ADD to BW1092, Citicorp reports third quarter net income of $935 million and earnings per common share of $1.85.NEW YORK--(BUSINESS WIRE)--Oct. 15, 1996-- ADDITION to BW1092 (CITICORP): Details follow: Consumer business results show revenue growth, but higher Cards credit costs Third Quarter (Dollars in Millions) 1996 1995 Change Adjusted Revenue Excluding SAIF $3,407 $3,144 8% Adjusted Operating Expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. 1,832 1,704 8% Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: Excluding SAIF 1,575 1,4401,5 9% Credit Costs 803 633 27% Income before Taxes Excluding SAIF 722 757 (5%) Net Income Excluding SAIF 506 515 (2%) SAIF Assessment, after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. 40 - - Net Income 466 515 (10%) Return on Assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). (%) 1.45 1.67 - Nine Months Adjusted Revenue Excluding SAIF $9,979 $9,124 9% Adjusted Operating Expense 5,376 5,071 6% Operating Margin Excluding SAIF 4,603 4,053 14% Credit Costs 2,271 1,785 27% Income before Taxes Excluding SAIF 2,182 2,118 3% Net Income Excluding SAIF 1,508 1,412 7% SAIF Assessment, after-tax 40 - - Net Income 1,468 1,412 4% Return on Assets (%) 1.56 1.59 - The Consumer businesses earned $466 million in the third quarter of 1996, compared with $515 million in the 1995 quarter, to reach $1.5 billion in the 1996 nine months, up $56 million or 4% from the first nine months of 1995. 1996 earnings reflected Citicorp's share of the SAIF assessments under legislation enacted on September September: see month. 30, 1996 to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. the deposit insurance fund for savings banks savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. . The $64 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern assessment, which was charged against net interest revenue, was first discussed in Citicorp's third quarter 1995 10-Q filing and approximates 66 basis points on $9.7 billion of covered deposits. Future insurance premiums paid by the Citicorp'scompany's savings bank subsidiary are expected to decline. Excluding SAIF, net income for the nine months grew 7%. Consumer businesses in the emerging markets earned $210 million in the quarter and $660 million for the nine months of 1996, increases of $6 million or 3% and $68 million or 11%, respectively, over the 1995 periods. Emerging markets rRevenue grew in the quarter by $94 million or 12%, while expense for the emerging markets franchise grew $83 million or 19%. Net income in the developed markets (excluding the SAIF assessment) was $296 million in the quarter and $848 million in the nine months, down $15 million or 5% and up $28 million or 3%, respectively, from the 1995 periods, as higher U.S. bankcards credit costs countered continued revenue growth. Citibanking Citibanking -- which delivers products and services to customers through Citicorp's worldwide branch network and electronic delivery systems -- earned $199 million and $558 million (excluding the SAIF assessment), respectively, in the 1996 third quarter and nine months. Earnings grew $37 million or 23%, and $111 million or 25%, from the respective 1995 periods. Revenue in the quarter of $1.5 billion (excluding the SAIF assessment) was up $93 million or 7% from a year-ago, reflecting higher business volumes and $42 million from the sale of the consumer mortgage portfolio in the United Kingdom, partially offset by continued spread tightening in most markets. Expense growth in the quarter was $74 million or 8% from a year ago, including 15% in the emerging markets and 5% in the developed markets. Investment spending continued on Citibanking initiatives, particularly on upgrading systems and delivery of services worldwide through technology convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. , together with branch, product, and service expansion, and further Citibank CITIBANK First National City Bank brand development. Model Branches, which represent the Citibanking branch standard for enhancing customer relationships and efficiency, grew by 18 in the quarter, to reach 525 worldwide, 46% of total consumer branches. PC banking was introduced in Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. and Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , making six countries where customers can conduct their banking through personal computers. Credit costs of $160 million in the quarter were down $1 million or 1% compared to the second quarter of 1996 and down $23 million or 13% from a year ago, reflecting continued improvement in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and, compared with a year ago, lower losses in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , particularly Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). .
