-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QFEokqTBi7wPdmjFHjlIwSaRbGVopewU8ue/w6+qMxci5pZt+9EyE3eZFsFSYZZP 517CeCEJ8LmOfeS66/0rQw== 0001005477-98-002952.txt : 19981026 0001005477-98-002952.hdr.sgml : 19981026 ACCESSION NUMBER: 0001005477-98-002952 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981021 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981023 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITICORP CENTRAL INDEX KEY: 0000020405 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 061515595 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05738 FILM NUMBER: 98729579 BUSINESS ADDRESS: STREET 1: 399 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10043 BUSINESS PHONE: 2125591000 MAIL ADDRESS: STREET 1: 425 PARK AVE- 2ND F STREET 2: ATTN: LEGAL AFFAIRS OFFICE CITY: NEW YORK STATE: NY ZIP: 10043 FORMER COMPANY: FORMER CONFORMED NAME: FIRST NATIONAL CITY CORP DATE OF NAME CHANGE: 19740414 FORMER COMPANY: FORMER CONFORMED NAME: CITY BANK OF NEW YORK NATIONAL ASSOCIATI DATE OF NAME CHANGE: 19680903 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1914 Date of Report (Date of earliest event reported): October 21, 1998 CITICORP (Exact name of registrant as specified in charter) Delaware 1-9924 52-1568099 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification Number) 399 Park Avenue, New York, New York 10043 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code) (212) 559-1000 NOT APPLICABLE (former name or former address, if changed since last report) Item 5. OTHER EVENTS. On October 21, 1998, Citigroup Inc. issued a press release. The text of the press release that relates to Citicorp follows. CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 CITICORP Citicorp net income totals $530 million on revenue of $6.1 billion
- ------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Summary of Results -------------------- % ---------------------- % (In Millions of Dollars) 1998 1997 Change 1998 1997 Change - ------------------------------------------------------------------------------------------------------------------- Adjusted Revenue (A) ............. $6,071 $5,944 2 $18,928 $17,318 9 -------------------- ---------------------- Adjusted Operating Expense (A) ... 3,923 3,364 17 11,214 9,753 15 Operating Margin ................. 2,148 2,580 (17) 7,714 7,565 2 Credit Costs (A) ................. 1,275 848 50 3,332 2,553 31 -------------------- ---------------------- Operating Margin Less Credit Costs 873 1,732 (50) 4,382 5,012 (13) Additional Provision ............. 25 25 -- 75 75 -- Restructuring Charge ............. -- 889 NM -- 889 NM -------------------- ---------------------- Income Before Taxes .............. $ 848 $ 818 4 $ 4,307 $ 4,048 6 ========================================================================= Net Income ....................... $ 530 $ 511 4 $ 2,692 $ 2,530 6 - ------------------------------------------========================================================================= Return on Common Equity (%) ...... 10.0 9.6 -- 17.6 17.0 -- Return on Assets (%) ............. 0.63 0.68 -- 1.11 1.16 -- Excluding Restructuring Charge Core Income (B) .................. $ 530 $1,067 (50) $ 2,692 $ 3,086 (13) Return on Common Equity (%) ...... 10.0 20.8 -- 17.6 20.8 -- Return on Assets (%) ............. 0.63 1.42 -- 1.11 1.41 -- - ------------------------------------------=========================================================================
(A) Citicorp's revenue is presented on a managed basis, principally adjusting for the effect of credit card securitization activity. See "Earnings Analysis" table in the Financial Supplement for further details. (B) Core income represents net income adjusted to exclude a restructuring charge of $556 million after-tax ($889 million pretax) in the 1997 third quarter. NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- Citicorp today reported income for the 1998 third quarter of $530 million, down $537 million from $1.1 billion (excluding the $556 million after-tax restructuring charge) in the 1997 third quarter. Generally strong Global Consumer results were reduced by a sharp decline in Global Corporate Banking resulting from previously disclosed after-tax losses of $240 million related to Russia ($384 million pretax), $97 million from marking to market fixed income inventories, and lower revenue from venture capital and Brady bonds. Net income in the 1997 third quarter included a $556 million restructuring charge ($889 million pretax). Adjusted revenue increased $127 million or 2%, reflecting a 19% increase in Global Consumer, predominately in the developed markets, which was reduced by an 18% decrease in Global Corporate Banking. Adjusted operating expense increased $559 million or 17% ($320 million or 10% excluding Universal Card Services -- UCS -- acquired in April 1998). Increased expense for preparations for the Year 2000 and EMU and the acquisition of certain assets and liabilities of Confia, as well as for advertising and marketing programs, and electronic banking initiatives represented approximately $166 million of the change from the 1997 third quarter. Foreign currency translation reduced adjusted revenue and operating expense growth by approximately 4 and 3 percentage points, respectively. Global Consumer credit costs were $1,044 million ($878 million excluding UCS) in the quarter, down $42 million from $1,086 million ($910 million excluding UCS) in the preceding quarter, and compared to $856 million a year ago, reflecting ratios of net credit losses to average managed loans of 2.69% (2.50% excluding UCS), 2.88% (2.66% excluding UCS), and 2.50% in the respective quarters. Commercial credit costs were $231 million, compared with an $8 million benefit in the 1 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 year ago quarter, principally reflecting writedowns associated with Russia, as well as Indonesia and Thailand, all partially offset by real estate recoveries. Pretax income in Asia Pacific of $204 million for the quarter was down $103 million or 34% from last year -- Global Consumer businesses were down $36 million or 24% while Global Corporate Banking results were down $67 million or 42%. Global Consumer business earns $477 million on revenue of $4.2 billion, Cards income up 18% from 1997
- ---------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Global Consumer -------------------- % ---------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 (A) 1997 Change - ---------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $4,199 $3,534 19 $11,748 $10,581 11 Adjusted Operating Expense ............ 2,407 2,011 20 6,779 5,880 15 -------------------- ---------------------- Operating Margin ...................... 1,792 1,523 18 4,969 4,701 6 Credit Costs (B) ...................... 1,044 856 22 3,016 2,672 13 -------------------- ---------------------- Operating Margin Less Credit Costs .... 748 667 12 1,953 2,029 (4) Additional Provision .................. 25 25 -- 75 75 -- -------------------- ---------------------- Income Before Taxes (C) ............... $ 723 $ 642 13 $ 1,878 $ 1,954 (4) ======================================================================= Core Business Income (C) .............. $ 477 $ 452 6 $ 1,264 $ 1,384 (9) ======================================================================= Net Income ............................ $ 477 $ 101 NM $ 1,264 $ 1,033 22 - -----------------------------------------------======================================================================= Average Assets (In Billions of Dollars) $ 144 $ 134 7 $ 139 $ 132 5 Return on Assets (C) (%) .............. 1.31 1.34 -- 1.22 1.40 -- - -----------------------------------------------=======================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Includes the effect of credit card securitization activity and the effect related to credit card receivables held for sale. (C) Excludes the 1997 third quarter restructuring charge of $580 million pretax ($351 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Global Consumer income before taxes in the 1998 third quarter was $723 million, up $81 million or 13% from $642 million (excluding the $580 million restructuring charge) in 1997, reflecting outstanding results in U.S. bankcards and in Japan, partially offset by lower earnings in Asia Pacific and Latin America. Global Consumer income before taxes increased $169 million or 31% from the 1998 second quarter, principally due to the significant improvement in the U.S. bankcards business. In the quarter, UCS' pretax loss of approximately $51 million ($32 million after-tax) reflected $107 million of acquisition premium costs (including funding costs associated with the acquisition purchase premium). The Global Consumer effective tax rate was 34% in the 1998 third quarter, up from 30% (excluding the effect of the restructuring charge) in 1997, reflecting changes in the geographic mix and nature of earnings. Core Business income was $477 million in the 1998 third quarter, up from $452 million in 1997. o Worldwide Citibanking accounts totaled 23 million as of September 30, 1998, up 15% from a year ago, reflecting growth across all regions. Citibanking customer deposits of $105 billion were up 12% from a year-ago, reflecting account openings and increased deposit levels primarily due to a "flight-to-quality" in Asia Pacific and Japan, and growth in the U.S. and Latin America. Asia Pacific and Japan added approximately $5.9 billion in customer deposits, up 19% -- 36% excluding the effect of foreign currency translation -- from 1997. o Card accounts worldwide totaled 50 million as of September 30, 1998, up from 36 million a year ago, principally reflecting the acquisition of UCS. Cards in the emerging markets grew 12% from a year ago, primarily in Latin America. The number of cards in force, including those issued by affiliates, at quarter-end was 92 million, up from 64 million a year ago. Cards, including Diners Club, operates in 47 countries and territories. 2 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 o Adjusted revenue of $4.2 billion was up $665 million or 19% from 1997. Revenue growth was led by U.S bankcards, up 46% including UCS, and increases in the Citibanking businesses in North America, Europe, and Japan. Latin America benefited from the addition of certain assets and liabilities of Confia, while revenue in Asia Pacific was down due to economic conditions in the region. The acquisition of UCS contributed approximately 10 percentage points to Global Consumer revenue growth. Foreign currency translation reduced revenue growth by approximately 4 percentage points. o Adjusted operating expense increased $396 million or 20% from a year ago. The additions of UCS (including the amortization of the acquisition premium) and certain assets and liabilities of Confia, higher advertising and marketing, and spending on technology initiatives, primarily related to electronic banking, represented approximately $315 million of the expense increase from the 1997 third quarter. Foreign currency translation reduced expense growth by approximately 4 percentage points. o Credit costs in the quarter were $1.0 billion, compared with $1.1 billion in the 1998 second quarter and $856 million a year ago. The increase in credit costs from a year ago primarily reflects the acquisition of UCS. Global Consumer continued to build the allowance for credit losses, with charges of $25 million in excess of net write-offs in the quarter. o On August 5, 1998, Citicorp completed the previously announced acquisition of certain assets and liabilities of Confia, a consumer and corporate bank in Mexico. The acquisition added approximately $4.7 billion in assets. o The U.S. national launch of Direct Access increased PC Banking users by 30% from 1997. Direct Access was also introduced in Germany. o Travelers variable annuities and Salomon mutual funds were introduced for sale through Citicorp Investment Services. Citibank and Primerica Financial Services joined forces to leverage Citibank's product strengths with Primerica's distribution capabilities with the introduction of Citibank Preferred Banking in Atlanta and Las Vegas pilot markets. o During the quarter, U.S. bankcards introduced the Sony Citibank Card and a new Drivers Edge card.
- ------------------------------------------------------------------------------------------------------------------ Global Consumer Third Quarter Nine Months in Emerging Markets ---------------- % -------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - ------------------------------------------------------------------------------------------------------------------ Adjusted Revenue ...................... $982 $970 1 $2,781 $2,905 (4) Adjusted Operating Expense ............ 638 598 7 1,818 1,728 5 ---------------- -------------------- Operating Margin ...................... 344 372 (8) 963 1,177 (18) Credit Costs .......................... 139 91 53 373 280 33 ---------------- -------------------- Operating Margin Less Credit Costs .... 205 281 (27) 590 897 (34) Additional Provision .................. 11 15 (27) 33 26 27 ---------------- -------------------- Income Before Taxes (B) ............... $194 $266 (27) $ 557 $ 871 (36) =================================================================== Core Business Income (B) .............. $158 $218 (28) $ 457 $ 697 (34) =================================================================== Net Income ............................ $158 $136 16 $ 457 $ 615 (26) - -----------------------------------------------=================================================================== Average Assets (In Billions of Dollars) $ 45 $ 43 5 $ 43 $ 42 2 Return on Assets (B) (%) .............. 1.39 2.01 -- 1.43 2.22 -- - -----------------------------------------------===================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Excludes the 1997 third quarter restructuring charge of $131 million pretax ($82 million after-tax). - -------------------------------------------------------------------------------- o Income before taxes in the emerging markets was $194 million in the quarter, down $72 million from $266 million (excluding the $131 million restructuring charge) in 1997, reflecting economic conditions, including weakened currencies, which reduced income before taxes in Asia Pacific by approximately $36 million. Earnings in Latin America benefited from the addition of certain assets and liabilities of Confia, that was more than offset by higher credit costs and a decline in Credicard earnings, a 33% owned Brazilian Card affiliate. Core Business income for the 1998 third quarter 3 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 was $158 million compared to $218 million in 1997. Cards represented 20% of emerging markets income in the quarter, compared with 33% in the 1997 quarter. o Revenue in Latin America was up 14% from the 1997 third quarter, primarily reflecting the acquisition of certain assets and liabilities of Confia. Asia Pacific (excluding Japan and the Indian subcontinent, but including Australia and New Zealand) revenue declined 10% in the quarter, primarily in Cards, reflecting economic conditions in the region including the effect of foreign currency translation. Foreign currency translation reduced revenue growth by approximately 13 percentage points. o Adjusted operating expense grew 7%, reflecting lower expense in Asia Pacific due to the effect of foreign currency translation, offset by an increase in Latin America, including the addition of certain assets and liabilities of Confia. Foreign currency translation reduced expense growth by approximately 13 percentage points. o Credit costs in the emerging markets increased $6 million from the 1998 second quarter and $48 million from the 1997 third quarter, reflecting economic conditions in Latin America and Asia Pacific. The net credit loss ratio in Asia Pacific was 1.10%, down from 1.16% in the 1998 second quarter and up from 0.63% a year ago. The net credit loss ratio in Latin America was 2.82%, up from 2.51% in the 1998 second quarter and 2.09% a year ago. Emerging markets managed loans delinquent 90 days or more were $748 million or 2.20% at quarter-end, compared with $647 million or 1.95% at June 30, 1998 and $453 million or 1.31% a year ago. The emerging markets businesses built the allowance for loan losses by $11 million.
