Citigroup (C)

earnings growth. The business expects to continue to expand its footprint with a continued program of new branch openings in both the Citibank and CitiFinancial businesses, to continue to grow our Citibank Direct business and to expand cross-marketing opportunities. The challenging interest rate environment is expected to continue, with a corresponding shift in deposits to lower-profit time deposits and CDs, which will affect revenue growth. Credit costs are expected to increase slightly, as unusually low bankruptcy levels in 2006 are expected to rise back to more normalized levels.

U.S. Consumer Lending—In 2007, U.S. Consumer Lending expects to generate earnings growth across its product lines. In Real Estate Lending, an expected decline in the level of new housing starts and existing home sales is expected to be mitigated by an increase in the Retail Distribution network of branches, higher sales from Primerica agents and the Smith Barney network, and from the acquisition of ABN AMRO Mortgage Group. With the acquisition of ABN AMRO, the combined company will move from number five to number four in mortgage loan servicing and strengthen CitiMortgage’s number three market position in originations, based on 2006 third quarter data. Results are also expected to reflect higher portfolio balances and servicing activities. Credit costs are expected to increase modestly due to seasoning in the rapidly growing Home Equity portfolio.

U.S. Commercial Business—In 2007, U.S. Commercial Business expects to generate increases in loans, deposits and accounts by continuing to expand its core business portfolio and through leveraging the expanded Retail Branch network. The business will also focus on tight expense control, effective credit management, and productivity improvements. The credit environment is expected to remain stable.