and expense management.
GCB drives client-led growth in three priority markets — Asia, Mexico and the U.S. — by deploying its global scale, products and capabilities, particularly digital, to differentiate locally with high impact and relevance.
With client engagement rapidly shifting to digital channels, mobile continues to be at the core of a simpler, better customer experience. With an increasingly agile model and mobile first approach, GCB dramatically accelerated its speed to market and the number of new digital features, up 300 percent versus 2016, driving robust double-digit growth in the number of digital and mobile users globally. Innovative solutions were launched across lending, wealth management, payments and cards, many of which were industry firsts, delivering greater speed, ease and convenience. And by partnering with leading digital ecosystems, we embedded our services in the platforms our clients use every day, driving increased engagement.
Today, following several years of streamlining and targeted investments, GCB comes to market with leading positions in core markets, far stronger products and digital capabilities than ever before, and multiple engines for future growth. Clients and the industry took note with Citi garnering key awards and recognition, including World's Best Digital Bank (Euromoney), Best Digital Bank in six Asia markets (Global Finance), #1 in Customer Satisfaction for the second consecutive year (American Customer Satisfaction Index) and Best Retail Bank for High-Net-Worth Families in the U.S. (Kiplinger's).
GCB operates approximately 2,450 branches and generated $7.2 billion in pretax earnings, representing 32 percent of Citigroup's total. In 2017, the business held $306 billion in average deposits, managed $418 billion in average assets and included $279 billion in average loans.
As the world's largest credit card issuer, Citi is a payments powerhouse, with premier partners, more than 142 million accounts, $499 billion in annual purchase sales, and $154 billion in average receivables across Citi Branded Cards and Citi Retail Services.
Citi Branded Cards
An important growth engine for GCB, Citi Branded Cards provides payment and credit solutions to consumers and small businesses, with 56 million accounts globally. In 2017, the business generated annual purchase sales of $418 billion and had an average loan portfolio of $108 billion.
Building a balanced portfolio across proprietary and co-brand products coupled with acquiring multi-year investments to provide differentiated value and experiences are starting to bear fruit, with gains in market share, acquisitions, purchase sales and loans.
In the U.S., the Costco co-brand credit card portfolio, acquired and converted in 2016, continues to see customer engagement exceeding expectations, with more than 2.1 million new accounts and $166 billion in purchase sales since conversion. Prestige, Citi's premium rewards travel credit card, was relaunched with a distinct look and enhanced benefits. Double Cash, the #1 cash back card in the U.S. based on Net Promoter Score, and Citi Simplicity®, the largest no-fee product portfolio in the world, continued to drive engagement and satisfaction with industry-leading Net Promoter Scores.
Citi continues to enhance its branch network in Mexico, executing on its previously announced $1 billion investment.
Internationally, Citi strengthened its card portfolio with new products and partnerships. Citi launched rewards, cash back and value cards, part of a global set of core products, in Hong Kong, Malaysia and the United Arab Emirates, expanded its long-term partnership with Expedia in Asia and launched a new white label card with Qantas in Australia. Citi also completed the sale of its merchant acquiring businesses in Hong Kong and Singapore.
Citi continued to leverage the advantage of its global scale and model. Its unrivaled global rewards program ThankYou® Rewards continued to welcome new Points Transfer partners, including JetPrivilege, Turkish Airlines and Avianca LifeMiles, while in Asia, Amazon Shop with Points launched for Citi cardholders in five markets, the first time Citi cardholders outside of the U.S. can redeem ThankYou Rewards for purchases at Amazon.com. Citi® Private Pass,® Citi's award-winning global entertainment access program, continued to grow. Citi offered access to more than 12,000 events with many of the world's biggest artists globally and, as part of its partnership with Live Nation, launched a new live music platform, Citi Sound VaultSM, to provide exclusive access to an extraordinary music experience.
To empower customers with speed, choice and convenience, we launched new e-commerce and digital wallet solutions. In the U.S., Citi PaySM, a tokenized, omnichannel digital wallet, rolled out to Citi's Mastercard cardmembers, and, through an expanded agreement with PayPal, eligible U.S. cardmembers will be able to redeem ThankYou Points when shopping online at millions of merchants that accept PayPal. Citi launched new mobile wallets to customers in several Asia markets, and we continue to drive digital payment tokenization, certifying several issuing platforms.
In addition to reaching clients where, when and how they want to engage with us, technology is enabling smarter, more efficient decisions about what products and services are best suited for them. By deploying machine learning and big data platforms, we are improving the effectiveness of the offers we provide. While at the early stages, utilizing models that allow us to understand each individual's wallet is driving significant improvements in response rates, efficiency, and retention of balances and spend. In the U.S., for example, about half of new credit card accounts originate through digital channels, lowering costs to acquire and serve.