- ---------------------------------------------------------------------------------------------------------------------- Global Consumer Third Quarter Nine Months in Developed Markets --------------------- % -------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - ---------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $3,217 $ 2,564 25 $8,967 $7,676 17 Adjusted Operating Expense ............ 1,769 1,413 25 4,961 4,152 19 --------------------- -------------------- Operating Margin ...................... 1,448 1,151 26 4,006 3,524 14 Credit Costs .......................... 905 765 18 2,643 2,392 10 --------------------- -------------------- Operating Margin Less Credit Costs .... 543 386 41 1,363 1,132 20 Additional Provision .................. 14 10 40 42 49 (14) --------------------- -------------------- Income Before Taxes (B) ............... $ 529 $ 376 41 $1,321 $1,083 22 ======================================================================= Core Business Income (B) .............. $ 319 $ 234 36 $ 807 $ 687 17 ======================================================================= Net Income ............................ $ 319 ($ 35) NM $ 807 $ 418 93 - -----------------------------------------------======================================================================= Average Assets (In Billions of Dollars) $ 99 $ 91 9 $ 96 $ 90 7 Return on Assets (B) (%) .............. 1.28 1.02 -- 1.13 1.02 -- - -----------------------------------------------=======================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Excludes the 1997 third quarter restructuring charge of $449 million pretax ($269 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Income before taxes in the developed markets was $529 million in the quarter, up $153 million or 41%, despite $107 million of UCS acquisition premium costs, from $376 million (excluding the $449 million restructuring charge) in 1997, reflecting outstanding performance in U.S. bankcards and in Japan. Core Business income for the 1998 third quarter was $319 million compared to $234 million in 1997. o Adjusted revenue was up 25% in the quarter, reflecting improvements in U.S. bankcards, including the acquisition of UCS in the 1998 second quarter, and increases in Citibanking and the Private Bank. Excluding UCS, U.S. bankcards revenue was up 16% in the quarter, benefiting from risk-based pricing strategies and higher interchange fee revenue. Charge volume of $36.4 billion increased $9.8 billion from the 1997 third quarter, reflecting UCS and 8% overall growth in other U.S. bankcard portfolios. 4 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 o Adjusted operating expense grew 25%, reflecting UCS (including the amortization of the acquisition premium), increased advertising and marketing, and spending on technology initiatives primarily related to electronic banking, together with business volume growth. o Credit costs in the developed markets were down $48 million from the 1998 second quarter, reflecting improvements in U.S bankcards. Credit costs in U.S. bankcards were $795 million or 5.23% of average managed loans for the quarter, compared to $842 million or 5.73% in the 1998 second quarter, and $639 million or 5.58% a year ago. Excluding UCS, the 12-month-lagged loss ratio was 5.49% in the quarter, compared with 5.98% in the 1998 second quarter and 5.93% a year ago. U.S. bankcards managed loans delinquent 90 days or more were $924 million or 1.51% at quarter-end, compared with $942 million or 1.58% for the prior quarter and $806 million or 1.76% a year-ago. The developed markets businesses built the allowance for loan losses by $14 million. 5 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- -------------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Citibanking ----------------------- % ---------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - -------------------------------------------------------------------------------------------------------------------------- Revenue ............................... $ 1,680 $ 1,532 10 $ 4,803 $4,536 6 Operating Expense ..................... 1,260 1,148 10 3,647 3,318 10 ----------------------- ---------------------- Operating Margin ...................... 420 384 9 1,156 1,218 (5) Credit Costs .......................... 144 135 7 425 428 (1) ----------------------- ---------------------- Operating Margin Less Credit Costs .... 276 249 11 731 790 (7) Additional Provision .................. (1) -- NM (7) -- NM ----------------------- ---------------------- Income Before Taxes (B) ............... $ 277 $ 249 11 $ 738 $ 790 (7) =========================================================================== Core Business Income (B) .............. $ 178 $ 168 6 $ 485 $ 535 (9) - -----------------------------------------------=========================================================================== Net Income ............................ $ 178 ($ 107) NM $ 485 $ 260 87 - -----------------------------------------------=========================================================================== Average Assets (In Billions of Dollars) $ 92 $ 85 8 $ 89 $ 84 6 Return on Assets (B)(%) ............... 0.77 0.78 -- 0.73 0.85 -- - -----------------------------------------------===========================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Excludes the 1997 third quarter restructuring charge of $457 million pretax ($275 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Cards -------------------- % -------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - -------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $2,225 $1,707 30 $6,064 $5,200 17 Adjusted Operating Expense ............ 942 673 40 2,529 2,024 25 -------------------- -------------------- Operating Margin ...................... 1,283 1,034 24 3,535 3,176 11 Credit Costs .......................... 907 729 24 2,609 2,254 16 -------------------- -------------------- Operating Margin Less Credit Costs .... 376 305 23 926 922 -- Additional Provision .................. 26 25 4 82 75 9 -------------------- -------------------- Income Before Taxes (B) ............... $ 350 $ 280 25 $ 844 $ 847 -- ===================================================================== Core Business Income (B) .............. $ 227 $ 193 18 $ 557 $ 597 (7) - -----------------------------------------------===================================================================== Net Income ............................ $ 227 $ 135 68 $ 557 $ 539 3 - -----------------------------------------------===================================================================== Average Assets (In Billions of Dollars) $ 35 $ 32 9 $ 33 $ 31 6 Return on Assets (B) (%) .............. 2.57 2.39 -- 2.26 2.57 -- - -----------------------------------------------=====================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Excludes the 1997 third quarter restructuring charge of $95 million pretax ($58 million after-tax). - -------------------------------------------------------------------------------- 6
- ---------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Private Bank ------------------- % ------------------ % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - ---------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $ 294 $ 295 -- $ 881 $ 845 4 Adjusted Operating Expense ............ 205 190 8 603 538 12 ------------------- ------------------ Operating Margin ...................... 89 105 (15) 278 307 (9) Credit Benefits ....................... (7) (8) (13) (18) (10) 80 ------------------- ------------------ Income Before Taxes (B) ............... $ 96 $ 113 (15) $ 296 $ 317 (7) ======================================================================= Core Business Income (B) .............. $ 72 $ 91 (21) $ 222 $ 252 (12) - -----------------------------------------------======================================================================= Net Income ............................ $ 72 $ 73 (1) $ 222 $ 234 (5) - -----------------------------------------------======================================================================= Average Assets (In Billions of Dollars) $ 17 $ 17 -- $ 17 $ 17 -- Return on Assets (B) (%) .............. 1.68 2.12 -- 1.75 1.98 -- - -----------------------------------------------=======================================================================
(A) Reclassified to conform to the latest quarter's presentation. (B) Excludes the 1997 third quarter restructuring charge of $28 million pretax ($18 million after-tax). - -------------------------------------------------------------------------------- 7 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 Global Corporate Banking net loss was $127 million on revenue of $1.5 billion
- ----------------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Global Corporate Banking ------------------------ % ---------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - ----------------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $ 1,472 $ 1,785 (18) $5,377 $ 5,204 3 Adjusted Operating Expense ............ 1,424 1,267 12 4,138 3,619 14 ----------------------- --------------------- Operating Margin ...................... 48 518 (91) 1,239 1,585 (22) Credit Costs (Benefits) ............... 231 (3) NM 326 (55) NM ----------------------- --------------------- Income (Loss) Before Taxes (B) ........ $ (183) $ 521 NM $ 913 $ 1,640 (44) ============================================================================== Core Business Income (Loss) (B) ....... $ (127) $ 417 NM $ 640 $ 1,271 (50) ============================================================================== Net Income (Loss) ..................... $ (127) $ 249 NM $ 640 $ 1,103 (42) - -----------------------------------------------============================================================================== Average Assets (In Billions of Dollars) $ (173) $ 151 15 $ 169 $ 145 17 Return on Assets (B) (%) .............. -- 1.10 -- 0.51 1.17 -- - -----------------------------------------------==============================================================================
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." (B) Excludes the 1997 third quarter restructuring charge of $281 million pretax ($168 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Global Corporate Banking reported a loss of $127 million in the 1998 third quarter, down $544 million from Core Business income of $417 million in the 1997 third quarter. Loss before taxes totaled $183 million and declined from $521 million (excluding a restructuring charge of $281 million) in the 1997 third quarter. The 1998 third quarter included a loss of $384 million attributable to the financial market turmoil in Russia, which affected both revenue and credit costs, as well as a $138 million write-down of fixed income inventories. o Adjusted revenue of $1.5 billion in the quarter declined $313 million or 18% (13% excluding the effect of foreign currency translation) from the year-ago quarter, reflecting a $170 million decline in the Emerging Markets business and a $143 million decline in Global Relationship Banking. Adjusted operating expense of $1.4 billion increased $157 million or 12% (15% excluding the effect of foreign currency translation) from 1997, with a $32 million increase in the Emerging Markets business and a $125 million increase in Global Relationship Banking. Credit costs of $231 million in the quarter compared with a net benefit of $3 million in 1997. o Cash-basis loans of $1.3 billion declined $13 million from the 1998 second quarter but increased $312 million from the 1997 third quarter. Cash-basis loans in Global Relationship Banking of $286 million declined $14 million from the 1998 second quarter and declined $150 million from the year-ago quarter, primarily in the real estate portfolio. Cash-basis loans in the Emerging Markets of $982 million were essentially unchanged from the 1998 second quarter, but grew $462 million from a year ago. The increase from the year-ago quarter is primarily due to the economic turmoil affecting Indonesia and Thailand. At September 30, 1998 and June 30, 1998, Emerging Markets cash-basis loans included $44 million of balance sheet credit exposures related to foreign currency derivative contracts for which the recognition of revaluation gains has been suspended. The amounts included a year ago were not material. Commercial OREO of $345 million was essentially unchanged from the 1998 second quarter and improved $134 million from the year-ago quarter, primarily in the real estate portfolio. o Exposure to hedge funds under foreign exchange and derivatives contracts totaled $45 million at September 30, 1998 and was fully collateralized by cash and U.S. Treasury securities. Other outstandings and commitments to hedge funds totaled $162 million, of which $129 million was secured and $33 million was unsecured. The value of foreign exchange and derivatives contracts, and the value of collateral, will fluctuate with market conditions. There was no equity investment in hedge funds. 8 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- -------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Emerging Markets ------------------- % -------------------- % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - -------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $ 713 $883 (19) $2,536 $2,511 1 Adjusted Operating Expense ............ 531 499 6 1,549 1,415 9 ------------------- -------------------- Operating Margin ...................... 182 384 (53) 987 1,096 (10) Credit Costs .......................... 212 35 NM 378 82 NM ------------------- -------------------- Income (Loss) Before Taxes (B) ........ $ (30) $349 NM $ 609 $1,014 (40) ===================================================================== Core Business Income (Loss) (B) ....... $ (19) $280 NM $ 473 $ 839 (44) ===================================================================== Net Income (Loss) ..................... $ (19) $248 NM $ 473 $ 807 (41) - -----------------------------------------------===================================================================== Average Assets (In Billions of Dollars) $ 81 $ 68 19 $ 79 $ 64 23 Return on Assets (B) (%) .............. -- 1.63 -- 0.80 1.75 -- - -----------------------------------------------=====================================================================
