Citigroup (C)

Loans

        Loans are reported at their outstanding principal balances net of any unearned income and unamortized deferred fees and costs except that credit card receivable balances also include accrued interest and fees. Loan origination fees and certain direct origination costs are generally deferred and recognized as adjustments to income over the lives of the related loans.

        As described in Note 17 to the Consolidated Financial Statements, the Company has elected fair value accounting for certain loans. Such loans are carried at fair value with changes in fair value reported in earnings. Interest income on such loans is recorded in Interest revenue at the contractually specified rate.

        Loans for which the fair value option has not been elected are classified upon origination or acquisition as either held-for-investment or held-for-sale. This classification is based on management's initial intent and ability with regard to those loans.

        Loans that are held-for-investment are classified as Loans, net of unearned income on the Consolidated Balance Sheet, and the related cash flows are included within the cash flows from investing activities category in the Consolidated Statement of Cash Flows on the line Changes in loans. However, when the initial intent for holding a loan has changed from held-for-investment to held-for-sale, the loan is reclassified to held-for-sale, but the related cash flows continue to be reported in cash flows from investing activities in the Consolidated Statement of Cash Flows on the line Proceeds from sales and securitizations of loans.

        Substantially all of the consumer loans sold or securitized by Citigroup are U.S. prime residential mortgage loans or U.S. credit card receivables. The practice of the U.S. prime mortgage business has been to sell all of its loans except for nonconforming adjustable rate loans. U.S. prime mortgage conforming loans are classified as held-for-sale at the time of origination. The related cash flows are classified in the Consolidated Statement of Cash Flows in the cash flows from operating activities category on the line Change in loans held-for-sale.

        U.S. credit card receivables are classified at origination as loans-held-for sale to the extent that management does not have the intent to hold the receivables for the foreseeable future or until maturity. The U.S. credit card securitization forecast for the three months following the latest balance sheet date is the basis for the amount of such loans classified as held-for-sale. Cash flows related to U.S. credit card loans classified as held-for-sale at origination or acquisition are reported in the cash flows from operating activities category on the line Change in loans held-for-sale.

Loans

Loans are reported at their outstanding principal balances net of any unearned income and unamortized deferred fees and costs. Loan origination fees and certain direct origination costs are generally deferred and recognized as adjustments to income over the lives of the related loans.

As set out in Note 27 to the Consolidated Financial Statements, the Company has elected fair value accounting under SFAS 159 and SFAS 155 for certain loans. Such loans are carried at fair value with changes in fair value reported in earnings. Interest income on such loans is recorded in Interest revenue at the contractually specified rate.

Loans for which the fair value option has not been elected under SFAS 159 or SFAS 155 are classified upon origination or acquisition as either held-for-investment or held-for-sale. This classification is based on management’s intent and ability with regard to those loans.

Substantially all of the consumer loans sold or securitized by Citigroup are U.S. prime mortgage loans or U.S. credit card receivables. The practice of the U.S. prime mortgage business has been to sell all of its loans except for nonconforming adjustable rate loans. U.S. prime mortgage conforming loans are classified as held-for-sale at the time of origination. The related cash flows are classified in the Consolidated Statement of Cash Flows in the cash flows from operating activities category on the line Change in loans held-for-sale.

U.S. credit card receivables are classified at origination as loans-held-for sale to the extent that management does not have the intent to hold the receivables for the foreseeable future or until maturity. The U.S. credit card securitization forecast for the three months following the latest balance sheet date is the basis for the amount of such loans classified as held-for-sale. Cash flows related to U.S. credit card loans classified as held-for-sale at origination or acquisition are reported in the cash flows from operating activities category on the line Change in loans held-for-sale.

Loans that are held-for-investment are classified as Loans, net of unearned income on the Consolidated Balance Sheet, and the related cash flows are included within the cash flows from investing activities category in the Consolidated Statement of Cash Flows on the line Changes in loans. However, when the initial intent for holding a loan has changed from held-for-investment to held-for-sale, the loan is reclassified to held-for-sale, but the related cash flows continue to be reported in cash flows from investing activities in the Consolidated Statement of Cash Flows on the line Proceeds from sales and securitizations of loans.

Loans

Loans are an extension of credit to individuals, corporations, or government institutions. Loans vary across regions and industries and primarily include credit cards, mortgages, other real estate lending, personal loans, auto loans, student loans, and corporate loans. The majority of loans are carried at cost with a minimal amount recorded at fair value in accordance with SFAS 155 and SFAS 159.

Consumer and corporate loans comprised 75% and 25%, respectively, of total loans (net of unearned income and before the allowance for loan losses).

During 2008 consumer loans decreased by $83 billion, or 14%, primarily due to:

These decreases were partially driven by the sales of CitiCapital and the German retail banking units. Foreign exchange translation also factored into the decrease in loans, as a number of currencies weakened against the dollar.

During 2008 corporate loans decreased $15 billion, or 8%, primarily driven by a decrease of $10 billion, or 7%, in commercial and industrial loans.

