After more than 22 years of successful operations in Hungary, Citi is planning to convert our legal entity in Hungary, Citibank Zrt. to a branch of Citibank Europe plc (CEP) based in Ireland. Citibank Zrt. is currently a wholly owned subsidiary of Citibank Overseas Investment Corporation, based in the USA. The branch conversion will be implemented in the form of a cross border merger and is planned to be completed on January 1, 2009. The branch conversion is subject to receipt of both Irish and Hungarian regulatory approval. After this, our name will be Citibank Europe plc Hungarian Branch Office.

Citibank Zrt. is converting to a branch office Customer information (193 kB)

Questions & Answers

1. Why is this branch conversion taking place?
2. What is the benefit to the clients?
3. How will this branch conversion impact the clients?
4. Will this branch conversion bring any extra administrative burden for me?
5. Will there be any changes to the products and services currently offered by Citibank in Hungary?
6. Will there be any changes in the customer deposit protection?
7. Will the investment protection scheme change?
8. When will the branch conversion become effective?
9. Will Citibank Zrt. and its statutory bodies cease to exist?
10. Will there be any changes to the regulatory and supervisory bodies of the new branch?
11. What kind of company is Citibank Europe plc?
12. In what other European countries does Citibank Europe plc operate?
13. Will other Citi subsidiaries in the region be converted into a branch of Citibank Europe plc?

1. Why is this branch conversion taking place?

The branch conversion is part of a global initiative within Citi to rationalize the legal structure in many countries where we operate, a process that started two years ago in our region.
As a branch of CEP, we will be part of a European entity with a larger balance sheet and a greater lending capacity that will make us an even stronger partner for our clients in Hungary and will allow us to expand more effectively in the market.
A significant advantage consists also in the fact that our Hungarian business will now be backed by Citibank Europe plc which has a credit rating of Aa3 by external rating agency Moody's.

2. What is the benefit to the clients?

As a branch of CEP, we will be part of a European entity with a larger balance sheet and a greater lending capacity that will make us an even stronger partner for our clients in Hungary and will allow us to expand more effectively in the market.
As Citibank Europe plc Hungarian Branch Office we will remain a member of Citi, the world's leading financial services group and will continue to offer our global products and services as well as leading with our innovations to bring the best financial solutions for our clients in Hungary.

3. How will this branch conversion impact the clients?

4. Will this branch conversion bring any extra administrative burden for me?

We do not anticipate that the branch conversion will bring any administrative burden for our clients.
All client contracts and relationships will automatically pass onto the new legal entity pursuant to a legal succession between Citibank Zrt. as the current service provider and the branch to be newly established.

5. Will there be any changes to the products and services currently offered by Citibank in Hungary?

As Citibank Europe plc Hungarian Branch Office we will remain a member of Citi, the world's leading financial services group and will continue to offer our global products and services as well as with our innovations to bring the best financial solutions for our clients in Hungary.
As a branch of CEP, we will be part of a European entity with a larger balance sheet and a greater lending capacity that will make us an even stronger partner for our clients in Hungary and will allow us to expand more effectively in the market.

6. Will there be any changes in the customer deposit protection?

As required by European Union rules, deposit protection for customers will be primarily governed by the Irish laws.
For individual customers the deposit insurance will continue to cover HUF 6 million, approximately EUR 26,000, by implementing a combination of the Irish Protection Scheme of EUR 20,000 and adding an incremental insurance protection provided by the National Deposit Insurance Fund of Hungary to ensure the current level.
Deposit protection for legal entities is guaranteed up to EUR 20,000. Deposits made by large companies as defined by Irish laws¹ are not eligible for cover.
Further information on the deposit protection scheme will be available on our local website at www.citibank.hu.

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¹ A company will be treated as large company if meets at least two of the following qualifying conditions: (i) its balance sheet total for the year exceeds EUR 1.9 million (approx. HUF 438.4 million; NBH exchange rate as of July 10, 2008), (ii) the amount of its turnover for the year exceeds EUR 3.8 million (approx. HUF 876.9 million; NBH exchange rate as of July 10, 2008) or (iii) the average number of employees by the company in that year exceeds 50.

7. Will the investment protection scheme change?

With regards to investment protection we will follow the Irish regulation in compliance with the applicable European Directive. The compensation will cover 90% of the total invested amount of the eligible customers, up to a maximum payout of EUR 20,000.
Further information on the investment protection scheme will be available on our website at www.citibank.hu.

8. When will the branch conversion become effective?

The process is already underway and according to our plans, and subject to the receipt of the necessary approvals, we hope to complete the branch conversion on January 1, 2009.

9. Will Citibank Zrt. and its statutory bodies cease to exist?

Yes, Citibank Zrt. will merge into Citibank Europe plc and Citibank Europe plc Hungarian Branch Office will assume the entire existing organizational and legal structure.

10. Will there be any changes to the regulatory and supervisory bodies of the new branch?

Citibank Europe plc Hungarian Branch Office will remain under the supervision of the Hungarian Financial Supervisory Authority (PSZÁF), especially in the area of consumer protection, and the National Bank of Hungary, in accordance with the Hungarian legislation.
In addition, we will be primarily supervised by the Irish Financial Services Regulatory Authority, which supervises the whole Citibank Europe plc, including its branches.

11. What kind of company is Citibank Europe plc?

Citibank Europe plc is a public limited company, a fully licensed bank based in Ireland that is rated Aa3 by Moody's external rating agency. It is subject to Ireland's financial regulatory body.
CEP had a balance sheet size of EUR 98.5 million and a capital base of EUR 34 million at 31 December 2001, compared with values at year-end 2007 of EUR 6.8 billion and EUR 1.4 billion, respectively.

12. In what other European countries does Citibank Europe plc operate?

Under various legal forms, Citibank Europe plc operates in many countries in the region, including Germany, France, Great Britain, Austria, Belgium, Italy, the Czech Republic and Poland.

13. Will other Citi subsidiaries in the region be converted into a branch of Citibank Europe plc?

We successfully converted the Czech Republic subsidiary into a branch of CEP effective January 1, 2008 and we are planning to convert Hungary and Slovakia in early first quarter of 2009.