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." (B) Excludes the 1997 third quarter restructuring charge of $54 million pretax ($32 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Emerging Markets reported a loss of $19 million in the 1998 third quarter, down $299 million from Core Business income of $280 million in the 1997 third quarter. Loss before taxes totaled $30 million and declined from $349 million (excluding a restructuring charge of $54 million) in the 1997 third quarter. The 1998 third quarter included a loss of $301 million attributable to the financial market turmoil in Russia, which affected revenue and credit costs. Average assets of $81 billion rose $13 billion from the 1997 third quarter, reflecting growth in the loan portfolio and treasury initiatives, together with trade finance products. o Adjusted revenue in the quarter of $713 million declined $170 million or 19% (10% excluding the effect of foreign currency translation) from the 1997 third quarter. Revenue reflected an $84 million decline in trading-related revenue attributable to the volatility experienced in the global capital markets during the quarter (including $57 million attributable to Russia), a $148 million writedown of impaired Russian available-for-sale securities, and lower corporate finance revenue, partially offset by double- digit growth in transaction banking services and loan product revenue. Trading-related revenue reflects double-digit growth in foreign exchange products more than offset by lower results in derivatives and other trading products. Revenue in Asia Pacific (excluding Japan and the Indian subcontinent, but including Australia and New Zealand) declined 2% from the 1997 third quarter due primarily to lower trading-related revenue, partially offset by improved treasury results. Revenue attributed to the Embedded Bank and Emerging Local Corporate strategies, together with new franchises, accounted for 9% of Emerging Markets revenue, up 59% from the comparable 1997 quarter. About 37% of the revenue in the Emerging Markets business was attributable to business from multinational companies managed jointly with Global Relationship Banking, with that revenue having grown 6% from the 1997 third quarter. o Adjusted operating expense of $531 million in 1998 increased $32 million or 6% (13% excluding the effect of foreign currency translation) from the year-ago quarter. The growth reflected investment spending to build the franchise, including costs associated with Citicorp's plan to gain market share in selected emerging market countries, and volume-related expense growth. o Credit costs totaled $212 million in the quarter, up from $35 million in the 1997 quarter. Credit costs included $96 million attributable to the financial market turmoil in Russia, with the balance concentrated in Indonesia and Thailand. 9 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- ------------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Global Relationship Banking ------------------- % ------------------------ % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - ------------------------------------------------------------------------------------------------------------------------- Adjusted Revenue ...................... $ 759 $ 902 (16) $ 2,841 $ 2,693 5 Adjusted Operating Expense ............ 893 768 16 2,589 2,204 17 ------------------- ------------------------ Operating Margin ...................... (134) 134 NM 252 489 (48) Credit Costs (Benefits) ............... 19 (38) NM (52) (137) 62 ------------------- ------------------------ Income (Loss) Before Taxes (B) ........ $(153) $ 172 NM $ 304 $ 626 (51) ========================================================================== Core Business Income (Loss) (B) ....... $(108) $ 137 NM $ 167 $ 432 (61) ========================================================================== Net Income (Loss) ..................... $(108) $ 1 NM $ 167 $ 296 (44) - -----------------------------------------------========================================================================== Average Assets (In Billions of Dollars) $ 92 $ 83 11 $ 90 $ 81 11 Return on Assets (B) (%) .............. -- 0.65 -- 0.25 0.71 -- - -----------------------------------------------==========================================================================
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities to a new business segment called "Investment Activities." (B) Excludes the 1997 third quarter restructuring charge of $227 million pretax ($136 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o The Global Relationship Banking business in North America, Europe, and Japan reported a loss of $108 million in the 1998 third quarter, compared with Core Business income of $137 million in the 1997 third quarter. Loss before taxes totaled $153 million and declined from $172 million (excluding a restructuring charge of $227 million) in the 1997 third quarter. The 1998 third quarter included a loss of $83 million attributable to the financial market turmoil in Russia, which affected revenue and credit costs. Average assets of $92 billion rose $9 billion from the 1997 third quarter, primarily reflecting an increase in the fair value of trading assets, including derivative and foreign exchange contracts. o Adjusted revenue of $759 million declined $143 million or 16% from the 1997 third quarter. The decline is attributable to a $183 million decline in trading-related revenue resulting from the volatility experienced in global capital markets during the quarter (including $30 million attributable to Russia and a $138 million write-down of fixed income inventories), partially offset by moderate growth in transaction banking services revenue. Trading-related revenue reflects double-digit growth in foreign exchange products more than offset by lower results in fixed income and other trading products. o Adjusted operating expense of $893 million grew $125 million or 16% compared with the 1997 third quarter, primarily from increased spending on technology, including costs related to the Year 2000 and the European EMU, volume-related growth in transaction banking services, and increases in asset management, partially offset by a decline in incentive compensation. o Credit costs in the quarter of $19 million compared with a net benefit of $38 million in the 1997 third quarter, and included write-offs of $53 million attributable to the financial market turmoil in Russia, partially offset by real estate recoveries. 10 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- ---------------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Investment Activities(A) ----------------- % --------------------- % (In Millions of Dollars) 1998 1997 Change 1998 1997 Change - ---------------------------------------------------------------------------------------------------------------------- Revenue ............................... $ 117 $ 348 (66) $ 1,024 $ 802 28 Operating Expense ..................... 11 9 22 34 26 31 ----------------- --------------------- Operating Margin ...................... 106 339 (69) 990 776 28 Credit Benefits ....................... -- (5) NM (10) (64) (84) ----------------- --------------------- Income Before Taxes ................... 106 344 (69) 1,000 840 19 Income Taxes .......................... 35 85 (59) 212 175 21 ----------------- --------------------- Core Income ........................... $ 71 $ 259 (73) $ 788 $ 665 18 - -----------------------------------------------======================================================================= Average Assets (In Billions of Dollars) $ 8 $ 9 (11) $ 9 $ 9 -- Return on Assets (%) .................. 3.52 11.42 -- 11.75 9.88 -- - -----------------------------------------------=======================================================================
(A) Investment Activities comprises Citicorp's venture capital activities, certain Corporate investments, and the results of certain investments in the former refinancing countries. NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Adjusted revenue from Investment Activities of $117 million declined $231 million or 66% from the 1997 third quarter. The decline reflected a $266 million reduction in venture capital revenue primarily attributable to the volatility in the U.S. equity markets during the quarter, and a $129 million decline in securities transactions, partially offset by a $165 million net gain on investments in Latin America. Revenue in the 1997 quarter included a $23 million investment writedown in Latin America. The increase in the effective income tax rate to 33% from 25% reflects changes in the nature and geographic mix of earnings.
- --------------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Corporate Items ----------------- % ------------------ % (In Millions of Dollars) 1998 1997 (A) Change 1998 1997 (A) Change - --------------------------------------------------------------------------------------------------------------- Revenue ............................... $283 $ 277 2 $779 $ 731 7 Operating Expense ..................... 81 77 5 263 228 15 ----------------- ----------------- Income Before Taxes (B) ............... $202 $ 200 1 $516 $ 503 3 ================================================================ Core Income (Loss) (B) ................ $109 $ (61) NM $ -- $(234) NM ================================================================ Net Income (Loss) ..................... $109 $ (98) NM $ -- $(271) NM - -----------------------------------------------================================================================ Average Assets (In Billions of Dollars) $ 7 $ 5 40 $ 7 $ 6 17 - -----------------------------------------------================================================================
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of certain Corporate investments and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." (B) Excludes the 1997 third quarter restructuring charge of $28 million pretax ($37 million after-tax). NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Corporate Items includes revenue derived from charging businesses for funds employed, based upon a marginal cost of funds concept, unallocated corporate costs, and the offset created by attributing income taxes to core business activities on a local tax-rate basis. o Income taxes are attributed to businesses on the basis of local tax rates. Changes in the nature and geographic mix of earnings, resulted in an unusually high effective business tax rate of 35% in the 1998 quarter, up from 25% a year ago. The increase in the effective rate charged to the businesses resulted in a reduction in the tax offset expense held in Corporate Items. The effective rate allocated to the businesses was 29% and 25% for the 1998 and 1997 nine month periods, respectively. Citicorp's effective tax rate was 37.5% in both 1998 and 1997 periods. 11 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 Other Items o Of the $889 million restructuring charge recorded in the 1997 third quarter, approximately $339 million remained in the reserve as of September 30, 1998. The utilization of the reserve included $245 million of premises and equipment writedowns and $300 million of primarily severance and related costs (of which $229 million has been paid in cash and $71 million is legally obligated), together with translation effects. o The effects of market fluctuations on the available-for-sale investment portfolio resulted in net unrealized losses, recorded against stockholders equity, of $242 million after-tax at September 30, 1998, down from net unrealized gains of $308 million at June 30, 1998. o The Tier 1 capital ratio at September 30, 1998 was estimated at 8.0%, consistent with the traditional 8.0%-8.3% target range. The decline in the ratio during the quarter was primarily attributable to customer driven growth in risk-adjusted assets, and the redemption of Graduated Rate Cumulative Preferred Stock, Series 8A and 7.5% Non-Cumulative Preferred Stock, Series 17 (for a total of $412 million). o The amounts shown below for Citibank Global Asset Management are also included in the results of Global Consumer, Emerging Markets, and Global Relationship Banking.