Citi Retail Services
Citi Retail Services is one of North America's largest providers of private label and co-brand credit cards for retailers, serving 86 million accounts for iconic brands, including Best Buy, ExxonMobil, Macy's, Sears, Shell and The Home Depot.
In 2017, Citi Retail Services strengthened its portfolio of leading brands by renewing its agreement with Ford Motor Company and expanding into power sports and equipment through agreements with American Honda Motor Corp., BRP, Honda Power Equipment and Kawasaki Motors Corp., U.S.A.
In addition to new and expanded partnerships, Citi Retail Services utilized its multi-channel expertise, advanced data analytics and digital solutions to help its retail partners grow their businesses. These included "Apply and Buy," enabling consumers nationwide to apply for the ExxonMobil Smart Card credit card directly through the app and begin immediately saving on fuel purchases and the relaunch of the Sears Mastercard with expanded Shop Your Way rewards, an industry-leading rewards offer in which customers can earn rewards points on all purchases everywhere they shop.
In 2017, Citi Retail Services saw purchase sales of $81 billion and a loan portfolio ending the year at $49 billion.
Citibank's relationship model serves clients across the full spectrum of consumer banking needs through its lean, urban-based branch footprint, leading digital capabilities and expanding client-centric ecosystem.
In 2017 we launched a series of ads in the U.S. and Hong Kong that articulated our promise of progress in an emotional way.
A global leader in wealth management, Citi provides personalized wealth management services, including dedicated bankers, fund access, and a range of exclusive privileges, preferred pricing and benefits to clients around the globe through its Citigold®, Citigold Private Client and Citi Priority client offerings.
In the U.S., Citi's growing retail bank continues to implement a multi-year network transformation, reducing its branch footprint by nearly a third since 2013 while upgrading formats and concentrating resources in six priority markets. With the highest deposits per branch versus peers in core markets, Citi's network is increasingly productive and convenient. In 2017, Citi nearly doubled its fee-free ATM network, making it the largest nationwide.
Sweeping enhancements to its Citigold wealth and investment offering, introduced in late 2016, drove growth in households and balances and increased penetration of investment products. In 2017, Citi added to the number of Relationship Managers and Financial Advisors by 18 percent and opened a dedicated wealth center in Miami and broke ground on another in San Francisco to provide clients with personalized service, industry-leading expertise and a distinctive experience.
In tandem, new, more powerful digital capabilities are driving significant gains in client adoption, engagement and satisfaction. Features and functionality include Quick Lock for Debit, enabling customers to lock and unlock their debit card if lost or stolen, access to mobile investment features that provide greater control and flexibility to manage and invest their money, and send and receive capabilities for fast, safe and easy personto- person (P2P) payments through the Zelle Network®. Zelle®, available within the Citi Mobile® App for iPhone® and at Citibank® Online, enables U.S. retail bank customers to make fast, free payments from their checking account to friends and family who bank with most financial institutions in the U.S.
Across the U.S., Citi continued to fuel the growth of small businesses, supporting job creation and thriving communities across the country. In 2017, Citi invested more than $11 billion in small business lending in the U.S. and also financed over $4.7 billion in affordable housing projects.
In Mortgage, Citi announced it would effectively exit direct servicing operations by the end of 2018. This strategic action will enable the business to intensify focus on originations and simplify operations. CitiMortgage, which provides loans for home purchase and refinance transactions in the U.S., originated $13.1 billion in new loans in 2017.
In Asia, Citi extended its leadership in wealth management by refreshing the Citigold brand campaign in 13 markets and streamlined its branch network in key markets, including China and Korea, to adapt to consumers' preference and migration to digital channels. In addition, partnerships with many of the most popular digital ecosystems in the region and a host of innovative digital solutions were introduced. Digital and mobile enhancements include instant lending via mobile, simplified authentication through a mobile token, fingerprint and facial recognition, eFX capabilities and two industry firsts: a natural language chatbot on Facebook Messenger in Singapore and interactive, live video banking in India. Citi also introduced P2P payments services in Hong Kong and Singapore in conjunction with government authorities.
In Mexico, Citibanamex enjoys a preeminent position as the #1 recognized bank brand with leading positions across deposits, investments and loan products. Following the 2016 announcement of a $1 billion investment to upgrade its network and technology, Citi continued to execute, renovating more than 70 Smart branches and installing over 1,600 additional ATMs, sharpening client segmentation, enhancing value propositions and improving data capabilities to enhance both acquisitions and the client experience in digital.
Citi Commercial Banking brings the best of Citi's institutional and consumer franchises to clients, providing global banking capabilities and services to midsized, trade-oriented companies within Citi's footprint. As many of these clients expand internationally, Citi helps enable their growth and ability to access capital across multiple countries, one of Citi's core activities.
