Michael Corbat
CEO, Citi
As prepared for delivery
April 21, 2020

Remarks by CEO Michael Corbat at Citi’s 2020 Annual Meeting

Thank you, Mr. Chair. And good morning, good afternoon and good evening to all my fellow shareholders attending remotely from locations around the world.

As John observed earlier, the health and safety of our shareholders, directors, officers and colleagues are our highest priority. That made a virtual Annual Meeting clearly the right approach. While we made that decision under extenuating circumstances, this is just one of many actions we are taking in response to the spread of a virus that has a velocity and viciousness not seen in generations.

As I have noted since this crisis began, we are not facing a financial crisis, but a public health crisis with severe economic ramifications. In terms of Citi, the hard work we put in over the past several years toward our goal of being an indisputably strong and stable institution has put us in a very good position, from a capital, liquidity, and balance sheet perspective, to get through this.

We have the resources we need to serve our clients without jeopardizing our safety and soundness. And our investments in risk management and controls, while never complete, are serving us well in the face of a severe economic downturn and the accompanying market volatility.

With that said, and keeping in mind that 2019 feels like a long time ago, I am now going to briefly recap last year’s performance and tell you in more detail how we have responded to COVID-19.

2019 Results

In 2019, Citi delivered its most profitable year since 2006. Our results were driven by revenue growth and disciplined expense management, even as we continued to make significant investments in our franchise, including in our technology infrastructure and controls.

In our Global Consumer Bank, we drove 4% annual underlying revenue growth with contributions from all three regions: the U.S., Mexico and Asia. In our largest Consumer market, the U.S., we affirmed the soundness of our strategy of unifying Branded Cards and Retail Banking by driving 8% growth in Branded Cards and attracting $6 billion in digital deposit sales—five times our volume in 2018.

Our Institutional Clients Group also had a good year, generating 4% underlying revenue growth. Our Banking, Capital Markets and Advisory (BCMA) team gained share across M&A and both the equity and debt capital markets. Treasury and Trade Solutions (TTS) maintained its industry-leading position as our clients’ first call to manage cash, process payments and create solutions to supply chain challenges across markets and currencies. For a fourth year in a row, Markets and Securities Services ranked #1 in the Greenwich Associates’ Global Fixed Income Dealer rankings. And our Private Bank saw strong growth across products and geographies.

In total, we produced $19.4 billion of net income, earned on $74.3 billion in revenue, $1.4 billion higher than in 2018. Our earnings per share of $8.04 were up over 20% year-over-year. Our Return on Tangible Common Equity was 12.1%—just above our 12% target and 120 basis points higher than the year before. We also returned $22.3 billion of capital to you through buybacks and dividends.

1Q 2020 Results

In the first quarter of 2020, while we sustained momentum in many of our products, the impacts of COVID-19 lowered our net income significantly.

Last Wednesday, we reported earnings of $2.5 billion for the first quarter. The $20.7 billion in revenue was 12% higher than a year ago. We kept expenses roughly flat year-over-year, and had a 27% improvement in our operating margin compared to the prior year period.

Our lower net income was driven by increased credit costs due to the deteriorating economic outlook combined with the impact of the new CECL accounting standard.

In our Institutional Clients Group, performance varied among different businesses. We had a strong performance in Markets and the Private Bank as we supported our clients through turbulent conditions. TTS had lower revenues due to rate reductions despite strong client engagement.

In our Global Consumer Bank, revenues grew 2% across the board. In the U.S., first quarter revenues of $5.2 billion were up 4% over last year. Branded Cards revenues rose 7%, reflecting strong client engagement through February, with—not surprisingly—a significant drop off after then. Internationally, Asia revenues reflected the fact that COVID-19 was first to hit that part of the world, while in Mexico and Latin America the likely worst impacts are still to come.

The Global Pandemic and Citi’s Comprehensive Crisis Response

The revenue performance for the quarter was solid as the economic impact of COVID 19 didn’t emerge until late in the quarter. However, over the past weeks it has become clear that our clients, colleagues and communities are collectively confronting a grave crisis that has sparked a sudden and severe economic downturn.

As a company, we are doing everything we can to support our economies around the world and serve as a critical catalyst for economic activity. A global financial institution like ours has an important role to play as a transmission mechanism for policy makers, both fiscal and monetary, which they can use as a bridge to the real economy.

To support our consumer clients, we were one of the first banks to announce assistance measures for impacted consumers and small businesses in the U.S. We are waiving monthly service fees and penalties for early CD withdrawal for eligible retail banking and small business clients, and providing after hours and weekend support.

While we aren’t a large lender to small businesses, we launched a new digital platform and will be able to resume accepting applications for the Small Business Administration’s Paycheck Protection Program when additional funding is authorized.

For our institutional clients, we are creating new payments, supply chain, liquidity optimization and trade finance solutions for clients whose needs are unusually urgent at present. We are advising on complex M&A transactions, IPOs, rights offerings and have helped clients issue a record volume of debt under volatile market conditions. We are booking loans, opening accounts and onboarding clients digitally. And we have been working long hours in the secondary markets, helping issuers and investors alike.

The crisis is accelerating the broad shift to digital engagement that had already been transforming our industry. From putting letters of credit on blockchains to digitally onboarding clients and conducting roadshows virtually, we are trying to rip up what few paper processes we have left. Those who hadn’t done much with us online are securely engaging with us digitally. For example, in our U.S. consumer business, mobile adoption was up 13% year over year. Hopefully, these behavioral shifts will endure after this tragic situation subsides.

For colleagues, our guiding principle has been to keep on site only those who cannot possibly do their jobs remotely. In areas with high community transmission, virtually all of our traders are off the floors. On the Consumer side, we have temporarily closed a number of branches and reduced hours with the objective of minimizing the amount of time our staff need to be supporting and protecting our clients. We want to do everything we can to protect the health of our colleagues and their families.

During this crisis, my Citi colleagues have repeatedly demonstrated why they are our most valuable asset. And many of them are going through the same struggles our customers are. That’s why for some 75,000 of our staff globally, we have distributed a Special Compensation Award in cash to help alleviate some of the stress resulting from the current situation.

To support our communities, we are proud to announce that to date, Citi has committed over $65 million to COVID-19-related relief efforts around the world. That amount includes nearly $36 million in charitable contributions and nearly $30 million in philanthropic support from the Citi Foundation.

Every day, my Citi colleagues are thinking of new ways to help.

We have donated unused personal protective equipment from our on-site clinics to healthcare workers. At our headquarters in lower Manhattan, we have re-purposed our cafeteria to make meals for local food banks at the pace of 1,000 a day.

And yesterday, we launched a new employee donation campaign called Double the Good. For every $1 donated by a Citi employee to an organization of their choice in support of COVID-19 relief, Citi will donate $1 to one of four organizations selected by each of Citi’s regions.

Over the past months, we have demonstrated the character of our firm by showing compassion for each other, supporting our communities and continually finding new ways to help those in need. We have acted decisively and urgently to address the crisis’ most immediate impacts, but also with discipline about running our firm for the long term.

I could not be prouder of my 200,000 colleagues who have responded to an extraordinary situation in an extraordinary manner. They are ensuring that we will emerge stronger from this crisis than when we entered it.

Thank you for this opportunity to share these thoughts with you today.

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