- ------------------------------------------------------------------------------------------------------- Third Quarter Nine Months Citibank Global Asset Managment ------------------ % ---------------- % (In Millions of Dollars) 1998 1997 Change 1998 1997 Change - ------------------------------------------------------------------------------------------------------- Revenue ...................... $ 103 $104 (1) $324 $286 13 Operating Expense ............ 98 86 14 280 238 18 ------------------ ---------------- Income Before Taxes .......... 5 18 (72) 44 48 (8) Income Taxes (Benefit) ....... (2) -- NM 2 2 -- ------------------ ---------------- Core Business Income ......... $ 7 $ 18 (61) $ 42 $ 46 (9) - --------------------------------------================================================================= (In Billions of Dollars)...... Assets Under Management ...... $ 126 $107 18 $126 $107 18 - --------------------------------------=================================================================
NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- o Although included in the results of Global Consumer and Global Corporate Banking, this division is focused upon as a separate Core Business. o Citibank Global Asset Management (CGAM) manages $126 billion of assets worldwide for major institutional clients as well as for high net worth individuals and other retail mutual fund shareholders. CGAM offers a broad range of equity, fixed-income, and liquidity products through its investment centers in twenty countries. CGAM's $126 billion in assets under management are comprised of 14% in money market funds, 42% in mutual and institutional commingled funds, and 44% in accounts managed for high net worth individuals, pension funds, corporations, and other institutions. o Declines in market prices depressed third quarter revenue growth. Revenue of $324 million for the 1998 nine months is up 13% from 1997 reflecting an 18% increase in assets under management since last year. Expense growth reflects CGAM's continuing build-up of its fundamental research and quantitative analysis investment teams, as well as incremental technology costs, including costs associated with Year 2000 and EMU. o In the 1998 nine months, CGAM raised over $2 billion from 32 new funds distributed worldwide through the Global Consumer and Global Corporate Banking channels. 12 CITICORP[LOGO] Third Quarter 1998 Earnings - October 21, 1998
- ---------------------------------------------------------------------------------- CITICORP and Subsidiaries Consolidated Statement of Income - ---------------------------------------------------------------------------------- Third Quarter Nine Months (In Millions of Dollars, --------------- % ---------------- % Except Per Share Amounts) 1998 1997 Change 1998 1997 Change - ---------------------------------------------------------------------------------- Interest Revenue ............ $6,976 $6,195 13 $19,937 $18,193 10 Interest Expense ............ 3,878 3,319 17 11,005 9,650 14 --------------- ---------------- Net Interest Revenue ........ 3,098 2,876 8 8,932 8,543 5 Provision for Credit Losses . 736 486 51 1,807 1,421 27 --------------- ---------------- Net Interest Revenue after Provision for Credit Losses 2,362 2,390 (1) 7,125 7,122 -- --------------- ---------------- Fees, Commissions, and Other Revenue Fees and Commissions ........ 1,575 1,478 7 4,569 4,271 7 Foreign Exchange ............ 474 435 9 1,288 1,043 23 Trading Account ............. (159) 134 NM 175 429 (59) Securities Transactions ..... (56) 186 NM 485 418 16 Other Revenue ............... 562 432 30 1,852 1,344 38 --------------- ---------------- Total Fees, Commissions, and Other Revenue ......... 2,396 2,665 (10) 8,369 7,505 12 --------------- ---------------- Operating Expense Salaries .................... 1,505 1,356 11 4,331 3,906 11 Employee Benefits ........... 325 317 3 1,038 1,039 -- --------------- ---------------- Total Employee Expense .... 1,830 1,673 9 5,369 4,945 9 Net Premises & Equipment Expense ......... 550 496 11 1,577 1,465 8 Restructuring Charge ........ -- 889 NM -- 889 NM Other Expense ............... 1,530 1,179 30 4,241 3,280 29 --------------- ---------------- Total Operating Expense ..... 3,910 4,237 (8) 11,187 10,579 6 --------------- ---------------- Income Before Taxes ......... 848 818 4 4,307 4,048 6 Income Taxes ................ 318 307 4 1,615 1,518 6 --------------- ---------------- Net Income .................. $ 530 $ 511 4 $ 2,692 $ 2,530 6 - --------------------------------==================================================
NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- 13 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998 - -------------------------------------------------------------------------------- CITICORP and Subsidiaries Consolidated Balance Sheet - -------------------------------------------------------------------------------- Sept. 30, Dec. 31, % (In Millions of Dollars) 1998 1997 Change - -------------------------------------------------------------------------------- Assets Cash and Due from Banks ....................... $ 9,107 $ 8,585 6 Deposits at Interest with Banks ............... 14,085 13,049 8 Securities, at Fair Value: Available for Sale ......................... 35,552 30,762 16 Venture Capital ............................ 3,285 2,599 26 Trading Account Assets ........................ 40,018 40,356 (1) Loans Held for Sale ........................... 5,183 3,515 47 Federal Funds Sold and Securities Purchased Under Resale Agreements .................... 13,412 10,233 31 Loans, Net: Consumer ................................... 112,103 108,066 4 Commercial ................................. 87,706 75,947 15 ---------------------- Loans, Net of Unearned Income ................. 199,809 184,013 9 Allowance for Credit Losses ................ (6,240) (5,816) 7 ---------------------- Total Loans, Net .............................. 193,569 178,197 9 ---------------------- Customers' Acceptance Liability ............... 1,609 1,726 (7) Premises and Equipment, Net ................... 5,019 4,474 12 Interest and Fees Receivable .................. 3,549 3,288 8 Other Assets .................................. 18,952 14,113 34 ---------------------- Total ......................................... $ 343,340 $ 310,897 10 - -------------------------------------------------=============================== Liabilities Non-Interest-Bearing Deposits in U.S. Offices . $ 16,315 $ 16,901 (3) Interest-Bearing Deposits in U.S. Offices ..... 42,318 40,361 5 Non-Interest-Bearing Deposits in Offices Outside the U.S. ........................... 10,925 9,627 13 Interest-Bearing Deposits in Offices Outside the U.S. ................................... 152,877 132,232 16 ---------------------- Total Deposits ............................. 222,435 199,121 12 ---------------------- Trading Account Liabilities ................... 30,692 30,986 (1) Purchased Funds and Other Borrowings .......... 24,305 21,231 14 Acceptances Outstanding ....................... 1,685 1,826 (8) Accrued Taxes and Other Expense ............... 7,284 6,464 13 Other Liabilities ............................. 15,811 10,288 54 Long-Term Debt ................................ 19,982 19,785 1 Stockholders' Equity Preferred Stock (Without par value) ........... 863 1,903 (55) Common Stock ($1.00 par value) ................ 506 506 -- Issued Shares: 506,298,235 in each period Surplus ....................................... 6,525 6,501 -- Retained Earnings ............................. 18,621 16,789 11 Accumulated Other Changes in Equity from Nonowner Sources (A) ....................... (871) (91) NM Common Stock in Treasury, at Cost ............. (4,498) (4,412) 2 Shares: 53,583,079 and 52,355,947, respectively ---------------------- Total Stockholders' Equity .................... 21,146 21,196 -- ---------------------- Total ........................................ $ 343,340 $ 310,897 10 - -------------------------------------------------=============================== (A) Amounts at September 30, 1998 and December 31, 1997 include the after-tax amounts for net unrealized gains (losses) on securities available for sale of ($242) million and $535 million, respectively, and foreign currency translation of ($629) million and ($626) million, respectively. NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- 14 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- -------------------------------------------------------------------------------------------------------------------- CITICORP Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios - -------------------------------------------------------------------------------------------------------------------- Total Average Loans 90 Days or More Past Due (A) Loans Net Credit Losses (A) (In Millions of Dollars, ------------------------------------------------------------------------------------------ except Loan Sept. 30, Sept. 30, June 30, Sept. 30, 3rd Qtr. 3rd Qtr. 2nd Qtr. 3rd Qtr. Amounts in Billions) 1998 1998 1998 1997 1998 1998 1998 1997 - -------------------------------------------------------------------------------------------------------------------- Citibanking ........... $ 70.1 $ 2,119 $ 1,995 $ 2,082 $ 69.0 $ 144 $ 144 $ 135 Ratio ................. 3.02% 2.93% 3.07% 0.83% 0.85% 0.80% Cards: - --------------------------- U.S. Bankcards (B) .... 61.2 924 942 806 60.3 795 842 639 Ratio ................. 1.51% 1.58% 1.76% 5.23% 5.73% 5.58% Other (C) ............. 10.0 230 220 182 9.5 112 103 90 Ratio ................. 2.31% 2.30% 1.98% 4.66% 4.42% 3.92% Private Bank .......... 16.4 195 197 146 16.3 1 -- (4) Ratio ................. 1.19% 1.23% 0.94% 0.02% NM NM - -------------------------------------------------------------------------------------------------------------------- Total Managed ......... 157.7 3,468 3,354 3,216 155.1 1,052 1,089 860 Ratio ................. 2.20% 2.19% 2.32% 2.69% 2.88% 2.50% - -------------------------------------------------------------------------------------------------------------------- Securitization Activity Credit Card Receivables (40.4) (611) (601) (452) (39.9) (539) (542) (378) Loans Held for Sale ... (5.2) (38) (40) (34) (5.2) (34) (37) (30) - -------------------------------------------------------------------------------------------------------------------- Total Loans ........... $112.1 $ 2,819 $ 2,713 $ 2,730 $110.0 $ 479 $ 510 $ 452 Ratio ................. 2.51% 2.53% 2.51% 1.72% 1.86% 1.67% - -------------------------------------------------------------------------------------------------------------------- Managed Portfolio: - --------------------------- Developed ............. $123.7 $ 2,720 $ 2,707 $ 2,763 $121.6 $ 913 $ 956 $ 769 Ratio ................. 2.20% 2.25% 2.66% 2.97% 3.24% 2.98% Emerging .............. 34.0 748 647 453 33.5 139 133 91 Ratio ................. 2.20% 1.95% 1.31% 1.65% 1.61% 1.06% - -------------------------------------------------------------------------------------------------------------------- Emerging Portfolio (D): - --------------------------- Asia Pacific .......... $ 22.6 $ 448 $ 374 $ 253 $ 22.2 $ 60 $ 63 $ 38 Ratio ................. 1.99% 1.70% 1.04% 1.10% 1.16% 0.63% Latin America ......... 9.9 254 227 162 9.9 70 61 45 Ratio ................. 2.56% 2.28% 1.83% 2.82% 2.51% 2.09% CEEMEA (E) ............ 1.5 46 46 38 1.4 9 9 8 Ratio ................. 3.13% 3.40% 2.67% 2.71% 2.86% 2.13% - --------------------------------------------------------------------------------------------------------------------
