Citigroup Reports First Quarter 2013 Earnings Per Share of $1.23; $1.29 Excluding CVA/DVA1

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Citigroup Reports First Quarter 2013 Earnings Per Share of $1.23; $1.29 Excluding CVA/DVA1

Net Income of $3.8 Billion; $4.0 Billion Excluding CVA/DVA

Revenues of $20.5 Billion; $20.8 Billion Excluding CVA/DVA


Net Interest Margin Increased to 2.94%

Net Credit Losses of $3.0 Billion Declined 25% Versus Prior Year Period

Loan Loss Reserve Release of $652 Million versus $1.2 Billion in Prior Year Period

Utilized $700 Million of Deferred Tax Assets

Basel I Tier 1 Common Ratio of 11.8%, Reflecting New U.S. Market Risk Rules2
Estimated Basel III Tier 1 Common Ratio Increased to 9.3%3

Book Value Per Share Increased to $62.51
Tangible Book Value Per Share4Increased to $52.35

Citigroup Deposits of $934 Billion Grew 3% versus Prior Year Period

Citicorp Loans of $539 Billion Grew 5% versus Prior Year Period

Citi Holdings Assets of $149 Billion Declined 29% from Prior Year Period and Represented 8% of Total Citigroup Assets at Quarter End

NEW YORK--(BUSINESS WIRE)-- Citigroup Inc. (NYS: C) today reported net income for the first quarter 2013 of $3.8 billion, or $1.23 per diluted share, on revenues of $20.5 billion. This compared to net income of $2.9 billion, or $0.95 per diluted share, on revenues of $19.4 billion for the first quarter 2012.

CVA/DVA was $(319) million ($(198) million after-tax) in the first quarter, mainly resulting from the improvement in Citigroup's credit spreads, compared to $(1.3) billion ($(800) million after-tax) in the prior year period. First quarter 2012 results included a net gain of $477 million on minority investments ($308 million after-tax)5. Excluding CVA/DVA in both periods and the gain on minority investments in the first quarter 2012, first quarter 2013 revenues increased 3% from the prior year period to $20.8 billion. First quarter 2013 earnings were $1.29 per diluted share, representing a 16% increase from prior year earnings of $1.11 per diluted share (excluding CVA/DVA and the gain on minority investments in first quarter 2012), as higher revenues and lower net credit losses were partially offset by higher legal and related expenses, a lower loan loss reserve release and a higher effective tax rate.

Michael Corbat, Chief Executive Officer of Citi, said, "Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging. During the quarter, we benefitted from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment. However, the environment remains challenging and we are sure to be tested as we go through the year.

"In addition to our performance across business lines, there were several other areas where we made progress. We reduced the drag on earnings caused by Citi Holdings and utilized a modest amount of our deferred tax assets. Our capital strength again improved during the quarter with the Tier 1 Common Ratio increasing to an estimated 9.3% on a Basel III basis. It is critical that Citi be viewed as an indisputably strong and stable institution and we made progress towards that goal," Mr. Corbat concluded.

Citigroup revenues of $20.8 billion in the first quarter 2013 increased 3% from the prior year period, excluding CVA/DVA and the gain on minority investments in the first quarter 2012. This increase was driven by 2% growth in Citicorp revenues and 15% growth in Citi Holdings revenues.

Citicorp revenues of $19.6 billion in the first quarter 2013 included $(310) million of CVA/DVA reported within Securities and Banking. Citicorp revenues of $19.9 billion increased 2% from the prior year period, excluding CVA/DVA and the impact of minority investment in the first quarter 2012. Securities and Banking revenues grew 8% (excluding CVA/DVA), Global Consumer Banking (GCB) revenues were flat and Transaction Services (CTS) revenues were down 4%, all versus the prior year period.

Citi Holdings revenues of $901 million in the first quarter 2013 included $(9) million of CVA/DVA. Excluding CVA/DVA, Citi Holdings revenues were $910 million, up 15% versus the prior year period. Higher revenues in the Special Asset Pool drove the improvement in Citi Holdings revenues from the prior year period reflecting lower asset marks and lower funding costs. The improvement in Special Asset Pool revenues was partially offset by a decline in Local Consumer Lending revenues, mainly due to the continuing decline in assets. Total Citi Holdings assets of $149 billion declined $60 billion, or 29%, from the first quarter 2012. Citi Holdings assets at the end of the first quarter 2013 represented approximately 8% of total Citigroup assets.

