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This excerpt taken from the C 8-K filed Jan 15, 2008. Private Bank
· Revenues were a record, driven by a 36% increase in international revenues, reflecting strong growth in capital markets products in Asia and EMEA. U.S. revenues increased 18% driven by increased average deposit and loan balances and higher investment sales.
· Client business volumes increased 17%, including higher client assets under fee-based management, up 9%, and average loans, up 33%.
· Expenses grew 10% and primarily reflected higher compensation costs, driven by increased client activity and an increase in bankers, and a $26 million pre-tax charge related to headcount reductions.
· Credit costs increased due to a $13 million pre-tax charge to increase loan loss reserves, primarily related to new loan volumes.
· International growth drove an 85% increase in net income.
This excerpt taken from the C 10-Q filed Nov 4, 2005. Private Bank
Private Bank reported net income of $79 million in the third quarter of 2005, a decrease of $57 million, or 42%, from the 2004 third quarter. Net income for the first nine months of 2005 was $284 million, a decrease of $163 million, or 36%, from the first nine months of 2004. The decrease in income in both the quarter and nine-month comparisons was mainly driven by the wind-down of the business in Japan, additions to the loan loss reserve, the impact of investment spending on front office sales and support, and spread compression. These items were partially offset by growth in recurring fee-based and net interest revenues from increased balances outside of Japan. Japan recorded losses of $29 million in the 2005 third quarter and $82 million in the 2005 nine months, a decrease in income of $32 million and $130 million, respectively, compared to the related 2004 periods.
Client business volumes were $218 billion at the end of the 2005 third quarter, up $6 billion, or 3%, from $212 billion at the end of the 2004 third quarter. Growth in client business volumes was driven by an increase in Custody assets of $5 billion, or 7%, with growth in the U.S., Mexico, and Latin America partially offset by a decline in Japan. Client assets under fee-based management grew $3 billion, or 6%, mainly reflecting positive net flows in the United States. Banking and fiduciary deposits decreased $1 billion, or 2%, as a $4 billion decline in Japan was partially offset by growth in Europe and Asia. Investment finance volumes, which include loans, letters of credit, and commitments, decreased $1 billion, or 2%, as growth in structured and real estate lending in the United States was offset by a $4 billion decline in Japan. Revenues, net of interest expense, were $446 million in the third quarter of 2005 and $1.403 billion in the 2005 nine months, down $36 million, or 7%, from the prior-year quarter and down $157 million, or 10%, from the first nine months of 2004. Revenue in Japan was down $46 million in the 2005 third quarter and $180 million in the 2005 nine months, and included losses of $22 million and $56 million, respectively, resulting from foreign exchange and interest rate hedges on the client settlement reserve that was established in the fourth quarter of 2004. In North America, revenue was flat compared to the 2004 quarter and grew $32 million, or 5%, compared to the 2004 nine-month period, mainly driven by growth in banking and lending volumes and fee-based assets that was partially offset by lower client transactional activity in Mexico. Revenue growth in North America was also negatively impacted by net interest margin compression resulting from rising interest rates and lower treasury earnings. Revenue in EMEA was up $11 million, or 16%, and up $1 million, compared to the 2004 third quarter and nine months, respectively. In Asia, revenue was up $5 million, or 5%, in the quarterly comparison and up $2 million, or 1%, in the nine-month comparison. Revenue growth in the quarter in EMEA and Asia, collectively, was driven by increased transactional revenue as well as growth in banking volumes, and in the nine-month growth comparison was partially offset by strong transactional revenue in the first quarter of 2004. Revenue in Latin America was down $6 million, or 11%, and $12 million, or 7%, compared to the 2004 third quarter and nine months, respectively. Revenue declines in Latin America reflect declines in client transactional activity and margin lending, and were partially offset by increased banking-related revenue. Operating expenses were $307 million in the third quarter of 2005 and $980 million in the first nine months of 2005, up $15 million, or 5%, and $63 million, or 7%, respectively. The 2005 third quarter expenses included a $45 million reserve release of the Japan 36 client settlement reserve that was established in the fourth quarter of 2004, and was partially offset by costs associated with exiting the business. The Company believes that the remaining reserve is adequate to cover any future settlements with ex-Private Bank Japan Customers. Increased expenses in other regions reflect higher employee-related costs, including investments in front office sales and support. The nine-month period of 2005 includes a $7 million charge associated with limited staff reductions, mainly in middle and back-office functions. Net recoveries in the provision for loan losses were $1 million and $11 million in the third quarter and nine months of 2005, respectively, compared to net recoveries of $8 million in the third quarter of 2004 and $4 million in the first nine months of 2004. The provision for loan losses includes a $24 million increase to the reserve in the third quarter reflecting increases in Japan, changes in the application of environmental factors and a SFAS 114 specific loan loss reserve increase. The provision for loan losses for the first nine months of 2005 was $14 million, as third quarter activity was partially offset by reductions in SFAS 114 specific loan loss reserves earlier in the year. Loans 90 days or more past due were $58 million in the 2005 third quarter, down from $113 million in the 2005 second quarter and $150 million in the 2004 third quarter, which was driven by both favorable credit trends and the wind-down of the operations in Japan. 37 These excerpts taken from the C 8-K filed Sep 9, 2005. Private Bank.