In 2017, the business successfully deepened client relationships in key segments and industries, digitized client touch points and sales and service tools, and improved client satisfaction. In the U.S., Citi Commercial Bank earned a Best Brand Award in Middle Market Banking by Greenwich Associates for embracing digitization, enabling business growth and delivering exceptional customer service.
Institutional Clients Group
The goal of Citi's Institutional Clients Group (ICG) is to serve as our clients' most important and most trusted banking partner by offering a comprehensive set of innovative products, services and solutions around the world in an integrated and responsible manner, creating sustainable value for shareholders.
Through our unmatched, worldwide proprietary network with a physical presence in 98 markets, Citi is uniquely positioned to take advantage of evolving global trends and provide large multinational corporations, public sector entities, ultra high-net-worth households and investment managers with a full suite of integrated products and services.
A trusted advisor and lender to our institutional clients, supporting innovation and growth for corporations, Citi provides cash management and trade solutions to 80% of Global Fortune 500 companies to help them conduct daily operations, to hire, to grow and to succeed. In the public sector, Citi helps build sustainable infrastructure, housing, transportation, schools and other vital public works for the future. With trading floors in 77 markets, clearing and custody networks in 63 markets and connections with 400 clearing systems, Citi maintains one of the largest global financial infrastructures and facilitates approximately $4 trillion of flows daily on average. This is what enables Citi to serve its core clients with distinction.
Utilizing a disciplined approach that has allowed us to deliver industry-leading efficiency and returns while investing in our talent, we have created a culture that is committed to enabling growth and progress through responsible finance.
In May, Citi partnered with Nasdaq to announce a pioneering blockchain and global banking integration that enabled straight-through payment processing and automated reconciliation by using a distributed ledger to record and transmit payment instructions
Accessing capital markets
Citi's Capital Markets Origination business is focused on the capitalraising needs of institutional clients, from inaugural issuances and exchanges to cross-border transactions and first-of-their-kind landmark structures. Owing to an unmatched global footprint and diverse range of financial products, Citi aims to be the first choice among issuers for clients' underwriting needs. Citi's track record of successfully executing in both buoyant and challenging market conditions is a testament to Citi's unwavering commitment to provide the highest quality service to clients. Citi's structuring and execution expertise has established the firm as a leader in the equity capital markets, whether measured by innovation or proceeds raised, and has distinguished Citi as the clear choice for debt underwriting, with excellence across a broad range of currencies and markets.
Citi successfully executed several landmark transactions for clients in 2017. Citi structured and committed to a bridge financing facility of $16 billion on a sole basis on behalf of BD (Becton, Dickinson and Company) to facilitate its acquisition of C.R. Bard, Inc. Citi then served as lead left bookrunner for all permanent financings for the company, including its $5 billion of simultaneous equity and mandatory preferred offering, $10 billion of bond offerings across multiple maturities, a $2+ billion of term loan and $2+ billion revolving credit facility. We served as joint global coordinator on the €7 billion rights issue for Banco Santander in connection with its agreement to acquire Banco Popular. Citi served as sole financial advisor to Banco Santander on the transaction. Citi also served as the joint lead financial advisor and jointly underwrote a $4.65 billion credit facility supporting the $17.9 billion privatization of the Singapore-listed Global Logistic Properties, acting as the facility agent and security agent for the credit facilities and also provided foreign exchange hedging solutions and ratings advisory services to the client. This was the largest ever private equity buyout of an Asian company and also the largest ever M&A in Singapore. Citi served as exclusive M&A financial advisor, co-structuring bank and placement agent to Ørsted, a global leader in offshore wind power, on the sale and financing of a 50 percent stake in Walney Extension, a U.K. offshore wind farm project in the Irish Sea. The offshore wind farm will have a total capacity of 659 megawatts — enough to power more than 500,000 U.K. homes with clean, renewable energy. The proceeds of the £2 billion sale will partially fund the construction of the offshore wind farm, which will be the largest in the world once commissioned. Citi acted as the sole placement agent for a $307.5 million debt private placement for an Infrastructure Public Private Partnership to develop, finance, construct, operate and maintain the on-campus housing portfolio for Wayne State University in Detroit, Michigan. Corvias, LLC provided the equity. The partnership includes construction of 841 new beds, renovation of 368 beds and the management of the existing 2,950 beds. The construction is essential to meet exploding student demand for housing at Wayne State, a premier institution and Detroit's only public research university.
