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CITICORP REPORTS SECOND-QUARTER PROFIT AND FURTHER PROGRESS TOWARD PLAN GOALS

 CITICORP REPORTS SECOND-QUARTER PROFIT
 AND FURTHER PROGRESS TOWARD PLAN GOALS
 NEW YORK, July 21 /PRNewswire/ -- Citicorp (NYSE: CCI) today reported 1992 second-quarter net income of $171 million, compared with $11 million in the same 1991 quarter. Earnings per common share were $0.32; a year earlier there was a loss of $0.12 per common share after preferred dividends.
 In the first half of 1992, earnings were $354 million, or $0.69 per share; comparable earnings in the first six months of 1991 were $104 million, or $0.05 per share.
 The company continues to give priority to strengthening the balance sheet through building both capital and reserves. Total regulatory capital at June 30, 1992 rose to $18.6 billion, or 8.50 percent of risk- adjusted assets, and the Tier 1 capital ratio increased to 4.25 percent. During the 1992 first half, the company added $1.5 billion to capital.
 The company added $80 million to its consumer loan loss reserve in the second quarter, increasing it to $1.3 billion, and built its commercial loan loss reserve, including real estate, by $101 million to $2.0 billion. These reserves are up from year-ago levels by approximately $200 million and $700 million respectively. Reflecting the continuation of improved credit quality of the cross-border refinancing portfolio, $100 million of that reserve was released, bringing it to $342 million at June 30, 1992.
 After-tax net gains on the sale of nonstrategic assets in the 1992 second quarter totaled $109 million, or $0.30 per common share, and after-tax restructuring charges amounted to $53 million, or $0.15 a share. In the 1991 second quarter, the net gains from asset sales on the same basis were $91 million, or $0.27 a share.
 Commenting on the second quarter and half-year, John S. Reed, Citicorp Chairman, said: "We are where we had expected to be. The results are further evidence that we are on track in meeting our plan objectives: our balance sheet is much improved and we continue to build our core earnings, reflecting our service to customers and franchise strengths."
 He pointed to continued substantial improvement in operating margin as key to the success of the plan, with increases of 24 percent to $1.8 billion from last year's second quarter and 5 percent from the 1992 first quarter. These gains were achieved, despite sluggish economic conditions in North American and European markets, through modest revenue growth (up 4 percent from the 1991 second quarter) and continued progress in reducing expenses (down 7 percent from the same 1991 quarter).
 Reflecting the focus on core businesses and customers, Global Finance revenues grew from the 1991 second quarter by 12 percent to $1.4 billion and Global Consumer revenues by 4% to $2.6 billion.
 As part of its effort to enhance revenues and reduce expense levels, management has charged corporate-wide task forces with addressing specific projects. In the second quarter the company implemented certain of the task force recommendations for improved efficiencies and incurred restructuring charges of $53 million ($95 million pretax); it expects that the resulting savings in each year will exceed the amount of the charge.
 Commercial cash-basis loans (excluding the cross-border refinancing portfolio) declined in the quarter by $339 million to $4.7 billion, while commercial nonperforming assets rose by $143 million to $8.1 billion because of additions to OREO (Other Real Estate Owned).
 Management reaffirmed its belief that commercial credit costs will decline in the second half of the year.
 CORE BUSINESSES
 Global Consumer
 Net income in Global Consumer was $234 million (after a restructuring charge of $20 million, after tax) in the 1992 second quarter, a gain of 34 percent from the second quarter of last year.
 Results reflected strong performance in a number of business areas, notably in card revenue growth in the United States. Other markets that performed particularly well include Argentina, Puerto Rico, Germany and most countries in the Asia/Pacific region.
 Revenues of $2.6 billion (adjusted for the effect of credit card securitization) rose 4 percent from the 1991 second quarter. Operating expenses were reduced by 7 percent from the 1991 second quarter to $1.4 billion, even as Global Consumer continued to expand its businesses in key markets.
 Total consumer 90-day delinquencies on the balance sheet stabilized at approximately $4.8 billion at the end of the quarter, and early delinquencies showed signs of improvement.
