Summary

• Citigroup Inc. is a multinational investment bank and financial services corporation.
• Citigroup offers a wide range of financial services to consumers, businesses, governments, and institutions around the world. It is a global leader in investment banking, retail banking, commercial banking, and asset management.
• Citi launches electronic trade loan facilities for U.S. Citi Commercial Bank clients.

Citigroup Inc. (NYSE: C, LSE:0R01) is a multinational investment bank and financial services corporation headquartered in New York City. It is one of the Big Four banks in the United States. Citigroup offers a wide range of financial services to consumers, businesses, governments, and institutions around the world. It is a global leader in investment banking, retail banking, commercial banking, and asset management. Citigroup has over 200 million customer accounts and does business in more than 160 countries.

Recent Developments

Citi launches electronic trade loan facilities for U.S. Citi Commercial Bank clients¹

July 19, 2023; The new offering, for U.S. Citi Commercial Bank (CCB) clients, is provided by Treasury and Trade Solutions (TTS) through the CitiDirect® platform to support cross-border trade flows, bringing a scalable solution to CCB clients

Citi has launched its Trade and Working Capital eLoans solution for its U.S. CCB clients. The solution is designed to help clients meet their current and projected working capital needs through loan advances via Citi’s easy to use and secure eLoans platform. The eLoans platform aims to support clients by: allowing qualified clients to access liquidity for running their commercial business, reducing manual touch points, while also allowing the client to manage outstanding loans via repayment features; enhancing self-service reporting via automated notifications among other features.

Financial Highlights

Second Quarter 2023 Results²

July 14, 2023; Citigroup Inc. reported net income for the second quarter 2023 of $2.9 billion, or $1.33 per diluted share, on revenues of $19.4 billion. This compares to net income of $4.5 billion, or $2.19 per diluted share, on revenues of $19.6 billion for the second quarter 2022.

Second quarter results included divestiture-related impacts of $(73) million in earnings before taxes ($(92) million after-tax), primarily driven by separation costs related to Mexico and severance costs in Asia exit markets, which were both recorded in Legacy Franchises. Excluding these divestiture-related impacts, earnings per share was $1.37. This compares to divestiture-related impacts in the second quarter 2022 of $48 million in earnings before taxes ($35 million after-tax), also recorded in Legacy Franchises, and earnings per share in the second quarter of 2022, excluding divestiture-related impacts, of $2.17.

Citigroup revenues of $19.4 billion in the second quarter 2023 decreased 1%. The lower revenues reflected strength across Services and US Personal Banking which was more than offset by declines in Markets, Investment Banking, and Global Wealth Management, as well as the revenue reduction from the exited markets and continued wind-downs. The decline in revenues was also partially offset by higher revenues in Corporate / Other.

Citigroup operating expenses of $13.6 billion in the second quarter 2023 increased 9%, largely driven by investments in risk and control, business-led and enterprise-led investments, volume growth and macro factors, including inflation, as well as severance. The expense increase was partially offset by productivity savings and an expense reduction from the exited markets and continued wind-downs.

Citigroup cost of credit was approximately $1.8 billion in the second quarter 2023, compared to $1.3 billion in the prior-year period, primarily driven by the continued normalization in net credit losses. A net build in the allowance for credit losses (ACL) for loans and unfunded commitments of $161 million was primarily driven by Branded Cards and Retail Services, largely related to growth in card balances. Additionally, other provisions were $159 million in the quarter.

Net income of $2.9 billion decreased 36% from the prior-year period. Excluding divestiture-related impacts, net income decreased 33%. The decrease in net income was primarily driven by higher expenses, higher cost of credit and the lower revenues.

Earnings per share of $1.33 decreased 39% from the prior-year period, reflecting the lower net income and an approximate 1% increase in average diluted shares outstanding.

Company Overview

Citigroup is a global diversified financial service holding company whose businesses provide consumers, corporations, governments and institutions with a broad, yet focused, range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management. Citi has approximately 200 million customer accounts and does business in nearly 160 countries and jurisdictions. At December 31, 2022, Citi had approximately 240,000 full-time employees.³

Business Segments

Institutional Clients Group

Institutional Clients Group (ICG) includes Services, Markets and Banking. ICG provides corporate, institutional and public sector clients around the world with a full range of wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, cash management, trade finance and securities services. ICG transacts with clients in both cash instruments and derivatives, including fixed income, foreign currency, equity and commodity products.

ICG’s revenue is generated primarily from fees and spreads associated with these activities. ICG earns fee income for assisting clients with transactional services and clearing and providing brokerage and investment banking services and other such activities. Such fees are recognized at the point in time when Citigroup’s performance under the terms of a contractual arrangement is completed, which is typically at the trade/execution date or closing of a transaction. Revenue generated from these activities is recorded in Commissions and fees and Investment banking fees. Revenue is also generated from assets under custody and administration, which is recognized as/when the associated promised service is satisfied, which normally occurs at the point in time the service is requested by the customer and provided by Citi. Revenue generated from these activities is primarily recorded in Administration and other fiduciary fees.

