This excerpt taken from the C 10-K filed Feb 23, 2007.
Operating expenses decreased, primarily due to a $400 million pretax exit plan charge in Japan recorded in the 2004 fourth quarter. Increased expenses in other regions reflected higher employee-related costs, including investments in front office sales and support.
Provision for loan losses included net recoveries in Asia and Europe, net write-offs in the U.S. and increases in the allowance for loan losses. The allowance reflected an increase in Japan, and changes in the application of environmental factors for all regions. Net credit recoveries were (0.02%) of average loans outstanding in both 2005 and 2004.
Client business volumes increased $2 billion in 2005, as a decline of $14 billion in Japan was offset by growth of $16 billion, or 8%, in other regions. Growth was led by an increase of $3 billion in custody assets, which were higher in the U.S. and Latin America, offsetting the decline in Japan. Assets managed on a fee-basis were flat due to the decline in Japan, offset predominantly by the impact of positive net flows in the U.S. Investment finance volumes were flat, reflecting the decline in Japan offset by growth in real-estate-secured loans in the U.S. Banking and fiduciary deposits decreased $1 billion, with double-digit growth in Asia and Europe offset by the decline in Japan.