Well-balanced performance across the consumer and corporate businesses
10 Percent Increase in After-tax Profits

2008 marked a successful business year for Citibank Zrt. Hungary despite the challenges in the financial markets and economies around the world and Hungary.

After-tax profit increased 10 percent over 2007, from HUF 15.1 billion to HUF 16.6 billion, while total assets grew from HUF 675.8 billion to HUF 801.4, a 19 percent expansion. The total loan portfolio at the end of 2008 was HUF 188.5 billion, resulting in a 4 percent increase. Deposits were at HUF 395.3 billion, recording a 10 percent increment over 2007. Return on equity (ROE) continued to be high at 24.73 percent and return on assets (ROA) was at 2.24 percent for 2008. Liquidity of the bank remained strong.

"We would like to express our sincere gratitude to our customers for their continued trust and confidence in us despite the unprecedented challenges in the financial markets and economies. This has enabled us to serve them as an even stronger partner in this difficult period. We will leverage our success to the benefit of our clients also in 2009, while our main priorities of providing our customers with the best financial solutions and helping them navigate through these critical times remain unchanged", said Batara Sianturi, Citi Country Officer for Citibank Zrt. Hungary.

After the Citigroup announcement in March, Citibank Hungary became part of the newly established high growth Central and Eastern Europe region. One of its major steps in this new structure was to combine the consumer and corporate businesses into one single business. From operating as a single business the franchise leverages many synergies in areas of operations and other shared functions that enable the bank in managing its efficiency better and generating revenues from cross marketing.

Another major milestone in the history of the local franchise was the reorganization of the legal vehicle by converting it into a branch of Citibank Europe plc based in Ireland. The branch conversion was implemented in the form of a cross-border merger that became effective on January 1, 2009. As a branch of Citibank Europe plc, the franchise in Hungary is now part of a European entity with a larger balance sheet and a greater lending capacity that will make it an even stronger partner for its clients in Hungary and will allow it to expand more effectively in the market. Citibank's physical presence in the country and services provided to the clients will continue unchanged and will improve in various areas.

The commitment to increase service levels and enhance technology continued to be recognized by clients through record high client satisfaction results in client and industry surveys.

• Citibank's Zero Fee Bank Account was voted #1 in the MasterCard - Bank of the Year 2008 Competition in the "Best Deposit Account" Award category. In addition to this win, Citibank also took top honor by winning the "Best Bank for Corporate Social Responsibility in Hungary", a category launched in 2008. Citibank ranked #3 in two further award categories, including: the "Best Electronic Bank of the Year" and the "Most Sympathetic Bank of the Year".
• The bank also won the Global Finance "Best Consumer Internet Bank" and "Best Corporate and Institutional Internet Bank" Award in 2008, for the third consecutive year. Citi was also the award winner for the "Best Online Consumer Credit", "Best Deposit Acquisition", "Best Online Cash Management" award categories in Central and Eastern Europe.
• The Global Investor magazine's European Clearing Survey ranked the financial institution as number one in the "Best Bank for Settlement - Fixed Income" and the "Best Bank for Settlement - Equity" categories and Citibank gained "Sub-custodian of the Year - Europe" award in the survey of the International Custody and Fund Administration magazine.

Corporate and Commercial Banking Business

• The Corporate and Commercial Banking business continued to deliver a well-balanced performance in 2008 across all businesses.

• Treasury
• The Treasury business offers a wide range of Treasury products to corporate clients with special focus to identification of their operational risks and offering tailored hedging solutions to reduce their risks. A new version of the Interactive Trading platform CitiTreasury Online Trading was introduced providing unique access to foreign exchange markets for the clients. The Treasury business managed to maintain its leading position in derivatives trading on the local market.

• Securities & Fund Services
• The results in the Securities & Fund Services business were impacted by market volatilities in the capital markets. However, average transaction volumes remained at previous year's levels, while exceeding those in some cases due to increased investor activity that allowed the bank to maintain its leading position in this field. The business introduced a new custody system and reorganized its internal mechanisms to focus on the needs of its Hungarian pension fund, mutual fund and insurance company clients. This client-focused, automated system managing all recent changes in the regulations related to pension funds has proved to be efficient in practice and will serve as basis for future client strategy.

