C » Topics » GLOBAL CONSUMER GROUP

This excerpt taken from the C 8-K filed Jan 20, 2006.

GLOBAL CONSUMER GROUP

 
   
   
   
  Fourth Quarter Net Income
   
 
 
  Fourth Quarter Revenues
   
   
 
 
  %
Change

  %
Change

 
(In Millions of Dollars)

  2005
  2004
  2005
  2004
 
U.S. Cards   $ 2,725   $ 3,506   (22 )% $ 444   $ 1,101   (60 )%
U.S. Retail Distribution     2,359     2,359       391     524   (25 )
U.S. Consumer Lending     1,388     1,251   11     458     345   33  
U.S. Commercial Business     481     581   (17 )   121     155   (22 )
   
 
 
 
 
 
 
  Total U.S. Consumer   $ 6,953   $ 7,697   (10 )% $ 1,414   $ 2,125   (33 )%

International Cards

 

$

1,360

 

$

1,140

 

19

%

$

357

 

$

342

 

4

%
International Consumer Finance     958     958       174     147   18  
International Retail Banking     2,552     2,349   9     565     585   (3 )
   
 
 
 
 
 
 
  Total International Consumer   $ 4,870   $ 4,447   10 % $ 1,096   $ 1,074   2 %

Other

 

 

(24

)

 

7

 

NM

 

 

(76

)

 

(54

)

(41

)
   
 
 
 
 
 
 
Global Consumer   $ 11,799   $ 12,151   (3 )% $ 2,434   $ 3,145   (23 )%
   
 
 
 
 
 
 
    U.S. Cards  

    Revenues declined, reflecting a $545 million pre-tax charge to conform accounting practice for customer rewards. Excluding the $545 million charge, revenues declined 7%, as the benefit of a 9% increase in purchase sales was more than offset by higher payment rates and continued net interest margin compression. Revenues also reflect the negative impact of an increase in consumer bankruptcy filings due to new legislation, which resulted in approximately $120 million pre-tax of reduced interest and fee revenue.

    Credit costs include the impact of increased consumer bankruptcy filings due to new legislation, which added approximately $180 million pre-tax to held net credit losses, which was offset by a $200 million pre-tax loan loss reserve release. Credit costs increased significantly versus the prior year due to the absence of a $420 million pre-tax release of loan loss reserves in the prior-year period. Excluding the impact of increased bankruptcies, credit conditions remained stable during the quarter.

    On a managed basis, net credit losses due to new bankruptcy legislation were approximately $600 million pre-tax.

    U.S. Retail Distribution  

    Revenues were even with the prior year period as 4% deposit growth and 7% loan growth were offset by continued net interest margin compression. Revenues include a $20 million pre-tax charge to conform accounting practice for customer rewards.

    Credit costs reflect an increase in consumer bankruptcy filings due to new legislation, which resulted in approximately $93 million pre-tax of additional net credit losses and a $42 million pre-tax charge to increase loan loss reserves. Excluding the impact of increased bankruptcy filings, credit conditions remained favorable.

    Net income decline also reflects the absence of tax benefits recorded in the prior-year period.

    U.S. Consumer Lending  

    Revenues and net income growth reflected 17% growth in average loans and improved net mortgage servicing revenues, which were partially offset by continued net interest margin compression.

    Originations increased 22%, reflecting strong volume growth across all loan products.

    Credit conditions remained favorable, leading to a decline in net credit loss ratios.

    U.S. Commercial Business  

    Revenues and net income reflected growth in core loan and deposit balances, up 20% and 27%, respectively, which was more than offset by net interest spread compression and the impact of portfolio divestitures during 2005.

    Credit costs declined, reflecting the continued favorable credit environment.

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    International Cards  

    Revenue and pre-tax income growth, up 19% and 20% respectively, reflected a 15% increase in average loans, with strong organic loan growth in Mexico, Asia and Latin America, and net interest margin expansion. Taxes increased due to the absence of tax benefits recorded in the prior-year period.

    Results included an $89 million pre-tax gain on the sale of European Card Acceptance, a merchant acquiring business in EMEA, and the absence of a $42 million pre-tax gain on the sale of Orbitall recorded in the prior-year period in Latin America.

    Higher credit costs reflected portfolio growth and target market expansion.

    International Consumer Finance  

    In Japan, income growth was primarily driven by lower expenses and reduced credit costs. During the quarter, 28 new automated loan machines (ALMs) were added. During 2005, the repositioning of the business continued as 170 ALMs were added and 80 branches were closed.

    Outside of Japan, revenues and net income increased 14% and 1%, respectively, as the benefit of growth in loan balances was partially offset by increased investment spending. During the quarter, 97 new branches were opened outside of Japan.

    Average loans decreased 3%, reflecting a decline in Japan of 14% and growth outside of Japan of 7%.

    Credit conditions remained favorable, leading to a 34 basis point decline in the NCL ratio to 5.62%.

    International Retail Banking  

    Revenue growth reflected a 5% increase in deposits and 28% growth in sales of investment products. Loan balances were even with the prior-year period, as a decline in EMEA due to loan write-offs in the third quarter 2005 offset growth in other regions.

