This excerpt taken from the C 10-Q filed Aug 3, 2007.
Provisions for loan losses and for benefits and claims increased 54% driven by portfolio growth, increased past due accounts and targeted market expansion in Mexico, the integration of acquisitions, higher net credit losses in Japan Consumer Finance, and the absence of 2006 second quarter loan loss reserve releases.
Net income was also affected by the absence of prior-year Mexico tax benefits of $70 million related to APB 23.
In Citigroups 2006 Form 10-K the Company stated that it expected its consumer finance business in Japan to break even in 2007. However, the situation remains unpredictable; and given the Companys recent experience with the level of Grey Zone related refund claims, the Companys best estimate now is that the business will have net losses in 2007. The Company will continue to analyze the profitability prospects for this business thereafter.
Certain of the statements above are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See Forward-Looking Statements on page 44.