Citigroup's net income rose to $3.8 billion in the first quarter 2013 from $2.9 billion in the prior year period. Excluding the impact of CVA/DVA and the gain on minority investments in the first quarter of 2012, Citigroup net income increased 17% to $4.0 billion. This increase was driven by revenue growth and lower net credit losses, partially offset by higher expenses, a lower loan loss reserve release and a higher effective tax rate. Operating expenses of $12.4 billion were 1% higher than the prior year period mainly reflecting an increase in legal and related costs and repositioning charges. Citigroup's cost of credit in the first quarter 2013 was $2.5 billion, a decrease of 16% over the prior year period, reflecting a $994 million improvement in net credit losses partially offset by a $513 million decline in net loan loss reserve releases. The higher effective tax rate reflected both higher earnings in North America as well as a higher tax rate on international operations due to a first quarter 2013 change in the assertion that earnings in certain international entities would be permanently reinvested outside the U.S.

Citigroup's allowance for loan losses was $23.7 billion at quarter end, or 3.7% of total loans, compared to $29.0 billion, or 4.5% of total loans, at the end of the prior year period. The loan loss reserve release of $652 million in the quarter was down 44% from the prior year period. Reserve releases in Citicorp of $301 million compared to $589 million in the first quarter 2012, predominantly reflecting lower releases in North America GCB, largely related to Citi-branded cards. Citi Holdings recorded a net loan loss reserve release of $351 million in the first quarter 2013, compared to a net reserve release of $576 million in the prior year period, which included approximately $350 million of reserve releases related to previously deferred principal balances on modified mortgages. Citigroup asset quality remained largely stable to improving in the first quarter 2013 as total non-accrual assets fell 9% to $11.1 billion compared to the first quarter 2012. Corporate non-accrual loans decreased 16% to $2.5 billion from the first quarter 2012, while consumer non-accrual loans decreased 5% to $8.1 billion. The decline in consumer non-accrual loans occurred despite the third quarter 2012 OCC guidance regarding the treatment of mortgage loans where the borrower has gone through Chapter 7 bankruptcy which added $1.5 billion to consumer non-accrual loans. Consumer loans that were 90+ days delinquent, excluding the Special Asset Pool, declined 26% versus the prior year period to $6.6 billion, or 1.7% of consumer loans.

Citigroup's capital levels and book value per share increased versus the prior year period. As of quarter end, book value per share was $62.51 and tangible book value per share was $52.35, 1% and 3% increases respectively versus the prior year period. At quarter end, Citigroup's Basel I Tier 1 Capital Ratio was 13.1% and its Basel I Tier 1 Common Ratio was 11.8%, each reflecting the final U.S. market risk capital rules (Basel II.5) which became effective on January 1, 2013. Citigroup's estimated Basel III Tier 1 Common Ratio was 9.3% at the end of the first quarter 2013.

 
CITIGROUP
     
($ millions, except per share amounts)1Q'134Q'121Q'12QoQ%YoY%
 
Citicorp19,59017,10718,52415%6%
Citi Holdings901 1,067 882 -16%2%
Total Revenues$20,491 $18,174 $19,406 13%6%
Total Revenues (Ex-CVA/DVA & Gain (Loss)     
on Minority Investments)$20,810 $18,659 $20,217 12%3%
     
Expenses$12,398 $13,845 $12,319 -10%1%
 
Net Credit Losses2,9613,0663,955-3%-25%
Loan Loss Reserve Build/(Release) (a)(652)(86)(1,165)NM44%
Provision for Benefits and Claims231 219 229 5%1%
Total Cost of Credit$2,540 $3,199 $3,019 -21%-16%
     
Income (Loss) from Cont. Ops. Before Taxes$5,553 $1,130 $4,068 NM37%
Provision for Income Taxes1,588(206)1,006NM58%
 
Income from Continuing Operations$3,965$1,336$3,062NM29%
Net income (loss) from Disc. Ops.(67)(112)(5)40%NM
Non-Controlling Interest90 28 126 NM-29%
Citigroup Net Income$3,808 $1,196 $2,931 NM30%
 