The CitiSelect family of asset allocation mutual funds Asset allocation mutual fund A mutual fund that rotates among stocks, bonds, and money market securities to maximize return on investment and minimize risk. expanded its offerings with Folio (1) Text management software for the professional reference publishing market from Fast Search & Transfer, Oslo, Norway and Boston, MA (www.fastsearch.com). Known as FAST Folio since its acquisition in 2004 from NextPage, Inc. 500 during the quarter. Since their launch last June June: see month. , CitiSelect portfolios in the U.S. and Asia have attracted $580 million of consumer investments. Cards Cards worldwide -- MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and , Visa, Diners Club Diners Club International, originally founded as Diners Club, is a credit card company formed in 1950 by Frank X. McNamara, Ralph Schneider and Casey R. Taylor. When it first emerged, it became the first independent credit card company in the world. and private label cards -- earned $243 million in the third quarter, down $47 million or 16% from a year ago, and $749 million in the nine months of 1996, down $59 million or 7% from the comparable 1995 period. Earnings reflected revenue improvements of 10% for the quarter and 11% for the nine month period, as well as increases in overall expense levels and, particularly in the U.S. bankcards business, continued increases in credit costs, particularly in the U.S. bankcards business. The emerging markets Cards business represented approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 29% of third quarter worldwide Cards earnings. U.S. bankcards revenue in the third quarter grew 9% over the year-ago quarter, reflecting growth in managed receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , up $2.0 billion or 5% from a year ago to $44.0 billion at September 30, 1996, and spread improvement. Managed receivables grew $1.2 billion or 3% from the preceding 1996 quarter, primarily reflecting expected seasonal trends. Charge volumes in the U.S. bankcards business increased from the yearago quarter by $2.8 billion or 12% to $24.9 billion. Receivable volume growth has been affected by competitive pressures, credit tightening on the part of Citicorp, and moderating increases in consumer personal debt levels. Third quarter revenue in the emerging markets Cards businesses grew 19% over a year ago, reflecting continued growth in the Asia Pacific and Middle East businesses, where charge volumes on Citicorp-issued cards increased 20% from the year-ago quarter, and improvements in Latin America, principally Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Cards in force in Latin America have grown 17% since last year. The Citibank AAdvantage card was launched in Trinidad Trinidad (trēnēthäth`), town (1983 est. pop. 43,500), Sancti Spíritus prov., central Cuba. Tobacco processing is the chief industry, although other agricultural processing has been developed. , adding to Citicorp's worldwide consumer presence. The number of cards in force worldwide, including those issued by affiliates, reached 60 million at the end of the quarter, an increase of 4 million or 7% from a year ago. In addition, Diners Club was awarded IBM's corporate card business in Europe, Asia, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and half of its U.S. business. Operating expense in the quarter increased 6% from the year-ago quarter. Expense levels in U.S. bankcards were essentially unchanged, consistent with the lower volume growth trends. Expense grew 32% in the emerging markets Cards businesses as investment spending and franchise development continued. Statement processing for the Caribbean region Cards business was moved to Hagerstown Hagerstown (hā`gərztoun'), city (1990 pop. 35,445), seat