As a general rule, for open-end revolving and closed-end installment and real
estate loans, interest accrual ceases when payments are no later than 90 days
contractually past due, except for certain open-end revolving products (e.g.,
credit cards), where the Company accrues interest until payments are 180 days
contractually past due and reverse the interest and fees earned, but not
collected.
As a general rule, unsecured closed-end installment loans that become 120 days contractually past due and unsecured open-end (revolving) loans that become 180 days contractually past due are charged-off. Loans secured with non-real-estate collateral are written down to the estimated value of the collateral, less costs to sell, at 120 days past due. Real-estate secured loans (both open- and closed-end) are written down to the estimated value of the property, less costs to sell, no later than 180 days past due.
In certainPrivate Bank,
as well as through Primerica and Citibank. All offerings will be subject to
usual suitability and performance standards.
For the years ended December 31, 2004, 2003, and 2002, intercompany
fees paid by the Asset Management business to various other Citigroup
businesses totaled approximately $193 million, $208 million, and $217 million,
respectively.
Upon completion of the Sale of the Asset Management Business, Citigroup expects to add more than 1,300 financial advisors in more than 100 branch offices from Legg Mason’s broker-dealer business to its Global Wealth Management business.
The Sale of the Asset Management Business is expected to close during the 2005 fourth quarter and is subject to certain regulatory approvals and customary closing conditions. In connection with the transaction, Citigroup is seeking approval of Asset Management’s mutual fund boards and shareholders.
Also included in the sales agreement between Citigroup and Legg Mason are provisions related to transitional services that will be provided for a period of 24 to 30 months. These transitional service provisions may be terminated or extended. The costs associated with these provisions are not considered to be significant.
The Asset Management Businesses being sold were the primary vehicles through which Citigroup engaged in the asset management business. The businesses had total assets of $1.3 billion at December 31, 2004.
Results for all of the businesses included in the Sale of the Asset Management Business are reported as Discontinued Operations for all periods presented. The assets and liabilities of the businesses being sold are included in their respective caption on the Consolidated Balance Sheet.
Summarized financial information for discontinued operations related to the Sale of the Asset Management Business is as follows:
This excerpt taken from the C 8-K filed Jun 7, 2005. Private Bank. As a general rule,
for open-end revolving and closed-end installment and real estate loans, interest
accrual ceases when payments are no later than 90 days contractually past due,
except for certain open-end revolving products (e.g., credit cards), where the
Company accrues interest until payments are 180 days contractually past due and
reverse the interest and fees earned, but not collected.
As a general rule, unsecured closed-end installment loans that become 120 days contractually past due and unsecured open-end (revolving) loans that become 180 days contractually past due are charged-off. Loans secured with non-real-estate collateral are written down to the estimated value of the collateral, less costs to sell, at 120 days past due. Real-estate secured loans (both open- and closed-end) are written down to the estimated value of the property, less costs to sell, no later than 180 days past due.
In certainThis excerpt taken from the C 8-K filed Apr 15, 2005. The Private Bank
— Results reflect continued wind-down of the Japan business. Ex-Japan, income declined 2% as a decline in customer trading volumes led to lower transactional revenues. — Client business volumes rose 9%, to $221 billion, led by 19% growth in proprietary managed assets. Ex-Japan, client business volumes rose 13% versus the prior year and were even with the prior quarter.