- Citi executed one of its most ambitious FinTech programs in 2017: the Citi Tech for Integrity (T4I) Challenge. The global open innovation competition, led by Citi in collaboration with public and private sector allies, sought to source innovation in a number of areas, including government transactions and procurement; culture, ethics and citizen engagement; reduction of red tape; and information security and identity. The T4I strategic allies included Clifford Chance, Facebook, IBM, Let's Talk Payments, Mastercard, Microsoft and PwC. From more than 1,000 initial registrations when the competition launched, Citi invited 96 finalists to present their ideas at Demo Days around the world. Through T4I, Citi and its allies helped to identify a number of promising solutions with the opportunity to develop further and move toward market implementation to help tackle corruption around the world.
- Citi received several top awards from International Financing Review in 2017, including Best Global Bond House, Best Bank for Governments and Best Global Credit Derivatives House, as well as regional and country honors, including Best Bank in Asia, Best EMEA Equity House, Best North America Equity House, Best North America Financial Bond House, Best U.S. Bond House and Best Latin America Bond House.
- Citi Private Bank was awarded several prestigious accolades, including Best Private Bank for Customer Service and Best Global Brand in Private Banking from The Banker and Professional Wealth Management Global Private Banking; Outstanding Private Bank for Ultra High-Net-Worth Clients from Private Banker International Global Wealth Summit; and the Law Firm Group was voted Best Private Banking Services; Wealth Management/Financial Asset Advisory Provider, Business Bank and Attorney Escrow Services from The National Law Journal.
Lending and advisory
Citi's Corporate and Investment Banking division provides comprehensive relationship coverage to ensure the best possible service and responsiveness to clients. With its strong banker presence in many countries, Citi uses sector and product expertise to deliver global capabilities to clients wherever they choose to compete. Citi's Corporate and Investment Banking client teams are organized by industry and by country. Each team is composed of two parts: Investment Banking Strategic Coverage Officers who focus on mergers and acquisitions and equity and related strategic financing solutions, while Corporate Bankers — in partnership with Citi's Capital Markets specialists and with support from the Global Subsidiaries Group — deliver corporate banking and corporate finance services to global, regional and local clients. By serving these companies, we help them grow, creating jobs and economic value at home and in communities worldwide.
Citi played a key role in some of 2017's most significant transactions, including its role as financial advisor to Intel Corporation on its $14 billion acquisition of Mobileye N.V. Citi served as a financial advisor to Johnson & Johnson on its $31 billion acquisition of Actelion, as well as a financial advisor to BD (Becton, Dickinson and Company) on its approximately $25 billion acquisition of C.R. Bard, Inc. and provided the $16 billion sole committed bridge in support of the transaction. Citi also served as exclusive financial advisor to Deere & Company on its $5.3 billion acquisition of Wirtgen Group. The transaction represents Deere's largest M&A transaction in its 180-year history.
Accessing global markets
Citi's Markets and Securities Services business provides world-class financial products and services as diverse as the needs of the thousands of corporations, institutions, governments and investors that Citi serves. Citi works to enrich the relationships, products and technology that define its market-making presence. The global breadth, product depth and strength of Citi's sales and trading, distribution and research capabilities span a broad range of asset classes, currencies, sectors and products, including equities, commodities, credit, foreign exchange, emerging markets, G10 rates, municipals, prime, futures and securities services businesses, providing customized solutions that support the diverse investment and transaction strategies of investors and intermediaries worldwide.
- Citi won top honors in Euromoney's Global Awards for Excellence, including Best Digital Bank, Best Bank for Markets and Best Bank for Transaction Services, as well as Best Bank for Markets in Latin America and Western Europe. Also Best Bank for Financing in Central and Eastern Europe, Best Bank for Transaction Services in Africa, Best Investment Bank in Argentina, Africa, Finland, Ireland, India, Turkey and Greece, and #1 Cash Management Bank in Latin America.
- Global Finance named Citi Best Global Custodian Bank, Securities Lender and Best Corporate/Institutional Digital Bank in Latin America, as well as Best Digital Bank for Corporate/Institutional and Consumer Banking in Asia Pacific.
- Citi was awarded Risk's OTC Client Clearer of the Year Award for the third year, as well as Derivatives Clearing Bank of the Year from Global Capital.
- Citi boasted the Most Rising Stars in Equity Research from Institutional Investor magazine.
- CitiDirect BE ranked #1 in Greenwich Associates' Digital Banking Benchmarking Study.
- Citi was awarded the 2017 Euromoney Magazine inaugural award for the "World's Best Bank for Financial Inclusion" acknowledging Citi's pioneering partnerships with governments, clients and microfinance institutions to build a more inclusive financial services industry that better serves the unbanked.