(A) The ratios of 90 days or more past due and net credit losses are calculated based on end-of-period and average loans, respectively, both net of unearned income. (B) The U.S. bankcards managed ratios of 90 days or more past due and net credit losses were reduced by 11 basis points and 23 basis points, respectively, in the current quarter, and by 12 basis points and 24 basis points in the preceding quarter, due to the addition of the UCS portfolio. (C) Includes bankcards outside of the U.S., worldwide Diners Club, and private label cards. (D) Includes Private Bank and excludes Japan. (E) Central and Eastern Europe, Middle East, and Africa. NM Not meaningful. - -------------------------------------------------------------------------------- 15 CITICORP [LOGO] Third Quarter 1998 Earnings - October 21, 1998
- --------------------------------------------------------------------------------------------- CITICORP Other Revenue Third Quarter Nine Months ----------------- % --------------- % (In Millions of Dollars) 1998 1997(A) Change 1998 1997(A) Change - --------------------------------------------------------------------------------------------- Credit Card Securitization Activity $ 374 $ 134 NM $ 863 $ 417 NM Venture Capital ................... (31) 235 NM 404 501 (19) Affiliate Earnings ................ 47 51 (8) 118 222 (47) Net Asset Gains ................... 142 (6) NM 371 150 NM Other Items ....................... 30 18 67 96 54 78 ---------------- --------------- Total ............................. $ 562 $ 432 30 $1,852 $1,344 38 - --------------------------------------======================================================
(A) Reclassified to conform to the latest quarter's presentation. NM Not meaningful, as percentage equals or exceeds 100%. - --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------- CITICORP Provision for Credit Losses Third Quarter Nine Months ----------------- % ---------------- % (In Millions of Dollars) 1998 1997 Change 1998 1997 Change - --------------------------------------------------------------------------------------------- Global Consumer Net Write-Offs .... $ 479 $ 452 6 $1,415 $ 1,399 1 Global Corporate Banking .......... 232 9 NM 317 (53) NM Net Write-Offs (Recoveries) Additional Provision .............. 25 25 -- 75 75 -- ---------------- --------------- Total ............................. $ 736 $ 486 51 $1,807 $ 1,421 27 - --------------------------------------=======================================================
NM Not meaningful, as percentage equals or exceeds 100%. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CITICORP Credit Loss Reserves Sept. 30, Dec. 31, Sept. 30, (In Millions of Dollars) 1998 1997 1997 - -------------------------------------------------------------------------------- Aggregate Allowance for Credit Losses: Global Consumer (A) .............................. $2,911 $2,487 $2,470 Global Corporate Banking ......................... 3,429 3,429 3,429 --------------------------- Total Aggregate Allowance for Credit Losses (B) .. 6,340 5,916 5,899 Reserves for Securitization Activities (C) ....... 66 85 89 --------------------------- Total Credit Loss Reserves ....................... $6,406 $6,001 $5,988 - -----------------------------------------------------=========================== Allowance As a Percent of Total Loans: Global Consumer .................................. 2.60% 2.30% 2.27% Global Corporate Banking (D) ..................... 3.80% 4.38% 4.60% Total ............................................ 3.12% 3.16% 3.20% - -----------------------------------------------------=========================== (A) The balance at September 30, 1998 includes $320 million of credit loss reserves related to the acquisition of UCS. (B) Includes $6.2 billion attributable to loans and loan commitments as a deduction from Loans, $50 million attributable to standby letters of credit and guarantees included in Other Liabilities, and $50 million attributable to derivative and foreign exchange contracts reported as a deduction from Trading Account Assets at September 30, 1998. (C) Attributable to mortgage loans sold with recourse. (D) Excludes allowance portion attributable to standby letters of credit and guarantees, and derivative and foreign exchange contracts. - -------------------------------------------------------------------------------- 16 Certain of the statements contained in the press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Citicorp's actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "are likely to be," and similar expressions. These forward-looking statements involve risks and uncertainties including, but not limited to, the following: changes in general economic conditions, including the performance of financial markets and interest rates; customer responsiveness to both new products and distribution channels; and competitive, regulatory, or tax changes that affect the cost of or demand for Citicorp's products. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits: Exhibit No. 12(a) Calculation of Ratio of Income to Fixed Charges Exhibit No. 12(b) Calculation of Ratio of Income to Fixed Changes Including Preferred Stock Dividends Exhibit No. 99 Citicorp 1998 Third Quarter Financial Supplement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CITICORP (Registrant) By: /s/ Roger W. Trupin ---------------------------------- Roger W. Trupin Vice President and Controller Dated: October 22, 1998 EX-12.A 2 CALCULATION OF RATIO OF INCOME TO FIXED CHARGES CITICORP AND SUBSIDIARIES CALCULATION OF RATIO OF INCOME TO FIXED CHARGES (In Millions)
NINE MONTHS YEAR ENDED DECEMBER 31, SEPTEMBER 30, -------------------------------------------------------- -------------------- 1997 1996 1995 1994 1993 1998 1997 --------- ---------- --------- ---------- -------- ---------- ------- EXCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE (OTHER THAN INTEREST ON DEPOSITS) ...... 3,468 3,435 4,110 5,906 6,324 2,620 2,561 INTEREST FACTOR IN RENT EXPENSE 159 150 140 143 147 129 116 ------ ------ ------ ------ ------ ------ ----- TOTAL FIXED CHARGES ........ 3,627 3,585 4,250 6,049 6,471 2,749 2,677 ------ ------ ------ ------ ------ ------ ----- INCOME: NET INCOME .................... 3,591 3,788 3,464 3,422 (A) 1,919 (B) 2,692 2,530 INCOME TAXES .................. 2,131 2,285 2,121 1,189 941 1,615 1,518 FIXED CHARGES ................. 3,627 3,585 4,250 6,049 6,471 2,749 2,677 ------ ------ ------ ------ ------ ------ ----- TOTAL INCOME ............... 9,349 9,658 9,835 10,660 9,331 7,056 6,725 ====== ====== ====== ====== ====== ====== ====== RATIO OF INCOME TO FIXED CHARGES EXCLUDING INTEREST ON DEPOSITS 2.58 2.69 2.31 1.76 1.44 2.57 2.51 ====== ====== ====== ====== ====== ====== ====== INCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE .............. 13,081 12,409 13,012 14,902 16,121 11,005 9,650 INTEREST FACTOR IN RENT EXPENSE 159 150 140 143 147 129 116 ------ ------ ------ ------ ------ ------ ----- TOTAL FIXED CHARGES ........ 13,240 12,559 13,152 15,045 16,268 11,134 9,766 ------ ------ ------ ------ ------ ------ ----- INCOME: NET INCOME .................... 3,591 3,788 3,464 3,422 (A) 1,919 (B) 2,692 2,530 INCOME TAXES .................. 2,131 2,285 2,121 1,189 941 1,615 1,518 FIXED CHARGES ................. 13,240 12,559 13,152 15,045 16,268 11,134 9,766 ------ ------ ------ ------ ------ ------ ----- TOTAL INCOME ............... 18,962 18,632 18,737 19,656 19,128 15,441 13,814 ====== ====== ====== ====== ====== ====== ====== RATIO OF INCOME TO FIXED CHARGES INCLUDING INTEREST ON DEPOSITS 1.43 1.48 1.42 1.31 1.18 1.39 1.41 ====== ====== ====== ====== ====== ====== ======
(A) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1994 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS", OF $(56) MILLION. (B) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES", OF $300 MILLION. EX-12.B 3 CALCULATION OF RATIO OF INCOME TO FIXED CHARGES CITICORP AND SUBSIDIARIES CALCULATION OF RATIO OF INCOME TO FIXED CHARGES INCLUDING PREFERRED STOCK DIVIDENDS (In Millions)
NINE MONTHS YEAR ENDED DECEMBER 31, SEPTEMBER 30, -------------------------------------------------------- ------------------- 1997 1996 1995 1994 1993 1998 1997 --------- --------- -------- ---------- -------- ---------- ------ EXCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE (OTHER THAN INTEREST ON DEPOSITS) ......... 3,468 3,435 4,110 5,906 6,324 2,620 2,561 INTEREST FACTOR IN RENT EXPENSE .. 159 150 140 143 147 129 116 DIVIDENDS--PREFERRED STOCK ....... 223 261 553 505 (A) 465 126 170 ------ ------ ------ ------ ------ ------ ------ TOTAL FIXED CHARGES ........... 3,850 3,846 4,803 6,554 6,936 2,875 2,847 ------ ------ ------ ------ ------ ------ ------ INCOME: NET INCOME ....................... 3,591 3,788 3,464 3,422 (B) 1,919 (C) 2,692 2,530 INCOME TAXES ..................... 2,131 2,285 2,121 1,189 941 1,615 1,518 FIXED CHARGES (EXCLUDING PREFERRED STOCK DIVIDENDS) .............. 3,627 3,585 4,250 6,049 6,471 2,749 2,677 ------ ------ ------ ------ ------ ------ ------ TOTAL INCOME .................. 9,349 9,658 9,835 10,660 9,331 7,056 6,725 ====== ====== ====== ====== ====== ====== ====== RATIO OF INCOME TO FIXED CHARGES EXCLUDING INTEREST ON DEPOSITS ... 2.43 2.51 2.05 1.63 1.35 2.45 2.36 ====== ====== ====== ====== ====== ====== ====== INCLUDING INTEREST ON DEPOSITS: FIXED CHARGES: INTEREST EXPENSE ................. 13,081 12,409 13,012 14,902 16,121 11,005 9,650 INTEREST FACTOR IN RENT EXPENSE .. 159 150 140 143 147 129 116 DIVIDENDS--PREFERRED STOCK ....... 223 261 553 505 (A) 465 126 170 ------ ------ ------ ------ ------ ------ ------ TOTAL FIXED CHARGES ........... 13,463 12,820 13,705 15,550 16,733 11,260 9,936 ------ ------ ------ ------ ------ ------ ------ INCOME: NET INCOME ....................... 3,591 3,788 3,464 3,422 (B) 1,919 (C) 2,692 2,530 INCOME TAXES ..................... 2,131 2,285 2,121 1,189 941 1,615 1,518 FIXED CHARGES (EXCLUDING PREFERRED STOCK DIVIDENDS) .............. 13,240 12,559 13,152 15,045 16,268 11,134 9,766 ------ ------ ------ ------ ------ ------ ------ TOTAL INCOME .................. 18,962 18,632 18,737 19,656 19,128 15,441 13,814 ====== ====== ====== ====== ====== ====== ====== RATIO OF INCOME TO FIXED CHARGES INCLUDING INTEREST ON DEPOSITS ... 1.41 1.45 1.37 1.26 1.14 1.37 1.39 ====== ====== ====== ====== ====== ====== ======