During 2008, average consumer loans (net of unearned income) of $551 billion yielded an average rate of 8.6%, compared to $523 billion and 9.0% in the prior year. Average corporate loans of $184 billion yielded an average rate of 8.2% in 2008, compared to $188 billion and 8.5% in the prior year.

For further information, see “Loans Outstanding” on page 53 and Note 17 to the Consolidated Financial Statements on page 162.

Loans

Loans are an extension of credit to individuals, corporations, or government institutions. Loans vary across regions and industries and primarily include credit cards, mortgages, other real estate lending, personal loans, auto loans, student loans, and corporate loans. The majority of loans are carried at cost with a minimal amount recorded at fair value in accordance with SFAS 155 and SFAS 159.

Consumer and corporate loans comprised 75% and 25%, respectively, of total loans (net of unearned income and before the allowance for loan losses).

During 2008 consumer loans decreased by $83 billion, or 14%, primarily due to:

These decreases were partially driven by the sales of CitiCapital and the German retail banking units. Foreign exchange translation also factored into the decrease in loans, as a number of currencies weakened against the dollar.

During 2008 corporate loans decreased $15 billion, or 8%, primarily driven by a decrease of $10 billion, or 7%, in commercial and industrial loans.

During 2008, average consumer loans (net of unearned income) of $551 billion yielded an average rate of 8.6%, compared to $523 billion and 9.0% in the prior year. Average corporate loans of $184 billion yielded an average rate of 8.2% in 2008, compared to $188 billion and 8.5% in the prior year.

For further information, see “Loans Outstanding” on page 53 and Note 17 to the Consolidated Financial Statements on page 162.

Loans

Loans are reported at their outstanding principal balances net of any unearned income and unamortized deferred fees and costs. Loan origination

Loans

Loans are reported at their outstanding principal balances net of any unearned income and unamortized deferred fees and costs. Loan origination

Loans

Loans are an extension of credit to individuals, corporations, and government institutions. Loans vary across regions and industries and primarily include credit cards, mortgages, other real estate lending, personal loans, auto loans, student loans, and corporate loans. The majority of loans are carried at cost with a minimal amount recorded at fair value in accordance with SFAS 155 and SFAS 159.

Consumer and corporate loans comprised 76% and 24%, respectively, of total loans (net of unearned income and before the allowance for loan losses).

Consumer loans increased by $73 billion, or 14%, primarily due to:

These increases were partially driven by acquisitions.

Corporate loans increased $19 billion, or 11%, primarily driven by an increase of $22 billion, or 16%, in commercial and industrial loans.

During 2007, average consumer loans (net of unearned income) of $553 billion yielded an average rate of 9.1%, compared to $480 billion and 9.0% in the prior year. Average corporate loans of $188 billion yielded an average rate of 8.5% in 2007, compared to $153 billion and 7.6% in the prior year.

For further information, see “Loans Outstanding” on page 41 and Note 17 to the Consolidated Financial Statements on page 145.

Loans

Loans are classified upon origination or acquisition as either held for investment or held-for-sale. This classification is based on management’s intent and ability with regard to those loans.

Substantially all of the consumer loans sold or securitized by Citigroup are U.S. prime mortgage loans or U.S. credit card receivables.  The practice of the U.S. prime mortgage business has been to sell all of its loans except for nonconforming adjustable rate loans.  U.S. prime mortgage conforming loans are classified as held-for-sale at the time of origination.   The related cash flows are classified in the Consolidated Statement of Cash Flows in the cash flows from operating activities category on the line “Change in loans held for sale.”

U.S credit card receivables are classified at origination as loans held-for-sale to the extent that management does not have the intent to hold the receivables for the foreseeable future or until maturity.  The U.S. credit card securitization forecast for the three months following the latest balance sheet date is the basis for the amount of such loans classified as held-for-sale.  Cash flows related to U.S. credit card loans classified as held-for-sale at origination or acquisition are reported in the cash flows from operating activities category on the line “Change in loans held for sale.”

Loans that are held for investment are classified as Loans, net of unearned income on the Consolidated Balance Sheet, and the related cash flows are included within the cash flows from investing activities category in the Consolidated Statement of Cash Flows, on the line “Changes in loans.”  However, when the initial intent for holding a loan has changed from held for investment to held-for-sale, the loan is reclassified to held-for-sale, but the related cash flows continue to be reported in cash flows from investing activities in the Consolidated Statement of Cash Flows on the line “Proceeds from sales and securitizations of loans.”

Loans

Loans are an extension of credit to individuals, corporations, and government institutions. Loans vary across regions and industry and primarily include credit cards, mortgages, other real estate lending, personal loans, auto loans, student loans, and corporate loans.

Consumer and corporate loans comprised 76% and 24%, respectively, of total loans (net of unearned income and before the allowance for loan losses).