ICG’s international presence is supported by trading floors in approximately 80 countries and a proprietary network in 95 countries and jurisdictions. As previously disclosed, Citi intends to end nearly all of the institutional banking services it offers in Russia by the end of the first quarter of 2023. Going forward, Citi’s only operations in Russia will be those necessary to fulfill its remaining legal and regulatory obligations.

At December 31, 2022, ICG had $1.7 trillion in assets and $845 billion in deposits. Securities services managed $22.2 trillion in assets under custody and administration at December 31, 2022, of which Citi provided both custody and administrative services to certain clients related to $1.9 trillion of such assets. Managed assets under trust were $4.0 trillion at December 31, 2022.

Personal Banking and Wealth Management

Personal Banking and Wealth Management (PBWM) consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking includes Retail banking, which provides traditional banking services to retail and small business customers. U.S. Personal Banking’s cards portfolio includes the following proprietary portfolios: Cash, Rewards and Value portfolios and co-branded cards (including, among others, American Airlines and Costco) within Branded cards, and co-brand and private label relationships (including, among others, The Home Depot, Best Buy, Sears and Macy’s) within Retail services. Global Wealth includes Private bank, Wealth at Work and Citigold and provides financial services to clients from affluent to ultra-high-net-worth through banking, lending, mortgages, investment, custody and trust product offerings in 20 countries, including the U.S., Mexico and four wealth management centers: Singapore, Hong Kong, the UAE and London.

At December 31, 2022, U.S. Personal Banking had 654 retail bank branches concentrated in the six key metropolitan areas of New York, Chicago, Los Angeles, San Francisco, Miami and Washington, D.C. U.S. Personal Banking had $151 billion in outstanding credit card balances, $113 billion in deposits and $37 billion in retail banking loans. At December 31, 2022, Global Wealth had $325 billion in deposits, $84 billion in mortgage loans, $61 billion in personal and small business loans and $5 billion in outstanding credit card balances.

Legacy Franchises

As of December 31, 2022, Legacy Franchises included  Asia Consumer Banking (Asia Consumer), representing the consumer banking operations of the remaining eight Asia and EMEA exit countries; (ii) Mexico Consumer Banking (Mexico Consumer) and Mexico Small Business and Middle-Market Banking (Mexico SBMM), collectively Mexico Consumer/SBMM, which Citi also plans to exit; and (iii) Legacy Holdings Assets (certain North America consumer mortgage loans and other legacy assets). Asia Consumer provides traditional retail banking and branded card products to retail and small business customers. Mexico Consumer/SBMM provides traditional retail banking and branded card products to consumers and small business customers and traditional middlemarket banking products and services to commercial customers through Citibanamex.

Legacy Franchises also included the following consumer banking businesses prior to their sale: Australia, until its closing on June 1, 2022; the Philippines, until its closing on August 1, 2022; Thailand and Malaysia, until their closings on November 1, 2022; and Bahrain, until its closing on December 1, 2022. In addition, Citi has entered into agreements to sell its consumer banking businesses in India, Indonesia, Taiwan and Vietnam, and announced its wind-down of consumer banking operations in Korea and China and consumer banking and local commercial banking operations in Russia. In December 2022, Citi announced the pursuit of sales of portfolios within its China consumer banking business, subject to applicable regulations.

At December 31, 2022, on a combined basis, Legacy Franchises had 1,438 retail branches, $23 billion in retail banking loans and $51 billion in deposits. In addition, the businesses had $8 billion in outstanding card loan balances, and Mexico SBMM had $7 billion in outstanding corporate loan balances. These amounts exclude approximately $12 billion of loans ($9 billion of retail banking loans and $3 billion of credit card loan balances) and approximately $16 billion of deposits, all of which were reclassified to Other assets and Other liabilities held-for-sale (HFS) as a result of Citi’s agreements to sell its consumer banking businesses in India, Indonesia, Taiwan and Vietnam.

Global Presence

The company's global network gives it the ability to connect and do business in nearly 160 countries using local banking licenses.⁴

References

1. ^ https://www.citigroup.com/global/news/press-release/2023/citi-launches-electronic-trade-loan-facilities-for-u-s-citi-commercial-bank-clients
2. ^ https://www.citigroup.com/rcs/citigpa/storage/public/citi-2Q23-press-release.pdf
3. ^ https://www.citigroup.com/rcs/citigpa/storage/public/citi-2022-annual-report.pdf
4. ^ https://www.citigroup.com/global/about-us/global-presence