Citi ranked first in Fixed Income Market Share globally for the third consecutive year according to Greenwich Associates' annual benchmarking study. With a global fixed income market share topping 10 percent, Citi has grown its share more than any other sell-side firm over the last 10 years. Citi's leading market position is driven by its strength in Global Credit and Global Rates, ranked #1, respectively, along with the top spot in Municipal Bonds. Citi also ranked #1 in Sales Quality, Trading Quality and e-Trading, according to the study.
Awarded Best Global Digital Bank by Euromoney in 2017, Citi's digital mindset has never broken from the path of progress. Throughout 2017, we invested in the digital ecosystem to further enhance the client experience, sales trading and analytics capabilities and productivity. Citi is one of the leading dealers engaged in actively identifying, evaluating and investing in FinTech firms and deploying innovations across all capital markets asset classes. Citi also partnered with WeWork and opened a London-based Innovations Lab. In Business Intelligence and Big Data Analytics, several leading data capabilities — including Velocity Clarity — went live using natural language processing, and investments were made in blockchain technology. Citi Velocity®, the award-winning capital markets platform, leverages the power of agile business and technology teams, bringing two software releases per day on average to our global client base.
Citi secured the top spot as the nation's #1 Affordable Housing Lender for the seventh consecutive year, according to Affordable Housing Finance magazine, for its commitment to projects such as Draper Hall, a former nurses' dormitory in East Harlem that was made over to include access to services and open space, providing 203 units of affordable housing for seniors. SKA Marin's Draper Hall won Affordable Housing Finance's Best Project of the Year for a combination of new construction and adaptive reuse.
In March, Citi announced the hiring of womenowned firms as lead managers of a $2.5 billion bond issuance on behalf of Citibank, N.A, illustrating Citi's deep, long-standing commitment to diversity and inclusion and to the growth and success of women, minority and veteran-owned businesses.
Citi raised $6.25 million in its fifth annual e for Education campaign, a global initiative that has raised more than $22.5 million for education-focused nonprofits in the last five years. The funds raised will be shared equally among seven educationfocused non-profits and will contribute to several key initiatives supporting youth education and improving literacy globally.
Citi Private Bank is dedicated to serving the world's wealthiest individuals and families. Its unique business model enables us to focus on fewer, larger and more sophisticated clients with a net worth in excess of $100 million. Private Bank clients enjoy an entirely customized experience with access to a comprehensive range of products and services.
Its exclusive Global Client Service facilitates clients' growing appetite for global financial assets by leveraging Citi's offices and capabilities worldwide, allowing our clients to open accounts across the globe with dedicated local bankers who, together, will work as one united team to provide a seamless cross-border service. This translates into tailored advice, competitive pricing and timely execution for their capital markets needs, financing and refinancing in both commercial and residential real estate globally, and access to Citi's Corporate and Investment Bank locally for business activities in their respective region.
With more than a thousand Family Office clients around the world, Citi Private Bank's teams understand the challenges that families and family office executives regularly face: serving family offices of varying size and complexity, executing multi-disciplinary strategies based upon each client's requirements, working with each family to create a strategy to help meet the family's unique objectives, and combining the personalized service of a private bank with sophisticated cross-border strategies that are typically reserved for major institutions. Citi frequently serves clients with family members, businesses and foundations that span multiple geographies around the world, and regional client teams work with a small number of Family Office clients in order to ensure high levels of service. This extensive offering includes brokerage, investment management, lending, banking, trust, custody, and a wide range of corporate advisory and financing services.
Citi was granted a license by the Capital Market Authority in Saudi Arabia that will enable the bank to provide a full range of investment banking, debt and equity capital markets, and securities research services to local and international institutional clients.
Citi Private Bank has deep experience with the transition of personal wealth following significant liquidity events, and our partnership with other businesses in ICG enables its shared clients to seamlessly manage both their business and private financial interests. Citi is committed to objective advice and a truly open architecture investment platform, and with access to global capital markets, cash management, lending solutions, wealth planning and trust services, we can meet the needs of the world's most sophisticated clients.
In 2017, Citi hosted Private Bank client events in Cambridge, Florence, New York, San Francisco and Shanghai, among others, on topics ranging from disruptive technology to family office management and planning to renaissance art.
Citi's Treasury and Trade Solutions (TTS) business provides integrated cash management and trade finance services to multinational corporations, financial institutions and public sector organizations around the globe. With the industry's most comprehensive suite of digital-enabled platforms, tools and analytics, TTS leads the way in delivering innovative and tailored solutions to clients. Offerings include payments, receivables, liquidity management and investment services, working capital solutions, commercial card programs and trade finance. Based on the belief that client experience is the driver of sustainable differentiation, TTS has focused its efforts on transforming its business to deliver a seamless, endto-end client experience through the development of its capabilities, client advocacy, network management and service delivery across the entire organization.