• Top tier local corporates and mid sized enterprises
• The business realigned the target market and the coverage teams dealing with top tier local corporates and mid sized enterprises to focus on high value-added products and services. The aim of the realignment was to provide more tailor-made and sophisticated solutions to the clients. The bank succeeded to demonstrate its strengths to benefit the customers especially in the areas of Treasury and Cash Management. Innovation continued to be a cornerstone of success and growth in these business segments with several new and unique structures.

• Global Subsidiaries Group
• Serving subsidiaries of global partners continued to be a key area for Citibank in Hungary. During the year relationships with these customers were further strengthened and even widened. The GSG business is offering global products and services in the local market to ensure that these multinationals have access to the same products in Hungary and across the globe.

• Solid results were achieved in the Consumer business as well with a significant number of new customers joining the bank last year. A dedicated team has been working on realigning the branch network to offer the full range of products and services to the consumer and SME clients following the universal banking model. The new branch located at one of the busiest intersections of Budapest at Oktogon was inaugurated by Shirish Apte, CEO for Citi in the Central and Eastern Europe region reinforcing Citi's commitment to clients and the community in Hungary.

• Credit Cards
• 2008 marked a major milestone also for the Cards business as it celebrated the 10th anniversary of launching the Citibank Credit Card in Hungary. Citibank was the first bank to issue credit card in 1998 in the local market and has not given up the leadership role ever since. Key innovations aimed at offering value-added, comfortable and flexible solutions to the customers include the first co-brand cards with a mobile phone company (Westel, now T-Mobile), an oil and gas company (Shell) and an airline company (MALÉV), all of them a leader in their industry. Also, the 24-hour telephone customer service, Utility Payment, Equal Payment Plan and Loan Over the Phone services were all novelties in the Hungarian market at the time Citibank brought them to its customers. Citibank is committed to continue with the innovations to maintain its leadership position in the credit card market for the benefit of the customers.

• Wealth Management
• The greatest innovation and success in the Deposit business in 2008 was introduction of the Zero Fee Bank Account, Hungary's first free current account product. By this launch Citibank has introduced a product offering Western-European standards and pricing to the customers in Hungary since it allows for unlimited domestic HUF transactions, including cash withdrawals and all bank transfer transactions through ATMs, branches, telephone and online channels. A free Citibank debit card is linked to the account, with free CitiAlert service in the first year. This innovative product provides comfort and freedom to the customers in managing their finances to a never experienced extent. It was very well-received by existing and new customers as well as the media and has been voted the #1 in the MasterCard - Bank of the Year 2008 Competition in the "Bank Account of the Year" category.
  
  
• 2008 was a year of diversification for the affluent customers in Citigold business. The challenging market environment presented opportunities in portfolio diversification. The initiatives in 2008 included offering a number of principal protected structured notes denominated in HUF, EUR and USD as well as Time Deposits with high interest rates. Citibank continued to enhance its sophisticated investment product offering and distributed a number of mutual funds adding up to a total of 130 mutual funds from 10 asset management and fund houses.
  
  
• 2008 was also a year of enhancing value for affluent customers. Citigold Platinum Club was relaunched with new exclusive offers from 30 of Citibank's existing and new top brand partners in the areas of fashion, entertainment, dining and travel. Also the Citigold website was revamped providing clear and easy to access information about investment products distributed and services provided by the bank, including performance and market value of the investment products.
  
  
• Citibank became the exclusive distributors of a new generation unit-linked insurance product of its partner Aegon Hungary. Multifund is a flexible combination of mutual funds and an insurance element providing a modern long-term savings and investment possibility to the customers. Compared to other unit-linked products available on the market in case of Multifund customers can select from funds of several onshore and offshore fund houses, a total of 130 mutual funds of ten fund houses, including equity, bond, real estate, money market, and other funds.

• Internet and Phone Banking
• Citibank Hungary continued with the innovations in the Internet and phone banking space. A major innovation last year was introduction of the eStatement. The bank encouraged its customers to enroll to paperless e-Statements by launching the Plant-a-Tree Program promising them that Citi would plant a tree for each conversion made. Citibank Online Internet banking service was enhanced to include time deposit related transactions. The multifactor authentication system for online transactions that is exclusively based on the list of payees set up by the customers is a very secure and cost efficient solution. The eCourier service was added for the convenience of customers complementing the One Minute Online Pre-Approval process and Webshop accessible via the Citibank Internet website at www.citibank.hu. Through the phone banking automated sales activity and automated customer satisfaction surveys were conducted in 2008.