of Washington co., NW Md., on Antietam Creek near its junction with the Potomac River, in the fertile Cumberland Valley; inc. 1791. , Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , as a part of an ongoing program to achieve efficiencies and lower unit costs. Credit costs for worldwide Cards continued to increase. Credit costs in the quarter were $639 million, up $28 million or 5% from the 1996 second quarter, and up $191 million or 43% from the 1995 third quarter. Credit costs for U.S. bankcards increased to $550 million, or 5.11% of average managed loans, up $28 million from $522 million or 4.99% in the preceding quarter, and from $379 million or 3.70% from a year-ago. Bankruptcies represented 38% of gross U.S. bankcard bank·card n. A card issued by a bank authorizing the holder to receive bank services and often functioning as a debit card. write-offs compared with 39% in the preceding quarter and 36% in the 1995 third quarter. Managed U.S. bankcard loans delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. 90 days or more were 1.86% of the portfolio, compared with 1.73% at the end of the preceding quarter and 1.54% a year ago. Citicorp continues to write -off bankrupt BANKRUPT. A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt. 2. It is proper to notice that there is much difference between a bankrupt and an insolvent. accounts upon notice of filing of bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . Managed U.S. bankcard loans delinquent 90 days or more were 1.86% of the portfolio, compared with 1.73% at the end of the preceding quarter and 1.54% a year ago. Credit costs in the non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. bankcards portfolio, which primarily includes bankcards in the emerging markets, Europe and Japan, as well as worldwide Diners Club, were $89 million or 4.35% of average loans, in the third quarter, compared with $89 million or 4.65% in the preceding quarter, and $6980 million or 4.406% in the 19956 thfirdst quarter. Loans delinquent 90 days or more improved to 2.13% of the portfolio, compared with 2.25% at the end of the preceding quarter and 2.315% at the end of the 1995 thfirdst quarter. Cards continued to build reserves for possible credit losses, with a provision of $48 million above net credit losses in the quarter, consistent with $49 million in the preceding quarter and $48 million in the same year-ago quarter. Private Bank Private Bank net income of $64 million and $201 million in the third quarter and nine months of 1996, respectively, was up $1 million or 2% and $44 million or 28% from the comparable 1995 periods. Income before taxes was $72 million, down 9%, in the third quarter and $250 million, up 30%, for the nine months. Revenue of $252 million and $749 million in the third quarter and nine months of 1996 was up $13 million orgrew 5% and $56 million or 8% from the comparable year-ago periodsquarter as core business revenues increased 10%, led by 13% growth in the emerging markets, somewhat offset by reduced transactional revenue and placement fees. Revenue in the nine months was $749 million, up 8% from the same 1995 period. The 11% increase in expense in the quarter was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher salary levels and reengineering Using information technology to improve performance and cut costs. Its main premise, as popularized by the book "Reengineering the Corporation" by Michael Hammer and James Champy, is to examine the goals of an organization and to redesign work and business processes from the ground up efforts expected to result in future cost efficiencies. Expense for the nine months, including the effects of reengineering, was up 7%. Total credit costs of $4 million in the quarter compared with $2 million in the year-ago period, which reflected the benefit from dispositions of OREO. For the nine months, Private Bank had net credits of $5 million, compared with net charges of $28 million as the U.S. business benefited from recoveries and lower OREO writedowns. Overall credit trends improved with delinquencies down to 1.61% of loans from 2.32% a year earlier, reflecting an overall decrease in the level of non-performing assets. Client business volumes under management at the end of the quarter totaled $93 billion, up $8 billion from