Consumer loans increased by $58 billion, or 13%, primarily due to:

Corporate Loans increased $38 billion, or 29%, primarily driven by increases of:

During 2006, average consumer loans (net of unearned income) of $480 billion yielded an average rate of 9.0%, compared to $437 billion and 9.0% in the prior year. Average corporate loans of $153 billion yielded an average rate of 7.7% in 2006, compared to $120 billion and 6.6% in the prior year.

For further information, see “Loans Outstanding” on page 61 and Note 16 to the Consolidated Financial Statements on page 136.

Loans

        The increase in total loans represented significant growth in the consumer loan portfolio (net of unearned income) of $19 billion primarily due to acquisitions, increases in loan originations due to the favorable interest rate environment, and the impact of foreign currency translation. These increases were partially offset by an increase in securitization of private label cards during the year, write-offs of loans for the estimated losses incurred from Hurricane Katrina, and the impact of U.S. Bankruptcy legislation. The 4% increase in the consumer loan portfolio was composed of a $30 billion, or 15%, increase in mortgage and real estate loans, slightly offset by a $9 billion, or 4%, decrease in installment and revolving credit, and a $2 billion, or 22%, decrease in lease financing. Allowance for consumer loan losses was $7 billion, which decreased $1 billion from prior year. During 2005, average consumer loans (net of unearned income) of $437 billion yielded an average rate of 9.0%, compared to $401 billion and 9.2% in the prior year.

        In addition, there was a $15 billion increase in the corporate loan portfolio (net of unearned income) reflected by the increase in existing loan portfolios and the acquisition of new portfolios, as well as the impact of foreign currency translation. The 13% increase in the corporate portfolio was driven by increases of $11 billion, or 12%, in commercial and industrial loans, $4 billion, or 31%, in loans to financial institutions, and $1 billion, or 30%, in mortgage and real estate loans. These increases were partially offset by a $1 billion, or 14%, decrease in lease financing and a slight decrease in governments and official institutions. The allowance for

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corporate loan losses balance of $3 billion was relatively flat from the prior year. Average corporate loans of $120 billion yielded an average rate of 6.6% in 2005, compared to $108 billion and 6.6% in the prior year.

        For further information, see "Loans Outstanding" on page 60 and Note 11 to the Consolidated Financial Statements on page 126.

Loans

        Total loans outstanding (net of unearned income) at December 31, 2004 were $548.8 billion compared to $478.0 billion in the prior year, an increase of $70.8 billion or 15%. Total average loans comprised 43% of total interest-earning assets in 2004, compared to 44% in the prior year.

        The increase represents significant growth in the consumer loan portfolio of $55.3 billion reflecting acquisitions, an increase in loan originations during the year due to the favorable interest rate environment, and the impact of FX. The 15% increase in the consumer loan portfolio was composed of a $43.2 billion or 27% increase in mortgage and real estate loans, and a $14.9 billion or 7% increase in installment, revolving credit, and other, slightly offset by a $3.1 billion or 29% decrease in lease financing. For more information, see "Loans Outstanding" on page 46.

        In addition, there was a $15.5 billion increase in the corporate loan portfolio. The 16% increase in the Corporate portfolio was driven by increases of $13.4 billion or 17% in commercial and industrial loans, $2.2 billion in mortgage and real estate loans, and $0.9 billion or 7% in loans to financial institutions. These increases are partially offset by a $0.5 billion or 10% decrease in lease financing and a $0.4 billion or 26% decrease in governments and official institutions. For further information, see "Loans Outstanding" on page 46.

        During 2004, average consumer loans of $401.3 billion yielded an average rate of 9.2%, compared to $341.4 billion and 9.3% in the prior year. Average corporate loans of $109.4 billion yielded an average rate of 6.7% in 2004, compared to $103.8 billion and 6.2% in the prior year. See Note 10 to the Consolidated Financial Statements.

        Total loans held-for-sale, included in other assets at December 31, 2004, were $11.4 billion compared to $9.2 billion in the prior year, an increase of $2.2 billion or 24%. The increase is attributable to an increase in credit cards of $2.5 billion, partially offset by a decrease in mortgages of $0.3 billion.

10. Loans

(1)

Loans secured primarily by real estate.

(2)

Includes loans not otherwise separately categorized.

(3)

Excludes loans held by the insurance subsidiaries which are included within Other Assets on the Consolidated Balance Sheet in 2004 and 2003.

        Impaired loans are those on which Citigroup believes it is not probable that it will be able to collect all amounts due according to the contractual terms of the loan, excluding smaller-balance homogeneous loans that are evaluated collectively for impairment, and are carried on a cash basis. Valuation allowances for these loans are estimated considering all available evidence including, as appropriate, the present value of the expected future cash flows discounted at the loan's contractual effective rate, the secondary market value of the loan and the fair value of collateral less disposal costs. The following table presents information about impaired loans:

(1)

Primarily commercial market loans managed by the consumer business.

(2)

Excludes loans purchased for investment purposes that are included within Other Assets on the consolidated Balance Sheet in 2004 and 2003.

(3)

Included in the allowance for credit losses.