For Immediate Release
    Citigroup Inc. (NYSE: C)
    July 16, 2001

    Citigroup Reports Second Quarter Earnings

    Citigroup Second Quarter Core Income Increases 13% to $3.79 Billion from $3.34 Billion in the Second Quarter of 2000
    Revenue Growth of 8% to $20.3 Billion
    Core EPS Growth of 14% to $0.74 Per Share, Diluted, from $0.65

    New York, NY — Citigroup Inc. (NYSE:C) today reported core income for the second quarter ended June 30, 2001, of $3.79 billion, or $0.74 per share, diluted, a 14% increase from the second quarter of 2000. Net income for the second quarter of $3.54 billion, or $0.69 per share, included a $116 million after tax charge related to the implementation of a new accounting rule (EITF 99-20) providing guidance on the valuation of certain asset-backed securities, as well as a $133 million after tax charge for severance and other costs in connection with staffing reductions in each major business segment.
     
    "The strength and diversity of our global franchises produced results that once again proved Citigroup's ability to increase revenue and earnings, even in light of the difficult market conditions," said Sanford I. Weill, Chairman and Chief Executive Officer of Citigroup. "Revenues grew 8%, led by 12% growth in the Global Consumer segment. Given the recent economic trends, we are particularly pleased with 14% growth in our Core EPS."
     
    "Our ability to deliver consistent earnings growth was further shown by strong performances in a number of our businesses, including a 40% increase in CitiFinancial, a 17% increase in North America Cards, an 18% increase in the Private Bank, and 28% growth in our Emerging Markets businesses. Despite a difficult environment, our Corporate Finance business delivered 12% earnings growth as it continued to increase its underwriting market share. We also benefited from disciplined expense management, resulting in overall expense growth of 1% versus last year. We exceeded our return targets, with a return on common equity of 22.4% in the quarter. We also continue to pursue new areas of growth as shown by our pending acquisitions of EAB and Banacci."
     
    Highlights of the quarter included:
    • Strengthening global strategic franchises:
         
      • Global Consumer Finance income grew 38%, driven by 13% receivables growth, reflecting strong organic growth in North America and Japan, as well as significant expense reductions from the consolidation of the Associates branches.
         
      • Emerging Markets income increased 28%, driven primarily by strong trading-related revenues, tight cost control and stable credit. Citigroup continued to build its franchises, announcing its partnership with Grupo Financiero Banamex-Accival ("Banacci"), the leading financial institution in Mexico, and launching its tender offer for the shares of Banacci in July. Citigroup was also named Best Emerging Markets Bank by Global Finance Magazine.
         
      • Global Cards income grew 11%, primarily reflecting 11% receivables growth and strong expense control. Cards income in Asia and Latin America declined partly due to weakening currencies. The business further enhanced its market leadership position with share gains in Taiwan, Mexico and Korea, as well as the Peoples Bank portfolio acquisition in the United Kingdom.
         
      • Citigroup's Corporate and Investment Bank continued to build its fixed income and equity underwriting market share, ranking #1 in U.S. investment grade debt with a 23% market share, #2 in High Yield debt with a 14% share, #5 in U.S. equities with a 14% share, #1 in Japanese equities with a 58% share, and #2 in European debt with a 7% market share. Citigroup participated in a number of significant transactions during the quarter, including lead roles in the $8.7 billion Kraft IPO, the second largest IPO ever in the U.S., and the $11.9 billion WorldCom debt offering. In addition, Euromoney magazine named Citigroup "Best Bank" and "Best in Foreign Exchange."

       
    • Total expenses of $9.4 billion increased 1% from the second quarter of 2000. Compared to the first quarter of 2001, total expenses decreased $1.0 billion, or 10%, with each major business segment reporting decreases.
       
    • Compared to the first quarter of 2001, overall credit loss rates increased modestly. Losses in consumer loans increased 25 basis points, as flat performance in CitiFinancial and the international portfolios was offset by an increase of 67 basis points in North America Cards, driven by deterioration in the general credit environment and increased bankruptcies. Ninety-day delinquency rates in North America Cards improved modestly. Credit loss rates in the Global Corporate segment remained flat, while Cash Basis Loans increased 9%.
       
    • Cross-marketing continued to deliver improving results. The share of sales of our own investment products through Citigroup distribution channels reached a record 60% for the six months to June 30, 2001, up from 44% during the same period last year, maintaining consistent year-on-year sales in a declining general market environment. For the first six months of 2001, sales of investment banking products to Global Relationship Banking clients increased 21% to approximately $1.3 billion and Global Relationship clients represented 35% of new national accounts sales in Commercial Lines.
       
    • Quarter-end total equity, including trust preferred securities, increased to $75.0 billion.