a year earlier. Growth was balanced across most product lines. -0- Corporate Banking reports higher net income with improved contributions from both Emerging Markets and Global Relationship Banking Third Quarter (Dollars in Millions) 1996 1995 Change Adjusted Revenue $1,746 $1,626 7% Adjusted Operating Expense 1,127 1,011 11% Operating Margin 619 615 1% Credit Costs (60) 61 - Income before Taxes 679 529 28% Net Income 520 389 34% Return on Assets (%) 1.53 1.10 - Nine Months Adjusted Revenue $5,158 $4,959 4% Adjusted Operating Expense 3,222 2,988 8% Operating Margin 1,936 1,971 (2%) Credit Costs (72) 86 - Income before Taxes 2,008 1,810 11% Net Income 1,629 1,348 21% Return on Assets (%) 1.58 1.23 - Net income from global corporate banking activities of $520 million in the third quarter increased 34% from the 1995 third quarter on revenue of $1.7 billion, which rose 7%. Return on average assets was 1.53%, up from 1.10% a year ago. Net income from Emerging Markets corporate banking was $345 million and Global Relationship Banking's net income was $175 million (which does not include business done in Emerging Markets for customer relationships managed jointly with the Emerging Markets business). Citibank placed first in foreign exchange in both Corporate Finance magazine's poll for providing global services to corporations and Emerging Markets Investor magazine's poll of 1,000 international fund managers, and first in equity derivatives In finance, an equity derivative is a class of financial instruments whose value is at least partly derived from one or more underlying equity securities. Market participants trade equity derivatives in order to transfer or transform certain risks associated with the in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in Risk magazine's poll of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . Emerging Markets Net income from banking for corporate customers in the emerging markets totaled $345 million in the quarter, up $83 million or 32% from a year ago. Return on assets of 2.25% increased from 2.08% in the 1995 third quarter. Pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. totaled $436 million, up 23% from the 1995 third quarter with an effective income tax rate of 21%, compared with an effective tax rate of 26% a year ago. Revenue of $815 million increased $98 million or 14% from the 1995 third quarter. The revenue growth included a $36 million or 20% increase in trading-related revenue coupled with strong momentum in transaction banking services. Revenue also included $28 million arising from the Panama Panama, country, Central America Panama (păn`əmä'), Span. Panamá, officially Republic of Panama, republic (2005 est. pop. refinancing Refinancing An extension and/or increase in amount of existing debt. agreement concluded during the quarter. About 20% of the revenue in the Emerging Markets business was attributable to business from multinational multinational Of, relating to, or being a company with subsidiaries or other operations in a number of countries. The diversity of operations of such companies subjects them to unique risks (for example, exchange rate changes or government nationalization) companies managed jointly with Global Relationship Banking, with that revenue having grown at a double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" rate from the third quarter of 1995. Expense of $426 million increased $80 million or 23% from the 1995 third quarter, primarily reflecting investment spending to build the franchise and costs associated with implementing Citicorp's plan to gain market share in selected emerging market countries. Since the third quarter of 1995, operations were expanded around the world by opening new or additional offices or converting representative offices to branches or subsidiaries in China, Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. , Lebanon Lebanon, country, Asia Lebanon (lĕb`ənən, –nŏn'), officially Republic of Lebanon, republic (2005 est. pop. 3,826,000), 4,015 sq mi (10,400 sq km), SW Asia. , Peru, Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). , Slovakia Slovakia (slōvă`kēə, slōvä`kēə) or the Slovak Republic, Slovak Slovensko (slô`vĕnskô), republic (2005 est. pop. and Tanzania Tanzania (tăn'zənē`ə, –zăn`ēə, Swahili tänzänē`ä), officially