Citigroup (C)

·                  Revenues were down 14%, to $1.6 billion from the prior year period, primarily driven by the impact of foreign exchange and lower investment product volumes.

·                  Income was $272 million, down 40% from the prior year period, as declining revenues and increasing credit costs were partially offset by expense reductions.

·                  Credit costs were $504 million, up 55% from the prior year period on deteriorating credit conditions, partially offset by the impact of foreign exchange.  Loan loss reserve build increased to $150 million from $84 million. 

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—           Excluding Japan Consumer Finance, revenues were down 25%, mainly driven by a significant decline in investment revenues, as investment sales decreased 66% reflecting a continued decline in equity markets across Asia, as well as a slight impact from foreign exchange.  The declines in average loans and deposits of 19% and 15%, respectively, were mainly due to the impact of foreign exchange.  Credit costs increased 22% due to higher net credit losses, up 45% or $57 million.  The net loan loss reserve build of $91 million was $8 million lower than the prior-year period.  Higher credit costs were mainly driven by continued deterioration in the credit environment in India.  The net credit loss ratio increased 81 basis points to 1.79%.  Net income declined 47% to $152 million.

—           In Japan Consumer Finance, revenues declined 40%, reflecting a decline in net interest revenues as the portfolio continues to be managed down.  Average loans were down 15% and the net credit loss ratio increased 253 basis points to 16.86%..

·             Excluding Japan Consumer Finance, revenues declined 20%, mainly driven by a significant decline in investment revenues, as investment sales declined 83%, reflecting a continued decline in equity markets

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·                  Consumer revenues and net income increased 48% and 83%, respectively, driven by growth in average deposits, up 13%, and average loans, up 21%, and an almost doubling of investment product sales.  Results also include an estimated $245 million pre-tax gain on Visa, Inc. shares.  During the past 12 months, 90 retail and consumer finance branches were open or acquired.  Results include the acquisition of Bank of Overseas Chinese.

·                  Markets & banking revenues and net income increased, up 14% and 42%, respectively.  Securities and banking revenues declined 3%, driven by lower fixed income markets revenues, which reflected lower results in credit markets, offset by increased results in interest rate and currency products and equity markets.  Transaction services revenues and net income grew at a strong double-digit pace, reflecting increased business volumes and balances.

·                  Wealth management revenue and income growth was driven primarily by continued strong volumes in capital markets products and performance fees.

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—           Consumer income rose strongly, with continued double-digit revenue and income growth across cards, retail banking, and consumer finance reflecting both organic growth and the acquisition of KorAm.  During the quarter, branches increased by 35, consisting of 28 consumer finance and 7 retail banking branches.

—           Corporate income reflects strong growth in transaction services and fixed income markets, which was partially offset by lower income from equity underwriting and trading.

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