    Expenses included continued investment spending, with 88 new branch openings during the quarter, and increased marketing and advertising.

    Net credit losses increased, primarily due to the impact of standardizing the loan write-off policy in EMEA in the third quarter 2005, and portfolio growth in Mexico.
This excerpt taken from the C 8-K filed Jan 13, 2006.

Global Consumer Group

                              Prior Disclosure

                          New Disclosure

N.A. Cards   U.S. Cards
(1)   U.S., Canada, Puerto Rico   (1)   U.S., Canada, Puerto Rico
    Mexico*        

N.A. Retail Banking

 

U.S. Retail Distribution
(2)   Retail Distribution   (2)   Citibank Branches
(3)   Commercial Business   (7)   CitiFinancial Branches
(4)   Prime Home Finance   (6)   Primerica Financial Services
(5)   Student Loans        
(6)   Primerica Financial Services        
    Mexico*   U.S. Consumer Lending
        (4,9)   Real Estate
        (8)   Auto
N.A. Consumer Finance   (5)   Student Loans
(7)   CitiFinancial Branches        
(8)   CitiFinancial Auto        
(9)   Home Equity   (3)   U.S. Commercial Business
    Mexico*        

International Cards

 

International Cards
          The same, plus Mexico

International Consumer Finance

 

International Consumer Finance
          The same, plus Mexico
          Additional regional disclosure

International Retail Banking

 

International Retail Banking
          The same, plus Mexico

*
Mexico is now reported in International Consumer results.

3


This excerpt taken from the C 8-K filed Jan 20, 2005.

GLOBAL CONSUMER GROUP

 
  Fourth Quarter—Revenues
   
  Fourth Quarter—Net Income
   
 
(In Millions of Dollars)

  %
Change

  %
Change

 
  2004
  2003
  2004
  2003
 
N. America Cards   $ 4,970   $ 4,961     $ 1,190   $ 1,010   18 %
International Cards     898     742   21     251     125   NM  
   
 
 
 
 
 
 
  Total Cards (1)   $ 5,868   $ 5,703   3 % $ 1,441   $ 1,135   27 %

N. America Consumer Finance

 

$

1,850

 

$

1,695

 

9

%

$

445

 

$

379

 

17

%
International Consumer Finance     915     863   6     139     100   39  
   
 
 
 
 
 
 
  Total Consumer Finance   $ 2,765   $ 2,558   8 % $ 584   $ 479   22 %

N. America Retail Banking

 

$

2,958

 

$

2,739

 

8

%

$

714

 

$

726

 

(2

)%
International Retail Banking     1,607     1,299   24     411     322   28  
   
 
 
 
 
 
 
  Total Retail Banking   $ 4,565   $ 4,038   13 % $ 1,125   $ 1,048   7 %

Other

 

$

(1

)

$

17

 

NM

 

$

(53

)

$

(23

)

NM

 
   
 
 
 
 
 
 
Global Consumer(1)   $ 13,197   $ 12,316   7 % $ 3,097   $ 2,639   17 %
   
 
 
 
 
 
 
(1)
Revenues on a managed basis.

North America Cards

Managed revenues were even with the prior year, as a 14% increase in sales was offset by higher payment rates, lower risk-based fees, and net interest margin compression.
Credit costs were significantly lower and included a $420 million pre-tax general credit reserve release.
The "ThankYou Network" continued to gain momentum and ended the fourth quarter with 8.7 million members.

International Cards

Revenue and income growth reflect a 32% increase in accounts and 22% growth in managed loans. Results included the impact of KorAm; strong organic growth in Australia, Greece, Spain, and Taiwan; and an after-tax gain of $27 million on the sale of a 33% ownership in Orbitall.
International consumer credit trends continued to improve as the NCL rate declined 68 basis points to 3.16%.

North America Consumer Finance

Income growth reflects a 13% increase in average loans and the successful integration of Washington Mutual's consumer finance business.
Net interest margin declined 17 basis points due to increased risk-based pricing and the repositioning of portfolios toward higher credit quality. The net credit loss rate improved 20 basis points to 2.61%.
Branches increased 314 versus the prior year and 18 versus the prior quarter, reflecting acquisitions and organic growth.

International Consumer Finance

Income growth was primarily driven by improvements in Japan. Outside of Japan strong revenue growth was offset by increased investment spending on new branches, advertising, and technology.
Average loans increased 8%, reflecting a decline in Japan of 7% and growth outside of Japan of 26%.
The NCL ratio improved by 73 basis points to 5.92%.
Excluding Japan, 188 new branches were added versus the prior year, and 54 new branches were added versus the prior quarter.

North America Retail Banking

Results reflect increased income from growth in customer deposits and loans, which was offset by a decline in net servicing revenues in prime home finance due to significantly higher hedging costs.
Lower credit costs reflect an improving credit environment and a $47 million pre-tax release of general loan loss reserves.

International Retail Banking

Income growth was driven by growth in deposits and loans of 19% and 43%, respectively, increased investment product sales, and the acquisition of KorAm in the second quarter of 2004.
Increased credit costs reflect the challenging economic environment in Germany.
Branches increased 259 during 2004, reflecting the acquisition of KorAm and organic growth.

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