United Republic of Tanzania, republic (2005 est. pop. . In addition, the Citi Islamic Is·lam n. 1. A monotheistic religion characterized by the acceptance of the doctrine of submission to God and to Muhammad as the chief and last prophet of God. 2. a. Bank was opened in Bahrain Bahrain or Bahrein (both: bärān`, bə–), officially Kingdom of Bahrain, constitutional monarchy and archipelago (2005 est. pop. 688,300), 266 sq mi (689 sq km), in the Persian Gulf. . Credit costs, including recoveries of $54 million attributable to the refinancing agreements concluded with Panama and Croatia Croatia (krōā`shə), Croatian Hrvatska, officially Republic of Croatia, republic (2005 est. pop. 4,496,000), 21,824 sq mi (56,524 sq km), in the northwest corner of the Balkan Peninsula. , remained low during the quarter, and resulted in a net credit of $47 million, compared with a net charge of $16 million in the 1995 third quarter. Debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: activities continued with Peru during the quarter. Global Relationship Banking Net income from the Global Relationship Banking business in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and Japan totaled $175 million, up $48 million or 38% from the 1995 third quarter. Pretax income was $243 million, up 40% from the 1995 third quarter. Average assets were reduced by $16 billion, primarily in trading-related activities, from the third quarter of 1995, as Global Relationship Banking continued to focus on asset utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be and improving returns. Return on average assets of 0.94% improved from 0.56% in the 1995 third quarter. Revenue of $931 million grew $22 million from the 1995 third quarter, and reflectsing growth in corporate finance and transaction banking services, together with strong trading and venture capital results. Trading-related revenue of $259 million declined $61 million from the unusually strong third quarter 1995 level. Venture capital revenues of $129 million improved $46 million from the 1995 third quarter, reflecting the robust U.S. equity markets. Expense of $701 million increased $36 million or 5% compared with the 1995 quarter, primarily reflecting increased spending on technology and risk management initiatives, and volume-related expenses in transaction banking services. Credit costs in the quarter were a net credit of $13 million, compared with a charge of $45 million in the 1995 third quarter. The third quarter of 1995 also included a provision in excess of net write-offs of $25 million. Other Items Citicorp's effective tax rate was 37% in the third quarters of 1996 and 1995, and 38% for the nine month periods of 1996 and 1995. Income taxes are attributed to core businesses on the basis of local tax rates, which resulted amounted into an effective tax rates of 26% and 30% in the quarter and 30% in the 1996 and 1995 third quarters, respectively, and (259% and 30% for the nine month periods, for the full 1995 year), reflecting changes in the nature and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. mix of earnings. The difference between the local tax rate and Citicorp's overall effective rate in each period is included in corporate items. At September 30, 1996, total reserves (including reserves for sold Consumer portfolios) were $5.9 billion. Citicorp continued to build its allowance for credit losses, adding $50 million above net credit losses, primarily related to Cards, consistent with the practice in recent quarters. Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. was $19.2 billion, total capital was estimated at $28.5 billion, and the Tier 1 and total capital ratios were estimated at 8.4% and 12.4%, respectively. The ratio of common equity to total assets was 6.7%. The number of shares acquired since June 20, 1995, when the Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, totaled 51.1 million for an outlay of $3.8 billion. As expanded in January January: see month. 