    GLOBAL CONSUMER
    Core income of $1.89 billion, up 19%. Highlights included:
     

    • Global Consumer revenue increased 12% to $10.7 billion, while expense growth was held to 2%.
    • CitiFinancial income rose 40% on substantial cost savings from the Associates integration, as well as 13% receivables growth and a lower cost of funds. Cost savings from the integration of Associates are running well ahead of targets. CitiFinancial continues to focus on raising standards in the industry and recently announced that it would stop selling single premium credit insurance. In addition, after instituting a stringent new broker code of conduct, it severed relationships with more than 1,000 mortgage brokers.
    • North America Cards income rose 17%, driven by 13% growth in receivables and a 95 basis point increase in the net interest margin, more than offsetting a 119 basis point deterioration in the net credit loss ratio to 5.51%.
    • Japan income rose 32% led by double-digit growth in consumer finance receivables.
    • Emerging Markets Consumer income increased 10% as a result of growth in new markets, in addition to improved credit and expense controls.
    • Travelers Life and Annuity income increased 14% as a result of strong group annuity volumes and higher net investment income. Despite a declining market, individual annuity sales were up 5% from last year, resulting in increased market share.



    GLOBAL CORPORATE
    Core income of $1.67 billion, up 10%. Highlights included:
     

    • Global Corporate revenues of $8.6 billion increased 4%, while expenses decreased 2%. Expenses were down $886 million or 16% from the first quarter of 2001.
    • Income from Emerging Markets Corporate and Global Transaction Services increased 35% to a record $467 million, driven by strong trading-related revenues, continued expense control and lower credit costs.
    • The Corporate & Investment Bank posted 2% earnings growth over the second quarter of 2000 on the strength of its product and geographic diversity, as well as continued expense controls and lower incentive compensation and benefits expense. Earnings increased 12%, excluding an $86 million decrease in income from Citigroup's 20.7% investment in Nikko Securities reflecting Japan's continued weak retail brokerage environment.
    • Income in the Corporate Finance unit increased 28% before the Nikko investment, driven by stronger investment banking revenues. Citigroup ranked #1 in disclosed fees from global debt and equity underwriting in the quarter.
    • Private Client income declined 19% from the second quarter of 2000, primarily due to lower transactional volumes. Income increased 7% over the first quarter and profit margins increased to 22%, due to expense reductions of $59 million, which more than offset lower revenues and gross production per Financial Consultant. Assets under fee-based management increased 6% to $206 billion, reflecting a continued emphasis on fee-based services. Franchise growth continued with the number of FC's increasing by 863 year-over-year to 12,549.



    GLOBAL INVESTMENT MANAGEMENT AND PRIVATE BANKING
    Core income of $180 million, up 6%. Highlights included:
     

    • Revenues increased 6% despite a difficult market environment and lower market values. Tight expense controls led to a $23 million reduction in expenses from the first quarter of 2001.
    • Private Bank income rose 18%, with increased customer activity across most products generating revenue growth of 11%, while expense growth was held to 7%.
    • Assets under Management grew 5%, as strong net flows of $16 billion year-to-date more than offset lower market values.
    • Asset Management market share increased in nearly all proprietary channels, with market shares of 58% in the Smith Barney retail channel, 66% at Primerica Financial Services and 77% in the Citibank North America channel.



    INVESTMENT ACTIVITIES AND CORPORATE/OTHER
     
    Income from Investment Activities was $227 million, down 12% from the second quarter of 2000; income consisted of net realized gains in the insurance and venture capital portfolios as well as an increase in the value of the mark-to-market venture capital portfolio. Expenses in Corporate/Other decreased by $8 million or 4% versus the second quarter of 2000, due primarily to expense reduction initiatives and lower funding costs.


    Citigroup (NYSE: C), the preeminent global financial services company, provides some 120 million consumers, corporations, governments and institutions in over 100 countries with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management. Major brand names under Citigroup's trademark red umbrella are Citibank, CitiFinancial, Primerica, Salomon Smith Barney, and Travelers. Additional information may be found at www.citigroup.com.
     
    A financial summary follows. Additional financial, statistical and business-related information, as well as business and segment trends, is included in a Financial Supplement. Both the earnings release and the Financial Supplement are available on Citigroup's web site (http://www.citigroup.com). This document can also be obtained by calling 1-800-853-1754 within the United States or 732-935-2771 outside the United States.
     