In 2017, TTS improved the efficiency of its global network by launching APIdriven connectivity services and global solutions for payments and receivables. The CitiConnect® API allows clients to directly connect with Citi across 96 countries to access services using their own Treasury Workstations or Enterprise Resource Platform, providing convenience, potential cost savings and reduced risk.
Partnering with Nasdaq, Citi participated in a pioneering blockchain and global banking integration that enabled straight-through payment processing and automated reconciliation by using a distributed ledger to manage payment instructions. This collaboration created a solution that integrates blockchain technology with Citi's global networkleveraging API technology. Citi also provided the payment processing services for Allianz Global Corporate & Specialty SE in a successful trial of blockchain technology for a global captive insurance program, including cash transfer between countries.
TTS continues building integrated global solutions to optimize its global payments network in an efficient and consistent manner. These solutions offer clients the ability to participate in commerce in new markets, through low-cost payment options delivered through digital channels. Citi expanded the global reach of its services to support the growing needs of corporations to receive and initiate payments. Citi Payer ID was launched in 17 new markets across North America and Western Europe, making it now available in 44 countries to allow institutional clients to manage their working capital with greater efficiency. Citi's WorldLink® Payment Service capability expanded cross-border ACH capabilities to 60 countries, offering a simple, global and digital cross-currency payments solution with service offered across a range of payment options in 135 currencies and 195 countries.
Our Trade business continues to help our clients with various strategies to optimize their working capital around the globe. In addition, we continue to drive innovation in our back office using optical character recognition to drive efficiencies and enhance our client experience.
Citi, International Financing Review's Best Bank in Asia, and top-ranked Asia Pacific Fixed Income Bank, according to Greenwich Associates, became one of the first batch of Bond Connect trading dealers and opened its first Korea Desk to expand service for Korean corporates in overseas markets.
Citi is committed to driving positive economic and social impacts by deploying the resources and strengths of our core business and operations. The Citi Foundation supports programs in its target focus areas that help promote economic progress and improve the lives of people in low-income communities around the world. We continually look for ways to more effectively achieve our mission of enabling growth and progress by serving as collaborative problem solvers in addressing social and environmental challenges that impact our work today and for future generations. We believe this approach to corporate citizenship is fundamental to the long-term success of the communities where we operate, our clients and our own company.
Our impact and reach would not be possible without the commitment, expertise and resources of partner organizations — from our clients and suppliers to non-governmental organizations, the public sector and other stakeholders. These partnerships enable us to understand and stay on top of the changing social and economic landscape globally and, together, identify and implement solutions that help address the world's toughest challenges.
Many of these challenges — including achieving financial security for low-income communities, tackling youth unemployment and combating climate change — are aligned with the Sustainable Development Goals (SDGs), the 2030 Agenda for Sustainable Development adopted by the 193 Member States of the United Nations in 2015. As a global bank, Citi believes it is important to take a leading role in contributing to the SDGs.
In 2016, Citi released Banking on 2030: Citi & the Sustainable Development Goals, a report that looks at how Citi and the Citi Foundation directly contribute to the SDGs, with a focus on seven goals where we are particularly well-positioned to drive significant progress based on our core business and specialized Citizenship initiatives.
Issues core to our Citizenship efforts include:
Jobs and the next generation
The world of work continues to evolve at a rapid pace. The changing job landscape, coupled with a persistently high youth unemployment rate, requires young people to have the power skills necessary — like communications, networking and problem-solving experiences — to compete within high-growth fields, including technology and healthcare. Through Pathways to Progress, Citi and the Citi Foundation are connecting young people to jobs, financial education and leadership opportunities that prepare them for a 21st century job market. In February 2017, under Pathways to Progress, the Citi Foundation announced its largest philanthropic commitment ever to invest $100 million to reach 500,000 youth by 2020. Additionally, we are leveraging the time and talents of 10,000 Citi volunteers to act as mentors and coaches who can provide guidance to help young people move toward their career goals.
Together with our nonprofit partners across the globe, we have reached more than 200,000 young people in 2017 and helped them gain employability skills and connect to new or first job opportunities. Over 3,500 Citi employees have volunteered to support the economic aspirations of young people globally.
In 2017, as part of Pathways to Progress, the Citi Foundation became the first foundation to sign on to the Global Initiative on Decent Jobs for Youth, which is aligned with the SDGs. The Citi Foundation is committed to supporting the operationalization of the International Labour Organization's Global Initiative and to report the outcomes of its work and how it contributes to the provision of decent jobs for youth.
Pathways to Progress
Meet Mery > "When I interviewed with companies, they told me I didn't have enough experience or that they would rather hire a man."