• SME Business
• The bank has reorganized its small and medium-sized enterprise businesses in order to serve clients more efficiently. In the new SME business tailor-made services are provided to clients ranging from newly established small businesses to companies with up to HUF 10 billion annual net sales. A wide range of liability, investment and financing products are available for the clients in this segment in local and foreign currency. Citibank introduced the "Forrás Plusz" ("Resource Plus") loan package as a new financing solution for which the private surety of the business owners is required as only collateral in addition to the guarantee provided by Garantiqa Hitelgarancia Zrt.

At Citibank they are very proud to have won MasterCard's award for corporate social responsibility in 2008, a category announced for the first time last year. This distinguished award recognizes the bank's long-term commitment to financial education and social enterprise building programs.

• In light of this award the financial institution used the funds traditionally spent on year-end customer gifts in support of underprivileged children by buying them Christmas gifts. Seven million forints were distributed among three pre-selected NGOs dealing with children based on votes from customers.

• In the framework of its Plant-a-Tree Program launched last year in support of the eStatement Citibank planted 6,000 oak samplings in autumn in Kamaraerdo, a special environmental area in a suburb of Budapest, in replacement of a superannuated locust forest damaged by a spring storm in 2007. Its partners in implementing this program were the Forests for the Community Foundation and the Pilisi Parkerdo Forestry Company. The bank launched this program to drive environmental awareness with its customers and encourage them to shift to paperless eStatements by promising to plant a tree for each conversion made.

• Around 50 employees of Citibank Hungary along with some of their family members and friends, joined around 50,000 Citi volunteers in 100 countries for the third Citi Global Community Day on Saturday, November 8 to support two institutions of education and children's health care in Budapest.

• With a grant from the Citi Foundation the franchise continued the Citibank Financial Education School Program bringing economics, finance, mathematics and English-language teaching materials and books for 15,000 students in 36 elementary schools across Hungary.

• Citibank also continued its Citi Corvinus University Financial Program, supporting the university in its endeavor to increase the level of financial education and to offer its students access to the most up-to-date information and trends in the financial markets. In addition to the financial support coming from the Citi Foundation, local Citi volunteers were giving presentations and lectures to the students of the Department of Enterprise Finances. Last year the bank organized a Case Study Competition to award students developing the best case studies.

• Thirty secondary school students and thirty Economics teachers took part in the annual Economics for Leaders Summer Program in Piliscsaba, which was also sponsored by the Citi Foundation.

• Within the framework of the Habitat for Humanity House Building Employee Volunteering Program, three groups of 25 employees helped build affordable houses for families in Hajdúböszörmény.

• In 2008 Citibank Zrt. continued the NESsT-Citi Regional Social Enterprise Competition in partnership with NESsT foundation to support nonprofit organizations in launching their own enterprises that allow them to create their long-term financial sustainability and fund their community goals. Besides financial support from the Citi Foundation, the assistance provided by NESsT and Citi professionals extended to consultation, guidance and mentoring. The $10,000 award last year went to Barka Foundation, which runs a workshop to produce a high quality, designer product line of home decoration and gift items and employs people with intellectual disabilities. It was essential for the Foundation to combine the business philosophy with their social goals, and to create an enterprise that is viable in a competitive market environment.

• Based on the success of this program, Citibank and NESsT prepared the launch of the NESsT-Citibank For-Profit Social Enterprise Development Program, the first of its kind in Hungary, which aims at supporting the development of for-profit social enterprises in Hungary. The program will be critical in raising awareness of and providing support to a newly emerging type of enterprise, which, in addition to generating profit, also works to solve critical social problems.

• Additional community programs included support of integrated studies of blind students, Kecskemet Children's Hospital, and the Friends of Franz Liszt Music Academy.

Major financial data for Citibank Zrt. (as of December 31st, 2008, according to Hungarian Accounting Standards)