    Citigroup Segment Income Second Quarter %   Six Months %
    (In Millions of Dollars) 2001 2000 Change 2001 2000 Change

    Global Consumer

               

    Citibanking North America

    $157 $134 17 $314 $265 18

    Mortgage Banking

    88 71 24 165 137 20

    North America Cards

    455 388 17 922 768 20

    CitiFinancial

    286 205 40 498 384 30

    Banking / Lending

    986 798 24 1,899 1,554 22

    Travelers Life and Annuity

    231 202 14 441 389 13

    Primerica Financial Services

    128 125 2 253 244 4

    Personal Lines

    39 82 (52) 126 156 (19)

    Insurance

    398 409 (3) 820 789 4

    Western Europe

    106 91 16 216 187 16

    Japan

    229 173 32 427 323 32

    Emerging Markets Consumer Banking

    213 193 10 408 413 (1)

    Total International

    548 457 20 1,051 923 14

    e-Consumer

    (32) (46) 30 (67) (114) 41

    Other Consumer

    (9) (33) 73 (5) (71) 93

    Total Global Consumer

    1,891 1,585 19 3,698 3,081 20
     

    Global Corporate

               

    Corporate Finance

    717 643 12 1,519 1,505 1

    Private Client

    205 253 (19) 396 612 (35)

    CitiCapital

    (3) 8 NM 16 64 (75)

    Corporate and Investment Bank

    919 904 2 1,931 2,181 (11)

    Emerging Markets Corporate Banking and Global Transaction Services

    467 345 35 923 685 35

    Commercial Lines Insurance

    286 272 5 564 519 9

    Total Global Corporate

    1,672 1,521 10 3,418 3,385 1
     

    Global Investment Management and Private Banking

               

    Citigroup Asset Management

    87 91 (4) 182 185 (2)

    The Citigroup Private Bank

    93 79 18 190 159 19

    Total Global Investment Management and Private Banking

    180 170 6 372 344 8
     

    Investment Activities

    227 258 (12) 359 907 (60)
     

    Corporate / Other

    (185) (193) 4 (402) (437) 8
     

    Core Income

    3,785 3,341 13 7,445 7,280 2
     

    Restructuring and Merger Related Items -- After Tax (A)

    (133) (2) NM (213) (85) NM

    Income Before Cumulative Effect of Accounting Changes

    $3,652 $3,339 9 $7,232 $7,195 1

    Cumulative Effect of Accounting Changes (B)

    (116) - NM (158) - NM

    Net Income

    $3,536 $3,339 6 $7,074 $7,195 (2)
     

    Diluted Earnings Per Share:

               

    Core Income

    $0.74 $0.65 14 $1.45 $1.41 3

    Income Before Cumulative Effect of Accounting Changes

    $0.71 $0.65 9 $1.40 $1.39 1

    Net Income

    $0.69 $0.65 6 $1.37 $1.39 (1)

    Core Diluted Earnings Per Share Excl. Goodwill Amortization

    $0.76 $0.67 13 $1.49 $1.45 3
    (A)Restructuring and merger-related items in the 2001 first quarter related principally to severance and costs associated with the reduction of staff in the Global Corporate businesses, and in the 2001 second quarter related principally to severance and costs associated with the reduction of staff in most businesses
    (B)Accounting Changes refer to the first quarter 2001 adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS 133) and the second quarter 2001 adoption of EITF issue 99-20 "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" (EITF 99-20).

     

    Core Income Supplemental Disclosure Second Quarter %   Six Months %
    (In Millions of Dollars) 2001 2000 Change 2001 2000 Change
     

    Citigroup Emerging Markets (excluding Investment Activities)

               

    Asia

               

    Consumer Banking

    $149 $137 9 $297 $276 8

    Corporate

    210 124 69 371 261 42

    Asset Management & Private Banking

    13 16 (19) 41 38 8

    Total Asia

    372 277 34 709 575 23
     

    Latin America

               

    Consumer Banking

    50 41 22 83 106 (22)

    Corporate

    179 149 20 363 323 12

    Asset Management & Private Banking

    34 38 (11) 72 68 6

    Total Latin America

    263 228 15 518 497 4
     

    Central and Eastern Europe, Middle East and Africa

               

    Consumer Banking

    20 14 43 38 29 31

    Corporate

    107 94 14 265 186 42

    Asset Management & Private Banking

    5 - NM 9 7 29

    Total Central and Eastern Europe, Middle East and Africa

    132 108 22 312 222 41
     

    Other

    10 (5) NM (8) 2 NM

    Total Emerging Markets

    $777 $608 28 $1,531 $1,296 18
     

    Global Wealth Management

               

    Private Client

    $205 $253 (19) $396 $612 (35)

    Citigroup Asset Management

    87 91 (4) 182 185 (2)

    The Citigroup Private Bank

    93 79 18 190 159 19

    Global Consumer Investment, Life Insurance and Annuity Products

    362 346 5 710 694 2

    Total Global Wealth Management

    $747 $769 (3) $1,478 $1,650 (10)
     

    Global Cards

               

    North America

    $455 388 17 $922 768 20

    International

    115 124 (7) 241 219 10

    Total Global Cards

    $570 $512 11 $1,163 $987 18
     

    Global Consumer Finance

               

    North America

    $286 205 40 $498 384 30

    International

    207 151 37 384 277 39

    Total Global Consumer Finance

    $493 $356 38 $882 $661 33