(A) CALCULATED ON A BASIS OF AN ASSUMED TAX RATE OF 29% FOR 1994. (B) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1994 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS", OF $(56) MILLION. (C) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 EXCLUDES THE CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES", OF $300 MILLION. EX-99 4 FINANCIAL SUPPLEMENT Page No. -------- CITICORP: Citicorp Financial Summary........................................... 1 Citicorp Earnings Analysis........................................... 2 Citicorp Segment Revenues ........................................... 3 Citicorp Segment Core Income ........................................ 4 Citicorp Global Consumer ............................................ 5 Citicorp Citibanking ................................................ 6 Citicorp Cards....................................................... 7 Citicorp Private Banking............................................. 8 Citicorp Global Consumer in Emerging Markets ........................ 9 Citicorp Global Consumer in Developed Markets........................ 10 Citicorp Global Corporate Banking.................................... 11 Citicorp Emerging Markets............................................ 12 Citicorp Global Relationship Banking................................. 13 Citicorp Investment Activities....................................... 14 Citicorp Corporate Items............................................. 14 Citicorp Other Revenue and Securities Transactions................... 15 Citicorp Trading-Related Revenue..................................... 15 Citicorp Cash-Basis and Renegotiated Loans........................... 16 Citicorp Other Real Estate Owned (OREO) and Assets Pending Disposition ....................................................... 16 Citicorp U.S. Bankcards Data Sheet................................... 17 CITICORP FINANCIAL SUMMARY (In millions of dollars)
1Q 2Q 3Q 4Q 1Q 2Q 1997 1997 1997 1997 1998 1998 --------- --------- --------- --------- --------- --------- Net Income $ 995 $ 1,024 $ 511 $ 1,061 $ 1,065 $ 1,097 ========= ========= ========= ========= ========= ========= --------- --------- --------- --------- --------- --------- Core Income Excluding Restructuring $ 995 $ 1,024 $ 1,067 $ 1,061 $ 1,065 $ 1,097 ========= ========= ========= ========= ========= ========= Financial Ratios Return on Assets 1.41% 1.40% 0.68% 1.39% 1.38% 1.35% Return on Common Stockholders' Equity 20.76% 20.97% 9.64% 21.49% 21.74% 21.51% Return on Total Stockholders' Equity 19.44% 19.72% 9.42% 20.18% 20.55% 20.46% Adjusted Net Interest Margin 5.23% 5.00% 4.88% 4.85% 4.85% 5.02% Financial Ratios Excluding Restructuring Return on Assets 1.41% 1.40% 1.42% 1.39% 1.38% 1.35% Return on Common Stockholders' Equity 20.76% 20.97% 20.77% 21.49% 21.74% 21.51% Return on Total Stockholders' Equity 19.44% 19.72% 19.57% 20.18% 20.55% 20.46% Capital (Dollars in Billions) Tier 1 $ 20.3 $ 20.6 $ 20.7 $ 21.1 $ 21.3 $ 21.9 Total (Tier 1 and 2) (A) 29.3 30.1 30.4 31.2 31.2 31.8 Tier 1 Ratio (A) 8.39% 8.18% 8.25% 8.34% 8.26% 8.29% Total Ratio (Tier 1 and 2) (A) 12.11% 11.96% 12.16% 12.31% 12.13% 12.05% Common Equity as a Percentage of Total Assets 6.50% 6.41% 6.53% 6.21% 6.01% 6.18% Total Equity as a Percentage of Total Assets 7.16% 7.04% 7.16% 6.82% 6.50% 6.57% YTD YTD 3Q 3Q 3Q 1998 1997 1998 --------- --------- --------- Net Income $ 530 $ 2,530 $ 2,692 ========= ========= ========= --------- --------- --------- Core Income Excluding Restructuring $ 530 $ 3,086 $ 2,692 ========= ========= ========= Financial Ratios Return on Assets 0.63% 1.16% 1.11% Return on Common Stockholders' Equity 9.98% 16.98% 17.61% Return on Total Stockholders' Equity 9.79% 16.08% 16.87% Adjusted Net Interest Margin 5.06% N/A N/A Financial Ratios Excluding Restructuring Return on Assets 0.63% 1.41% 1.11% Return on Common Stockholders' Equity 9.98% 20.84% 17.61% Return on Total Stockholders' Equity 9.79% 19.58% 16.87% Capital (Dollars in Billions) Tier 1 $ 21.8 $ 20.7 $ 21.8 Total (Tier 1 and 2) (A) 31.8 30.4 31.8 Tier 1 Ratio (A) 8.0% 8.25% 8.0% Total Ratio (Tier 1 and 2) (A) 11.7% 12.16% 11.7% Common Equity as a Percentage of Total Assets 5.91% 6.53% 5.91% Total Equity as a Percentage of Total Assets 6.16% 7.16% 6.16%
(A) Estimated for September 30, 1998. N/A Not Available. Page 1 CITICORP EARNINGS ANALYSIS (In millions of dollars)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1997 1997 1997 1997 1998 1998 1998 -------- -------- -------- -------- -------- -------- -------- Total Revenue $ 5,196 $ 5,311 $ 5,541 $ 5,568 $ 5,605 $ 6,202 $ 5,494 Effect of Credit Card Securitization Activity 434 437 408 434 461 579 573 Net Cost To Carry (A) (3) (1) (5) 4 (1) 11 4 -------- -------- -------- -------- -------- -------- -------- Adjusted Revenue 5,627 5,747 5,944 6,006 6,065 6,792 6,071 -------- -------- -------- -------- -------- -------- -------- Total Operating Expense 3,169 3,173 4,237 3,408 3,394 3,883 3,910 Net OREO Benefits (B) 10 37 16 9 12 2 13 Restructuring Charge -- -- (889) -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Adjusted Operating Expense 3,179 3,210 3,364 3,417 3,406 3,885 3,923 -------- -------- -------- -------- -------- -------- -------- Operating Margin 2,448 2,537 2,580 2,589 2,659 2,907 2,148 -------- -------- -------- -------- -------- -------- -------- Global Consumer Net Write-Offs 459 488 452 432 426 510 479 Effect of Credit Card Securitization Activity 434 437 408 434 461 579 573 Net Cost to Carry and Net OREO (Benefits) Costs (A) (B) 1 (3) (4) -- (1) (3) (8) -------- -------- -------- -------- -------- -------- -------- Global Consumer Credit Costs 894 922 856 866 886 1,086 1,044 -------- -------- -------- -------- -------- -------- -------- Global Corporate Banking Net Write-Offs (Recoveries) (6) 3 14 29 66 29 232 Net Cost to Carry and Net OREO Costs (Benefits) (A) (B) (14) (35) (17) (5) (12) 12 (1) Global Corporate Banking -------- -------- -------- -------- -------- -------- -------- Credit Costs (Benefits) (20) (32) (3) 24 54 41 231 -------- -------- -------- -------- -------- -------- -------- Investment Activities Credit -------- -------- -------- -------- -------- -------- -------- (Benefits) (55) (4) (5) -- (10) -- -- -------- -------- -------- -------- -------- -------- -------- Operating Margin Less Credit Costs 1,629 1,651 1,732 1,699 1,729 1,780 873 Additional Provision (C) 25 25 25 25 25 25 25 Restructuring Charge -- -- 889 -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Income Before Taxes 1,604 1,626 818 1,674 1,704 1,755 848 Income Taxes 609 602 307 613 639 658 318 -------- -------- -------- -------- -------- -------- -------- Net Income $ 995 $ 1,024 $ 511 $ 1,061 $ 1,065 $ 1,097 $ 530 ======== ======== ======== ======== ======== ======== ======== -------- -------- -------- -------- -------- -------- -------- Core Income Excluding Restructuring $ 995 $ 1,024 $ 1,067 $ 1,061 $ 1,065 $ 1,097 $ 530 ======== ======== ======== ======== ======== ======== ======== YTD YTD 3Q 3Q 1997 1998 -------- -------- Total Revenue $ 16,048 $ 17,301 Effect of Credit Card Securitization Activity 1,279 1,613 Net Cost To Carry (A) (9) 14 -------- -------- Adjusted Revenue 17,318 18,928 -------- -------- Total Operating Expense 10,579 11,187 Net OREO Benefits (B) 63 27 Restructuring Charge (889) -- -------- -------- Adjusted Operating Expense 9,753 11,214 -------- -------- Operating Margin 7,565 7,714 -------- -------- Global Consumer Net Write-Offs 1,399 1,415 Effect of Credit Card Securitization Activity 1,279 1,613 Net Cost to Carry and Net OREO (Benefits) Costs (A) (B) (6) (12) -------- -------- Global Consumer Credit Costs 2,672 3,016 -------- -------- Global Corporate Banking Net Write-Offs (Recoveries) 11 327 Net Cost to Carry and Net OREO Costs (Benefits) (A) (B) (66) (1) Global Corporate Banking -------- -------- Credit Costs (Benefits) (55) 326 Investment Activities Credit -------- -------- (Benefits) (64) (10) -------- -------- Operating Margin Less Credit Costs 5,012 4,382 Additional Provision (C) 75 75 Restructuring Charge 889 -- -------- -------- Income Before Taxes 4,048 4,307 Income Taxes 1,518 1,615 -------- -------- Net Income $ 2,530 $ 2,692 ======== ======== -------- -------- Core Income Excluding Restructuring $ 3,086 $ 2,692 ======== ========
(A) Includes the net cost to carry cash-basis loans and other real estate owned ("OREO"). (B) Includes gains and losses on sales, direct revenue and expense, and writedowns of OREO. (C) Represents amounts in excess of net write-offs. Page 2 CITICORP SEGMENT REVENUES (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Global Consumer $ 3,069 $ 3,107 $ 3,128 $ 3,115 $ 3,046 $ 3,464 $ 3,633 $ 9,304 $10,143 Global Corporate Banking 1,763 1,660 1,788 1,709 1,858 2,036 1,461 5,211 5,355 ------- ------- ------- ------- ------- ------- ------- ------- ------- Core Businesses 4,832 4,767 4,916 4,824 4,904 5,500 5,094 14,515 15,498 Investment Activities 146 308 348 493 468 439 117 802 1,024 Corporate Items 218 236 277 251 233 263 283 731 779 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Citicorp $ 5,196 $ 5,311 $ 5,541 $ 5,568 $ 5,605 $ 6,202 $ 5,494 $16,048 $17,301 ======= ======= ======= ======= ======= ======= ======= ======= ======= Supplemental Information Global Consumer Citibanking $ 1,476 $ 1,528 $ 1,532 $ 1,534 $ 1,510 $ 1,613 $ 1,680 $ 4,536 $ 4,803 Cards 1,322 1,300 1,299 1,291 1,251 1,548 1,652 3,921 4,451 Private Bank 271 279 297 290 285 303 301 847 889 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 3,069 $ 3,107 $ 3,128 $ 3,115 $ 3,046 $ 3,464 $ 3,633 $ 9,304 $10,143 ======= ======= ======= ======= ======= ======= ======= ======= ======= Global Consumer Emerging Markets $ 948 $ 987 $ 970 $ 908 $ 877 $ 922 $ 982 $ 2,905 $ 2,781 Developed Markets 2,121 2,120 2,158 2,207 2,169 2,542 2,651 6,399 7,362 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 3,069 $ 3,107 $ 3,128 $ 3,115 $ 3,046 $ 3,464 $ 3,633 $ 9,304 $10,143 ======= ======= ======= ======= ======= ======= ======= ======= ======= Global Corporate Banking Emerging Markets $ 832 $ 792 $ 881 $ 729 $ 891 $ 906 $ 697 $ 2,505 $ 2,494 Global Relationship Banking 931 868 907 980 967 1,130 764 2,706 2,861 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 1,763 $ 1,660 $ 1,788 $ 1,709 $ 1,858 $ 2,036 $ 1,461 $ 5,211 $ 5,355 ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities, certain Corporate investments, and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." Page 3 CITICORP SEGMENT CORE INCOME (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Global Consumer $ 475 $ 457 $ 452 $ 411 $ 420 $ 367 $ 477 $ 1,384 $ 1,264 Global Corporate Banking 457 397 417 194 390 377 (127) 1,271 640 ------- ------- ------- ------- ------- ------- ------- ------- ------- Core Businesses 932 854 869 605 810 744 350 2,655 1,904 Investment Activities 166 240 259 386 376 341 71 665 788 Corporate Items (103) (70) (61) 70 (121) 12 109 (234) -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Citicorp $ 995 $ 1,024 $ 1,067 $ 1,061 $ 1,065 $ 1,097 $ 530 $ 3,086 $ 2,692 ======= ======= ======= ======= ======= ======= ======= ======= ======= Supplemental Information Global Consumer Citibanking $ 175 $ 192 $ 168 $ 130 $ 158 $ 149 $ 178 $ 535 $ 485 Cards 219 185 193 205 189 141 227 597 557 Private Bank 81 80 91 76 73 77 72 252 222 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 475 $ 457 $ 452 $ 411 $ 420 $ 367 $ 477 $ 1,384 $ 1,264 ======= ======= ======= ======= ======= ======= ======= ======= ======= Global Consumer Emerging Markets $ 240 $ 239 $ 218 $ 160 $ 159 $ 140 $ 158 $ 697 $ 457 Developed Markets 235 218 234 251 261 227 319 687 807 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 475 $ 457 $ 452 $ 411 $ 420 $ 367 $ 477 $ 1,384 $ 1,264 ======= ======= ======= ======= ======= ======= ======= ======= ======= Global Corporate Banking Emerging Markets $ 309 $ 250 $ 280 $ 75 $ 285 $ 207 $ (19) $ 839 $ 473 Global Relationship Banking 148 147 137 119 105 170 (108) 432 167 ------- ------- ------- ------- ------- ------- ------- ------- ------- Total $ 457 $ 397 $ 417 $ 194 $ 390 $ 377 $ (127) $ 1,271 $ 640 ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities, certain Corporate investments, and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." Page 4 CITICORP GLOBAL CONSUMER (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Adjusted Revenue $ 3,503 $ 3,544 $ 3,534 $ 3,549 $ 3,506 $ 4,043 $ 4,199 $10,581 $11,748 Adjusted Operating Expense 1,908 1,961 2,011 2,059 1,994 2,378 2,407 5,880 6,779 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 1,595 1,583 1,523 1,490 1,512 1,665 1,792 4,701 4,969 Credit Costs (B) 894 922 856 866 886 1,086 1,044 2,672 3,016 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin Less Credit Costs 701 661 667 624 626 579 748 2,029 1,953 Additional Provision 25 25 25 25 25 25 25 75 75 Restructuring Charge -- -- 580 -- -- -- -- 580 -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 676 636 62 599 601 554 723 1,374 1,878 Income Taxes 201 179 (39) 188 181 187 246 341 614 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income $ 475 $ 457 $ 101 $ 411 $ 420 $ 367 $ 477 $ 1,033 $ 1,264 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 131 $ 133 $ 134 $ 133 $ 131 $ 140 $ 144 $ 132 $ 139 Return on Assets (%) 1.47% 1.38% 0.30% 1.23% 1.30% 1.05% 1.31% 1.05% 1.22% ======= ======= ======= ======= ======= ======= ======= ======= ======= Excluding Restructuring Charge Core Income $ 475 $ 457 $ 452 $ 411 $ 420 $ 367 $ 477 $ 1,384 $ 1,264 Return on Assets (%) 1.47% 1.38% 1.34% 1.23% 1.30% 1.05% 1.31% 1.40% 1.22% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation. (B) Includes the effect of credit card securitization activity and the effect related to credit card receivables held for sale. Page 5 CITICORP CITIBANKING (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Revenue $ 1,476 $ 1,528 $ 1,532 $ 1,534 $ 1,510 $ 1,613 $ 1,680 $ 4,536 $ 4,803 Operating Expense 1,071 1,099 1,148 1,187 1,154 1,233 1,260 3,318 3,647 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 405 429 384 347 356 380 420 1,218 1,156 Credit Costs 148 145 135 139 137 144 144 428 425 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin Less Credit Costs 257 284 249 208 219 236 276 790 731 Additional Provision -- -- -- -- (2) (4) (1) -- (7) Restructuring Charge -- -- 457 -- -- -- -- 457 -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 257 284 (208) 208 221 240 277 333 738 Income Taxes 82 92 (101) 78 63 91 99 73 253 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income (Loss) $ 175 $ 192 $ (107) $ 130 $ 158 $ 149 $ 178 $ 260 $ 485 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 83 $ 84 $ 85 $ 85 $ 86 $ 88 $ 92 $ 84 $ 89 Return on Assets (%) 0.86% 0.92% -- 0.61% 0.75% 0.68% 0.77% 0.41% 0.73% ======= ======= ======= ======= ======= ======= ======= ======= ======= Excluding Restructuring Charge Core Income $ 175 $ 192 $ 168 $ 130 $ 158 $ 149 $ 178 $ 535 $ 485 Return on Assets (%) 0.86% 0.92% 0.78% 0.61% 0.75% 0.68% 0.77% 0.85% 0.73% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation. Page 6 CITICORP CARDS (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------ ------ ------ ------ ------ ------ ------ ------ ------ Adjusted Revenue $1,756 $1,737 $1,707 $1,725 $1,712 $2,127 $2,225 5,200 6,064 Adjusted Operating Expense 671 680 673 671 645 942 942 2,024 2,529 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin 1,085 1,057 1,034 1,054 1,067 1,185 1,283 3,176 3,535 Credit Costs 747 778 729 736 757 945 907 2,254 2,609 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin Less Credit Costs 338 279 305 318 310 240 376 922 926 Additional Provision 25 25 25 25 27 29 26 75 82 Restructuring Charge -- -- 95 -- -- -- -- 95 -- ------ ------ ------ ------ ------ ------ ------ ------ ------ Income Before Taxes 313 254 185 293 283 211 350 752 844 Income Taxes 94 69 50 88 94 70 123 213 287 ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Income $ 219 $ 185 $ 135 $ 205 $ 189 $ 141 $ 227 539 557 ====== ====== ====== ====== ====== ====== ====== ====== ====== Average Assets (In Billions of Dollars) $ 31 $ 32 $ 32 $ 31 $ 29 $ 36 $ 35 $ 31 $ 33 Return on Assets (%) 2.87% 2.32% 1.67% 2.62% 2.64% 1.57% 2.57% 2.32% 2.26% ====== ====== ====== ====== ====== ====== ====== ====== ====== Excluding Restructuring Charge Core Income $ 219 $ 185 $ 193 $ 205 $ 189 $ 141 $ 227 $ 597 $ 557 Return on Assets (%) 2.87% 2.32% 2.39% 2.62% 2.64% 1.57% 2.57% 2.57% 2.26% ====== ====== ====== ====== ====== ====== ====== ====== ======
(A) Reclassified to conform to the latest quarter's presentation. Page 7 CITICORP PRIVATE BANKING (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ----- ----- ----- ----- ----- ----- ----- ----- ----- Adjusted Revenue $ 271 $ 279 $ 295 $ 290 $ 284 $ 303 $ 294 $ 845 $ 881 Adjusted Operating Expense 166 182 190 201 195 203 205 538 603 ----- ----- ----- ----- ----- ----- ----- ----- ----- Operating Margin 105 97 105 89 89 100 89 307 278 Credit (Benefits) (1) (1) (8) (9) (8) (3) (7) (10) (18) ----- ----- ----- ----- ----- ----- ----- ----- ----- Operating Margin Less Credit (Benefits) 106 98 113 98 97 103 96 317 296 Restructuring Charge -- -- 28 -- -- -- -- 28 -- ----- ----- ----- ----- ----- ----- ----- ----- ----- Income Before Taxes 106 98 85 98 97 103 96 289 296 Income Taxes 25 18 12 22 24 26 24 55 74 ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Income $ 81 $ 80 $ 73 $ 76 $ 73 $ 77 $ 72 $ 234 $ 222 ===== ===== ===== ===== ===== ===== ===== ===== ===== Average Assets (In Billions of Dollars) $ 17 $ 17 $ 17 $ 17 $ 16 $ 16 $ 17 $ 17 $ 17 Return on Assets (%) 1.93% 1.89% 1.70% 1.77% 1.85% 1.93% 1.68% 1.84% 1.75% ===== ===== ===== ===== ===== ===== ===== ===== ===== Excluding Restructuring Charge Core Income $ 81 $ 80 $ 91 $ 76 $ 73 $ 77 $ 72 $ 252 $ 222 Return on Assets (%) 1.93% 1.89% 2.12% 1.77% 1.85% 1.93% 1.68% 1.98% 1.75% ===== ===== ===== ===== ===== ===== ===== ===== =====
(A) Reclassified to conform to the latest quarter's presentation. Page 8 CITICORP GLOBAL CONSUMER IN EMERGING MARKETS (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------ ------ ------ ------ ------ ------ ------ ------ ------ Adjusted Revenue $ 948 $ 987 $ 970 $ 908 $ 877 $ 922 $ 982 $2,905 $2,781 Adjusted Operating Expense 545 585 598 612 570 610 638 1,728 1,818 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin 403 402 372 296 307 312 344 1,177 963 Credit Costs 92 97 91 88 101 133 139 280 373 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin Less Credit Costs 311 305 281 208 206 179 205 897 590 Additional Provision 4 7 15 25 11 11 11 26 33 Restructuring Charge -- -- 131 -- -- -- -- 131 -- ------ ------ ------ ------ ------ ------ ------ ------ ------ Income Before Taxes 307 298 135 183 195 168 194 740 557 Income Taxes 67 59 (1) 23 36 28 36 125 100 ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Income $ 240 $ 239 $ 136 $ 160 $ 159 $ 140 $ 158 $ 615 $ 457 ====== ====== ====== ====== ====== ====== ====== ====== ====== Average Assets (In Billions of Dollars) $ 42 $ 43 $ 43 $ 42 $ 41 $ 42 $ 45 $ 42 $ 43 Return on Assets (%) 2.32% 2.23% 1.25% 1.51% 1.57% 1.34% 1.39% 1.96% 1.43% ====== ====== ====== ====== ====== ====== ====== ====== ====== Excluding Restructuring Charge Core Income $ 240 $ 239 $ 218 $ 160 $ 159 $ 140 $ 158 $ 697 $ 457 Return on Assets (%) 2.32% 2.23% 2.01% 1.51% 1.57% 1.34% 1.39% 2.22% 1.43% ====== ====== ====== ====== ====== ====== ====== ====== ======
(A) Reclassified to conform to the latest quarter's presentation. Page 9 CITICORP GLOBAL CONSUMER IN DEVELOPED MARKETS (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Adjusted Revenue $ 2,555 $ 2,557 $ 2,564 $ 2,641 $ 2,629 $ 3,121 $ 3,217 $ 7,676 $ 8,967 Adjusted Operating Expense 1,363 1,376 1,413 1,447 1,424 1,768 1,769 4,152 4,961 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 1,192 1,181 1,151 1,194 1,205 1,353 1,448 3,524 4,006 Credit Costs 802 825 765 778 785 953 905 2,392 2,643 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin Less Credit Costs 390 356 386 416 420 400 543 1,132 1,363 Additional Provision 21 18 10 -- 14 14 14 49 42 Restructuring Charge -- -- 449 -- -- -- -- 449 -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 369 338 (73) 416 406 386 529 634 1,321 Income Taxes 134 120 (38) 165 145 159 210 216 514 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income (Loss) $ 235 $ 218 $ (35) $ 251 $ 261 $ 227 $ 319 $ 418 $ 807 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 89 $ 90 $ 91 $ 91 $ 90 $ 98 $ 99 $ 90 $ 96 Return on Assets (%) 1.07% 0.97% -- 1.09% 1.18% 0.93% 1.28% 0.62% 1.13% ======= ======= ======= ======= ======= ======= ======= ======= ======= Excluding Restructuring Charge Core Income $ 235 $ 218 $ 234 $ 251 $ 261 $ 227 $ 319 $ 687 $ 807 Return on Assets (%) 1.07% 0.97% 1.02% 1.09% 1.18% 0.93% 1.28% 1.02% 1.13% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation. Page 10 CITICORP GLOBAL CORPORATE BANKING (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Adjusted Revenue $ 1,760 $ 1,659 $ 1,785 $ 1,713 $ 1,858 $ 2,047 $ 1,472 $ 5,204 $ 5,377 Adjusted Operating Expense 1,148 1,204 1,267 1,341 1,299 1,415 1,424 3,619 4,138 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 612 455 518 372 559 632 48 1,585 1,239 Credit Costs (Benefits) (20) (32) (3) 24 54 41 231 (55) 326 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin Less Credit Costs (Benefits) 632 487 521 348 505 591 (183) 1,640 913 Restructuring Charge -- -- 281 -- -- -- -- 281 -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 632 487 240 348 505 591 (183) 1,359 913 Income Taxes 175 90 (9) 154 115 214 (56) 256 273 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income (Loss) $ 457 $ 397 $ 249 $ 194 $ 390 $ 377 $ (127) $ 1,103 $ 640 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 140 $ 143 $ 151 $ 155 $ 165 $ 170 $ 173 $ 145 $ 169 Return on Assets (%) 1.32% 1.11% 0.65% 0.50% 0.96% 0.89% -- 1.02% 0.51% ======= ======= ======= ======= ======= ======= ======= ======= ======= Excluding Restructuring Charge Core Income $ 457 $ 397 $ 417 $ 194 $ 390 $ 377 $ (127) $ 1,271 $ 640 Return on Assets (%) 1.32% 1.11% 1.10% 0.50% 0.96% 0.89% -- 1.17% 0.51% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." Page 11 CITICORP EMERGING MARKETS (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------ ------ ------ ------ ------ ------ ------ ------ ------ Adjusted Revenue $ 833 $ 795 $ 883 $ 738 $ 902 $ 921 $ 713 $2,511 $2,536 Adjusted Operating Expense 444 472 499 533 494 524 531 1,415 1,549 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin 389 323 384 205 408 397 182 1,096 987 Credit Costs 19 28 35 53 73 93 212 82 378 ------ ------ ------ ------ ------ ------ ------ ------ ------ Operating Margin Less Credit Costs 370 295 349 152 335 304 (30) 1,014 609 Restructuring Charge -- -- 54 -- -- -- -- 54 -- ------ ------ ------ ------ ------ ------ ------ ------ ------ Income Before Taxes 370 295 295 152 335 304 (30) 960 609 Income Taxes 61 45 47 77 50 97 (11) 153 136 ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Income (Loss) $ 309 $ 250 $ 248 $ 75 $ 285 $ 207 $ (19) $ 807 $ 473 ====== ====== ====== ====== ====== ====== ====== ====== ====== Average Assets (In Billions of Dollars) $ 60 $ 63 $ 68 $ 73 $ 77 $ 79 $ 81 $ 64 $ 79 Return on Assets (%) 2.09% 1.59% 1.45% 0.41% 1.50% 1.05% -- 1.69% 0.80% ====== ====== ====== ====== ====== ====== ====== ====== ====== Excluding Restructuring Charge Core Income $ 309 $ 250 $ 280 $ 75 $ 285 $ 207 $ (19) $ 839 $ 473 Return on Assets (%) 2.09% 1.59% 1.63% 0.41% 1.50% 1.05% -- 1.75% 0.80% ====== ====== ====== ====== ====== ====== ====== ====== ======
