Citi Reports First Quarter Revenues of $24.8 Billion
Net Income of $1.6 Billion, Loss Per Share of $0.18
Positive EPS Excluding The $0.24 Impact of Resetting The Conversion Price of Certain Preferred Shares

Net Income Primarily Driven by Improved Performance in Institutional Clients Group and Continued Expense Reductions

New York, NY, April 17, 2009 — Citigroup Inc. (NYSE: C) today reported net income for the first quarter of 2009 of $1.6 billion and a loss per share of $0.18, based on 5,385 million shares outstanding. Revenues of $24.8 billion were driven by strong results in the Institutional Clients Group, partially offset by net write-downs. Results also include $7.3 billion in net credit losses and a $2.7 billion net loan loss reserve build.

The $0.18 loss per share reflected the reset in January 2009 of the conversion price of the $12.5 billion convertible preferred stock issued in a private offering in January 2008. This did not have an impact on net income but resulted in a reduction to income available to common shareholders of $1.3 billion or $0.24 per share. Without this reduction, earnings per share were positive. The loss per share also reflected preferred stock dividends, which did not impact net income but reduced income available to common shareholders by $1.3 billion.

Key Items

Total revenues of $24.8 billion were up 99% compared to the first quarter of 2008, with sequential improvement across all regions.
Net interest margin of 3.30% increased 50 and 8 basis points versus the first and fourth quarter 2008, respectively.
Operating expenses were down $3.7 billion, or 23%, since the first quarter 2008.
Headcount reduced by approximately 13,000 since the fourth quarter 2008 to 309,000 and approximately 65,000 since peak levels.
Tier 1 capital ratio was approximately 11.8% versus 7.7% in the first quarter 2008.
Deposit base remained relatively stable at $763 billion compared to the fourth quarter 2008, despite the challenging environment. Deposits declined 8% since the first quarter 2008, due to the sale of the German retail banking operations and the impact of foreign exchange. U.S. deposits increased $8 billion sequentially and $28 billion year-over-year.
Closed sale of remaining Redecard position for an after-tax gain of $704 million.

Management Comment

"Our results this quarter reflect the strength of Citi's franchise and we are pleased with our performance. With revenues of nearly $25 billion and net income of $1.6 billion, we had our best overall quarter since the second quarter of 2007," said Vikram Pandit, Chief Executive Officer of Citi.

"The clear message from this quarter is that our clients remain engaged. Citi is a unique franchise in global financial services. We offer more services in more places around the globe than anyone, which our clients have long recognized. Despite the challenges we have faced this past year, they remain closely engaged with us.

"As strong as our franchise is, we have been taking steps to strengthen it further. We have lowered risk and dramatically reduced the problem legacy assets that have caused many of our losses. We have meaningfully lowered expenses and headcount and improved efficiency. We have also increased our capital base.

"Additionally, we continued to extend significant amounts of credit to U.S. consumers and continued to focus on supporting the U.S. housing market. Since October 2008, we successfully worked with borrowers, with combined mortgages totaling approximately $13.5 billion, to avoid potential foreclosure and were able to keep more than 9 out of 10 distressed borrowers with Citi mortgages we own in their homes. Also since October 2008, our U.S. Cards business has worked with over 820,000 consumers to help them manage their credit card debt through a variety of forbearance programs.

"While we and the industry face challenges in the coming quarters as we work through the weak economy, we will remain focused on strengthening the Citi franchise. We will continue to reduce our legacy risk, aggressively manage expenses and improve efficiency. Most importantly, we will continue to engage our clients with what I believe to be the most talented team of people in financial services today.

"As a final note, I want to personally thank all Citi employees around the world who are the foundation of Citi's success. Their continued tireless efforts on behalf of our clients underscore their dedication. Despite the challenges of the past year, I remain confident that Citi will emerge from the financial crisis as one of the strongest franchises in financial services," said Pandit.

FIRST QUARTER SUMMARY
Revenues were $24.8 billion, approximately double those of the prior-year period. Strong trading results and lower net write-downs in Securities and Banking drove revenues. The difficult economic environment continued to have a negative impact on all other businesses.
Global Cards GAAP revenues declined 10%, mainly due to higher credit losses flowing through the securitization trusts in North America. On a managed basis, Global Cards revenues grew 3% and North America increased 6%. Revenues in the current quarter included a $1.1 billion pre-tax gain on the sale of Redecard shares. The prior-year period included a $439 million gain on Visa shares and a $663 million gain on the sale of Redecard shares.
Consumer Banking revenues declined 18%, driven by a 42% decline in investment sales, the impact from foreign exchange changes on non-U.S. dollar revenues as they are converted to U.S. dollars for reporting purposes ("impact of foreign exchange"), lower volumes, and spread compression.
In the Institutional Clients Group, Securities and Banking revenues were $7.2 billion, mainly due to strong trading results, partially offset by net write-downs and losses of $2.2 billion (see detail in Schedule B).
Transaction Services revenues declined 1% to $2.3 billion, and average deposits and other customer liability balances declined 2%. Growth in both revenues and deposits, driven by double-digit growth in North America and strong growth in EMEA, was more than offset by the impact of foreign exchange.
Global Wealth Management revenues declined 20%, reflecting the adverse impact of market conditions on capital markets and investment revenues across all regions. The revenue decline was partially offset by higher banking revenues, driven by the bank deposit program.
Citi adopted FASB's recent rule changes regarding fair valuation (FAS 157) and other than temporary impairments (FAS 115). The adoption of the changes to FAS 157 had no impact on Citi's financial results. The adoption of the changes to FAS 115 resulted in approximately $631 million pre-tax of lower impairment charges recorded in revenue in the current quarter. Additionally, the cumulative effect of the changes to FAS 115, which did not impact revenues, led to a $413 million after-tax increase in retained earnings and an offset in other comprehensive income on the balance sheet.

Operating expenses were $12.1 billion, down 23%, reflecting benefits from ongoing re-engineering efforts, the impact of foreign exchange, and a $250 million litigation reserve release. Expenses in the prior-year period included $626 million of net charges (see detail in Schedule D). Excluding those items, as well as the litigation release in the current quarter, expenses declined 19%.
Credit costs of $10.3 billion, up 76%, consisted of $7.3 billion in net credit losses, a $2.7 billion net loan loss reserve build, and $332 million of policyholder benefits and claims. Net credit losses increased $3.6 billion, primarily driven by Consumer Banking and Cards in North America, and Securities and Banking. The incremental net loan loss reserve build of $754 million was mainly driven by Global Cards and Securities and Banking. The total allowance for loans, leases and unfunded lending commitments was $32.7 billion.
Taxes. The effective tax rate on continuing operations was 32.8% versus 42.9% in the prior-year period. The current quarter included a $110 million tax benefit related to the resolution of certain issues in an IRS audit.
Capital Position. On January 15, 2009, Citi issued $7.1 billion of preferred stock and a warrant to purchase common stock to the U.S. Treasury and the FDIC as consideration for the loss-sharing agreement on a $301 billion portfolio of assets (valued as of November 21, 2008). Of the issuance, $3.6 billion was treated as Tier 1 Capital for regulatory purposes. The Tier 1 capital ratio was approximately 11.8% versus 7.7% in the first quarter of 2008 and 11.9% in the fourth quarter of 2008. The sequential decline in the Tier 1 capital ratio was largely due to the consolidation of $82 billion of card-related securitization assets for regulatory capital purposes, largely offset by higher Tier 1 capital and a reduction in other risk-weighted assets.