Net Income (Ex-CVA/DVA, Gain (Loss) on     
Minority Investments & 4Q Repositioning)$4,006 $2,150 $3,423 86%17%
 
 
Tier 1 Common Ratio(b)11.8%12.7%12.5%
Tier 1 Capital Ratio(b)13.1%14.1%14.3%
Return on Common Equity8.2%2.5%6.5%
Book Value per Share$62.51$61.57$61.902%1%
Tangible Book Value per Share$52.35$51.19$50.902%3%
 
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information.
(a) Includes provision for unfunded lending commitments.
(b) As of 1Q'13, Tier 1 Capital and Tier 1 Common Ratios under Basel I reflect the final (revised) U.S. market risk capital rules (Basel II.5).
 
 
CITICORP
     
(in millions of dollars)1Q'134Q'121Q'12QoQ%YoY%
 
Global Consumer Banking10,01310,23410,006-2%0%
Securities and Banking6,9784,3625,34260%31%
Transaction Services2,6062,6172,7050%-4%
Corporate/Other(7)(106)471 93%NM
Total Revenues$19,590 $17,107 $18,524 15%6%
 
Total Revenues (Ex-CVA/DVA and     
Gain (Loss) on Minority Investments)$19,900 $17,617 $19,423 13%2%
     
Expenses$10,896 $12,241 $11,102 -11%-2%
 
Net Credit Losses2,0312,0942,221-3%-9%
Loan Loss Reserve Build/(Release) (a)(301)(137)(589)NM49%
Provision for Benefits and Claims63 64 58 -2%9%
Total Cost of Credit$1,793 $2,021 $1,690 -11%6%
     
Net Income$4,602 $2,245 $3,950 NM17%
 
 
Revenues
North America8,7067,4277,24717%20%
EMEA3,1022,5963,20119%-3%
LATAM3,7923,6623,6384%4%
Asia3,9973,5283,96713%1%
Corporate/Other(7)(106)47193%NM
 
Net Income
North America2,3771,2911,57884%51%
EMEA63937377371%-17%
LATAM88981189010%0%
Asia1,1167351,10852%1%
Corporate/Other(419)(965)(399)57%-5%
 
 
EOP Assets ($B)1,7331,7091,7351%0%
EOP Loans ($B)5395405140%5%
EOP Deposits ($B)8688638431%3%
 
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information.
(a) Includes provision for unfunded lending commitments.

Citicorp

Citicorprevenues of $19.6 billion in the first quarter 2013 increased by 6% from the prior year period. CVA/DVA, reported within Securities and Banking, was $(310) million in the first quarter 2013, compared to $(1.4) billion in the prior year period. Excluding CVA/DVA and the gain on minority investments in first quarter 2012, revenues were $19.9 billion, up 2% from the first quarter 2012 driven by 8% growth in Securities and Banking revenuesto $7.3 billion while GCB revenues were flat at $10.0 billion and CTS revenues declined 4% to $2.6 billion. Corporate/Other revenues of $(7) million were roughly flat versus the prior year period, excluding the gain on minority investments in the first quarter 2012.

Citicorpnet income increased 17% from the prior year period to $4.6 billion, as revenue growth, lower operating expenses and lower net credit losses were partially offset by lower loan loss reserve releases and a higher effective tax rate.

Citicorpoperating expenses decreased 2% from the prior year period to $10.9 billion, largely reflecting lower legal and related expenses.

Citicorpcost of credit of $1.8 billion in the first quarter 2013 increased 6% from the prior year period. The increase reflected lower loan loss reserve releases, which declined 49% to $301 million, partially offset by lower net credit losses, which declined 9% to $2.0 billion compared to the prior year period. The decline in reserve releases was largely in North America GCB and primarilyrelated to Citi-branded cards. Citicorp's consumer loans 90+ days delinquent declined 12% from the prior year period to $2.9 billion, and the 90+ days delinquency ratio decreased 15 basis points to 1.02% of loans.

Citicorpend of period loans grew 5% versus the prior year period to $539 billion, reflecting growth in corporate loans and Latin America consumer loans. Consumer loans grew 1% to $290 billion and corporate loans grew 9% to $249 billion, both versus the prior year period.

 
Global Consumer Banking
     
(in millions of dollars)1Q'134Q'121Q'12QoQ%
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