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." Page 12 CITICORP GLOBAL RELATIONSHIP BANKING (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Adjusted Revenue $ 927 $ 864 $ 902 $ 975 $ 956 $ 1,126 $ 759 $ 2,693 $ 2,841 Adjusted Operating Expense 704 732 768 808 805 891 893 2,204 2,589 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 223 132 134 167 151 235 (134) 489 252 Credit Costs (Benefits) (39) (60) (38) (29) (19) (52) 19 (137) (52) ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin Less Credit Costs (Benefits) 262 192 172 196 170 287 (153) 626 304 Restructuring Charge -- -- 227 -- -- -- -- 227 -- ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 262 192 (55) 196 170 287 (153) 399 304 Income Taxes 114 45 (56) 77 65 117 (45) 103 137 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income (Loss) $ 148 $ 147 $ 1 $ 119 $ 105 $ 170 $ (108) $ 296 $ 167 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 80 $ 80 $ 83 $ 82 $ 88 $ 91 $ 92 $ 81 $ 90 Return on Assets (%) 0.75% 0.74% -- 0.58% 0.48% 0.75% -- 0.49% 0.25% ======= ======= ======= ======= ======= ======= ======= ======= ======= Excluding Restructuring Charge Core Income $ 148 $ 147 $ 137 $ 119 $ 105 $ 170 $ (108) $ 432 $ 167 Return on Assets (%) 0.75% 0.74% 0.65% 0.58% 0.48% 0.75% -- 0.71% 0.25% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Reclassified to conform to the latest quarter's presentation, including the reclassification of Citicorp's venture capital activities to a new business segment called "Investment Activities." Page 13 CITICORP INVESTMENT ACTIVITIES (A) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------- ------- ------- ------- ------- ------- ------- ------- ------- Revenue $ 146 $ 308 $ 348 $ 493 $ 468 $ 439 $ 117 $ 802 $ 1,024 Operating Expense 9 8 9 12 11 12 11 26 34 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating Margin 137 300 339 481 457 427 106 776 990 Credit (Benefits) (55) (4) (5) -- (10) -- -- (64) (10) ------- ------- ------- ------- ------- ------- ------- ------- ------- Income Before Taxes 192 304 344 481 467 427 106 840 1,000 Income Taxes 26 64 85 95 91 86 35 175 212 ------- ------- ------- ------- ------- ------- ------- ------- ------- Net Income $ 166 $ 240 $ 259 $ 386 $ 376 $ 341 $ 71 $ 665 $ 788 ======= ======= ======= ======= ======= ======= ======= ======= ======= Average Assets (In Billions of Dollars) $ 9 $ 9 $ 9 $ 9 $ 9 $ 9 $ 8 $ 9 $ 9 Return on Assets (%) 7.48% 10.70% 11.42% 17.02% 16.94% 15.20% 3.52% 9.88% 11.75% ======= ======= ======= ======= ======= ======= ======= ======= =======
(A) Investment Activities comprises Citicorp's venture capital activities, certain Corporate investments, and the results of certain investments in the former refinancing countries. CITICORP CORPORATE ITEMS (A) (B) (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ----- ----- ----- ----- ----- ----- ----- ----- ----- Revenue $ 218 $ 236 $ 277 $ 251 $ 233 $ 263 $ 283 $ 731 $ 779 Operating Expense 114 37 77 5 102 80 81 228 263 ----- ----- ----- ----- ----- ----- ----- ----- ----- Operating Margin 104 199 200 246 131 183 202 503 516 Restructuring Charge -- -- 28 -- -- -- -- 28 -- ----- ----- ----- ----- ----- ----- ----- ----- ----- Income Before Taxes 104 199 172 246 131 183 202 475 516 Income Taxes 207 269 270 176 252 171 93 746 516 ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Income (Loss) $(103) $ (70) $ (98) $ 70 $(121) $ 12 $ 109 $(271) $ -- ===== ===== ===== ===== ===== ===== ===== ===== ===== Average Assets (In Billions of Dollars) $ 5 $ 8 $ 5 $ 5 $ 8 $ 8 $ 7 $ 6 $ 7 ===== ===== ===== ===== ===== ===== ===== ===== ===== Excluding Restructuring Charge Core Income $(103) $ (70) $ (61) $ 70 $(121) $ 12 $ 109 $(234) $ -- ===== ===== ===== ===== ===== ===== ===== ===== =====
(A) Corporate Items includes revenue derived from charging businesses for funds employed, based upon a marginal cost of funds concept, unallocated corporate costs, and the offset created by attributing income taxes to core business activities on a local tax-rate basis. (B) Reclassified to conform to the latest quarter's presentation, including the reclassification of certain Corporate investments and the results of certain investments in the former refinancing countries to a new business segment called "Investment Activities." Page 14 CITICORP OTHER REVENUE AND SECURITIES TRANSACTIONS (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------ ------ ------ ------ ------ ------ ------ ------ ------ Securities Transactions $ 108 $ 124 $ 186 $ 250 $ 241 $ 300 $ (56) $ 418 $ 485 ------ ------ ------ ------ ------ ------ ------ ------ ------ Other Revenue Credit Card Securitization Activity $ 165 $ 118 $ 134 $ 142 $ 138 $ 351 $ 374 $ 417 $ 863 Venture Capital 93 173 235 248 264 171 (31) 501 404 Affiliate Earnings 59 112 51 33 29 42 47 222 118 Net Asset Gains 92 64 (6) 206 31 198 142 150 371 Other Items 28 8 18 29 37 29 30 54 96 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total Other Revenue $ 437 $ 475 $ 432 $ 658 $ 499 $ 791 $ 562 $1,344 $1,852 ====== ====== ====== ====== ====== ====== ====== ====== ======
CITICORP TRADING-RELATED REVENUE (In millions of dollars)
YTD YTD 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q 3Q 1997 1997 1997 1997 1998 1998 1998 1997 1998 ------ ------ ------ ------ ------ ------ ------ ------ ------ By Income Statement Line Foreign Exchange $ 297 $ 311 $ 435 $ 443 $ 349 $ 465 $ 474 $1,043 $1,288 Trading Account 198 97 134 (188) 236 98 (159) 429 175 Other 94 103 91 92 143 167 77 288 387 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total $ 589 $ 511 $ 660 $ 347 $ 728 $ 730 $ 392 $1,760 $1,850 ====== ====== ====== ====== ====== ====== ====== ====== ====== By Trading Activity Foreign Exchange $ 237 $ 258 $ 342 $ 327 $ 386 $ 391 $ 386 $ 837 $1,163 Derivative 207 129 170 (49) 236 218 110 506 564 Fixed Income 70 59 75 1 56 31 (36) 204 51 Other 75 65 73 68 50 90 (68) 213 72 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total $ 589 $ 511 $ 660 $ 347 $ 728 $ 730 $ 392 $1,760 $1,850 ====== ====== ====== ====== ====== ====== ====== ====== ====== By Business Sector Emerging Markets $ 207 $ 155 $ 268 $ 132 $ 271 $ 259 $ 184 $ 630 $ 714 Global Relationship Banking 330 270 296 134 378 357 113 896 848 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total Corporate Banking 537 425 564 266 649 616 297 1,526 1,562 Consumer and Other 52 86 96 81 79 114 95 234 288 ------ ------ ------ ------ ------ ------ ------ ------ ------ Total $ 589 $ 511 $ 660 $ 347 $ 728 $ 730 $ 392 $1,760 $1,850 ====== ====== ====== ====== ====== ====== ====== ====== ======
Page 15 CITICORP CASH-BASIS AND RENEGOTIATED LOANS (In millions of dollars)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1997 1997 1997 1997 1998 1998 1998 ------ ------ ------ ------ ------ ------ ------ Commercial Cash-Basis Loans Collateral Dependent (at Lower of Cost or Collateral Value) (A) $ 288 $ 274 $ 271 $ 258 $ 242 $ 193 $ 170 Other (B) 641 643 698 806 1,102 1,100 1,110 ------ ------ ------ ------ ------ ------ ------ Total Commercial Cash-Basis Loans $ 929 $ 917 $ 969 $1,064 $1,344 $1,293 $1,280 ====== ====== ====== ====== ====== ====== ====== Commercial Cash-Basis Loans Emerging Markets (B) $ 399 $ 470 $ 520 $ 649 $ 953 $ 981 $ 982 Global Relationship Banking 514 434 436 401 378 300 286 Investment Activities 16 13 13 14 13 12 12 ------ ------ ------ ------ ------ ------ ------ Total Commercial Cash-Basis Loans $ 929 $ 917 $ 969 $1,064 $1,344 $1,293 $1,280 ====== ====== ====== ====== ====== ====== ====== Commercial Renegotiated Loans $ 296 $ 295 $ 70 $ 59 $ 61 $ 45 $ 48 ====== ====== ====== ====== ====== ====== ====== Consumer Loans on which Accrual of Interest has been Suspended $2,119 $2,036 $1,902 $1,849 $1,850 $1,864 $1,924 ====== ====== ====== ====== ====== ====== ======
(A) A cash-basis loan is defined as collateral dependent when repayment is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment, in which case the loans are written down to the lower of cost or collateral value. (B) Includes foreign currency derivative contracts with a balance sheet credit exposure of $44 million, $44 million, $83 million, and $59 million at September 30, 1998, June 30, 1998, March 31, 1998, and December 31, 1997, respectively, for which the recognition of revaluation gains has been suspended. CITICORP OTHER REAL ESTATE OWNED (OREO) AND ASSETS PENDING DISPOSITION (A) (In millions of dollars)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1997 1997 1997 1997 1998 1998 1998 ------ ------ ------ ------ ------ ------ ------ Consumer OREO $ 408 $ 362 $ 309 $ 263 $ 242 $ 182 $ 238 Emerging Markets 24 22 23 21 21 24 26 Global Relationship Banking 569 460 456 440 329 324 319 ------ ------ ------ ------ ------ ------ ------ Commercial OREO 593 482 479 461 350 348 345 ====== ====== ====== ====== ====== ====== ====== Total $1,001 $ 844 $ 788 $ 724 $ 592 $ 530 $ 583 ====== ====== ====== ====== ====== ====== ====== Assets Pending Disposition (B) $ 174 $ 72 $ 88 $ 96 $ 103 $ 104 $ 103 ====== ====== ====== ====== ====== ====== ======
(A) Carried at lower of cost or collateral value. (B) Represents consumer residential mortgage loans that have a high probability of foreclosure. Page 16 CITICORP U.S. BANKCARDS DATA SHEET (In billions of dollars)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1997 1997 1997 1997 1998 1998 1998 -------- -------- -------- -------- -------- -------- -------- End of Period Managed Receivables $ 45.1 $ 45.8 $ 46.5 $ 48.2 $ 45.3 $ 60.3 $ 62.0 Total accounts (In Millions) 25.1 25.1 25.0 24.8 24.5 38.2 38.5 Charge volume $ 23.0 $ 25.3 $ 26.6 $ 27.9 $ 24.1 $ 34.0 $ 36.4 End of Period Loans On Balance Sheet $ 17.2 $ 19.1 $ 17.9 $ 18.8 $ 15.2 $ 15.8 $ 18.3 Securitized $ 25.4 $ 24.2 $ 26.0 $ 26.8 $ 27.6 $ 41.3 $ 40.4 Held for sale $ 2.0 $ 2.0 $ 2.0 $ 2.0 $ 2.0 $ 2.5 $ 2.5 Total $ 44.6 $ 45.3 $ 45.9 $ 47.6 $ 44.8 $ 59.6 $ 61.2 Average Loans On Balance Sheet $ 17.9 $ 18.0 $ 18.6 $ 17.7 $ 16.1 $ 19.6 $ 17.9 Securitized $ 25.1 $ 24.7 $ 24.8 $ 26.3 $ 27.4 $ 36.8 $ 39.9 Held for sale $ 2.0 $ 2.0 $ 2.0 $ 2.0 $ 2.0 $ 2.5 $ 2.5 Total $ 45.0 $ 44.7 $ 45.4 $ 46.0 $ 45.5 $ 58.9 $ 60.3 Write-offs (In Millions of Dollars) On Balance Sheet $ 222 $ 246 $ 231 $ 221 $ 207 $ 263 $ 222 Securitized $ 402 $ 404 $ 378 $ 403 $ 430 $ 542 $ 539 Held for sale $ 32 $ 33 $ 30 $ 31 $ 31 $ 37 $ 34 Total $ 656 $ 683 $ 639 $ 655 $ 668 $ 842 $ 795 Adjusted for Sale of Bankrupt Accounts -- -- 650 -- -- -- -- Coincident Net Credit Loss Rate 5.91% 6.13% 5.58% 5.64% 5.96% 5.73% 5.23% Adjusted for Sale of Bankrupt Accounts -- -- 5.68% -- -- -- -- 12 Month Lagged Net Credit Loss Rate (ex-UCS) 6.21% 6.51% 5.93% 5.86% 6.03% 5.98% 5.49% Adjusted for Sale of Bankrupt Accounts -- -- 6.03% -- -- -- -- 90+ Days Past Due (In Millions of Dollars) $ 884 $ 843 $ 806 $ 856 $ 842 $ 942 $ 924 (%) 1.98% 1.86% 1.76% 1.80% 1.88% 1.58% 1.51% % of Gross Write-offs that are Bankruptcies 37% 40% 40% 41% 37% 41% 43% 2Q 3Q 1998 1998 EX-UCS EX-UCS -------- -------- End of Period Managed Receivables Total accounts (In Millions) Charge volume End of Period Loans On Balance Sheet Securitized Held for sale Total $ 45.2 $ 46.0 Average Loans On Balance Sheet Securitized Held for sale Total $ 44.8 $ 45.7 Write-offs (In Millions of Dollars) On Balance Sheet Securitized Held for sale Total $ 667 $ 629 Adjusted for Sale of Bankrupt Accounts Coincident Net Credit Loss Rate 5.97% 5.46% Adjusted for Sale of Bankrupt Accounts 12 Month Lagged Net Credit Loss Rate (ex-UCS) Adjusted for Sale of Bankrupt Accounts 90+ Days Past Due (In Millions of Dollars) $ 766 $ 747 (%) 1.70% 1.62% % of Gross Write-offs that are Bankruptcies 40% 42%
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