1996, the program is authorized to make total purchases for up to $4.5 billion. Average common shares outstanding for the purpose of computing computing - computer fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the 1996 third quarter were 486 million and 492 million in the preceding 1996 quarter, principally reflecting the net effect of the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program and employee stock plans. Press contact: John M. Morris (212) 559-4285 Investor contact: Frederick Frederick, city, United States Frederick, city (1990 pop. 40,148), seat of Frederick co., NW Md.; settled 1745, inc. 1817. The processing center of a fertile farm and dairying area, it makes beer, household items, optical and glass products, leather goods, A. Roesch (212) 559-2715 Tables detailing key financial data, an analysis of earnings, business results and credit indicators follow, along with selected financial statements. Further details concerning the financial results will be available next month in Citicorp's Form 10-Q Form 10-Q See 10-Q. . FINANCIAL SUMMARY Third Quarter Nine Months 1996 1995 Change 1996 1995 Change Net Income (In $935 $877 7% $2,801 $2,559 9% Millions of Dollars) Net Income Per Share Common & Common Equivalent Shares $ 1.85 $ 1.79 3% $ 5.53 $ 5.29 5% Assuming Full $ 1.85 $ 1.62 14% $ 5.45 $ 4.72 15% Dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. Common Stockholders' Equity Per Share $38.94 $37.99 3% Closing Stock Price At Quarter End $90.63 $70.75 28% Financial Ratios Return on Total 1.39% 1.31% 1.40% 1.27% Assets Return on Common Stockholders' 19.87% 20.12% 20.27% 20.90% Equity Capital (Dollars in Billions) Tier 1 $19.2 $18.6 Total (Tier 1 and 2) 28.5 27.3 (A) Tier 1 Ratio (A) 8.4% 8.4% Total Ratio (Tier 1 12.4% 12.3% and 2) (A) Common Equity as a Percentage of 6.74% 6.27% Total Assets Total Equity as a Percentage of 7.50% 7.57% Total Assets Dividends Declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. (In Millions of Dollars) Common $213 $127 $639 $365 Preferred 38 83 123 271 (A) 1996 estimated. Earnings Analysis (In Millions of Dollars) Third Quarter Nine Months 1996 1995 Change 1996 1995 Change Total Revenue $5,010 $4,757 5% $14,831 $13,889 7% Effect of Credit Card 360 219 64% 1,003 667 50% Securitizations Net Cost To Carry(A) (8) 7 NM (39) 15 NM Adjusted Revenue 5,362 4,983 8% 15,795 14,571 8% Total Operating 3,078 2,793 10% 8,916 8,284 8% Expense Net OREO Benefits(B) 8 33 (76%) 37 46 (20%) Adjusted Operating 3,086 2,826 9% 8,953 8,330 7% Expense Operating Margin 2,276 2,157 6% 6,842 6,241 10% Consumer Credit 803 633 27% 2,271 1,785 27% Costs (C) Commercial Credit (60) 61 NM (72) 86 NM Costs (D) Operating Margin Less Credit 1,533 1,463 5% 4,643 4,370 6% Costs Additional 50 75 (33%) 150 225 (33%) Provision (E) Income Before Taxes 1,483 1,388 7% 4,493 4,145 8% Income Taxes 548 511 7% 1,692 1,586 7% Net Income $935 $ 877 7% $ 2,801 $ 2,559 9% (A) Principally the net cost to carry commercial cash-basis loans and other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most ("OREO"). (B) Principally gains and losses on sales, direct revenue and expense, and writedowns of commercial OREO. (C) Principally Consumer net credit write-offs adjusted for the effect of credit card receivables securitizations. (D) Includes commercial net credit write-offs, net cost to carry, and net OREO benefits. (E) Primarily charges for credit losses in excess of net write-offs. NM Not meaningful, as percentage equals or exceeds 100%. Earnings Summary Third Quarter Nine Months (Dollars In 1996 1995(A) Change 1996 1995(A) Change Millions) Consumer $466 $515 (10%) $1,468 $1,412 4% Corporate Banking(B) 520 389 34% 1,629 1,348 21% Core Businesses 986 904 9% 3,097 2,760 12% Corporate Items (51) (27) (89%) (296) (201) (47%) Total Citicorp $935 $877 7% $2,801 $2,559 9% Supplemental Information: Consumer: Citibanking $159 $162 (2%) $ 518 $ 447 16% Cards 243 290 (16%) 749 808 (7%) Private Bank 64 63 2% 201 157 28% Total $466 $515 (10%) $1,468 $1,412 4% Developed Markets $256 $311 (18%) $ 808 $ 820 (1%) Emerging Markets 210 204 3% 660 592 11% Total $466 $515 (10%) $1,468 $1,412 4% Corporate Banking(B): Emerging Markets $345 $262 32% $1,169 $ 875 34% Global Relationship 175 127 38% 460 473 (3%) Banking Total $520 $389 34% $1,629 $1,348 21% (A) Reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" latest quarter's presentation. (B) Corporate Banking activities also include the results of the Cross-Border Refinancing and the North America Commercial Real Estate portfolios in Emerging Markets and Global Relationship Banking, respectively. Consumer