4
This excerpt taken from the C 10-K filed Feb 28, 2005. PRIVATE BANK
Private Bank reported net income of $318 million in 2004, down $233 million or 42% from 2003, reflecting a $288 million decline in Japan. The decline in Japan reflected a $244 million after-tax charge associated with the closure of the business, as well as a decline in transactional revenue (see page 9). Excluding Japan, income grew $55 million or 12% driven by growth in recurring fee-based and net interest revenues, a lower effective tax rate and improved credit costs which were partially offset by higher incentive compensation costs. Net income of $551 million in 2003 was up $90 million or 20% from 2002, primarily reflecting increased investment management and capital markets activity, lending activity, and a lower provision for credit losses, partially offset by higher expenses, reflecting incentive 33 compensation expense associated with higher revenues and higher other employee-related costs, and the impact of narrowing interest rate spreads.
Client business volumes were $224 billion at the end of the year, up $29 billion or 15% from $195 billion at the end of 2003. Double-digit growth in client business volumes was led by an increase in custody assets, which were higher in all regions except Japan. Proprietary managed assets increased $9 billion or 26% predominantly in the U.S., reflecting the impact of positive net flows. Investment finance volumes, which include loans, letters of credit, and commitments, increased $5 billion or 14%, reflecting growth in real-estate-secured loans in the U.S. and increased margin lending in the international business, excluding Japan. Banking and fiduciary deposits grew $4 billion or 9%, with double-digit growth in the U.S. and EMEA, partially offset by a $1 billion or 19% decline in Japan. Client business volumes were $195 billion at the end of 2003, up 15% from $170 billion in 2002, reflecting increases in other (principally custody) accounts of $12 billion, banking and fiduciary deposits of $7 billion, investment finance volumes of $4 billion and assets under fee-based management of $2 billion. Revenues, net of interest expense, were $2.044 billion in 2004, up $48 million or 2% from 2003 as combined growth of $112 million or 6% in Asia, North America (including Mexico), EMEA and Latin America was partially offset by a $64 million or 24% decline in Japan. In Asia, revenue increased $34 million or 9%, reflecting broad-based increases in recurring fee-based and net interest revenue that were partially offset by a decline in client transactional activity and lower performance fees. Revenue in North America increased $32 million or 4%, primarily driven by strong growth in banking and lending volumes in the U.S. and increased client transaction activity in Mexico, combined with growth in fee income from discretionary, custody and trust assets in both the U.S. and Mexico. Growth in North America was negatively impacted by net interest margin compression as increased funding costs, including lower revenue from treasury activities, was partially offset by the benefit of changes in the mix of deposits and liabilities. In EMEA, revenue grew $31 million or 12%, primarily driven by growth in fee income from discretionary and trust assets as well as increased transactional revenue. Revenue growth of $15 million or 7% in Latin America primarily reflected growth in banking and lending volumes. In Japan, revenue declined $64 million or 24% mainly due to lower transactional revenues. Revenues, net of interest expense, were $1.996 billion in 2003, up $295 million or 17% from 2002, primarily driven by revenue increases from investment management and capital markets activity, as well as lending and banking activities, partially offset by the impact of a narrowing of interest rate spreads. Operating expenses of $1.650 billion in 2004 were up $467 million or 39% from 2003. Operating expenses in 2004 included the $400 million exit plan charge in Japan. Excluding the exit plan charge, expenses increased $67 million or 6%, primarily reflecting increases in incentive compensation resulting from corresponding increases in revenue, as well as higher staff costs that were driven by investments in bankers and product specialists. Offsetting the growth in expenses was the absence of prior-year repositioning costs in Europe. Operating expenses were $1.183 billion in 2003, up $176 million or 17% from 2002, primarily reflecting increased incentive compensation associated with higher revenues, incremental repositioning costs in EMEA, and increased salary and benefits costs due to a change in employee mix of front-end sales staff. The provision for credit losses reflected net recoveries of $5 million in 2004 compared to net provisions of $11 million in 2003 and $18 million in 2002. The improvement in 2004 reflected net recoveries in Japan, Asia, the U.S., and Europe. The improvement in 2003 primarily reflected an improvement in credit experience in North America and Asia, partially offset by higher net write-offs in Japan. Net credit write-offs / (recoveries) in 2004 were (0.02%) of average loans outstanding compared with 0.05% in both 2003 and 2002. Loans 90 days or more past due at year-end 2004 were $127 million or 0.33% of total loans outstanding, compared with $121 million or 0.35% at the end of 2003. The decline in the effective tax rate in 2004 as compared to the prior year was primarily driven by the impact of the $400 million pretax ($244 million after-tax) Japan exit plan implementation charge. | EXCERPTS ON THIS PAGE:
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