Citigroup (C)

GLOBAL WEALTH MANAGEMENT OUTLOOK

Global Wealth Management is affected by the levels of activity in the capital markets, which are influenced by macro-economic and political developments, among other factors.

The Global Wealth Management business could also be negatively impacted by the “Economic Environment” discussed on page 5.

In 2008, Global Wealth Management expects to see continued asset and revenue growth resulting from the 2007 investments in its wealth management platform, as well as from past acquisitions. However, declines in asset values due to economic conditions could adversely impact asset and revenue levels.

Investments are expected to continue in 2008 and will include initiatives intended to improve technology platforms, strengthen our global competitive position and improve Financial Advisor retention.

GLOBAL WEALTH MANAGEMENT OUTLOOK

Certain of the statements below are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See “Forward-Looking Statements” on page 97.

Global Wealth Management is affected by the levels of activity in the capital markets, which are influenced by macro-economic and political developments, among other factors. Global economic and market events can have both positive and negative effects on the revenue and credit performance of the businesses.

Smith Barney–In 2007, Smith Barney expects to see continued asset and revenue growth resulting from the 2006 investments in its wealth management platform, as well as from the acquisition of the Quilter private client business from Morgan Stanley.

Investments are expected to continue in 2007 and will include additional initiatives intended to improve our client and Financial Advisor experience, significant resources allocated to Smith Barney’s partnership with the U.S. Consumer business, continued investment in the advisory platform, and continued increases in Financial Advisor hiring.

In Citigroup Investment Research, major initiatives include expanding client relationships, broadening research coverage in emerging markets, differentiating research product and service and continuing productivity improvements.

Private Bank–Leveraging Citigroup’s onshore and institutional capabilities, the Private Bank is building onshore franchises focused on wealth-creating individuals in key markets such as the U.S., the U.K., India and Brazil.

In 2007, the Private Bank expects growth in both annuity and transactional revenue across the product set, from investments to capital raising. In addition, investments in origination, product and onshore market build-outs are expected to have a positive impact on 2007 net income growth.

Global Wealth Management Outlook

        Certain of the statements below are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 95.

        Smith Barney—In 2006, Smith Barney expects to see continued asset and revenue growth resulting from the 2005 investments in its wealth management platform, as well as from the acquisition of the Legg Mason private client business.

        Investments are expected to continue in 2006 and will include expanded fee-based services (wealth management, advisory, and liability management among others) as well as selective recruiting and training of financial advisors.

        In Citigroup Investment Research, major initiatives include strategically expanding research coverage in targeted sectors, continuing expense management, and refining the scope and management structure of the global research platform.

        Private Bank—In 2006, the Private Bank will continue to focus on expansion in geographic markets, adding onshore offices and bankers in India, Brazil, China, Mexico, the United Kingdom and select cities in North America. Moreover, the Private Bank will continue to invest in building out new product capabilities, maintain and expand successful partnerships with other Citigroup entities, and develop its team of bankers.

        In 2006, the Private Bank expects growth in recurring fee-based revenue and transactional revenue to be partially offset by a decline in net interest revenue due to the flat-yield-curve environment. Investments in origination, product and onshore market build-outs will negatively affect net income growth, as the associated revenues will trail the costs in the near term.

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GLOBAL WEALTH MANAGEMENT OUTLOOK

        Certain of the statements below are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 73.

        Smith Barney—In 2004, Smith Barney delivered industry-leading profit margins primarily due to increased revenues reflecting higher client assets and trading volumes and a continued emphasis on expense management. In 2005, the focus for Smith Barney will be on franchise growth through customer acquisition, selected recruiting and training of experienced Financial Consultants and continued investment in its wealth management platform, including financial planning, liability management and fee-based services. In Global Equity Research, major initiatives include strategically expanding research coverage in targeted sectors, continuing expense management, as well as refining the scope and management structure of our global research platform.

        Private Bank—The strategy of Private Bank consists of four major components: integrated client solutions, innovative product capabilities, a focus on key markets worldwide, and a leveraging of the global reach of Citigroup. These components have enabled Private Bank to offer top-tier capabilities and investment solutions to the wealthiest families around the world by drawing upon the vast resources of Citigroup's businesses. During uncertain and complex economic and geopolitical times, the stability, globality, balance sheet strength and broad product capabilities of Citigroup provide the Private Bank with a competitive and sustainable advantage over its peer group.

        Exiting the private banking operations in Japan will impact the operating and financial performance of the Private Bank in 2005. Costs will continue to be incurred in connection with implementing the exit plan and additional charges may be taken. The Private Bank will continue to focus on expansion in geographic markets including India, South Korea and select cities in North America; build-out new product capabilities; maintain and expand successful partnerships with other Citigroup entities worldwide; and develop and attract a talented sales force that will focus on expanding our client base and strengthening relationships with existing clients. Private Bank expects its market-leading regions to continue their strong performance in 2005.

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GLOBAL INVESTMENT MANAGEMENT