Third Quarter Nine Months (Dollars In 1996 1995(A) Change 1996 1995(A) Change Millions) Total Revenue (B) $2,982 $2,922 2% $8,921 $8,447 6% Effect of Credit Card 360 219 64% 1,003 667 50% Securitizations Net Cost to Carry Cash-Basis Loans 1 3 (67%) (9) 10 NM and OREO Adjusted Revenue 3,343 3,144 6% 9,915 9,124 9% Total Operating 1,834 1,700 8% 5,380 5,076 6% Expense Net OREO Costs (2) 4 NM (4) (5) (20%) Adjusted Operating 1,832 1,704 8% 5,376 5,071 6% Expense Operating Margin 1,511 1,440 5% 4,539 4,053 12% Net Write-offs 440 415 6% 1,273 1,103 15% Effect of Credit Card 360 219 64% 1,003 667 50% Securitizations Net Cost to Carry and Net OREO 3 (1) NM (5) 15 NM Costs Credit Costs 803 633 27% 2,271 1,785 27% Operating Margin Less Credit Costs 708 807 (12%) 2,268 2,268 - Additional 50 50 - 150 150 - Provision Income Before Taxes 658 757 (13%) 2,118 2,118 - Income Taxes 192 242 (21%) 650 706 (8%) Net Income $ 466 $ 515 (10%) $1,468 $1,412 4% Average Assets (In Billions of $128 $122 5% $126 $119 6% Dollars) Return on Assets 1.45% 1.67% - 1.56% 1.59% - (A) Reclassified to conform to latest quarter's presentation. (B) Includes $64 million SAIF assessment in the 1996 periods. NM Not meaningful, as percentage equals or exceeds 100%. (Dollars In Third Quarter % Nine Months % Millions) Citibanking 1996 1995(A) Change 1996 1995(A) Change Revenue (B) $1,408 $1,379 2 $4,265 $4,018 6 Operating Expense 1,021 947 8 3,020 2,799 8 Operating Margin 387 432 (10) 1,245 1,219 2 Credit Costs 160 183 (13) 479 510 (6) Operating Margin Less Credit Costs 227 249 (9) 766 709 8 Additional 2 2 - 4 14 (71) Provision Income Before Taxes 225 247 (9) 762 695 10 Income Taxes 66 85 (22) 244 248 (2) Net Income $ 159 $ 162 (2) $ 518 $ 447 16 Average Assets (In Billions of $83 $80 4 $82 $79 4 Dollars) Return on Assets 0.76% 0.80% - 0.84% 0.76% - Cards Adjusted Revenue $1,683 $1,526 10 $4,901 $4,413 11 Adjusted Operating 635 599 6 1,852 1,800 3 Expense Operating Margin 1,048 927 13 3,049 2,613 17 Credit Costs 639 448 43 1,797 1,247 44 Operating Margin Less Credit Costs 409 479 (15) 1,252 1,366 (8) Additional 48 48 - 146 136 7 Provision Income Before Taxes 361 431 (16) 1,106 1,230 (10) Income Taxes 118 141 (16) 357 422 (15) Net Income $ 243 $ 290 (16) $ 749 $ 808 (7) Average Assets (In Billions of $28 $27 4 $28 $25 12 Dollars) Return on Assets 3.45% 4.26% - 3.57% 4.32% - (CB) Private Bank Adjusted Revenue $252 $239 5 $749 $693 8 Adjusted Operating 176 158 11 504 472 7 Expense Operating Margin 76 81 (6) 245 221 11 Credit Costs 4 2 NM (5) 28 NM Operating Margin Less Credit Costs 72 79 (9) 250 193 30 Additional - - - - - - Provision Income Before Taxes 72 79 (9) 250 193 30 Income Taxes 8 16 (50) 49 36 36 Net Income $ 64 $ 63 2 $201 $157 28 Average Assets (In Billions of $17 $15 13 $16 $15 7 Dollars) Return on Assets 1.50% 1.67% - 1.68% 1.40% - (A) Reclassified to conform to latest quarter's presentation. (B) Includes $64 million SAIF assessment in the 1996 periods. (C) Adjusted for the effect of credit card securitizations, the return on managed assets for worldwide Cards was 1.77% in the 1996 quarter and 2.28% in the year-ago quarter. For the nine months of 1996 and 1995, the return on managed assets was 1.86% and 2.22%, respectively. NM Not meaningful, as percentage equals or exceeds 100%. (Dollars In Third Quarter % Nine Months % Millions) Developed Markets 1996 1995(A) Change 1996 1995(A) Change Adjusted Revenue $2,456 $2,351 4 $7,262 $6,824 6 (B) Adjusted Operating 1,310 1,265 4 3,869 3,791 2 Expense Operating Margin 1,146 1,086 6 3,393 3,033 12 Credit Costs 714 548 30 1,991 1,594 25 Operating Margin Less Credit Costs 432 538 (20) 1,402 1,439 (3) Additional 47 46 2 136 126 8 Provision Income Before Taxes 385 492 (22) 1,266 1,313 (4) Income Taxes 129 181 (29) 458 493 (7) Net Income $ 256 $ 311 (18) $ 808 $ 820 (1) Average Assets (In Billions of $89 $87 2 $88 $85 4 Dollars) Return on Assets 1.14% 1.42% - 1.23% 1.29% - Emerging Markets Adjusted Revenue $887 $793 12 $2,653 $2,300 15 Adjusted Operating 522 439 19 1,507 1,280 18 Expense Operating Margin 365 354 3 1,146 1,020 12 Credit Costs 89 85 5 280 191 47 Operating Margin Less Credit Costs 276 269 3 866 829 4 Additional 3 4 (25) 14 24 (42) Provision Income Before Taxes 273 265 3 852 805 6 Income Taxes 63 61 3 192 213 (10) Net Income $210 $204 3 $ 660 $ 592 11 Average Assets (In Billions of $39 $35 11 $38 $34 12 Dollars) Return on Assets 2.14% 2.31% - 2.32% 2.33% - (A) Reclassified to conform to latest quarter's presentation. (B) Includes $64 million SAIF assessment in the 1996 periods. Corporate Banking Third Quarter % Nine Months % (Dollars In 1996 1995(A) Change 1996 1995(A) Change Millions) Total Revenue $1,755 $1,622 8 $5,188 $4,954 5 Net Cost to Carry Cash-Basis Loans (9) 4 NM (30) 5 NM and OREO Adjusted Revenue 1,746 1,626 7 5,158 4,959 4 Total Operating 1,117 982 14 3,181 2,937 8 Expense Net OREO Benefits 10 29 (66) 41 51 (20) Adjusted Operating 1,127 1,011 11 3,222 2,988 8 Expense Operating Margin 619 615 1 1,936 1,971 (2) Net Write-offs (41) 86 NM (1) 132 NM (Recoveries) Net Cost to Carry and Net OREO (19) (25) (24) (71) (46) 54 Benefits Credit Costs (60) 61 NM (72) 86 NM Operating Margin Less Credit Costs 679 554 23 2,008 1,885 7 Additional - 25 NM - 75 NM Provision Income Before Taxes 679 529 28 2,008 1,810 11 Income Taxes 159 140 14 379 462 (18) Net Income $ 520 $ 389 34 $1,629 $1,348 21 Average Assets (In Billions of $135 $140 (4) $138 $146 (5) Dollars) Return on Assets 1.53% 1.10% - 1.58% 1.23% - (A) Reclassified to conform to latest quarter's presentation. NM Not meaningful, as percentage equals or exceeds 100%. (Dollars In Third Quarter % Nine Months % Millions) Emerging Markets 1996 1995(A) Change 1996 1995(A) Change Adjusted Revenue $815 $717 14 $2,532 $2,190 16 Adjusted Operating 426 346 23 1,197 1,013 18 Expense Operating Margin 389 371 5 1,335 1,177 13 Credit Costs (47) 16 NM (45) 33 NM Operating Margin Less Credit Costs 436 355 23 1,380 1,144 21 Additional - - - - - - Provision Income Before Taxes 436 355 23 1,380 1,144 21 Income Taxes 91 93 (2) 211 269 (22) Net Income $345 $262 32 $1,169 $ 875 34 Average Assets (In Billions of $61 $50 22 $58 $49 18 Dollars) Return on Assets 2.25% 2.08% - 2.69% 2.39% - Global Relationship Banking Adjusted Revenue $931 $909 2 $2,626 $2,769 (5) Adjusted Operating 701 665 5 2,025 1,975 3 Expense Operating Margin 230 244 (6) 601 794 (24) Credit Costs (13) 45 NM (27) 53 NM Operating Margin Less Credit 243 199 22 628 741 (15) Costs Additional - 25 NM - 75 NM Provision Income Before Taxes 243 174 40 628 666 (6) Income Taxes 68 47 45 168 193 (13) Net Income $175 $127 38 $ 460 $ 473 (3) Average Assets (In Billions of $74 $90 (18) $80 $97 (18) Dollars) Return on Assets 0.94% 0.56% - 0.77% 0.65% - (A) Reclassified to conform to latest quarter's presentation. NM Not meaningful, as percentage equals or exceeds 100%. Corporate Items (A) Third Quarter % Nine Months % (In Millions of 1996 1995(B) Change 1996 1995(B) Change Dollars) Revenue $273 $213 28 $ 722 $ 488 48 Operating Expense 127 111 14 355 271 31 Income Before Taxes 146 102 43 367 217 69 Income Taxes 197 129 53 663 418 59 Net Loss $(51) $(27) 89 $(296) $(201) 47 (A) Corporate Items includes revenue derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from charging businesses for funds employed (based upon a marginal cost Marginal cost The increase or decrease in a firm's total cost of production as a result of changing production by one unit. marginal cost The additional cost needed to produce or purchase one more unit of a good or service. of funds concept), unallocated corporate costs, and the offset created by attributing income taxes to the core businesses on a local tax-rate basis. (B) Reclassified to conform to latest quarter's presentation. Consumer Loan Delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. Amounts, Net Credit Losses, and Ratios Total 90 Days or More Net Credit Losses Loans (A) Past Due Sept. Sept. June Sept. 3rd 2nd 3rd 30, 30, 30, 30, Qtr. Qtr. Qtr. 1996 1996 1996 1995 1996 1996 1995 (Dollars in Billions) (Dollars in (Dollars in Millions) Millions) Citibanking $ 65.2 $2,527 $2,663 $2,759 $160 $161 $183 Ratio 3.87% 4.05% 4.26% 0.95% 0.99% 1.14% Cards U.S. Bankcards 43.5 809 732 643 550 522 379 Ratio 1.86% 1.73% 1.54% 5.11% 4.99% 3.70% Other 8.3 178 180 150 89 89 69 Ratio 2.13% 2.25% 2.15% 4.35% 4.65% 4.06% Private Bank 15.3 247 254 321 1 (3) 3 Ratio 1.61% 1.66% 2.32% 0.05% NM 0.07% Total Managed 132.3 3,761 3,829 3,873 800 769 634 Ratio 2.84% 2.91% 3.04% 2.40% 2.38% 2.02% Effect of Credit |
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