Mery had a degree in computer and information sciences but was unable to secure a job in the tech industry. She was then recruited by Laboratoria, a nonprofit organization that trains young women in Lima, Peru to become web developers. After excelling in her pre-admission classes and using the knowledge she acquired during the program, Mery secured a full-time job as a front-end developer. She is currently building a web platform that will allow companies to post job opportunities exclusively for Laboratoria graduates.
Local governments and community organizations are often on the front line of complex challenges like strained infrastructure, affordable housing shortages and unemployment, particularly in low-income areas. But local leaders, in both the public and nonprofit sectors, are continually facing budget and resource shortages. Increased collaboration and investment in innovative, efficient solutions can help address old problems in new ways.
Some of these efforts include supporting integral parts of a thriving community, including small businesses and affordable housing. In 2017, Citi invested more than $11 billion in small business lending in the U.S. We also financed over $4.7 billion in affordable housing projects in 2017.
To further test new ways to drive sustainable growth while increasing economic opportunity for lower-income residents, the Citi Foundation's City Accelerator program, in partnership with Living Cities, has worked directly with 17 municipalities in the U.S. since 2014. For example, the city of San Francisco used its City Accelerator support to develop a financing plan to reinforce the city's coastal seawall, which protects vital public transportation assets and land designated for affordable housing on a parcel adjacent to the Port of San Francisco. Participation in the City Accelerator program resulted in a crossdepartmental partnership that worked to successfully include the seawall project in the city's 10-year capital plan and secure millions of capital funding dollars.
In 2017, the Citi Foundation and Living Cities announced the expansion of the City Accelerator program to five additional U.S. cities — Charlotte, Chicago, Los Angeles, Memphis and Milwaukee. These cities will work together over the next year to refine their approach to procurement spending, pursuing at least one new strategy to increase the diversity of municipal vendors and contractors and direct more spend to local minority-owned businesses.
Citi and the Citi Foundation also work with community organizations to amplify their impact. Through the Community Progress Makers Fund, the Citi Foundation is helping to build vibrant, sustainable cities that offer economic opportunities for low-income residents. The $20 million initiative provided multiyear core operating grant support to 40 high-impact community organizations in six U.S. cities. Over two years, Community Progress Makers helped 14,000 people build financial assets, including $137 million in tax credits and savings; connected 3,000 youth to jobs; and helped 1,000 small businesses expand or improve. More than 120 Citi employees provided pro bono, volunteer advisory services to these community-based organizations. In 2017, the Citi Foundation announced an additional $20 million investment in the Community Progress Makers Fund.
As part of our ongoing support of the Paris Agreement and as the flagship initiative of our Sustainable Progress Strategy, Citi continues to make notable progress on our commitment to finance and facilitate $100 billion in environmental finance activity such as renewable energy, sustainable infrastructure and clean technology projects that are helping to build a more sustainable economy.
In our latest report, Sustainable Growth at Citi: Progress and Impacts of Citi's $100 Billion Environmental Finance Goal, we share details about our progress to date, how we're measuring our environmental and social impacts and what we're learning in partnership with our clients.
In the first four years of our 10-year commitment, Citi has already financed and facilitated $57 billion in environmental solutions in partnership with our clients, which will help address climate change and benefit society.
$100 BILLION ENVIRONMENTAL FINANCE GOAL: FINANCIAL HIGHLIGHTS, 2014–2017
In 2017, we also announced an ambitious goal to source renewable power for 100 percent of our global energy needs by 2020. For the 55+ million square feet of real estate owned or leased globally, Citi will consider onsite power generation, power purchase agreements for energy-intensive properties such as data centers, and appropriate use of renewable energy credits, as well as continued focus on energy efficiency as a critical component of its strategy. Citi's new global headquarters currently under construction in New York City is being targeted for LEED Platinum, the highest level of certification under the U.S. Green Building Council.
In 2017, Citi provided tax equity financing with BHE Renewables (a division of Berkshire Hathaway Energy) to the Goldwind Americas 160 megawatt Rattlesnake Wind Project in McCulloch County, Texas. Citi also provided the long-term fixed-price power hedge. Goldwind is a subsidiary of China-based Xinjiang Goldwind Science & Technology Co. Ltd., the largest manufacturer of permanent magnet direct-drive wind turbines in the world. This project will be Goldwind's largest U.S. project to date, utilizing 64 of its turbines. The Rattlesnake Wind Project, valued at approximately $250 million, will bring significant economic benefit to the community of McCulloch County, and the company estimates it will support approximately 250 well-paying construction and servicerelated jobs. For more information on our environmental finance activities, please visit citi.com/citi/sustainability.