 Geographically, net income in the quarter from the consumer businesses in North America, Europe and Japan was $110 million, compared with $99 million in the year-earlier quarter. Net income from consumer businesses in Asia/Pacific, Latin America and other international regions was $124 million, compared with $76 million in the 1991 second quarter.
 Global Finance
 Global Finance, which includes Citicorp's worldwide commercial and financial institutions business (other than commercial real estate activities in North America) reported second-quarter net income of $294 million (after a restructuring charge of $27 million, after tax), compared with a loss of $10 million in the year-ago second quarter.
 Global Finance activities in Asia, Latin America, Middle East and Africa markets maintained a strong growth trend, producing net income of $166 million, up from $112 million in the same year-earlier quarter. Global Finance activities in Japan, Europe and North America, although hampered by the continued effect of economic weakness on customers and with high credit costs in the United Kingdom, reported earnings of $128 million in the quarter, compared with a loss of $122 million in the same 1991 quarter, which reflected a higher level of write-offs.
 Revenues of $1.4 billion were 12 percent above those in the 1991 second quarter, paced by a 24 percent increase from Asia, Latin America and the Middle East, as well as a 7 percent increase from North America, Europe and Japan.
 Global Finance businesses reduced operating expenses to $752 million, down 7percent from the second quarter of 1991.
 Credit costs, primarily reflecting real estate problems in the United Kingdom, included $126 million of net write-offs and a $26 million additional provision to the commercial loan loss reserve.
 Cash-basis loans in Global Finance declined slightly during the quarter to $1.8 billion, while OREO increased by $153 million.
 OTHER ITEMS
 North America Commercial Real Estate
 A loss of $355 million in the second quarter was reported by Commercial Real Estate in the United States and Canada, which compared with a loss of $108 million in the same year-ago quarter, reflecting continued high net write-offs and reserve building relating to the difficulties in the real estate market.
 Cash-basis loans decreased by $223 million in the second quarter to $2.9 billion at June 30, 1992. OREO assets increased by $329 million to $2.6 billion at the quarter-end.
 Cross-Border Refinancing Portfolio
 The cross-border refinancing portfolio reported net income of $105 million in the second quarter, compared with $3 million in the 1991 second quarter.
 As announced on July 9, Brazil has reached an agreement in principle on the settlement of its commercial-bank debt. This announcement will trigger the issuance of bonds covering the remaining unpaid interest due during 1989 and 1990 from Brazil. Upon becoming effective, the agreement would have generally
positive future effects on the company's earnings. The timing and amounts cannot yet be determined, since, among other things, they depend on decisions to be made by the international banking community regarding the agreement's various options.
 In other developments, the Philippines is scheduled to sign its restructuring agreement with its bank creditors on July 24, and Argentina, having reached agreement on a term sheet, plans a signing of the contracts implementing its bank accord by the end of September.
 With the improvement in the condition of the portfolio, the reserve attributed to that portfolio, $342 million at June 30, 1992, reflected the release of $100 million in the second quarter.
 Capital
 Citicorp continued to strengthen its capital base through the sale of nonstrategic businesses and gains related to other investment interests, which added 12 basis points to the Tier 1 capital ratio. Major transactions were the sales of CapMAC, the card establishment processing business and certain equity holdings in Latin American companies. Other factors affecting the ratio include reevaluating the risk-weighting of certain mortgages and the phasing-in of the previously announced change in guidelines pertaining to mortgages sold with recourse.
 Operating Margin
 The company's management employs operating margin as a key measure in its program to continue to build its core businesses at the same time as it absorbs credit costs, increases capital and restores earnings to a satisfactory level. Operating margin is the difference between revenues and operating expenses, adjusted for credit-related costs, card securitization and nonrecurring items.
 Since instituting its five-point plan, Citicorp has increased its operating margin from $4.8 billion in 1990 to an annualized $6.9 billion in the 1992 first half. Its goal has been to reach a 1992 operating margin of approximately $7 billion.
 Tables detailing key financial data, an analysis of operating margin and pretax earnings, business results and credit indicators follow, along with financial statements. Further details concerning the financial results will be available in August in Citicorp's Form 10-Q.
 -0- 7/21/92 R
 /FIRST AND FINAL ADD TO FOLLOW/


KD -- NY039X -- 1363 07/21/92 12:56 EDT
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