Citigroup (C)

EMEA

NM    Not meaningful

1Q09 vs. 1Q08

        Revenues increased to $5.7 billion largely driven by S&B. Revenues in Global Cards and Consumer Banking decreased by 16% and 28% respectively, driven by continued deterioration in the market environment and the negative impact of FX translation.

        In ICG, S&B had record revenues, based on significant contributions across all products, and in particular Rates & Currencies which benefited from high volatility and wide-spreads. The first quarter of 2008 included write-downs in subprime-related losses of $1.4 billion and $0.6 billion in commercial real estate and highly leveraged finance commitments. The current quarter included $0.6 billion of CVA on derivatives, which is now reported within the region. Transaction Services revenues decreased 3% largely due to a decline in customer liability balances, down 8%, and headwinds from FX translation and interest rates.

        Revenues in GWM declined by 26% due to lower capital markets and investment activity, FX translation impact and reduction in loan balances and customer deposits. Average loans declined 30% due to client pay-downs and active asset management, while client assets under fee-based management decreased 40% primarily due to lower market values and FX translation impact.

        Operating Expenses were down 37% from the first quarter of 2008 driven by lower headcount and continued benefits from re-engineering efforts, the favorable impact of FX translation, lower incentive compensation and repositioning charges.

        Provisions for credit losses and for benefits and claims increased by $771 million from the first quarter of 2008 due to ongoing deterioration in market conditions, predominantly in the UK, Spain and Greece, and losses associated with loan sales in ICG.

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—           Revenues declined 28%, as investment sales and assets under management declined 64% and 49%, respectively, mainly due to adverse market conditions.  Average loans were down 21% due to tighter underwriting criteria, exiting certain markets, and the impact of foreign exchange.  Average deposits were down 35%, reflecting a decline in balances in the UK as customers align deposits with government insurance programs and the impact of foreign exchange.

—           Credit costs nearly doubled as a result of higher net credit losses, up 57% or $91 million, and an incremental net loan loss reserve build of $100 million.  Higher credit costs reflected continued credit deterioration, particularly in Spain, Greece, and the UK.  The net credit loss ratio increased 256 basis points to 5.11%.  Higher credit costs and lower revenues more than offset lower expenses, resulting in a net loss of $178 million.

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