Global Community Day
In 2017, Citi celebrated its 12th annual Global Community Day. More than 100,000 Citi employees, friends and families participated in volunteer projects ranging from revitalizing parks to providing youth with financial education, mentorship and literacy training, and serving and collecting food. Together, volunteers delivered more than 29,000 hours of financial education; provided over 14,300 youth with access to education and career activities, including mentoring; and built or rehabilitated in excess of 380 homes to provide families with a safe place to thrive.
More than 1,500 service projects were held in 500 cities and 91 countries for Citi's 12th annual Global Community Day.
"At the end of the day, what matters to us most is that all of us who come to work here from different backgrounds, thoughts, experiences and perspectives can feel good and proud about our differences and our diversity. As Citi colleagues, we should all feel pride in who we are, where we're from, and what we do for our clients and for our communities."
— CEO Mike Corbat
- Citi celebrated International Women's Day with over 238 events in 75 countries
- Citi signs the Masterpiece Cakeshop Ltd. V. The Colorado Civil Rights Commission amicus brief in support of the LGBTQ community
- Citi leaders Raymond J. Mcguire and Mark Mason named to Black Enterprise's Most Powerful Executives list
- Citi earns perfect score on Human Rights Campaign Foundation's Corporate Equality Index for the 14th consecutive year
- Citi had six senior women on the American Banker magazine's Most Powerful Women in Banking lists
- Citi Veterans Network Gala Dinner raised more than £300,000 for military charities across the U.K.
- Citi was awarded the Gold Award as a Military Friendly employer
- Minds at Citi, an internal initiative focused on mental health, launched in over 14 countries
- Citi hosted the 15th annual women of ALPFA summit focused on Latina empowerment in the workplace
- Citi has launched more than 150 Network chapters as part of our Employee Network Program
IF ONE GIRL WITH AN EDUCATION CAN CHANGE THE WORLD, WHAT CAN 130 MILLION DO?
More than 130 million girls are not in school, due to poverty, conflict, and other societal barriers. Malala Fund works to provide access to 12 years of free, safe, quality education for all girls. To achieve this goal, it offers financial support to education advocates around the world.
Needing a bank with global reach, Malala Fund turned to Citi. With presence in nearly 100 countries, Citi assures these advocates ready, reliable access to the resources they need and enables Malala Fund to expand its efforts with confidence. Education for a girl doesn't just improve her life; Malala is proof that it can help change the world.
For over 200 years, Citi's job has been to believe in people and help make their ideas a reality.
Citigroup common stock is listed on the NYSE under the ticker symbol "C" and on the Mexico Stock Exchange. Citigroup preferred stock Series C, J, K, L and S are also listed on the NYSE.
Because Citigroup's common stock is listed on the NYSE, the Chief Executive Officer is required to make an annual certification to the NYSE stating that he was not aware of any violation by Citigroup of the corporate governance listing standards of the NYSE. The annual certification to that effect was made to the NYSE on May 22, 2017.
As of January 31, 2018, Citigroup had approximately 65,691 common stockholders of record. This figure does not represent the actual number of beneficial owners of common stock because shares are frequently held in "street name" by securities dealers and others for the benefit of individual owners who may vote the shares.
Stockholder address changes and inquiries regarding stock transfers, dividend replacement, 1099-DIV reporting and lost securities for common and preferred stock should be directed to:
Holders of Golden State Bancorp, Associates First Capital Corporation or Citicorp common stock should arrange to exchange their certificates by contacting:
On May 9, 2011, Citi effected a 1-for-10 reverse stock split. All Citi common stock certificates issued prior to that date must be exchanged for new certificates by contacting Computershare at the address noted above.
Citi's 2017 Form 10-K filed with the SEC, as well as other annual and quarterly reports, are available from Citi Document Services toll free at 877 936 2737 (outside the United States at 716 730 8055), by e-mailing a request to firstname.lastname@example.org or by writing to:
Citi Document Services
540 Crosspoint Parkway
Getzville, NY 14068
Information about Citi, including quarterly earnings releases and filings with the U.S. Securities and Exchange Commission, can be accessed via Citi's website at www.citigroup.com. Stockholder inquiries can also be directed by e-mail to email@example.com.
The cover and editorial section of this annual report are printed on McCoy, manufactured by Sappi North America with 10% PCW and FSC®
Chain of Custody Certified. 100% of the electricity used to manufacture McCoy is Green-e® certified renewable energy.
The financial section of this annual report is printed on FSC® certified Accent Opaque from International Paper. International Paper's U.S. mills are certified to the FSC®, PEFC and SFI® Chain of Custody standards.
Citi, Citi and Arc Design and other marks used herein are service marks of Citigroup Inc. or its affiliates, used and registered throughout the world.
All advertising featured in this report ran in the U.S.
Apple, the Apple logo and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries.