<PAGE>
Financial Review
and Form 10-Q
Second Quarter
1996
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
TABLE OF
CONTENTS
PAGE
<S> <C>
FINANCIAL SUMMARY............................................................1
BUSINESS DISCUSSIONS.........................................................4
Earnings Summary..........................................................4
Consumer..................................................................5
Citibanking.............................................................7
Cards...................................................................8
Private Bank............................................................9
Consumer Portfolio Review...............................................9
(Corporate) Banking......................................................12
Emerging Markets.......................................................13
Global Relationship Banking............................................14
Corporate Items..........................................................16
MANAGING GLOBAL RISK........................................................17
Liquidity................................................................17
Price Risk...............................................................17
Derivative and Foreign Exchange Contracts................................18
Estimated Fair Value of Financial Instruments............................22
Capital..................................................................23
STATEMENT OF INCOME ANALYSIS................................................26
Net Interest Revenue (Taxable Equivalent Basis)..........................26
Fee and Commission Revenue...............................................27
Trading-Related Revenue..................................................28
Securities Transactions..................................................29
Other Revenue............................................................29
Provision and Allowance for Credit Losses................................30
Operating Expense........................................................31
Income Taxes.............................................................32
Effect of Credit Card Receivables Securitizations........................32
Future Impact of Recently Issued Accounting Standards....................32
CONSOLIDATED FINANCIAL STATEMENTS...........................................33
Consolidated Statement of Income.........................................33
Consolidated Balance Sheet...............................................34
Consolidated Statement of Changes in Stockholders' Equity................35
Consolidated Statement of Cash Flows.....................................36
CITIBANK, N.A. Consolidated Balance Sheet................................37
OTHER FINANCIAL INFORMATION.................................................38
Securities...............................................................38
Trading Account Assets and Liabilities...................................38
Cash-Basis, Renegotiated, and Past Due Loans.............................39
Other Real Estate Owned and Assets Pending Disposition...................39
Details of Credit Loss Experience........................................40
Calculation of Earnings Per Share........................................41
Cross-Border and Non-Local Currency Outstandings.........................42
Average Balances and Interest Rates (Taxable Equivalent Basis)...........43
FORM 10-Q...................................................................45
Form 10-Q Cross-Reference Index..........................................46
SIGNATURES..................................................................49
</TABLE>
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
FINANCIAL SUMMARY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------------------------------------------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income (In Millions of Dollars) $ 952 $ 853 $ 1,866 $ 1,682
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income Per Share (A)
On Common and Common Equivalent Shares........................ $ 1.86 $ 1.76 $ 3.68 $ 3.47
Assuming Full Dilution........................................ $ 1.86 $ 1.57 $ 3.61 $ 3.09
Common Stockholders' Equity Per Share............................. $37.73 $37.35 $ 37.73 $ 37.35
- ---------------------------------------------------------------------------------------------------------------------------------
Financial Ratios
Return on Total Assets............................................ 1.43% 1.25% 1.40% 1.25%
Return on Common Stockholders' Equity............................. 20.76% 20.85% 20.47% 21.33%
Return on Total Stockholders' Equity.............................. 19.35% 18.11% 18.99% 18.42%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Capital (Dollars in Billions) (see page 23)
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
1996 1996 1995 1995 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tier 1............................................... $19.1 $19.0 $18.9 $18.6 $18.6
Total (Tier 1 and 2)................................. 28.2 28.0 27.7 27.3 27.3
Tier 1 Ratio......................................... 8.38% 8.42% 8.41% 8.38% 8.43%
Total Ratio (Tier 1 and 2)........................... 12.35 12.37 12.33 12.31 12.40
Leverage Ratio....................................... 7.49 7.44 7.45 7.35 7.19
Common Equity as a Percentage of Total Assets........ 6.69% 6.71% 6.43% 6.27% 6.02%
Total Equity as a Percentage of Total Assets......... 7.47 7.50 7.62 7.57 7.59
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Earnings Analysis (In Millions of Dollars) 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
1996 1996 1995 1995 1995 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Revenue............................... $4,993 $4,828 $4,789 $4,757 $4,689 $4,443
Effect of Credit Card Securitizations (B)... 349 294 250 219 226 222
Net Cost To Carry (C)....................... (26) (5) 8 7 8 -
----------------------------------------------------------------------------------
Adjusted Revenue............................ 5,316 5,117 5,047 4,983 4,923 4,665
----------------------------------------------------------------------------------
Total Operating Expense..................... 2,978 2,860 2,818 2,793 2,798 2,693
Net OREO Benefits (D)....................... 17 12 59 33 13 -
----------------------------------------------------------------------------------
Adjusted Operating Expense.................. 2,995 2,872 2,877 2,826 2,811 2,693
----------------------------------------------------------------------------------
Operating Margin............................ 2,321 2,245 2,170 2,157 2,112 1,972
Consumer Credit Costs (E)................... 762 706 688 633 616 536
Commercial Credit Costs (F)................. (27) 15 (14) 61 23 2
----------------------------------------------------------------------------------
Operating Margin Less Credit Costs.......... 1,586 1,524 1,496 1,463 1,473 1,434
Additional Provision (G).................... 50 50 56 75 75 75
----------------------------------------------------------------------------------
Income Before Taxes......................... 1,536 1,474 1,440 1,388 1,398 1,359
Income Taxes................................ 584 560 535 511 545 530
----------------------------------------------------------------------------------
Net Income.................................. $ 952 $ 914 $ 905 $ 877 $ 853 $ 829
----------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Based on net income less preferred stock dividends, except when conversion
is assumed. See page 41 for details.
(B) For a description of the effect of credit card receivables securitizations
see page 32.
(C) Principally the net cost to carry commercial cash-basis loans and other
real estate owned ("OREO").
(D) Principally gains and losses on sales, direct revenue and expense, and
writedowns of commercial OREO.
(E) Principally Consumer net credit write-offs adjusted for the effect of
credit card receivables securitizations.
(F) Includes commercial net credit write-offs, net cost to carry, and net OREO
benefits.
(G) Primarily charges for credit losses in excess of net write-offs. See page
30 for discussion.
- --------------------------------------------------------------------------------
1
<PAGE>
CITICORP [LOGO]
Citicorp reported second quarter net income of $952 million, or $1.86 per fully
diluted common share, up 12% and 18%, respectively, compared with $853 million,
or $1.57 a year ago. Net income for the six months ended June 30, 1996, totaled
$1.9 billion, or $3.61 per fully diluted common share, up 11% and 17%,
respectively, compared with $1.7 billion, or $3.09, in the same 1995 period.
Return on common equity of 20.8% and 20.5% in the second quarter and six months
of 1996 remained strong, but was down slightly from a year-ago, reflecting the
higher common equity levels. Return on average assets was 1.43% and 1.40% in the
second quarter and six months of 1996, compared with 1.25% in the same 1995
periods.
The Consumer businesses earned $491 million and $1.0 billion in the second
quarter and six months of 1996, up 13% and 12% from the year-ago periods, due to
strong growth in Citibanking and the Private Bank, partially offset by reduced
Cards earnings resulting from increased credit costs, primarily in U.S.
bankcards. Earnings in the (Corporate) Bank of $644 million and $1.1 billion in
the second quarter and six months of 1996, were up 15% and 16% from the
comparable year-ago periods, reflecting strong growth in the Emerging Markets
business and lower income taxes attributable to the businesses, partially offset
by lower trading-related revenue and venture capital results in Global
Relationship Banking, which continued its repositioning and focus on asset
utilization and improving returns.
Adjusted revenue of $5.3 billion and $10.4 billion in the second quarter and six
months of 1996 was up $393 million, or 8%, and $845 million, or 9%, from the
comparable year-ago periods. Revenue in the Consumer businesses increased 9%, to
$3.3 billion for the second quarter (10% for the six month period), spread
across Cards, Citibanking, and the Private Bank, with particularly strong growth
of 17% for both the quarter and six months in the emerging markets. Second
quarter revenue of $1.8 billion in the (Corporate) Banking businesses was
essentially unchanged as strong growth in the Emerging Markets business was
principally offset by lower revenue in Global Relationship Banking.
Trading-related revenue of $427 million and $819 million in the second quarter
and six months of 1996, which included a charge of $60 million related to
certain mortgage-backed securities activities, was down $126 million, or 23%,
and $129 million, or 14%, from the comparable 1995 periods. Venture capital
gains of $107 million for the quarter and $145 million for the first six months
of 1996 were down $81 million, or 43%, and $128 million, or 47%, from the
comparable year-ago periods, reflecting a particularly strong 1995 second
quarter. Also included in other revenue for the 1996 quarter was a $110 million
gain from the sale of an automated trading business, which was part of the
company's former information initiatives, and an investment writedown of $50
million in Latin America. The year-ago quarter included a similar investment
writedown of $70 million.
Adjusted operating expense for the quarter and six month period increased 7%
from 1995, primarily reflecting a 16% increase in the emerging markets. Expense
levels related to core business activities in the developed markets were
virtually unchanged from the respective 1995 periods.
Operating margin grew 10% and 12% in the second quarter and six months of 1996
from the comparable year-ago periods. The incremental revenue to expense ratio
was 2.1:1 and 2.3:1 in the second quarter and six months of 1996 and the
efficiency ratio (adjusted operating expense as a percentage of adjusted
revenue) of 56% in both the second quarter and six months of 1996 improved from
57% in both the comparable year-ago periods. Revenue and expense growth rates
were deflated by approximately 2% compared to the year-earlier quarter due to
the stronger U.S. dollar.
Total credit costs, adjusted for the effect of credit card securitizations, were
$735 million in the second quarter, up from $721 million in the preceding
quarter and from $639 million in the 1995 second quarter. Consumer credit costs
of $762 million, or an annualized 2.38% of managed loans, in the second quarter
of 1996 were up from $706 million, or 2.19%, in the first quarter and up from
$616 million, or 1.99%, in the 1995 second quarter. The increase in credit costs
and related loss ratios chiefly reflected a continued rise in U.S. bankcards
credit losses. Net credit losses on managed U.S. bankcards were $522 million, up
$55 million from the 1996 first quarter and up $159 million from the 1995 second
quarter, representing net credit loss rates of 4.99%, 4.38%, and 3.75%,
respectively. The managed Consumer loan delinquency ratio (90 days or more past
due) improved to 2.91%, down from 3.03% and 3.14% at the end of the preceding
and year-ago quarters.
2
<PAGE>
CITICORP [LOGO]
Commercial credit costs remained low at a net credit of $27 million in the
quarter. Commercial cash-basis loans and OREO of $1.9 billion at June 30, 1996
were down from $2.0 billion at March 31, 1996, and $2.7 billion a year earlier.
The decrease from the prior year principally reflected continued reductions in
the commercial real estate portfolio.
At June 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 in the quarter.
Citicorp's effective tax rate was 38% for the 1996 quarter and six months,
compared with 39% for both 1995 periods. The 1995 full year effective tax rate
was 38%.
Total capital (Tier 1 and Tier 2) was $28.2 billion, or 12.35% of net
risk-adjusted assets, and Tier 1 capital was $19.1 billion, or 8.38%, at June
30, 1996. During the second quarter and six months of 1996, Citicorp generated
$683 million and $1.4 billion of free capital. With the repurchase of 9.6
million shares of common stock in the quarter at a total cost of $777 million,
the number of shares acquired since June 20, 1995, when the Board of Directors
authorized the stock repurchase program, totaled 42.2 million at a cost of $3.0
billion. As expanded in January 1996, the program is authorized to make total
purchases for up to $4.5 billion through January 1998.
3
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
BUSINESS DISCUSSIONS
- --------------------------------------------------------------------------------
The table below and the discussions that follow analyze Citicorp's results by
global business areas including its core business franchises of Consumer and
(Corporate) Banking.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Earnings Summary
- ------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
------------------------ % ------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Consumer ............................................. $ 491 $ 436 13 $ 1,004 $ 897 12
(Corporate) Banking (B) .............................. 644 560 15 1,115 959 16
Core Businesses ................................. 1,135 996 14 2,119 1,856 14
Corporate Items ...................................... (183) (143) (28) (253) (174) (45)
------------------------------------------------------------------
Total Citicorp ....................................... $ 952 $ 853 12 $ 1,866 $ 1,682 11
------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Supplemental Information:
Consumer
Citibanking .................................... $ 177 $ 136 30 $ 360 $ 284 27
Cards .......................................... 242 255 (5) 507 519 (2)
Private Bank ................................... 72 45 60 137 94 46
------------------------------------------------------------------
Total .............................................. $ 491 $ 436 13 $ 1,004 $ 897 12
------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Developed Markets .............................. $ 265 $ 242 10 $ 554 $ 510 9
Emerging Markets ............................... 226 194 16 450 387 16
------------------------------------------------------------------
Total .............................................. $ 491 $ 436 13 $ 1,004 $ 897 12
------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
(Corporate) Banking (B):
Emerging Markets ............................... $ 433 $ 342 27 $ 826 $ 613 35
Global Relationship Banking .................... 211 218 (3) 289 346 (16)
------------------------------------------------------------------
Total .............................................. $ 644 $ 560 15 $ 1,115 $ 959 16
------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to 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.
- --------------------------------------------------------------------------------
4
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Consumer
- --------------------------------------------------------------------------------
Citicorp's Consumer businesses operate a uniquely global, full-service franchise
encompassing branch and electronic banking ("Citibanking"), credit and charge
cards ("Cards"), and the Private Bank.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
------------------------- % --------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Revenue.................................... $2,979 $2,805 6 $5,939 $5,525 7
Effect of Credit Card Securitizations............ 349 226 54 643 448 44
Net Cost to Carry Cash-Basis Loans
and OREO........................................ (9) 3 NM (10) 7 NM
-----------------------------------------------------------------------------
Adjusted Revenue................................. 3,319 3,034 9 6,572 5,980 10
-----------------------------------------------------------------------------
Total Operating Expense.......................... 1,801 1,719 5 3,542 3,376 5
Net OREO Costs................................... (2) (8) 75 (2) (9) 78
-----------------------------------------------------------------------------
Adjusted Operating Expense....................... 1,799 1,711 5 3,540 3,367 5
-----------------------------------------------------------------------------
Operating Margin................................. 1,520 1,323 15 3,032 2,613 16
-----------------------------------------------------------------------------
Net Write-offs................................... 420 379 11 833 688 21
Effect of Credit Card Securitizations............ 349 226 54 643 448 44
Net Cost to Carry and Net OREO Costs............. (7) 11 NM (8) 16 NM
-----------------------------------------------------------------------------
Credit Costs..................................... 762 616 24 1,468 1,152 27
-----------------------------------------------------------------------------
Operating Margin Less Credit Costs............... 758 707 7 1,564 1,461 7
Additional Provision............................. 50 50 - 100 100 -
-----------------------------------------------------------------------------
Income Before Taxes.............................. 708 657 8 1,464 1,361 8
Income Taxes..................................... 217 221 (2) 460 464 (1)
-----------------------------------------------------------------------------
Net Income....................................... $ 491 $ 436 13 $1,004 $ 897 12
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ......... $ 125 $ 120 4 $ 125 $ 118 6
Return on Assets................................. 1.58% 1.46% - 1.62% 1.53% -
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Net income from the worldwide Consumer businesses of Citibanking, Cards, and the
Private Bank of $491 million and $1.0 billion in the second quarter and six
months of 1996, respectively, was up $55 million, or 13%, and $107 million, or
12%, from the comparable year-ago periods. The improvement in the quarter was
led by Citibanking, up 30%, and the Private Bank, up 60%, while Cards earnings
declined 5%. Geographically, net income in the emerging markets increased 16%,
in both the second quarter and six months of 1996, principally from continued
growth in Asia Pacific. Net income in the developed markets improved 10% in the
quarter and 9% in the six months of 1996.
Adjusted revenue was up 9% and 10% in the second quarter and six months of 1996
from the comparable year-ago periods, representing growth across the three
Consumer businesses. Adjusted operating expense increased 5% in both periods,
principally reflecting spending on initiatives for Citibanking worldwide and for
Cards in the emerging markets, partially offset by lower expense levels in U.S.
bankcards.
Consumer credit costs were $762 million, up from $706 million in the 1996 first
quarter and from $616 million in the 1995 second quarter, with the annualized
net credit loss ratio at 2.38% of managed loans in the second quarter up from
2.19% in the preceding quarter and 1.99% in the year-ago quarter. The net
increase in credit costs and the related loss ratios chiefly reflected a
continued rise in Cards credit losses in the U.S. and Asia Pacific; however,
credit costs in Citibanking and the Private Bank improved in the quarter by $17
million and $26 million, respectively, as compared to the second quarter of
1995. The provision for credit losses included charges in excess of net
write-offs of $50 million and $100 million in the second quarter and six months
of 1996, respectively, reflecting the build in the allowance for credit losses.
5
<PAGE>
CITICORP [LOGO]
Income taxes are attributed to core businesses on the basis of local tax rates,
which resulted in an effective rate of 31% in the second quarter and six months
of 1996, compared to 34% in the comparable year-ago periods, reflecting changes
in the nature and geographic mix of earnings.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Developed Markets
- ----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
--------------------------- % --------------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue................................. $2,415 $2,263 7 $4,805 $4,472 7
Adjusted Operating Expense....................... 1,290 1,279 1 2,555 2,524 1
-----------------------------------------------------------------------------
Operating Margin................................. 1,125 984 14 2,250 1,948 16
Credit Costs..................................... 664 552 20 1,277 1,046 22
-----------------------------------------------------------------------------
Operating Margin Less Credit Costs............... 461 432 7 973 902 8
Additional Provision............................. 41 34 21 89 80 11
-----------------------------------------------------------------------------
Income Before Taxes.............................. 420 398 6 884 822 8
Income Taxes..................................... 155 156 (1) 330 312 6
-----------------------------------------------------------------------------
Net Income....................................... $ 265 $ 242 10 $ 554 $ 510 9
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ......... $ 87 $ 85 2 $ 88 $ 84 5
Return on Assets................................. 1.23% 1.14% - 1.27% 1.22% -
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Emerging Markets
- ----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
--------------------------- % --------------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue................................. $ 904 $ 771 17 $1,767 $1,508 17
Adjusted Operating Expense....................... 509 432 18 985 843 17
-----------------------------------------------------------------------------
Operating Margin................................. 395 339 17 782 665 18
Credit Costs..................................... 98 64 53 191 106 80
-----------------------------------------------------------------------------
Operating Margin Less Credit Costs............... 297 275 8 591 559 6
Additional Provision............................. 9 16 (44) 11 20 (45)
-----------------------------------------------------------------------------
Income Before Taxes.............................. 288 259 11 580 539 8
Income Taxes..................................... 62 65 (5) 130 152 (14)
-----------------------------------------------------------------------------
Net Income....................................... $ 226 $ 194 16 $ 450 $ 387 16
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ......... $ 38 $ 35 9 $ 37 $ 34 9
Return on Assets................................. 2.39% 2.22% - 2.45% 2.30% -
-----------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Citibanking
- -------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
-------------------- % ------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue ..................................................... $1,452 $1,350 8 $2,856 $2,637 8
Operating Expense ........................................... 1,028 948 8 1,995 1,852 8
-----------------------------------------------------------
Operating Margin ............................................ 424 402 5 861 785 10
Credit Costs ................................................ 161 178 (10) 319 327 (2)
-----------------------------------------------------------
Operating Margin Less Credit Costs .......................... 263 224 17 542 458 18
Additional Provision ........................................ 1 10 (90) 2 12 (83)
-----------------------------------------------------------
Income Before Taxes ......................................... 262 214 22 540 446 21
Income Taxes ................................................ 85 78 9 180 162 11
-----------------------------------------------------------
Net Income .................................................. $ 177 $ 136 30 $ 360 $ 284 27
-----------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ..................... $ 82 $ 80 3 $ 82 $ 78 5
Return on Assets ............................................ 0.87% 0.68% -- 0.88% 0.73% --
-----------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
- --------------------------------------------------------------------------------
Citibanking activities in the second quarter and six months of 1996 contributed
$177 million and $360 million of net income, up $41 million, or 30%, and up $76
million, or 27%, from the comparable 1995 periods. The increase in net income
reflected improved results in the developed markets and business expansion in
Asia Pacific. Income before taxes was $262 million and $540 million in the 1996
second quarter and six months, up 22% and 21% from the comparable 1995 periods.
Revenue, up 8% in both the second quarter and six months of 1996, was led by
double-digit growth in the emerging markets, particularly in Asia Pacific, and
improvements in the U.S. and Europe business, partially offset by the effect of
foreign currency translation.
Expense was also up 8% in both periods, largely reflecting investment spending
on branded distribution designed to enhance customer service, particularly to
support electronic banking, and the further conversion of existing branches and
the opening of Model Branches, partially offset by the effect of foreign
currency translation.
Credit costs in the quarter were $161 million, up $3 million from the preceding
quarter, but down $17 million from the 1995 second quarter, with annualized net
credit loss ratios of 0.99%, 0.97%, and 1.14%, respectively.
The Federal Deposit Insurance Fund reform legislation under consideration
includes a proposal to recapitalize the Savings Association Insurance Fund
("SAIF") through a special assessment on current members of the SAIF, including
Citicorp's savings bank subsidiary. If adopted as proposed, the savings bank
subsidiary would be subject to a special assessment of approximately $70 million
pretax, which must be recognized in the quarter when the legislation is enacted.
It is expected that following recapitalization of the SAIF, future deposit
insurance premiums charged to savings banks would be lowered.
7
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Cards
- -------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
-------------------- % ------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue .................................. $ 1,616 $ 1,453 11 $ 3,219 $ 2,888 11
Adjusted Operating Expense ........................ 605 601 1 1,217 1,200 1
-------------------------------------------------------------------
Operating Margin .................................. 1,011 852 19 2,002 1,688 19
Credit Costs ...................................... 611 422 45 1,158 799 45
-------------------------------------------------------------------
Operating Margin Less Credit Costs ............... 400 430 (7) 844 889 (5)
Additional Provision .............................. 49 40 23 98 88 11
-------------------------------------------------------------------
Income Before Taxes ............................... 351 390 (10) 746 801 (7)
Income Taxes ...................................... 109 135 (19) 239 282 (15)
-------------------------------------------------------------------
Net Income ........................................ $ 242 $ 255 (5) $ 507 $ 519 (2)
-------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) .......... $ 27 $ 25 8 $ 27 $ 25 8
Return on Assets (B) .............................. 3.60% 4.09% -- 3.78% 4.19% --
-------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
(B) Adjusted for the effect of credit card securitizations, the return on
managed assets for worldwide Cards was 1.84% in the 1996 quarter and 2.13%
in the year-ago quarter. For the six months of 1996 and 1995, the return on
managed assets was 1.92% and 2.18%, respectively.
- --------------------------------------------------------------------------------
Cards worldwide activities contributed net income of $242 million and $507
million in the second quarter and six months of 1996, down $13 million, or 5%,
and $12 million, or 2%, from the comparable 1995 periods. The decline in
earnings was primarily due to higher credit costs, partially offset by increased
revenue and a lower effective tax rate, while expense levels were essentially
unchanged. Business in the emerging markets represented approximately 30% of
Cards earnings, compared with 26% in the year-ago quarter. Cards continued to
build reserves for possible credit losses, with charges in excess of net
write-offs of $49 million and $98 million in the 1996 second quarter and six
months, respectively.
Income before taxes was $351 million and $746 million in the 1996 second quarter
and six months, down 10% and 7% from the comparable 1995 periods.
Adjusted revenue in the quarter and six months of 1996 was up 11% from the
year-ago periods, reflecting volume growth and improved spreads due to the
effective management of interest rate exposure in U.S. bankcards, business
expansion in Asia Pacific and higher revenue from Latin America. Compared to the
year-ago quarter, U.S. bankcards revenue increased 12%, while emerging markets
Cards revenue was up 25%. Revenue in other markets and products was down 9% in
the quarter from the 1995 second quarter primarily due to declines in the
private label business.
The number of cards in force worldwide (including affiliates) exceeded 59
million at the end of the quarter. Charge volumes in the U.S. bankcards business
increased $2.3 billion, or 10.8%, from the 1995 second quarter, while charge
volumes on Citicorp-issued cards in Asia Pacific increased 26%. Managed card
receivables in the U.S. bankcards business grew from the year-ago quarter by
$2.3 billion, or 5.6%, to $42.8 billion at June 30, 1996, and were up slightly
from $42.6 billion at the end of the 1996 first quarter. The reduced growth
compared with the preceding quarter was due to competition, tighter credit
standards, and seasonality.
Adjusted operating expense increased by only 1% in both periods, reflecting
continued investment spending in the emerging markets, partially offset by lower
expense levels in U.S. bankcards. Expense in U.S. bankcards was down 5% from the
year-ago quarter, while emerging markets expense increased 25%.
Credit costs for worldwide Cards were $611 million in the quarter, up $64
million from the preceding quarter and up $189 million from the 1995 second
quarter. Consistent with broad industry trends, net credit losses in the managed
U.S. bankcards portfolio increased in the quarter to $522 million, up $55
million from the first quarter, and up $159 million from the 1995 second
quarter. The net credit loss ratio in the U.S. bankcards portfolio rose to 4.99%
in the quarter from 4.38% in the preceding quarter and 3.75% in the year-ago
quarter. The loss ratio, which is influenced by economic conditions, changes in
portfolio levels, and credit performance of the portfolio, may increase further
from the second quarter of 1996.
8
<PAGE>
CITICORP [LOGO]
See "Consumer Portfolio Review" on pages 9-11 and "Provision and Allowance for
Credit Losses" on pages 30-31 for additional discussion of the Cards portfolio.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Private Bank
- ---------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
--------------------- % -------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue ..................................... $ 251 $ 231 9 $ 497 $ 455 9
Adjusted Operating Expense ........................... 166 162 2 328 315 4
-------------------------------------------------------------------------
Operating Margin ..................................... 85 69 23 169 140 21
Credit Costs ......................................... (10) 16 NM (9) 26 NM
-------------------------------------------------------------------------
Operating Margin Less Credit Costs ................... 95 53 79 178 114 56
Additional Provision ................................. -- -- -- -- -- --
-------------------------------------------------------------------------
Income Before Taxes .................................. 95 53 79 178 114 56
Income Taxes ......................................... 23 8 NM 41 20 NM
-------------------------------------------------------------------------
Net Income ........................................... $ 72 $ 45 60 $ 137 $ 94 46
-------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) .............. $ 16 $ 15 7 $ 16 $ 15 7
Return on Assets ..................................... 1.81% 1.20% -- 1.72% 1.26% --
-------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Net income in the Private Bank business was $72 million and $137 million in the
second quarter and six months of 1996, up $27 million, or 60%, and $43 million,
or 46%, from the comparable 1995 periods. The increase in both 1996 periods
reflected improved credit loss experience together with continued revenue growth
throughout the Private Bank. Income before taxes was $95 million and $178
million in the 1996 second quarter and six months, up 79% and 56% from the
comparable 1995 periods.
Adjusted revenue increased 9% to $251 million in the quarter and $497 million
for the six months, as a result of continued growth in all markets, especially
the developed markets. Customer business volumes under management of $92 billion
at June 30, 1996, grew $11 billion, or 13%, over the prior year.
Adjusted operating expense was up 2% from the 1995 quarter and 4% over the 1995
six month period, as the Private Bank benefited from re-engineering and cost
management initiatives, as well as from the effect of foreign currency
translation. Compared with 1995, the Private Bank generated an incremental
revenue to expense ratio of 5:1 and 3.2:1 for the quarter and six month periods,
respectively.
Credit costs in the Private Bank were net credits of $10 million for the second
quarter and $9 million in the six month period, compared to net charges of $16
million and $26 million in the respective 1995 periods, as the U.S. business
benefited from recoveries and lower OREO writedowns.
- --------------------------------------------------------------------------------
Consumer Portfolio Review
- --------------------------------------------------------------------------------
In the Consumer portfolio, credit loss experience is often expressed in terms of
annual net credit losses as a percentage of average Consumer loans. Pricing and
credit policies reflect the loss experience of each particular product. Consumer
loans are generally written off no later than a predetermined number of days
past due on a contractual basis, or earlier in the event of bankruptcy. The
number of days is set at an appropriate level according to loan product and
country.
The following table summarizes the Consumer delinquencies and net credit loss
experience in both the managed and on-balance sheet Consumer loan portfolio in
terms of loans 90 days or more past due, net credit losses, and as a percentage
of related loans.
9
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios
- -----------------------------------------------------------------------------------------------------------------------------------
Total
Loans (A) 90 Days or More Past Due Net Credit Losses
--------------- -------------------------------- ----------------------------------
June 30, June 30, Mar. 31, June 30, 2nd Qtr. 1st Qtr. 2nd Qtr.
1996 1996 1996 1995 1996 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
(Dollars
in Billions) (Dollars in Millions) (Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Citibanking ..................................... $ 65.7 $ 2,663 $ 2,755 $ 2,789 $ 161 $ 158 $ 178
Ratio ..................................... 4.05% 4.18% 4.37% 0.99% 0.97% 1.14%
Cards
U.S. Bankcards ............................... 42.4 732 759 616 522 467 363
Ratio ..................................... 1.73% 1.80% 1.54% 4.99% 4.38% 3.75%
Other ........................................ 8.0 180 176 149 89 80 59
Ratio ..................................... 2.25% 2.31% 2.19% 4.65% 4.40% 3.67%
Private Bank .................................... 15.3 254 260 348 (3) 2 5
Ratio ..................................... 1.66% 1.76% 2.54% NM 0.06% 0.15%
---------------------------------------------------------------------------------
Total Managed ................................... 131.4 3,829 3,950 3,902 769 707 605
Ratio ..................................... 2.91% 3.03% 3.14% 2.38% 2.19% 1.99%
Effect of Credit Card Securitizations ........... (26.0) (452) (479) (367) (349) (294) (226)
---------------------------------------------------------------------------------
Total On-Balance Sheet .......................... $ 105.4 $ 3,377 $ 3,471 $ 3,535 $ 420 $ 413 $ 379
Ratio ..................................... 3.20% 3.33% 3.51% 1.62% 1.60% 1.54%
--------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental Information (Managed Portfolio):
Developed ....................................... $ 100.9 $ 3,448 $ 3,603 $ 3,625 $ 672 $ 614 $ 542
Ratio ..................................... 3.42% 3.58% 3.75% 2.70% 2.45% 2.29%
Emerging ........................................ 30.5 381 347 277 97 93 63
Ratio ..................................... 1.25% 1.17% 1.01% 1.30% 1.29% 0.93%
---------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Net of unearned income.
NM Not meaningful, as recoveries result in a negative percentage.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Consumer Loan Balances
- -----------------------------------------------------------------------------------------------------------------------------------
End of Period(A) Average(A)
-------------------------------------------------------------------------------------------
June 30, Mar. 31, June 30, 2nd Qtr. 1st Qtr. 2nd Qtr.
(In Billions of Dollars) 1996 1996 1995 1996 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Managed ............................ $ 131.4 $ 130.3 $ 124.2 $ 130.3 $ 129.8 $ 122.0
Securitized Loans .................. (26.0) (26.2) (23.3) (26.2) (25.9) (23.3)
-------------------------------------------------------------------------------------------
On-Balance Sheet ................... $ 105.4 $ 104.1 $ 100.9 $ 104.1 $ 103.9 $ 98.7
-------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Net of unearned income
- --------------------------------------------------------------------------------
Total managed delinquent dollars and the related delinquency ratio improved from
both the 1996 first quarter and the second quarter of 1995, primarily reflecting
improvements in Citibanking and the Private Bank, as well as seasonal
improvements in U.S. bankcards from the first quarter of 1996. Net credit losses
and the related loss ratios have increased from both the preceding and year-ago
quarters.
In Citibanking, the improvement in delinquent dollars and rate reflected
improvements in the U.S. and Europe business, including U.S. mortgages, and the
effect of foreign currency translation, partially offset by increases in the
emerging markets. The increase in the emerging markets reflected portfolio
growth and higher delinquency ratios in both Asia Pacific and Latin America. Net
credit losses were essentially unchanged from the preceding quarter and declined
from the year-ago quarter by $17 million, primarily due to improvements in the
U.S. and Europe business.
As of June 30, 1996, U.S. bankcards managed loans that were delinquent 90 days
or more totaled $732 million, or 1.73% of the portfolio, down from $759 million,
or 1.80%, at March 31, 1996. The net credit loss ratio was 4.99% in the quarter,
up from 4.38% in the preceding quarter and up from 3.75% in the second quarter
of 1995. Personal bankruptcies accounted for
10
<PAGE>
CITICORP [LOGO]
39% of gross write-offs in the quarter, up from 34% in the preceding quarter and
36% in the year-ago quarter. These increases, which reflect a general
deterioration in the credit environment as well as the effect of portfolio
seasoning, are broadly consistent with industry trends. See pages 8 and 30 for
additional discussion.
In other Cards businesses, expansion in Asia Pacific was primarily responsible
for the rise in delinquencies of $31 million and the increase in net credit
losses of $30 million from the second quarter of 1995, as well as for the
increase in losses of $9 million from the preceding quarter.
Private Bank delinquencies and net credit losses have improved from both the
preceding quarter and the second quarter of 1995, reflecting lower levels of
cash-basis loans and higher credit recoveries.
Total Consumer loans on the balance sheet delinquent 90 days or more on which
interest continued to be accrued were $944 million at June 30, 1996, compared
with $915 million and $910 million at March 31, 1996 and June 30, 1995,
respectively. Included in these amounts are government-guaranteed U.S. student
loans of $237 million, $218 million, and $147 million, respectively. Other
Consumer loans delinquent 90 days or more on which interest continued to be
accrued (which primarily include worldwide bankcard receivables and certain
installment loans in Germany) were $707 million, $697 million, and $763 million,
respectively. The majority of these other loans are written off upon reaching a
stipulated number of days past due.
Citicorp's policy for suspending the accrual of interest on Consumer loans
varies depending on the terms, security and credit loss experience
characteristics of each product, as well as write-off criteria in place. At June
30, 1996, interest accrual had been suspended on $2.5 billion of Consumer loans,
compared with $2.7 billion both at March 31, 1996 and June 30, 1995. The
decrease was principally due to improvements across the developed markets,
including the effect of foreign currency translation, partially offset by
increases in the emerging markets. Included in these numbers are U.S. mortgages
on which the accrual of interest has been suspended of $942 million at June 30,
1996, and $1.0 billion at both March 31, 1996 and June 30, 1995.
Consumer credit costs, particularly in U.S. bankcards, and the related net
credit loss ratios may increase from second quarter 1996 levels as a result of
economic conditions, changes in portfolio levels, and credit performance of the
portfolios. Additionally, delinquencies and loans on which the accrual of
interest is suspended could remain at relatively high levels. These factors may
result in further increases to the Consumer allowance.
11
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
(Corporate) Banking
- --------------------------------------------------------------------------------
(Corporate) Banking serves corporations, financial institutions, governments,
and other participants in capital markets throughout the world. The (Corporate)
Banking results presented below include the results of the Cross-Border
Refinancing Portfolio (as a component of the Emerging Markets business) and
North America Commercial Real Estate (as a component of the Global Relationship
Banking business), both of which were reported as separate businesses prior to
1996.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
----------------------- % ----------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Revenue .................................... $ 1,814 $ 1,770 2 $ 3,434 $ 3,332 3
Net Cost to Carry Cash-Basis Loans and
OREO ............................................ (17) 5 NM (21) 1 NM
----------------------------------------------------------------------------
Adjusted Revenue ................................. 1,797 1,775 1 3,413 3,333 2
----------------------------------------------------------------------------
Total Operating Expense .......................... 1,068 1,002 7 2,062 1,954 6
Net OREO Benefits ................................ 19 21 (10) 31 22 41
----------------------------------------------------------------------------
Adjusted Operating Expense ....................... 1,087 1,023 6 2,093 1,976 6
----------------------------------------------------------------------------
Operating Margin ................................. 710 752 (6) 1,320 1,357 (3)
----------------------------------------------------------------------------
Net Write-offs ................................... 9 39 (77) 40 46 (13)
Net Cost to Carry and Net OREO Benefits .......... (36) (16) NM (52) (21) NM
----------------------------------------------------------------------------
Credit Costs ..................................... (27) 23 NM (12) 25 NM
----------------------------------------------------------------------------
Operating Margin Less Credit Costs ............... 737 729 1 1,332 1,332 --
Additional Provision ............................. -- 25 NM -- 50 NM
----------------------------------------------------------------------------
Income Before Taxes .............................. 737 704 5 1,332 1,282 4
Income Taxes ..................................... 93 144 (35) 217 323 (33)
----------------------------------------------------------------------------
Net Income ....................................... $ 644 $ 560 15 $ 1,115 $ 959 16
----------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) .......... $ 139 $ 149 (7) $ 139 $ 149 (7)
Return on Assets ................................. 1.86% 1.51% -- 1.61% 1.30% --
----------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Net income from global corporate banking activities of $644 million and $1.1
billion in the 1996 second quarter and six months, respectively, was up $84
million, or 15%, and $156 million, or 16%, from the comparable 1995 periods.
Growth in the Emerging Markets business more than offset lower results in the
Global Relationship Banking business in both periods. Net income in the 1996
periods also benefited from lower effective income tax rates, primarily in the
Emerging Markets business. Return on average assets increased to 1.86% and 1.61%
in the 1996 second quarter and six months from 1.51% and 1.30% in the comparable
1995 periods.
Citicorp attributes income taxes to core businesses on the basis of local tax
rates, which resulted in effective income tax rates of 13% and 16% in the 1996
second quarter and six months compared with 20% and 25% in the respective 1995
periods. The difference between the local tax rates attributed to core
businesses and Citicorp's overall effective tax rate in each period is included
in Corporate Items.
At June 30, 1996, cash-basis loans of $1.4 billion were composed of $0.4 billion
in the Emerging Markets business and $1.0 billion in the Global Relationship
Banking business (including $0.8 billion attributable to the North America
Commercial Real Estate portfolio). Cash-basis loans declined $180 million from
December 31, 1995 and $298 million from June 30, 1995. The OREO portfolio of
$528 million declined $97 million from December 31, 1995 and $526 million from
June 30, 1995. The declines from the year-ago quarter were primarily
attributable to reductions in the North America Commercial Real Estate
portfolio. See the tables entitled "Cash-Basis, Renegotiated, and Past Due
Loans" and "Other Real Estate Owned and Assets Pending Disposition" on page 39.
12
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Emerging Markets
- -----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
---------------------- % ------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue .................................... $ 853 $ 760 12 $1,720 $1,474 17
Adjusted Operating Expense .......................... 402 354 14 773 668 16
------------------------------------------------------------------------
Operating Margin .................................... 451 406 11 947 806 17
Credit Costs ........................................ (8) 9 NM 2 17 (88)
------------------------------------------------------------------------
Operating Margin Less Credit Costs .................. 459 397 16 945 789 20
Additional Provision ................................ -- -- -- -- -- --
------------------------------------------------------------------------
Income Before Taxes ................................. 459 397 16 945 789 20
Income Taxes ........................................ 26 55 (53) 119 176 (32)
------------------------------------------------------------------------
Net Income .......................................... $ 433 $ 342 27 $ 826 $ 613 35
------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ............. $ 58 $ 49 18 $ 56 $ 48 17
Return on Assets .................................... 3.00% 2.80% -- 2.97% 2.58% --
------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Net income from the Emerging Markets business totaled $433 million and $826
million in the 1996 second quarter and six months, up $91 million, or 27%, and
$213 million, or 35%, respectively, from the comparable 1995 periods as revenue
growth outpaced expense growth by 1.9:1 and 2.3:1 ratios in the second quarter
and six-month period. The results represented a return on assets of 3.00% and
2.97% in the 1996 second quarter and six months, up from 2.80% and 2.58% in the
comparable 1995 periods.
Income before taxes was $459 million and $945 million in the 1996 second quarter
and six months, up 16% and 20% from the comparable 1995 periods. The effective
income tax rates in the 1996 second quarter and six months were 6% and 13%,
respectively, compared with 14% and 22% in the respective 1995 periods. The
declines in the effective income tax rates in the 1996 periods were primarily
attributable to changes in the geographic mix and nature of earnings coupled
with certain second quarter 1996 local tax benefits.
Adjusted revenue growth of 12% and 17% in the 1996 second quarter and six months
compared with the respective 1995 periods reflected strong base business growth
in loan products and transaction services, partially offset by the effect of
foreign currency translation. Trading-related revenue declined $18 million in
the quarterly comparison due to the unusually strong results reported in the
second quarter of 1995, but improved $38 million in the six-month comparison. In
both the 1996 second quarter and six months, about one-fifth of the revenue in
the Emerging Markets business was attributable to business from multinational
companies managed jointly with the Global Relationship Banking business; that
revenue grew 7% and 10% during the 1996 second quarter and six months from the
respective 1995 periods. Revenue in the 1996 second quarter and six months from
net asset gains and securities transactions was $67 million and $176 million, up
$64 million and $83 million from the comparable 1995 periods. This revenue
included a 1996 first quarter gain of $52 million from the sale of Brazil
interest bonds while the 1995 first quarter included gains from the sale of a
real estate asset and revenue related to the completion of the refinancing
agreement with Ecuador.
Adjusted expense increased 14% and 16% in the 1996 second quarter and six months
compared with the respective 1995 periods, primarily reflecting spending to
build the franchise and increased costs related to higher business volumes. The
expense growth experienced in recent quarters is expected to continue as the
business builds its franchise. Since the second quarter of 1995, banking
operations were initiated in Slovakia, Romania, Lebanon, and Israel. In
addition, operations were expanded by opening additional offices or converting
representative offices to branches or subsidiaries in China, Russia, Peru, South
Africa, and Tanzania. In early July 1996, the Citi Islamic Investment Bank was
opened in Bahrain.
Credit costs remained low during the 1996 second quarter and six months and
included a $21 million recovery related to the restructuring agreement concluded
with Slovenia in June 1996. Debt restructuring activities during the 1996 second
13
<PAGE>
CITICORP [LOGO]
quarter included the signing of an agreement with Panama and negotiation of an
agreement with Croatia, both of which closed in July 1996. Additionally, a term
sheet was distributed to Peru's international commercial creditors.
At June 30, 1996, Citicorp's cross-border and non-local currency outstandings in
the Cross-Border Refinancing Portfolio (which is included in the Emerging
Markets business results) included $3.2 billion of medium- and long-term
outstandings, down $0.2 billion from 1995 year end and $0.4 billion from the
second quarter of 1995. The medium- and long-term debt outstandings at June 30,
1996 included $2.2 billion in Brazil, $0.4 billion in Venezuela, $0.2 billion in
South Africa, and $0.4 billion in the aggregate in nine other countries. Of the
$3.2 billion of outstandings in the Cross-Border Refinancing Portfolio, $2.8
billion is in the form of securities carried at fair value in the
available-for-sale securities portfolio (with an amortized cost of $2.5
billion), all of which were current as to principal and interest as of June 30,
1996 (see the table entitled "Securities" on page 38). The amount of cash-basis
loans in the Cross-Border Refinancing Portfolio was $23 million at June 30,
1996.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Global Relationship Banking
- -----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
------------------ % ------------------- %
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted Revenue ................................... $ 944 $1,015 (7) $1,693 $1,859 (9)
Adjusted Operating Expense ......................... 685 669 2 1,320 1,308 1
------------------------------------------------------------------------
Operating Margin ................................... 259 346 (25) 373 551 (32)
Credit Costs ....................................... (19) 14 NM (14) 8 NM
------------------------------------------------------------------------
Operating Margin Less Credit Costs ................. 278 332 (16) 387 543 (29)
Additional Provision ............................... -- 25 NM -- 50 NM
------------------------------------------------------------------------
Income Before Taxes ................................ 278 307 (9) 387 493 (22)
Income Taxes ....................................... 67 89 (25) 98 147 (33)
------------------------------------------------------------------------
Net Income ......................................... $ 211 $ 218 (3) $ 289 $ 346 (16)
------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions of Dollars) ............ $ 81 $ 100 (19) $ 83 $ 101 (18)
Return on Assets ................................... 1.05% 0.87% -- 0.70% 0.69% --
------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Net income from the Global Relationship Banking business in North America,
Europe, and Japan totaled $211 million and $289 million in the 1996 second
quarter and six months. Income before taxes was $278 million and $387 million in
the 1996 second quarter and six months, down 9% and 22% from the comparable 1995
periods. Net income in the 1996 periods benefited from a low effective income
tax rate associated with a gain on the sale of an automated trading business.
Average assets declined $19 billion and $18 billion during the 1996 second
quarter and six months compared with the respective 1995 periods, as the Global
Relationship Bank continued its repositioning and focus on asset utilization and
improving returns. Return on average assets of 1.05% and 0.70% in the 1996
second quarter and six months improved from 0.87% and 0.69% in the comparable
1995 periods.
Adjusted revenue of $944 million and $1.7 billion in the 1996 second quarter and
six months declined 7% and 9% from the comparable 1995 periods. The results
reflected stable business in loan products and growth in transaction services,
and declines in both trading-related revenue and venture capital revenue
aggregating $183 million and $286 million in the 1996 second quarter and six
months, respectively. Trading-related revenue in both the second quarter and six
month periods reflected lower foreign exchange activity and a second quarter
charge of $60 million related to certain mortgage-backed securities activities
(see "Trading-Related Revenue" on page 28). Venture capital revenue in the 1996
periods was strong, but declined from the unusually strong 1995 periods and
reflected gains related to public offerings by investees in the second quarter
of each year. Revenue in the 1996 second quarter also included a $110 million
gain from the sale of a stand-alone automated trading business, which was part
of the company's former information initiatives. Adjusted expense of $685
million and $1.3 billion in the 1996 second quarter and six months increased 2%
and 1% compared with the respective 1995 periods due primarily to higher volumes
in transaction services and investment in technological infrastructure,
partially offset by the effect of foreign currency translation.
14
<PAGE>
CITICORP [LOGO]
Credit costs were net credits of $19 million and $14 million in the 1996 second
quarter and six months, compared with net charges of $14 million and $8 million
in the respective 1995 periods. The 1995 second quarter and six months also
reflected charges in excess of net write-offs of $25 million and $50 million,
respectively.
The Global Relationship Banking results include the North America Commercial
Real Estate portfolio. Total North America Commercial Real Estate exposure at
June 30, 1996 of $6.5 billion consisted of performing loans ($4.0 billion),
cash-basis loans ($0.8 billion), OREO ($0.4 billion), and letters of credit and
other ($1.3 billion). Total exposure at June 30, 1996 declined $2.2 billion, or
25% from June 30, 1995, primarily as a result of paydowns, maturities, asset
sales, and reductions of commitments. At June 30, 1996, total exposure was
spread among office (44%), residential (21%), retail (18%), and other (17%)
projects; with the largest concentrations in the mid-Atlantic (23%) and
California (21%) regions. Cash-basis loans and OREO at June 30, 1996 were
reduced by $0.8 billion from a year ago. Letters of credit and other included
$0.3 billion related to projects on which debt service is continuing but the
loan-to-value ratios have deteriorated or where the borrowers are experiencing
financial difficulties.
15
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Corporate Items
- --------------------------------------------------------------------------------
Corporate Items includes revenue derived from charging businesses for funds
employed (based upon a marginal cost of funds concept), unallocated corporate
costs, and the offset created by attributing income taxes to the core businesses
on a local tax-rate basis.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
---------------------- % ----------------------- %
(In Millions of Dollars) 1996 1995(A) Change 1996 1995(A) Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue .................................. $ 200 $ 114 75 $ 448 $ 275 63
Operating Expense ........................ 109 77 42 234 161 45
--------------------------------------------------------------------------------
Income Before Taxes ...................... 91 37 NM 214 114 88
Income Taxes ............................. 274 180 52 467 288 62
--------------------------------------------------------------------------------
Net Loss ................................. $(183) $(143) (28) $(253) $(174) (45)
--------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- --------------------------------------------------------------------------------
Corporate Items revenue increased in both the second quarter and six months of
1996 reflecting funding benefits associated with higher equity levels while
expense levels reflected increases in corporate employee expense and other
unallocated corporate costs, partially offset by lower costs associated with
performance-based incentive plans. Revenue also included investment writedowns
in Latin America of $50 million and $70 million in the 1996 and 1995 second
quarters, respectively.
16
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
MANAGING GLOBAL RISK
- --------------------------------------------------------------------------------
Liquidity
- --------------------------------------------------------------------------------
Citicorp manages liquidity through a well-defined process described in the 1995
Annual Report and Form 10-K.
Total deposits of $175.8 billion represent 66% of total funding at June 30,
1996, compared with $167.1 billion (65% of total funding) at December 31, 1995,
and are broadly diversified by geography and customer segments. Stockholders'
equity, which was $19.9 billion at June 30, 1996 compared with $19.6 billion at
December 31, 1995, is also an important component of the overall funding
structure. In addition, long-term debt is issued by Citicorp (the "Parent
Company") and its subsidiaries. Total long-term debt and subordinated capital
notes outstanding at June 30, 1996, were $19.5 billion, compared with $18.5
billion at year-end 1995. A diversity of sources, currencies, and maturities is
used to gain the broadest practical access to the investor base.
Securitization of assets remains an important source of liquidity. Total assets
securitized during the quarter were $1.4 billion, including $0.7 billion of U.S.
credit card receivables and $0.4 billion of U.S. mortgages. Total assets
securitized during the six months of 1996 were $3.4 billion, including $2.3
billion of U.S. credit card receivables. As securitized credit card receivable
transactions amortize, newly originated receivables are recorded on Citicorp's
balance sheet and become available for asset securitization. During the six
months ended June 30, 1996, $1.8 billion of previously securitized credit card
receivables amortized as scheduled and $4.0 billion are scheduled to amortize
during the remainder of the year.
The Parent Company is a legal entity separate and distinct from Citibank, N.A.
and its other subsidiaries and affiliates. As discussed in the 1995 Annual
Report and Form 10-K, there are various legal limitations on the extent to which
Citicorp's subsidiaries may extend credit, pay dividends, or otherwise supply
funds to Citicorp. As of June 30, 1996, under their applicable dividend
limitations, Citicorp's national and state-chartered bank subsidiaries could
have declared dividends to their respective parent companies without regulatory
approval of approximately $4.1 billion. In determining whether and to what
extent to pay dividends, each bank subsidiary must also consider the effect of
dividend payments on applicable risk-based capital and leverage ratio
requirements, as well as policy statements of the federal regulatory agencies
that indicate that banking organizations should generally pay dividends out of
current operating earnings. Consistent with these considerations, Citicorp
estimates that as of June 30, 1996, its bank subsidiaries could have distributed
dividends to Citicorp, directly or through their parent holding company, of
approximately $3.6 billion of the available $4.1 billion.
- --------------------------------------------------------------------------------
Price Risk
- --------------------------------------------------------------------------------
Citicorp manages the sensitivity of earnings to changes in interest rates,
foreign exchange rates, and market prices and volatilities through established
procedures described in the 1995 Annual Report and Form 10-K. These include
limits set annually for each major category of risk; these limits are monitored
and managed by the businesses and reviewed monthly at the corporate level.
Citicorp uses a risk management system based on market factors that accommodates
the diversity of balance sheet and derivative product exposures and exposure
management systems of its various businesses. The market factor approach
identifies the variables that cause a change in the value of a financial
instrument, including the term structure of interest rates, foreign exchange
rates, equity securities and commodities prices and their volatilities. Price
risk is then measured using various tools, including the earnings at risk
method, which is applied to interest rate risk of the non-trading portfolios,
and the potential loss amount method, which is applied to the trading
portfolios. These methods are comparable with value at risk measurements
employed throughout the industry, and are used as indicators to monitor
sensitivity of earnings to market risk rather than as a quantification of
aggregate risk amounts.
Earnings at risk measures the potential pretax earnings impact on the
non-trading activities of a specified movement in interest rates for an assumed
defeasance period, which ranges from one to eight weeks depending on the depth
of liquidity in the market and the instrument involved. The earnings at risk is
calculated separately for each currency by multiplying the repricing gap between
interest sensitive items by the specified interest rate movement, and then
taking into account the impact of options, both explicit and embedded. The
specific rate movements are statistically derived
17
<PAGE>
CITICORP [LOGO]
from a two standard deviation movement, which results in a confidence level of
97.5%. Business units manage the potential earnings effect of interest rate
movements by modifying the asset and liability mix, either directly or through
the use of derivatives. These include interest rate swaps and other derivative
instruments which are either designated and effective as hedges or designated
and effective in modifying the interest rate characteristics of specified assets
or liabilities. The utilization of derivatives is modified from time to time in
response to changing market conditions as well as changes in the characteristics
and mix of the related assets and liabilities.
Citicorp's primary non-trading price risk exposure is to movements in U.S.
dollar interest rates. During the second quarter of 1996, the amount of U.S.
dollar pretax earnings at risk for the following 12 months to a two standard
deviation increase in rates had a potential negative impact which ranged at each
month-end from approximately $165 million to $193 million in the aggregate,
which is higher than the range from $30 million to $150 million during the full
year 1995. As of June 30, 1996, the U.S. dollar interest rate exposure taken in
tenors beyond one year results in pretax earnings at risk of a maximum of $110
million in any single future year. The table below summarizes Citicorp's
worldwide earnings at risk at June 30, 1996 over the next 12 months from changes
in U.S. dollar interest rates.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Twelve Month U.S. Dollar Earnings at Risk (Pretax)
Assuming a Rate Move of
Two Standard Two Standard
Deviation Deviation
(In Millions of Dollars at June 30, 1996) Increase Decrease
- --------------------------------------------------------------------------------
<S> <C> <C>
Excluding Derivatives............................. $ 91 $(87)
Including Derivatives............................. (193) 206
- --------------------------------------------------------------------------------
</TABLE>
The table illustrates that including derivatives, Citicorp's earnings in its
non-trading activities would be reduced from an increase in interest rates and
benefit from a decrease in interest rates. This primarily reflects the
utilization of receive-fixed interest rate swaps and similar instruments to
effectively modify the repricing characteristics of certain consumer and
commercial loan portfolios, funding, and long-term debt.
Earnings at risk in other currencies also existed at significantly lower levels
than U.S. dollar earnings at risk. The level of exposure taken is based on the
market environment and will vary from period to period based on rate and other
economic expectations.
The price risk of the trading activities is measured using the potential loss
amount method, which estimates the sensitivity of the value of the trading
activities to changes in the various market factors, such as interest and
foreign exchange rates, over the period necessary to close the position
(generally one day). This measurement includes the foreign exchange risks that
arise in traditional banking business as well as explicit trading positions. The
method considers the probability of movements of these market factors (as
derived from a two standard deviation movement), adjusted for correlation among
them within each trading center.
During the first and second quarters of 1996, the potential loss amount in the
trading portfolios based on monthly averages of daily exposures ranged from
approximately $50 million to $60 million pretax in the aggregate for Citicorp's
major trading centers, compared with a range in the full year of 1995 of
approximately $40 million to $60 million. The potential loss amounts were
relatively stable in 1995 and the six months of 1996. The level of exposure
taken is a function of the market environment and expectations of future price
and market movements, and will vary from period to period. Trading-related
revenue for the second quarter of 1996 was $427 million, compared with $392
million in the first quarter of 1996 (see "Trading-Related Revenue" on page 28).
- --------------------------------------------------------------------------------
Derivative and Foreign Exchange Contracts
- --------------------------------------------------------------------------------
Derivative and foreign exchange products are important risk management tools for
Citicorp and its customers. These contracts typically take the form of futures,
forward, swap, and option contracts, and derive their value from underlying
interest rate, foreign exchange, commodity, or equity instruments. They are
subject to the same types of liquidity, price, credit, and operational risks as
other financial instruments, and Citicorp manages these risks in a consistent
manner.
18
<PAGE>
CITICORP [LOGO]
As a dealer, Citicorp enters into derivative and foreign exchange instruments
with customers separately or with other products, to help them to manage their
risk profile, and also trades for Citicorp's own account. In addition, Citicorp
employs derivative and foreign exchange contracts among other instruments as an
end-user in connection with its risk management activities. Monitoring
procedures entail objective measurement systems, well-defined market and credit
risk limits at appropriate control levels, and timely reports to line and senior
management according to prescribed policies. Additional information concerning
Citicorp's derivative and foreign exchange activities, including a description
of accounting policies, is provided in the 1995 Annual Report and Form 10-K.
Notional principal amounts are frequently used as indicators of derivative and
foreign exchange activity, serving as a point of reference for calculating
payments. Notional principal amounts do not reflect balances subject to credit
or market risk, nor do they reflect the extent to which positions offset one
another. As a result, they do not represent the much smaller amounts that are
actually subject to risk in these transactions. Balance sheet credit exposure
arises from unrealized gains and represents the amount of loss that Citicorp
would suffer if every counterparty to which Citicorp was exposed were to default
at once (i.e., the cost of replacing these contracts), and does not represent
actual or expected loss amounts. Master netting agreements mitigate credit risk
by permitting the offset of amounts due from and to individual counterparties in
the event of counterparty default. The table below presents the aggregate
notional principal amounts of Citicorp's outstanding derivative and foreign
exchange contracts at June 30, 1996 and December 31, 1995, along with the
related balance sheet credit exposure. The table includes all contracts with
third parties, including both dealer and end-user positions.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Derivative and Foreign Exchange Contracts
- -----------------------------------------------------------------------------------------------------------------------------------
Balance Sheet
Notional Principal Amounts Credit Exposure (A)
-------------------------- --------------------------
June 30, Dec. 31, June 30, Dec. 31,
(In Billions of Dollars) 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Rate Products
Futures Contracts ...................................... $ 156.6 $ 145.2 $ -- $ --
Forward Contracts ...................................... 185.4 295.2 0.2 0.6
Swap Agreements ........................................ 444.0 431.9 7.2 9.1
Purchased Options ...................................... 112.3 105.9 1.1 1.2
Written Options ........................................ 151.5 158.1 -- --
Foreign Exchange Products
Futures Contracts ...................................... 2.4 1.1 -- --
Forward Contracts ...................................... 1,111.0 983.5 12.4 12.2
Cross-Currency Swap Agreements ......................... 37.9 35.2 1.7 2.0
Purchased Options ...................................... 95.8 93.7 1.5 1.8
Written Options ........................................ 92.1 88.2 -- --
Commodity and Equity Products ................................ 32.0 38.0 1.5 0.9
-------------------------
25.6 27.8
Effects of Master Netting Agreements (B) ..................... (11.6) (11.7)
-------------------------
$ 14.0 $ 16.1
-------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) There is no balance sheet credit exposure for futures contracts because
they settle daily in cash, and none for written options because they
represent obligations (rather than assets) of Citicorp.
(B) Master netting agreements mitigate credit risk by permitting the offset of
amounts due from and to individual counterparties in the event of
counterparty default.
- --------------------------------------------------------------------------------
Citicorp manages its credit exposure on derivative and foreign exchange
instruments as part of the overall extension of credit to individual customer
relationships, subject to the same credit approvals, limits, and monitoring
procedures used for other activities. In managing the aggregate credit extension
to an individual customer, Citicorp measures the amount at risk on a derivative
or foreign exchange instrument as the sum of two factors: the current
replacement cost (i.e., balance sheet credit exposure), and the potential
increase in the replacement cost over the remaining life of the
19
<PAGE>
CITICORP [LOGO]
instrument should market prices change. Citicorp's use of these two risk
measures is discussed further in the 1995 Annual Report and Form 10-K. As shown
in the table on page 19, the current replacement cost for all contracts in the
aggregate was $14.0 billion at June 30, 1996. The potential increase in
replacement cost, estimated as the additional loss that Citicorp would suffer if
changes in market rates resulted in additional unrealized gains and every
counterparty to which Citicorp was exposed were to default at once, was
approximately $39.8 billion in the aggregate for all contracts at June 30, 1996
and $42.2 billion at December 31,1995. At year-end 1995, approximately 94% of
the total credit exposure was to investment grade counterparties and
approximately 88% was under three years tenor, and Citicorp believes the
distribution is substantially similar at June 30, 1996. There were no
significant amounts of non-performing contracts at June 30, 1996 and there were
no credit-related losses on derivative contracts in the second quarter of 1996.
Citicorp's management of its derivative and foreign exchange activities,
including the related accounting and operational controls, is tailored to its
dealer and end-user activities.
Citicorp's dealer activities are managed on a market-value basis, which
recognizes in earnings the gains or losses resulting from changes in market
rates. For other than short-term derivative and foreign exchange contracts,
Citicorp defers, at the inception of each contract, an appropriate portion of
the initial market value attributable to ongoing costs such as servicing and
operational activities. This amount is amortized into trading account or foreign
exchange revenue over the life of the contract. The balance of unamortized
revenue was $282 million at June 30, 1996. Information regarding derivative and
foreign exchange trading-related revenue can be found on page 28.
Citicorp's risk management activities employ interest rate swaps and other
derivatives that are designated and effective as hedges, as well as contracts
that are designated and effective in modifying the interest rate characteristics
of specified assets or liabilities. These contracts are accounted for in a
manner consistent with the related assets or liabilities. Revenue and expense
related to these agreements are generally included in net interest revenue over
the lives of the agreements on an accrual basis, and realized gains and losses,
including any related to terminated contracts, are deferred and amortized.
The tables below and on page 21 provide data on the notional principal amounts
and maturities of end-user (non-trading) derivatives, along with additional data
on end-user interest rate swaps and net purchased option positions as of June
30, 1996 with three-month LIBOR forward rates included for reference. Contract
maturities are related to the underlying risk management strategies.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
End-User Derivative and Foreign Exchange Contracts
(Including Third-Party and Intercompany Contracts)
- ------------------------------------------------------------------------------------------------------------------------------
Notional Principal
Amounts Percentage of June 30, 1996 Amount Maturing
------------------- ----------------------------------------------------
June 30, Dec. 31, Within 1 to 2 2 to 3 3 to 4 4 to 5 After 5
(Dollars in Billions) 1996 1995 1 Year Years Years Years Years Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Rate Products
Futures Contracts ............................. $ 27.8 $ 13.6 77% 20% 2% 1% -- --
Forward Contracts ............................. 4.9 5.6 93 6 -- 1 -- --
Swap Agreements ............................... 104.2 90.9 28 23 16 11 8% 14%
Option Contracts .............................. 34.7 45.6 27 60 4 6 1 2
Foreign Exchange Products
Futures and Forward Contracts ................. 55.0 54.8 96 4 -- -- -- --
Cross-Currency Swap Agreements ................ 3.0 3.2 19 16 8 18 15 24
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
End-User Interest Rate Swaps and Net Purchased Options as of June 30, 1996
- -----------------------------------------------------------------------------------------------------------------------------
Remaining Contracts Outstanding at June 30,
- -----------------------------------------------------------------------------------------------------------------------------
(Dollars in Billions) 1996 1997 1998 1999 2000 2001
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Receive Fixed Swaps
Notional Amounts ............................ $ 77.0 $ 57.2 $ 44.4 $ 29.9 $ 18.9 $ 11.3
Weighted-Average Fixed Rate ................. 6.4% 6.5% 6.6% 6.8% 6.5% 6.8%
Pay Fixed Swaps
Notional Amounts ............................ $ 12.7 $ 8.5 $ 5.4 $ 4.4 $ 3.9 $ 3.6
Weighted-Average Fixed Rate ................. 7.1% 7.1% 7.1% 7.1% 7.1% 7.0%
Basis Swaps
Notional Amounts ............................ $ 14.5 $ 9.1 $ 1.4 $ 0.2 $ 0.1 $ 0.1
Purchased Caps (Including Collars)
Notional Amounts ............................ $ 19.8 $ 11.3 $ 2.4 $ 1.3 -- --
Weighted-Average Cap Rate Purchased ......... 6.3% 6.1% 7.0% 7.9% -- --
Written Floors Related to Purchased Caps (Collars)
Notional Amounts ............................ $ 1.3 $ 0.2 $ 0.2 $ 0.2 -- --
Weighted-Average Floor Rate Written ......... 5.6% 8.2% 8.2% 8.2% -- --
Written Caps Related to Other Purchased Caps (A)
Notional Amounts ............................ $ 13.6 $ 12.7 $ 1.3 $ 1.3 $ 0.6 $ 0.5
Weighted-Average Cap Rate Written ........... 6.1% 6.1% 9.1% 9.1% 9.5% 9.6%
- -----------------------------------------------------------------------------------------------------------------------------
Three-Month Implied Forward LIBOR Rates (B) ...... 5.6% 6.3% 6.7% 7.0% 7.1% 7.3%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Includes written options related to purchased options embedded in other
financial instruments.
(B) The floating rate for a substantial majority of the end-user interest rate
swaps is three-month LIBOR. The three-month LIBOR rates shown above reflect
the implied forward yield curve for that index as of June 30,1996.
- --------------------------------------------------------------------------------
Citicorp's utilization of these instruments is modified from time to time in
response to changing market conditions as well as changes in the characteristics
and mix of the related assets and liabilities. In this connection, during the
second quarter of 1996 interest rate contracts with notional principal amounts
of approximately $15.6 billion were closed out, resulting in no significant gain
or loss. Total unamortized net deferred losses, including those related to prior
period close-outs, were approximately $71 million at June 30, 1996, which will
be amortized through earnings over the period reflecting the original hedging or
risk management strategy (28% in 1996, 49% in 1997, and 23% in subsequent
years). End-user derivative positions are components of Citicorp's designated
asset and liability management activities. Derivatives provide an additional
tool for accomplishing risk management objectives, but these same objectives
could alternatively be accomplished using other financial instruments.
Therefore, Citicorp does not believe it is meaningful to analyze the derivatives
component of its risk management activities in isolation from related positions.
The table on page 22 provides information about the estimated fair values of
financial instruments.
During the second quarter of 1996, the Financial Accounting Standards Board
issued an exposure draft for a proposed new accounting standard which would
significantly affect the accounting treatment of end-user derivative and foreign
exchange contracts by Citicorp and its customers. Under this proposal, all
derivative and foreign exchange contracts would be carried at fair value, with
changes in fair value reflected in earnings or in a new measure called
"comprehensive income," depending on the nature of the risk management strategy.
Additionally, in certain cases offsetting changes in the fair value of the
underlying hedged item would be reflected in earnings. As currently proposed,
the new standard would be effective in the first quarter of 1998. If the
proposal is adopted, Citicorp and the customers to which it provides derivatives
and foreign exchange products will have to reconsider their risk management
strategies, since the proposal would not reflect the results of many of those
strategies in the same manner as current accounting practice.
21
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Estimated Fair Value of Financial Instruments
- --------------------------------------------------------------------------------
The table below presents the estimated fair value in excess of (less than)
carrying value of Citicorp's financial instruments as defined in accordance with
applicable requirements, including financial assets and liabilities recorded on
the balance sheet as well as off-balance sheet instruments such as derivative
and foreign exchange contracts and credit card receivables securitizations. To
better reflect Citicorp's values subject to market risk and to illustrate the
interrelationships that characterize risk management strategies, the table below
also provides estimated fair value data for the expected time period until
runoff of existing deposits with no fixed maturity.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Estimated Fair Value in Excess of (Less Than) Carrying Value
- -----------------------------------------------------------------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
(In Billions of Dollars) 1996 1996 1995 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets and Liabilities....................................... $5.6 $5.4 $5.0 $4.4 $4.3
End-User Derivative and Foreign Exchange Contracts........... (0.3) 0.2 1.4 0.5 0.4
Loan Commitments............................................. -- -- -- (0.1) (0.1)
Credit Card Receivables Securitizations (A).................. 0.5 0.3 (0.3) (0.1) (0.1)
------------------------------------------------------------------
5.8 5.9 6.1 4.7 4.5
Deposits with No Fixed Maturity (B).......................... 3.3 2.7 2.3 2.4 2.4
------------------------------------------------------------------
Total........................................................ $9.1 $8.6 $8.4 $7.1 $6.9
------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Represents the estimated excess (shortfall) in fair value of the underlying
receivables and investor certificates, which is derived by Citicorp in the
form of excess servicing, and principally arises from fixed rates payable
to certificate holders.
(B) Represents the estimated excess fair value related to the expected time
period until runoff of existing deposits with no fixed maturity on the
balance sheet, without assuming any regeneration of balances, based on the
estimated difference between the cost of funds on these deposits and the
cost of funds from alternative sources.
- --------------------------------------------------------------------------------
The quarterly fluctuations among financial instruments are primarily due to the
changing interest rate environment. The declining rate environment which
generally prevailed in 1995 had negative effects on the value of credit card
securitizations, fixed rate liabilities and, to a lesser extent, deposits with
no fixed maturity, which were offset by increases in the value of derivative
contracts. Conversely, rising rates thus far in 1996 have had the opposite
effect by increasing the value of deposits with no fixed maturity, credit card
securitizations and fixed rate liabilities partially offset by the decrease in
the value of derivative contracts. In addition to the effects of interest rate
movements, fair values vary from period to period based on changes in a variety
of factors including credit quality and market perceptions of value, the
changing composition of assets and liabilities, and in the fourth quarter of
1995, the transfer of securities from the held to maturity to the available for
sale category.
22
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Capital
- --------------------------------------------------------------------------------
Citicorp is subject to risk-based capital guidelines issued by the Federal
Reserve Board ("FRB"). These guidelines are supplemented by a leverage ratio
requirement. The risk-based capital guidelines and the leverage ratio
requirement are detailed in the 1995 Annual Report and Form 10-K.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31,
Citicorp Ratios 1996 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stockholders' Equity............. 6.69% 6.71% 6.43%
Tier 1 Capital.......................... 8.38 8.42 8.41
Total Capital (Tier 1 and Tier 2)....... 12.35 12.37 12.33
Leverage (A) ........................... 7.49 7.44 7.45
- -------------------------------------------------------------------------------------------
</TABLE>
(A) Tier 1 capital divided by adjusted average assets.
- --------------------------------------------------------------------------------
Citicorp continued to maintain a strong capital position during the second
quarter of 1996. Total capital (Tier 1 and Tier 2) rose $190 million to $28.2
billion at June 30, 1996, representing 12.35% of net risk-adjusted assets. This
compares with $28.0 billion and 12.37% at March 31, 1996 and $27.7 billion and
12.33% at December 31, 1995. Tier 1 capital of $19.1 billion at June 30, 1996
represented 8.38% of net risk-adjusted assets, compared with $19.0 billion and
8.42% at March 31, 1996 and $18.9 billion and 8.41% at December 31, 1995. The
Tier 1 capital ratio at June 30, 1996 exceeded Citicorp's target range of 8.0%
to 8.3%.
The excess of Tier 1 capital generated during a period reduced by capital
utilized for business expansion is referred to as "free capital." As shown in
the table below, Citicorp generated $683 million and $1.4 billion of free
capital during the second quarter and six months, respectively, of 1996.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Free Capital Second Quarter Six Months
(In Millions of Dollars) 1996 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
Tier 1 Capital Generated:
Net Income ............................. $ 952 $ 1,866
Issuances/Other (A) .................... 148 333
Cash Dividends Declared ................ (254) (511)
-------------------------------
Total Tier 1 Capital Generated ............... 846 1,688
Capital Utilized for Growth in
Net Risk-Adjusted Assets ................... (163) (254)
-------------------------------
Free Capital ................................. $ 683 $ 1,434
-------------------------------
- -------------------------------------------------------------------------------
</TABLE>
(A) Primarily includes issuance of common stock under various staff benefits
plans and the dividend reinvestment plan.
- --------------------------------------------------------------------------------
In order to return this free capital to its shareholders, Citicorp initiated a
two-year $3.0 billion common stock repurchase program in June 1995. In January
1996, the program was expanded to a total of $4.5 billion through January 31,
1998. During the second quarter and six months of 1996, Citicorp repurchased 9.6
million and 19.2 million shares, respectively, of common stock under the
repurchase program at aggregate purchase prices of $777 million ($80.87 average
price per share) and $1.5 billion ($78.14 average price per share),
respectively. Citicorp began the second quarter of 1996 with Tier 1 capital in
excess of its target, enabling repurchases to exceed the amount of free capital
generated for the quarter. Since the program was initiated, Citicorp has
repurchased 42.2 million shares of common stock at an aggregate cost of $3.0
billion.
Common stockholders' equity of $17.9 billion at June 30, 1996 represented 6.69%
of assets, compared with 6.71% at March 31, 1996 and 6.43% at year-end 1995. The
net increase of $168 million in common stockholders' equity during the quarter
principally reflected changes in retained earnings, issuances of common stock
under various staff benefit plans and the dividend reinvestment plan, and an
increase in net unrealized gains on securities available for sale, partially
offset by activity under the stock repurchase program. The book value per share
of $37.73 at June 30, 1996 was up slightly from the preceding quarter, but down
from $38.64 at December 31, 1995. The change from December 31, 1995
23
<PAGE>
CITICORP [LOGO]
reflected the effect of conversions of convertible preferred stock and, to a
lesser extent, repurchases of common stock at market prices greater than the
book value per share.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Components of Risk-Based Capital Under Regulatory Guidelines
June 30, Mar. 31, Dec. 31,
(In Millions of Dollars) 1996 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tier 1 Capital
Common Stockholders' Equity ............................................ $ 17,852 $ 17,684 $ 16,510
Perpetual Preferred Stock .............................................. 2,078 2,078 3,071
Minority Interest ...................................................... 85 81 70
Less:
Net Unrealized (Gains) - Securities Available for Sale (A) ....... (297) (174) (132)
Intangible Assets (B) ............................................ (300) (314) (293)
50% Investment in Certain Subsidiaries (C) ....................... (313) (319) (311)
-------------------------------------------------
Total Tier 1 Capital ................................................... 19,105 19,036 18,915
-------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Tier 2 Capital
Allowance for Credit Losses (D) ........................................ 2,882 2,857 2,843
Qualifying Debt (E) .................................................... 6,476 6,386 6,278
Less: 50% Investment in Certain Subsidiaries (C) ....................... (313) (319) (311)
-------------------------------------------------
Total Tier 2 Capital ................................................... 9,045 8,924 8,810
-------------------------------------------------
Total Capital (Tier 1 and Tier 2) ...................................... $ 28,150 $ 27,960 $ 27,725
-------------------------------------------------
Net Risk-Adjusted Assets (F) ........................................... $ 227,980 $ 226,020 $ 224,915
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Tier 1 capital excludes unrealized gains and losses on securities available
for sale in accordance with regulatory risk-based capital guidelines.
(B) Includes goodwill and certain identifiable intangible assets.
(C) Primarily Citicorp Securities, Inc.
(D) Includable up to 1.25% of risk-adjusted assets. Any excess allowance is
deducted from risk-adjusted assets.
(E) Includes qualifying senior and subordinated debt in an amount not exceeding
50% of Tier 1 capital and subordinated capital notes subject to certain
limitations.
(F) Includes risk-weighted credit equivalent amounts net of applicable
bilateral netting agreements of $8.6 billion for interest rate, commodity
and equity derivative contracts and foreign exchange contracts as of June
30, 1996, compared with $8.8 billion and $10.0 billion at March 31, 1996
and December 31, 1995, respectively. Net risk-adjusted assets also includes
the effect of other off-balance sheet exposures such as unused loan
commitments and letters of credit and reflects deductions for intangible
assets and any excess allowance for credit losses.
- --------------------------------------------------------------------------------
As discussed in the 1995 Annual Report and Form 10-K, Citicorp has entered into
forward purchase agreements on its common stock, to be settled in shares of its
common stock on a net basis, in order to partially offset the dilutive effects
of various staff benefit plans. As of June 30, 1996, agreements were in place
covering approximately $900 million of Citicorp common stock (11.0 million
shares) with forward prices averaging $81.98 per share. Both the number of
shares covered and the forward prices of the contracts are adjusted on a
quarterly basis and reflect the stock price at the time of adjustment. If these
agreements were settled based on the June 30, 1996 market price of Citicorp
common stock ($82.75 per share), Citicorp would be entitled to receive
approximately 0.1 million shares. During the second quarter of 1996, settlements
resulted in Citicorp receiving approximately 1.9 million shares of its common
stock.
Citicorp's subsidiary depository institutions are subject to the risk-based
capital guidelines issued by their respective primary federal bank regulatory
agencies, which are generally similar to the FRB's guidelines. At June 30, 1996
all of Citicorp's subsidiary depository institutions were "well capitalized"
under the federal bank regulatory agencies' definitions.
24
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31,
Citibank, N.A. Ratios 1996 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stockholder's Equity.................. 7.04% 7.18% 7.08%
Tier 1 Capital............................... 8.27 8.42 8.32
Total Capital (Tier 1 and Tier 2)............ 12.12 12.30 12.24
Leverage .................................... 6.79 6.75 6.65
- --------------------------------------------------------------------------------
</TABLE>
Citibank, N.A.'s ("Citibank") common stockholder's equity ratio was 7.04% at the
end of the second quarter of 1996, down slightly from 7.08% at December 31,
1995, reflecting an increase in assets partially offset by net changes in
retained earnings. The leverage ratio at June 30, 1996 was 6.79%, up slightly
over the six month period as a result of increased Tier 1 capital. Citibank's
Tier 1 capital ratio was 8.27% at June 30, 1996, within the target range of 8.0%
to 8.3%.
From time to time, the FRB and the Federal Financial Institutions Examination
Council propose amendments to, and issue interpretations of, risk-based capital
guidelines and reporting instructions. Such proposals or interpretations could,
if implemented in the future, affect reported capital ratios and net
risk-adjusted assets.
25
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
STATEMENT OF INCOME ANALYSIS
- --------------------------------------------------------------------------------
Net Interest Revenue (Taxable Equivalent Basis)
- --------------------------------------------------------------------------------
Net interest revenue of $2.7 billion in the second quarter of 1996 increased 11%
from the year-ago period, reflecting higher net rate spreads, including funding
benefits associated with higher equity levels, as well as an increase in
interest-earning assets. Net interest revenue and net interest margin are
reduced by the effect of credit card securitizations. Adjusted for the effect of
credit card securitizations, net interest revenue for the 1996 second quarter of
$3.4 billion increased 13% from the 1995 second quarter and 3% from the 1996
first quarter. The adjusted net interest margin increased to 5.25% in the 1996
second quarter from 4.80% in the second quarter of 1995 and 5.15% in the first
quarter of 1996.
The adjusted net interest margin in the U.S. of 5.81% in the 1996 second quarter
was up from 4.81% in the 1995 second quarter and 5.64% in the 1996 first
quarter. The increase in the adjusted net interest margin in the U.S. from the
second quarter of 1995 principally reflected a decrease in the level of
lower-yielding trading assets in the Global Relationship Bank, higher volumes
and increased spreads in the U.S. bankcards business, a reduced deposit
insurance assessment rate, and a lower net cost to carry cash-basis loans and
OREO. The improvement over the 1996 first quarter reflected increased spreads in
the U.S. bankcards business and a decrease in the level of lower-yielding
trading assets in the Global Relationship Bank.
Net interest revenue from activities outside the U.S. grew 10% from the second
quarter of 1995 and represented 48% of total adjusted net interest revenue in
the second quarter of 1996. The net rate spread outside the U.S. of 4.75% in the
second quarter of 1996 decreased from 4.80% in the 1995 second quarter and
increased from 4.71% in the 1996 first quarter. The decrease in the net interest
margin from the 1995 second quarter reflected lower spreads and increased
competition in the Emerging Markets (Corporate) Banking business, partially
offset by the expansion of the Cards business in Asia Pacific. The increase in
the net interest margin from the 1996 first quarter is due to an increase in
trading-related net interest revenue in the Global Relationship Bank in Europe,
partially offset by lower spreads in Latin America.
The $8.6 billion increase in adjusted average interest-earning assets in the
1996 second quarter from the year-ago period was mainly attributable to higher
levels of consumer loans, and commercial loans outside the U.S., partially
offset by a reduction in trading assets in the Global Relationship Bank.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Net Interest Revenue Statistics
(Taxable Equivalent 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Basis) (A) (B) 1996 1996 1995 1995 1995 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Interest Revenue:
(In Millions of Dollars)
U.S ..................... $1,750 $1,716 $1,607 $1,612 $1,514 $1,515
Outside the U.S. ........ 1,601 1,547 1,499 1,502 1,459 1,286
-------------------------------------------------------------------------------
Total Adjusted (C) ............ 3,351 3,263 3,106 3,114 2,973 2,801
Effect of Credit Card
Securitizations ............. (615) (570) (537) (508) (497) (468)
-------------------------------------------------------------------------------
Total ......................... $2,736 $2,693 $2,569 $2,606 $2,476 $2,333
-------------------------------------------------------------------------------
Average Interest-Earning Assets:
(In Billions of Dollars)
U.S ..................... $121.1 $122.4 $123.3 $122.3 $126.4 $127.4
Outside the U.S. ........ 135.7 132.2 127.7 122.8 121.8 118.8
-------------------------------------------------------------------------------
Total Adjusted (C) ............ 256.8 254.6 251.0 245.1 248.2 246.2
Effect of Credit Card
Securitizations ............. (26.2) (25.9) (25.2) (23.6) (23.3) (22.5)
-------------------------------------------------------------------------------
Total ......................... $230.6 $228.7 $225.8 $221.5 $224.9 $223.7
-------------------------------------------------------------------------------
Net Interest Margin:
U.S ..................... 5.81% 5.64% 5.17% 5.23% 4.81% 4.82%
Outside the U.S. ........ 4.75 4.71 4.66 4.85 4.80 4.39
Total Adjusted (C) ............ 5.25 5.15 4.91 5.04 4.80 4.61
Effect of Credit Card
Securitizations ............. (.48) (.41) (.40) (.37) (.38) (.38)
-------------------------------------------------------------------------------
Total ......................... 4.77% 4.74% 4.51% 4.67% 4.42% 4.23%
-------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Includes appropriate allocations for capital and funding costs based on the
location of the asset.
(B) The taxable equivalent adjustment is based on the U.S. federal statutory
tax rate of 35%.
(C) Adjusted for the effect of credit card securitizations. See page 32 for
discussion.
- --------------------------------------------------------------------------------
26
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
Fee and Commission Revenue
- --------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
--------------------------- --------------------------
(In Millions of Dollars) 1996 1995(A) 1996 1995(A)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consumer:
Developed Markets........................... $ 538 $ 569 $1,070 $1,134
Emerging Markets............................ 267 226 522 445
---------------------------------------------------------------------
Total Consumer.............................. 805 795 1,592 1,579
(Corporate) Banking and Other..................... 493 441 975 889
---------------------------------------------------------------------
Total Adjusted Fee and Commission Revenue (B) 1,298 1,236 2,567 2,468
Effect of Credit Card Securitizations............. 51 27 94 57
---------------------------------------------------------------------
Total Fee and Commission Revenue.................. $1,349 $1,263 $2,661 $2,525
---------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
(B) Adjusted for the effect of credit card securitizations. See page 32 for
discussion.
- --------------------------------------------------------------------------------
Total fee and commission revenue of $1.3 billion for the second quarter and $2.7
billion for the six months of 1996 increased $86 million, or 7%, and $136
million, or 5%, respectively, from the comparable 1995 periods. Fee and
commission revenue was increased in all periods presented by the effect of
credit card securitizations. Fee and commission revenue, adjusted for the effect
of credit card securitizations, in the second quarter and six months of 1996 was
up 5% and 4%, respectively, from the comparable year-ago periods.
Within the Consumer businesses, fee and commission revenue for the second
quarter and six months of 1996 was essentially unchanged from the year-ago
periods as continued double-digit growth in the emerging markets was offset by
reductions in the developed markets. The emerging markets growth in both the
quarter and six months reflected increases across various Consumer products
offered in these markets, particularly credit and charge card related fees in
Asia Pacific and investment related fees in Latin America and Asia Pacific. Fees
in the developed markets were reduced from levels in the 1995 periods as
decreased credit and charge card fees and reduced insurance premiums and
commissions were partially offset by increased trust, agency, and custodial
fees.
In the (Corporate) Banking business, fee and commission revenue for the second
quarter and six months of 1996 was up 12% and 10%, respectively, from the
comparable year-ago periods, primarily reflecting higher business volumes in the
emerging markets, particularly in Asia Pacific and Latin America, representing
continued growth in transaction banking services, corporate finance, and trust,
agency and custodial fees.
27
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Trading-Related Revenue
- --------------------------------------------------------------------------------
Trading-related revenue is reported in "Trading Account" and "Foreign Exchange"
in the statement of income and also includes other amounts, principally
reflected in net interest revenue. The table below presents trading-related
revenue by business sector, by trading activity, and by income statement line.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
---------------------------------------------------------------------
(In Millions of Dollars) 1996 1995(A) 1996 1995(A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
By Business Sector:
(Corporate) Banking
Emerging Markets.................. $ 190 $ 208 $ 365 $ 327
Global Relationship Banking....... 177 279 344 496
---------------------------------------------------------------------
Total (Corporate) Banking......... 367 487 709 823
Consumer and Other..................... 60 66 110 125
---------------------------------------------------------------------
Total........................................ $ 427 $ 553 $ 819 $ 948
---------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
By Trading Activity:
Foreign Exchange (B) .................. $ 232 $ 303 $ 442 $ 568
Derivative (C) ........................ 129 120 275 219
Fixed Income (D) ...................... (27) 49 (28) 6
Other.................................. 93 81 130 155
---------------------------------------------------------------------
Total........................................ $ 427 $ 553 $ 819 $ 948
---------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
By Income Statement Line:
Foreign Exchange....................... $ 214 $ 323 $ 419 $ 628
Trading Account........................ 106 142 196 181
Other (E) ............................. 107 88 204 139
---------------------------------------------------------------------
Total........................................ $ 427 $ 553 $ 819 $ 948
---------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
(B) Includes foreign exchange spot, forward, and option contracts.
(C) Primarily interest rate and currency swaps, options, financial futures, and
equity and commodity contracts.
(D) Principally debt instruments including government and corporate debt as
well as mortgage-backed securities.
(E) Primarily net interest revenue.
- --------------------------------------------------------------------------------
Trading-related revenue declined in both the 1996 second quarter and six months
compared with the respective 1995 periods. The declines primarily reflected
lower foreign exchange activity coupled with a second quarter charge of $60
million related to certain mortgage-backed securities activities. Levels of
trading-related revenue may fluctuate in the future as a result of market
conditions and other factors.
Foreign exchange revenue of $232 million and $442 million in the 1996 second
quarter and six months declined $71 million and $126 million from the comparable
1995 periods primarily reflecting the unusually strong results in the volatile
first half of 1995, when the dollar weakened substantially and then rebounded
against the major currencies.
Derivative revenue totaled $129 million and $275 million in the 1996 second
quarter and six months compared with $120 million and $219 million in the
comparable 1995 periods. The increases reflected continued customer demand for
risk-management products. Additionally, the year-ago second quarter reflected
difficult market conditions in Latin America and North America, while the
year-ago six months reflected difficult market conditions in those regions and
in Europe.
Fixed income revenue in the 1996 second quarter and six months declined $76
million and $34 million from the comparable 1995 periods, primarily reflecting
the 1996 second quarter $60 million mortgage-backed securities charge coupled
with lower emerging market debt trading results.
28
<PAGE>
CITICORP [LOGO]
Trading-related revenue includes the net interest revenue associated with the
trading positions. Aggregate net interest revenue associated with trading
activities in the 1996 second quarter and six months improved from the
comparable 1995 periods, primarily in Latin America.
- --------------------------------------------------------------------------------
Securities Transactions
- --------------------------------------------------------------------------------
Net gains from the sale of securities were $39 million in the second quarter and
$141 million in the six months of 1996, compared with $18 million and $44
million in the respective 1995 periods. The net gains in the second quarter of
1996 reflected gross realized gains of $52 million ($163 million for the six
months) and gross realized losses of $13 million ($22 million for the six
months). Results for the six months of 1996 included a realized gain of $52
million from the sale of Brazil interest bonds.
The fair value of securities available for sale and the related adjustment to
stockholders' equity may fluctuate over time based on market conditions and
changes in market interest rates, as well as events and trends affecting
specific securities.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue
- ------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
---------------------------------------------------------------------
(In Millions of Dollars) 1996 1995(A) 1996 1995(A)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Securitized Credit Card Receivables............ $ 215 $ 244 $ 448 $ 460
Venture Capital............................... 107 188 145 273
Affiliate Earnings............................ 83 52 145 107
Net Asset Gains (Losses) and Other Items...... 152 (9) 253 121
---------------------------------------------------------------------
Total......................................... $ 557 $ 475 $ 991 $ 961
---------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Reclassified to conform to latest quarter's presentation.
- --------------------------------------------------------------------------------
The decrease in revenue related to securitized credit card receivables reflected
higher net credit loss rates, partially offset by an improved net interest
margin and higher average securitized volumes. The effect of credit card
receivables securitizations is discussed in more detail on page 32.
Venture capital revenue in the 1996 periods was strong, but declined from the
unusually strong 1995 periods. The results reflected gains related to public
offerings by investees in the second quarter of each year. Investments of
venture capital subsidiaries are carried at fair value and earnings volatility
can occur in the future, based on general market conditions as well as events
and trends affecting specific venture capital investments.
Affiliate earnings improved by $31 million and $38 million compared to the
second quarter and first half of 1995, largely due to improved results in Latin
America.
Net asset gains (losses) and other items in the 1996 second quarter included a
$110 million gain from the sale of an automated trading business and a gain
related to the partial disposition of Citicorp's holding in an Asian affiliate,
partially offset by an investment writedown of $50 million in Latin America.
Revenue in the six months of 1996 also reflected gains related to the sale of
assets held by the (Corporate) Banking and the Consumer businesses, including
the partial disposition of Citicorp's holding in the Asian affiliate. Revenue in
the six months of 1995 primarily reflected net gains on the sale of real estate
assets and a gain related to the completion of Ecuador's refinancing package,
partially offset by an investment writedown of $70 million in Latin America
during the second quarter.
29
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Provision and Allowance for Credit Losses
- --------------------------------------------------------------------------------
Total net write-offs were $429 million and $873 million for the 1996 second
quarter and six months, respectively. Total adjusted net write-offs, adjusted
for the effect of credit card securitizations, were $778 million for the second
quarter, and $1.5 billion for the six months, up $121 million and $344 million
from the 1995 periods. The increases reflect higher consumer net write-offs,
primarily in U.S. bankcards, partially offset by reductions in the commercial
businesses. Citicorp continued to build reserves; the 1996 second quarter and
six month provisions for credit losses included charges in excess of net
write-offs of $50 million and $100 million compared with charges of $75 million
and $150 million in the respective 1995 periods.
Details of net write-offs, excess provision, and the provision for credit losses
are included in the following table:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Net Write-offs, Excess Provision, and Provision for Credit Losses
- ------------------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
--------------------------------------------------------------------
(In Millions of Dollars) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Write-offs:
Consumer (A)................................. $ 769 $ 605 $1,476 $1,136
Commercial................................... 9 52 40 36
--------------------------------------------------------------------
Total Adjusted Net Write-offs................ 778 657 1,516 1,172
Effect of Credit Card Securitizations........ (349) (226) (643) (448)
--------- -------------------- ------------------- --------------------
Total.............................................. $ 429 $ 431 $ 873 $ 724
--------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Excess Provision:
Consumer..................................... $ 50 $ 50 $ 100 $ 100
Commercial................................... -- 25 - 50
-------- ------------------- -------------------- -------------------
Total.............................................. $ 50 $ 75 $ 100 $ 150
--------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Provision for Credit Losses:
Consumer..................................... $ 470 $ 429 $ 933 $ 788
Commercial................................... 9 64 40 96
-------- ------------------- -------------------- -------------------
Total.............................................. $ 479 $ 493 $ 973 $ 884
--------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Adjusted for the effect of credit card securitizations. See page 32 for
discussion.
- --------------------------------------------------------------------------------
Consumer adjusted net write-offs in the 1996 second quarter and six months of
$769 million and $1.5 billion were up from $605 million and $1.1 billion in the
1995 periods. The increases in adjusted net write-offs in the 1996 second
quarter and six months were primarily due to higher losses in the U.S. bankcards
portfolio. Net write-offs also increased in the second quarter in Asia Pacific
as a result of business expansion. In the six month comparison, the increase
also included higher credit losses associated with Cards and Citibanking
activities throughout the emerging markets. Losses in Latin America, however,
continued to be lower than levels in the second half of 1995. Net write-offs
from Private Bank and Citibanking activities in the developed markets were
reduced from year-ago levels. Consumer adjusted net write-offs may increase from
1996 second quarter levels as a result of economic conditions, changes in
portfolio levels, and credit performance of the portfolios. See "Consumer
Portfolio Review" on pages 9-11 for an additional discussion of the Consumer
portfolio.
Commercial net write-offs in the 1996 second quarter and six months remained low
at $9 million (including net recoveries of $22 million related to the
Cross-Border Refinancing Portfolio) and $40 million and compared with net
write-offs of $52 million in the 1995 second quarter and $36 million in the 1995
six months (including 1995 first quarter net recoveries of $23 million related
to the Cross-Border Refinancing Portfolio). The decline in net write-offs in the
quarterly comparison reflected higher recoveries. Included in commercial net
write-offs in the 1995 second quarter and six months are a net write-off of $13
million and a net recovery of $10 million, respectively, related to the
Cross-Border Refinancing Portfolio that were charged or credited directly to the
allowance for credit losses and did not affect the provision for credit losses.
The commercial provision for credit losses included charges in excess of net
write-offs of
30
<PAGE>
CITICORP [LOGO]
$25 million in the 1995 quarters. Commercial net write-offs may increase
moderately from the low first and second quarter 1996 levels.
The entire allowance is available to absorb all probable credit losses inherent
in the portfolio; however, for analytical purposes only, Citicorp views its
allowance as attributable to the following portions of its credit portfolios:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Allowance for Credit Losses
- ----------------------------------------------------------------------------------------------------------------
June 30, Dec. 31, June 30,
(Dollars In Millions) 1996 1995 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer................................................... $2,000 $1,944 $1,923
Commercial................................................. 3,424 3,424 3,385
-------------------------------------------------
Total...................................................... $5,424 $5,368 $5,308
-------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Allowance As a Percent of Total Loans:
Consumer.............................................. 1.90% 1.84% 1.91%
Commercial............................................ 5.48 5.71 5.90
Total...................................................... 3.23 3.24 3.36
- ----------------------------------------------------------------------------------------------------------------
Reserves For Sold Consumer Portfolios...................... $ 466 $ 486 $ 467
-------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The allowance for credit losses was $5.4 billion at June 30, 1996, compared with
$5.3 billion at June 30, 1995. The net increase included the continued reserve
building previously discussed, partially offset by net transfers to the reserves
for sold Consumer portfolios and the effect of foreign currency translation. Net
write-offs were $429 million and $873 million in the 1996 second quarter and six
months, respectively. The reserves for sold Consumer portfolios were $466
million at June 30, 1996.
Uncertainty related to the credit and economic environment, as well as higher
loan volumes in the worldwide Consumer portfolios, may result in further
increases in the allowance for credit losses attributable to the Consumer
businesses.
- --------------------------------------------------------------------------------
Operating Expense
- --------------------------------------------------------------------------------
Total operating expense was $3.0 billion in the second quarter and $5.8 billion
in the six months of 1996, up $180 million and $347 million, respectively, from
the comparable 1995 periods. The overall 6% expense increase in both periods
principally related to business activities in the emerging markets (16% increase
in both periods) while expense related to Consumer and (Corporate) Banking
activities in the developed markets was up 1% from the year-ago second quarter
and six month periods.
Employee expense was $1.5 billion in the second quarter and $3.0 billion in the
six months of 1996, up $81 million and $172 million from the comparable 1995
periods. The increases primarily reflected higher staff levels related to
business expansion in the emerging markets and salary increases. These increases
were partially offset by the foreign currency translation effect of the stronger
U.S. dollar and a decrease in costs associated with performance-based stock
incentive plans. Staff levels of 87,700 at June 30, 1996 increased 3,400 or 4%
from year-ago levels, largely in the emerging markets.
Net premises and equipment expense was $439 million in the second quarter and
$896 million in the six months of 1996, up $22 million and $69 million from the
comparable 1995 periods. Other expense was $996 million in the second quarter
and $1.9 billion in the six months, up $77 million and $106 million from the
comparable 1995 periods. These increases primarily reflected costs to support
expansion in the emerging markets, the continued roll-out of the Citibanking
branding strategy worldwide, including the conversion and addition of branches
to the Model Branch standard, and continued investments in operational and
technological infrastructure. These increases were partially offset by the
foreign currency translation effect of the stronger U.S.
dollar.
31
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Income Taxes
- --------------------------------------------------------------------------------
Income taxes were $584 million and $1.1 billion, in the second quarter and six
months of 1996. The 1996 effective tax rate was 38% in both the quarter and six
month period, compared with 39% for both the 1995 periods. The 1995 full-year
effective tax rate was 38%.
- --------------------------------------------------------------------------------
Effect of Credit Card Receivables Securitizations
- --------------------------------------------------------------------------------
During the six months of 1996, $2.3 billion of U.S. credit card receivables were
sold. The total amount of securitized receivables, net of amortization, as of
June 30, 1996, was $26.0 billion, compared with $26.2 billion as of March 31,
1996 and $23.3 billion as of June 30, 1995.
The securitization of credit card receivables, which is fully described in the
1995 Annual Report and Form 10-K, does not affect the earnings reported in a
period. However, securitization affects the manner in which the revenue is
reported in the income statement. For securitized receivables, amounts that
would otherwise be reported as net interest revenue, as fee and commission
revenue, and as credit losses on loans are instead reported as fee and
commission revenue (for servicing fees) and as other revenue (for the remaining
cash flows to which Citicorp is entitled, net of credit losses). The table below
shows the net impact of the securitization of credit card receivables as an
increase or (decrease) to the amounts reported in the Consolidated Statement of
Income and Average Balance Sheet, and under the captions of Return on Assets,
Net Interest Margin, and Consumer Net Credit Loss Ratio.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Second Quarter Six Months
---------------------------------------------------------------------
(Dollars in Millions) 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Interest Revenue...................... $ (615) $ (497) $(1,185) $ (965)
Fee and Commission Revenue................ 51 27 94 57
Other Revenue............................. 215 244 448 460
Provision for Credit Losses............... (349) (226) (643) (448)
---------------------------------------------------------------------
Net Income Impact of Securitizations...... $ -- $ -- $ -- $ --
---------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Average Assets (In Billions).............. $ (26) $ (23) $ (26) $ (23)
Return on Assets.......................... .13% .10% .12% .10%
Net Interest Margin....................... (.48) (.38) (.45) (.39)
Consumer Net Credit Loss Ratio............ (.76) (.45) (.67) (.48)
---------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Future Impact of Recently Issued Accounting Standards
- --------------------------------------------------------------------------------
During the second quarter of 1996, the Financial Accounting Standards Board
issued SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." The new standard provides more consistent
standards for distinguishing transfers of financial assets that are sales from
those that are secured borrowings, and provides guidance on the recognition and
measurement of asset servicing contracts. The new standard is to be applied
prospectively to transactions which occur after December 31, 1996. Citicorp is
currently in the process of assessing the effects of the new accounting
standard, and expects that existing asset securitization programs will continue
to qualify for sale accounting treatment under the new standard.
Additionally, the FASB has issued an exposure draft for a new accounting
standard on derivatives and hedge accounting, which is described on page 21.
32
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------
Consolidated Statement of Income CITICORP and Subsidiaries
----------------------------------------------------
Second Quarter Six Months
- -----------------------------------------------------------------------------------------------------------------------
(In Millions of Dollars Except Per Share Amounts) 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Revenue
Interest and Fees on Loans ..................................... $ 4,539 $ 4,368 $ 9,097 $ 8,709
Interest on Deposits with Banks ................................ 207 201 403 382
Interest on Federal Funds Sold and Securities Purchased
Under Resale Agreements ...................................... 246 258 502 509
Interest and Dividends on Securities
U.S. Treasury and Federal Agencies 56 62 112 125
State and Municipal 20 23 41 45
Other (Principally in offices outside the U.S.) .......... 362 301 666 581
Interest on Trading Account Assets ............................ 321 500 706 959
----------------------------------------------------
Total Interest Revenue ................................... 5,751 5,713 11,527 11,310
----------------------------------------------------
Interest Expense
Interest on Deposits ........................................... 2,168 2,178 4,354 4,434
Interest on Trading Account Liabilities ........................ 59 62 138 145
Interest on Purchased Funds and Other Borrowings ............... 457 653 948 1,237
Interest on Long-Term Debt and Subordinated Capital Notes ...... 339 352 674 701
----------------------------------------------------
Total Interest Expense ................................... 3,023 3,245 6,114 6,517
----------------------------------------------------
Net Interest Revenue ........................................... 2,728 2,468 5,413 4,793
----------------------------------------------------
Provision for Credit Losses .................................... 479 493 973 884
----------------------------------------------------
Net Interest Revenue after Provision for Credit Losses ......... 2,249 1,975 4,440 3,909
----------------------------------------------------
Fees, Commissions, and Other Revenue
Fees and Commissions ........................................... 1,349 1,263 2,661 2,525
Foreign Exchange ............................................... 214 323 419 628
Trading Account ................................................ 106 142 196 181
Securities Transactions ........................................ 39 18 141 44
Other Revenue .................................................. 557 475 991 961
----------------------------------------------------
Total Fees, Commissions, and Other Revenue ............... 2,265 2,221 4,408 4,339
----------------------------------------------------
Operating Expense
Salaries ....................................................... 1,212 1,119 2,344 2,199
Employee Benefits .............................................. 331 343 668 641
----------------------------------------------------
Total Employee Expense ................................... 1,543 1,462 3,012 2,840
Net Premises and Equipment Expense ............................. 439 417 896 827
Other Expense .................................................. 996 919 1,930 1,824
----------------------------------------------------
Total Operating Expense .................................. 2,978 2,798 5,838 5,491
----------------------------------------------------
Income Before Taxes ............................................ 1,536 1,398 3,010 2,757
Income Taxes ................................................... 584 545 1,144 1,075
----------------------------------------------------
Net Income ..................................................... $ 952 $ 853 $ 1,866 $ 1,682
----------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Income Applicable to Common Stock .............................. $ 914 $ 757 $ 1,785 $ 1,492
----------------------------------------------------
Earnings Per Share:
On Common and Common Equivalent Shares ................... $ 1.86 $ 1.76 $ 3.68 $ 3.47
Assuming Full Dilution ................................... $ 1.86 $ 1.57 $ 3.61 $ 3.09
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Consolidated Balance Sheet CITICORP and Subsidiaries
- ------------------------------------------------------------------------------------------------------
June 30, Dec. 31,
(In Millions of Dollars) 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and Due from Banks ........................................... $ 7,066 $ 5,723
Deposits at Interest with Banks ................................... 10,554 9,028
Securities, At Fair Value
Available for Sale .......................................... 22,710 18,213
Venture Capital ............................................. 1,803 1,854
Trading Account Assets ............................................ 29,882 32,093
Federal Funds Sold and Securities Purchased Under Resale Agreements 9,889 8,113
Loans, Net of Unearned Income
Consumer .................................................... 105,363 105,643
Commercial .................................................. 62,510 59,999
---------------------------
Total Loans ................................................. 167,873 165,642
Allowance for Credit Losses ....................................... (5,424) (5,368)
Customers' Acceptance Liability ................................... 1,981 1,542
Premises and Equipment, Net ....................................... 4,428 4,339
Interest and Fees Receivable ...................................... 2,938 2,914
Other Assets ...................................................... 13,124 12,760
---------------------------
Total ............................................................. $ 266,824 $ 256,853
---------------------------
- ------------------------------------------------------------------------------------------------------
Liabilities
Non-Interest-Bearing Deposits in U.S. Offices ..................... $ 13,262 $ 13,388
Interest-Bearing Deposits in U.S. Offices ......................... 37,994 36,700
Non-Interest-Bearing Deposits in Offices Outside the U.S. ......... 8,745 8,164
Interest-Bearing Deposits in Offices Outside the U.S. ............. 115,782 108,879
---------------------------
Total Deposits .............................................. 175,783 167,131
Trading Account Liabilities ....................................... 18,145 18,274
Purchased Funds and Other Borrowings .............................. 17,519 16,334
Acceptances Outstanding ........................................... 2,033 1,559
Accrued Taxes and Other Expense ................................... 5,460 5,719
Other Liabilities ................................................. 8,477 9,767
Long-Term Debt and Subordinated Capital Notes ..................... 19,477 18,488
Stockholders' Equity
Preferred Stock (Without par value) ............................... 2,078 3,071
Common Stock ($1.00 par value) .................................... 505 461
Issued Shares: 505,199,048 and 461,319,265, respectively
Surplus ........................................................... 6,518 5,702
Retained Earnings ................................................. 12,882 12,190
Net Unrealized Gains - Securities Available for Sale .............. 297 132
Foreign Currency Translation ...................................... (469) (437)
Common Stock in Treasury, at Cost ................................. (1,881) (1,538)
Shares: 32,035,374 and 34,030,205, respectively
---------------------------
Total Stockholders' Equity .................................. 19,930 19,581
---------------------------
Total ............................................................. $ 266,824 $ 256,853
---------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Consolidated Statement of Changes in Stockholders' Equity CITICORP and Subsidiaries
- -------------------------------------------------------------------------------------------------
Six Months
-------------------------
(In Millions of Dollars) 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance at Beginning of Period ................................. $ 19,581 $ 17,769
Preferred Stock Issuance, Net of Related Costs ................. -- 267
Convertible Preferred Stock, Series 12
Redemption of Series 12 .................................. (590) --
Issuance of Common Stock ................................. 590 --
Convertible Preferred Stock, Series 13
Redemption of Series 13 .................................. (403) --
Issuance of Common Stock from Treasury Shares ............ 1,066 --
Adjustment to Retained Earnings for Treasury Shares Issued (663) --
Conversion Preferred Stock, Series 15 ("PERCS")
Redemption of PERCS ...................................... -- (443)
Issuance of Common Stock ................................. -- 443
Issuance of Common Stock Under Various Staff Benefit Plans
(Net of Amortization) and the Dividend Reinvestment Plan ..... 270 279
Net Income ..................................................... 1,866 1,682
Cash Dividends Declared
Common ................................................... (426) (238)
Preferred ................................................ (85) (188)
Change in Net Unrealized Gains on Securities Available for Sale 165 (74)
Foreign Currency Translation ................................... (32) 63
Repurchased Common Shares ...................................... (1,498) (50)
Other Treasury Stock Transactions, at Cost ..................... 89 (11)
-------------------------
Balance at End of Period ....................................... $ 19,930 $ 19,499
-------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Consolidated Statement of Cash Flows CITICORP and Subsidiaries
- ----------------------------------------------------------------------------------------------------------------------------------
Six Months
---------------------------
(In Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income .................................................................................... $ 1,866 $ 1,682
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision for Credit Losses ............................................................. 973 884
Depreciation and Amortization of Premises and Equipment ................................. 342 310
Amortization of Goodwill ................................................................ 24 25
Provision for Deferred Taxes ............................................................ 154 (163)
Venture Capital Activity ................................................................ 51 296
Net Gain on Sale of Securities .......................................................... (141) (44)
Net Gain on Sale of Subsidiaries and Affiliates ......................................... (181) --
Changes in Accruals and Other, Net ...................................................... (2,116) 116
Net Decrease in Trading Account Assets .................................................. 2,211 1,000
Net (Decrease) Increase in Trading Account Liabilities .................................. (129) 729
---------------------------
Total Adjustments ............................................................................. 1,188 3,153
---------------------------
Net Cash Provided by Operating Activities ..................................................... 3,054 4,835
---------------------------
Cash Flows from Investing Activities
Net Increase in Deposits at Interest with Banks ............................................... (1,526) (1,876)
Securities - Available for Sale
Purchases ............................................................................... (18,014) (9,419)
Proceeds from Sales ..................................................................... 6,239 4,719
Maturities .............................................................................. 7,553 4,953
Securities - Held to Maturity
Purchases ............................................................................... -- (2,922)
Maturities .............................................................................. -- 3,046
Net Increase in Federal Funds Sold and Securities Purchased
Under Resale Agreements ..................................................................... (1,776) (599)
Net Increase in Loans ......................................................................... (66,490) (48,728)
Proceeds from Sales of Loans and Credit Card Receivables ...................................... 63,170 42,439
Capital Expenditures on Premises and Equipment ................................................ (646) (537)
Proceeds from Sales of Premises and Equipment ................................................. 138 59
Proceeds from Sales of Subsidiaries and Affiliates ............................................ 259 --
Proceeds from Sales of OREO ................................................................... 375 385
---------------------------
Net Cash Used in Investing Activities ......................................................... (10,718) (8,480)
---------------------------
Cash Flows from Financing Activities
Net Increase in Deposits ...................................................................... 8,652 7,396
Net Increase (Decrease) in Federal Funds Purchased and Securities Sold
Under Repurchase Agreements ................................................................ 1,650 (3,350)
Proceeds from Issuance of Commercial Paper and Funds Borrowed with
Original Maturities of Less Than One Year ................................................... 338,205 234,859
Repayment of Commercial Paper and Funds Borrowed with
Original Maturities of Less Than One Year ................................................... (338,625) (235,703)
Proceeds from Issuance of Long-Term Debt ...................................................... 2,885 2,665
Repayment of Long-Term Debt ................................................................... (1,934) (2,014)
Proceeds from Issuance of Preferred Stock ..................................................... -- 267
Proceeds from Issuance of Common Stock ........................................................ 216 205
Treasury Stock Transactions ................................................................... (1,409) (51)
Dividends Paid ................................................................................ (511) (426)
---------------------------
Net Cash Provided by Financing Activities ..................................................... 9,129 3,848
---------------------------
Effect of Exchange Rate Changes on Cash and Due from Banks .................................... (122) 128
---------------------------
Net Increase in Cash and Due from Banks ....................................................... 1,343 331
Cash and Due from Banks at Beginning of Period ................................................ 5,723 6,470
---------------------------
Cash and Due from Banks at End of Period ...................................................... $ 7,066 $ 6,801
---------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Period for:
Interest ................................................................................ $ 5,861 $ 6,070
Income Taxes ............................................................................ 1,058 788
Non-Cash Investing Activities
Transfer from Loans to OREO and Assets Pending Disposition .............................. $ 252 $ 422
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Consolidated Balance Sheet CITIBANK, N.A. and Subsidiaries
- ---------------------------------------------------------------------------------------------------------------
June 30, Dec. 31,
(In Millions of Dollars) 1996 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and Due from Banks................................................... $ 6,325 $ 4,842
Deposits at Interest with Banks........................................... 11,133 9,256
Securities, At Fair Value
Available for Sale.................................................. 18,389 14,256
Venture Capital..................................................... 1,401 1,457
Trading Account Assets.................................................... 25,876 28,407
Federal Funds Sold and Securities Purchased Under Resale Agreements....... 7,140 6,676
Loans, Net of Unearned Income............................................. 138,952 136,693
Allowance for Credit Losses............................................... (4,426) (4,403)
Customers' Acceptance Liability........................................... 1,981 1,542
Premises and Equipment, Net............................................... 3,409 3,386
Interest and Fees Receivable.............................................. 2,085 1,940
Other Assets.............................................................. 7,798 7,422
-------------------------------
Total..................................................................... $220,063 $211,474
-------------------------------
- ---------------------------------------------------------------------------------------------------------------
Liabilities
Non-Interest-Bearing Deposits in U.S. Offices............................. $ 11,003 $ 10,959
Interest-Bearing Deposits in U.S. Offices................................. 23,079 22,676
Non-Interest-Bearing Deposits in Offices Outside the U.S.................. 8,513 7,955
Interest-Bearing Deposits in Offices Outside the U.S...................... 115,012 108,018
-------------------------------
Total Deposits...................................................... 157,607 149,608
Trading Account Liabilities............................................... 16,538 17,544
Purchased Funds and Other Borrowings...................................... 10,635 10,106
Acceptances Outstanding................................................... 2,033 1,559
Accrued Taxes and Other Expense........................................... 3,373 3,263
Other Liabilities......................................................... 4,892 5,300
Long-Term Debt and Subordinated Notes..................................... 9,503 9,128
Stockholder's Equity
Common Stock ($20.00 par value) .......................................... 751 751
Outstanding Shares: 37,534,553 in each period
Surplus................................................................... 6,863 6,744
Retained Earnings......................................................... 8,188 7,972
Net Unrealized Gains - Securities Available for Sale...................... 258 55
Foreign Currency Translation.............................................. (578) (556)
-------------------------------
Total Stockholder's Equity.......................................... 15,482 14,966
-------------------------------
Total..................................................................... $220,063 $211,474
-------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
OTHER FINANCIAL INFORMATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, 1996 December 31, 1995 (A)
------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair Amortized Fair
(In Millions of Dollars) Cost Gains Losses Value Cost Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Securities - Available for Sale (B)
U.S. Treasury and Federal Agency (C) ..... $ 4,184 $ 39 $ 23 $ 4,200 $ 4,285 $ 4,345
State and Municipal ...................... 1,598 86 36 1,648 1,611 1,631
Foreign Government (D) ................... 11,902 726 347 12,281 8,507 8,443
U.S. Corporate (C) ....................... 1,591 15 52 1,554 1,169 1,221
Other Debt Securities .................... 1,235 7 14 1,228 1,112 1,119
------------------------------------------------------------------------------------
Total Debt Securities ............... 20,510 873 472 20,911 16,684 16,759
Equity Securities (E) .................... 1,753 95 49 1,799 1,345 1,454
------------------------------------------------------------------------------------
22,263 968 521 22,710 18,029 18,213
------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Venture Capital (F) ...................... 1,803 -- -- 1,803 1,854 1,854
------------------------------------------------------------------------------------
$24,066 $ 968 $ 521 $24,513 $19,883 $20,067
------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) At December 31, 1995, gross unrealized gains and gross unrealized losses on
securities available for sale totaled $829 million and $645 million,
respectively.
(B) Securities available for sale held by equity-method affiliates are not
included in the table. Citicorp's share of gross unrealized gains and gross
unrealized losses related to those securities at June 30, 1996 was $3
million and $1 million, respectively, and is included in the net unrealized
gains-securities available for sale component of stockholders' equity, net
of applicable taxes. At December 31, 1995, Citicorp's share of gross
unrealized gains and gross unrealized losses related to securities
available for sale held by equity method affiliates was $22 million and $2
million, respectively.
(C) Included in U.S. Federal Agency and U.S. Corporate securities available for
sale at June 30, 1996 are mortgage-backed securities with an amortized cost
of $1,297 million, gross unrealized gains of $4 million, gross unrealized
losses of $19 million, and fair value of $1,282 million.
(D) Included in Foreign Government securities available for sale at June 30,
1996 are Brady bonds issued by the Government of Brazil with an amortized
cost and fair value of $1.5 billion and $2.1 billion, respectively. Also
included are Brady bonds issued by the Government of Venezuela with an
amortized cost and fair value of $563 million and $397 million,
respectively.
(E) Equity securities available for sale include certain non-marketable equity
securities which are carried at cost. At June 30, 1996, the carrying amount
of those securities was $888 million (reported in both the amortized cost
and fair value columns) and the fair value was $920 million.
(F) For the six months ended June 30, 1996, net gains on investments held by
venture capital subsidiaries totaled $145 million, of which $121 million
and $90 million represented gross unrealized gains and gross unrealized
losses, respectively. For the six months ended June 30, 1995, net gains on
investments held by venture capital subsidiaries totaled $273 million, of
which $261 million and $155 million represented gross unrealized gains and
gross unrealized losses, respectively.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Trading Account Assets and Liabilities
- --------------------------------------------------------------------------------
June 30, Dec. 31,
(In Millions of Dollars) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Trading Account Assets
Trading Account Securities.................. $15,921 $15,997
Revaluation Gains on Derivative and
Foreign Exchange Contracts (A) ........... 13,961 16,096
-----------------------------
$29,882 $32,093
-----------------------------
- --------------------------------------------------------------------------------
Trading Account Liabilities
Securities Sold, Not Yet Purchased.......... $ 4,478 $ 3,696
Revaluation Losses on Derivative and
Foreign Exchange Contracts (A) ........... 13,667 14,578
-----------------------------
$18,145 $18,274
-----------------------------
- --------------------------------------------------------------------------------
</TABLE>
(A) Net of master netting agreements.
- --------------------------------------------------------------------------------
38
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Cash-Basis, Renegotiated, and Past Due Loans (A)
- -----------------------------------------------------------------------------------------------------------------------------
June 30, Dec. 31, June 30,
(In Millions of Dollars) 1996 1995 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Cash-Basis Loans (B)
Collateral-Dependent (at Lower of Cost or Collateral
Value) (C) ....................................................................... $ 677 $ 779 $1,040
Other ............................................................................. 677 755 612
------------------------------------
Total Commercial Cash-Basis Loans ................................................. $1,354 $1,534 $1,652
------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Commercial Cash-Basis Loans (B)
In U.S. Offices ................................................................... $ 854 $ 925 $1,201
In Offices Outside the U.S. ....................................................... 500 609 451
------------------------------------
Total Commercial Cash-Basis Loans ................................................. $1,354 $1,534 $1,652
------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Commercial Renegotiated Loans
In U.S. Offices ................................................................... $ 266 $ 309 $ 301
In Offices Outside the U.S. ....................................................... 69 112 84
------------------------------------
Total Commercial Renegotiated Loans ............................................... $ 335 $ 421 $ 385
------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Consumer Loans On Which Accrual of Interest
Has Been Suspended
In U.S. Offices ................................................................... $1,340 $1,413 $1,463
In Offices Outside the U.S. ....................................................... 1,205 1,247 1,234
------------------------------------
Total Consumer Loans On Which Accrual
of Interest Has Been Suspended .................................................. $2,545 $2,660 $2,697
------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Accruing Loans 90 or More Days Delinquent (D)
In U.S. Offices ................................................................... $ 568 $ 499 $ 458
In Offices Outside the U.S. ....................................................... 490 498 535
------------------------------------
Total Accruing Loans 90 or More Days Delinquent ................................... $1,058 $ 997 $ 993
------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Loan commitments and standby letters of credit to North America Commercial
Real Estate borrowers or projects experiencing financial difficulties are
not included in this table. Refer to page 15 for discussion.
(B) Refer to the discussion of cash-basis loans on page 13.
(C) A cash-basis loan is defined as collateral dependent when repayment is
expected to be provided solely by the underlying collateral and there are
no other available and reliable sources of repayment, in which case the
loans are written down to the lower of cost or collateral value.
(D) Includes Consumer loans of $944 million, $951 million and $910 million at
June 30, 1996, December 31, 1995, and June 30, 1995, respectively. Refer to
discussion of the Consumer loan portfolio on pages 9-11
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Other Real Estate Owned and Assets Pending Disposition (A)
- --------------------------------------------------------------------------------------
June 30, Dec. 31, June 30,
(In Millions of Dollars) 1996 1995 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer OREO....................... $ 497 $ 529 $ 545
Commercial OREO .................... 528 625 1,054
-------------------------------------------------
Total OREO.......................... $1,025 $1,154 $1,599
-------------------------------------------------
- --------------------------------------------------------------------------------------
Assets Pending Disposition (B)...... $ 180 $ 205 $ 195
-------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
(A) Carried at lower of cost or collateral value.
(B) Represents Consumer residential mortgage loans that have a high probability
of foreclosure.
- -------------------------------------------------------------------------------
39
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Details of Credit Loss Experience
- ----------------------------------------------------------------------------------------------------------------------------------
2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr.
(Dollars in Millions) 1996 1996 1995 1995 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Allowance for Credit Losses
at Beginning of Period ............ $ 5,390 $ 5,368 $ 5,341 $ 5,308 $ 5,270
------------------------------------------------------------------------------------
Additions
Provision for Credit Losses ......... 479 494 531 576 493
------------------------------------------------------------------------------------
Deductions
Gross Credit Losses
Consumer
In U.S. Offices ..................... 311 301 319 301 279
In Offices Outside the U.S. ......... 222 216 246 217 199
Commercial
In U.S. Offices ..................... 14 20 28 58 41
In Offices Outside the U.S. ......... 62 32 72 70 38
------------------------------------------------------------------------------------
609 569 665 646 557
------------------------------------------------------------------------------------
Credit Recoveries
Consumer
In U.S. Offices ..................... 61 58 71 55 56
In Offices Outside the U.S. ......... 52 46 53 48 43
Commercial
In U.S. Offices ..................... 36 13 52 18 8
In Offices Outside the U.S. ......... 31 8 22 24 19
------------------------------------------------------------------------------------
180 125 198 145 126
------------------------------------------------------------------------------------
Net Credit Losses
In U.S. Offices ..................... 228 250 224 286 256
In Offices Outside the U.S. ......... 201 194 243 215 175
------------------------------------------------------------------------------------
429 444 467 501 431
------------------------------------------------------------------------------------
Other, Net (A) ...................... (16) (28) (37) (42) (24)
------------------------------------------------------------------------------------
Allowance for Credit Losses
at End of Period .................. $ 5,424 $ 5,390 $ 5,368 $ 5,341 $ 5,308
------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net Consumer Credit Losses .......... $ 420 $ 413 $ 441 $ 415 $ 379
As a Percentage of Average
Consumer Loans .................... 1.62% 1.60% 1.70% 1.63% 1.54%
Net Commercial Credit Losses ........ $ 9 $ 31 $ 26 $ 86 $ 52
As a Percentage of Average
Commercial Loans .................. 0.06% 0.21% 0.18% 0.61% 0.37%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Includes net transfers to the reserves for sold Consumer portfolios and
foreign exchange effects.
- --------------------------------------------------------------------------------
40
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Calculation of Earnings Per Share
- -----------------------------------------------------------------------------------------------------------------------------
Second Quarter 1996 Second Quarter 1995
-----------------------------------------------------------------------
On Common On Common
and Common Assuming and Common Assuming
Equivalent Full Equivalent Full
(In Millions, except Per Share Amounts) Shares Dilution Shares Dilution
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings
Income Applicable to Common Stock.............. $914 $914 $757 $757
Dividends on Conversion Preferred Stock,
Series 15 (A)................................ -- -- 23 23
Dividends on Convertible Preferred Stock,
Series 12 and Series 13 (B).................. -- -- -- 34
-----------------------------------------------------------------------
Income Applicable to Common Stock, Adjusted.... $914 $914 $780 $814
-----------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Shares
Weighted-Average Common Shares
Outstanding (A) (B) (C)...................... 476.9 476.9 401.4 401.4
Conversion Preferred Stock,
Series 15 (A)................................ -- -- 29.3 29.3
Convertible Preferred Stock,
Series 12 and Series 13 (B).................. -- -- -- 73.0
Other Common Equivalent Shares (D)............. 14.9 15.2 13.8 15.8
-----------------------------------------------------------------------
Total.......................................... 491.8 492.1 444.5 519.5
-----------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Per Share
Net Income..................................... $1.86 $1.86 $1.76 $1.57
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Six Months 1996 Six Months 1995
-----------------------------------------------------------------------
On Common On Common
and Common Assuming and Common Assuming
Equivalent Full Equivalent Full
(In Millions, except Per Share Amounts) Shares Dilution Shares Dilution
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnings
Income Applicable to Common Stock.............. $1,785 $1,785 $1,492 $1,492
Dividends on Conversion Preferred Stock,
Series 15 (A)................................ -- -- 47 47
Dividends on Convertible Preferred Stock,
Series 12 and Series 13 (B).................. -- 5 -- 68
-----------------------------------------------------------------------
Income Applicable to Common Stock, Adjusted.... $1,785 $1,790 $1,539 $1,607
-----------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Shares
Weighted-Average Common Shares
Outstanding (A) (B) (C)...................... 470.2 470.2 398.9 398.9
Conversion Preferred Stock,
Series 15 (A)................................ -- -- 32.9 32.9
Convertible Preferred Stock,
Series 12 and Series 13 (B).................. -- 10.5 -- 73.0
Other Common Equivalent Shares (D)............. 15.0 15.8 11.8 16.0
-----------------------------------------------------------------------
Total.......................................... 485.2 496.5 443.6 520.8
-----------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Per Share
Net Income..................................... $ 3.68 $ 3.61 $ 3.47 $ 3.09
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Conversion Preferred Stock, Series 15 was fully redeemed during 1995.
(B) During the first quarter of 1996, the remaining Convertible Preferred
Stock, Series 12 and 13 were converted to 59.0 million shares of common
stock. The shares are included in the fully diluted computation on an
if-converted basis up to conversion dates, and from conversion dates
forward these shares are included in weighted-average common shares
outstanding.
(C) Includes 1.0 million and 1.1 million book value shares in 1996 and 1995,
respectively.
(D) Includes the dilutive effect of stock options and stock purchase agreements
computed using the treasury stock method and shares issuable under deferred
stock awards.
- --------------------------------------------------------------------------------
41
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
Cross-Border and Non-Local Currency Outstandings
- --------------------------------------------------------------------------------
Cross-border and non-local currency outstandings are presented on a regulatory
basis, as discussed in the 1995 Annual Report and Form 10-K. From time to time,
the Federal Financial Institutions Examination Council proposes amendments to,
and interpretations of, country exposure reporting guidelines. Such proposals or
interpretations could, if implemented in the future, affect reported
cross-border and non-local currency outstandings.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Countries with Outstandings Exceeding 1% of Total Assets (A) (B)
- -----------------------------------------------------------------------------------------------------------------------------------
Cross-Border Investments
and Non-Local Currency Claims in and
on Third Parties Funding of Total Outstandings
-------------------------------------------------- Local -------------------------
Public Private Citicorp June 30, Dec. 31,
(In Billions of Dollars) Banks Sector Sector Total Franchises 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
United Kingdom.............. $0.4 $0.1 $4.4 $4.9 $3.1 $8.0 $7.6
Brazil (C).................. 0.3 2.1 2.2 4.6 1.9 6.5 5.1
Japan....................... 0.5 0.2 1.7 2.4 0.7 3.1 3.6
Argentina (C)............... 0.1 -- 2.4 2.5 0.6 3.1 2.9
Mexico...................... 0.1 2.0 0.6 2.7 0.3 3.0 2.9
Germany..................... 0.2 0.8 0.3 1.3 1.5 2.8 2.7
Singapore................... -- 0.1 1.1 1.2 1.5 2.7 2.5
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Legally binding cross-border and non-local currency commitments, including
irrevocable letters of credit and commitments to extend credit, after
adjustments to assign externally guaranteed commitments to the country of
the guarantor, amounted to $6.3 billion in the United Kingdom, $1.8 billion
in Japan, $1.0 billion in Germany, $0.3 billion in Singapore, $0.1 billion
in each of Argentina and Brazil, and less than $0.1 billion in Mexico at
June 30, 1996.
(B) At June 30, 1996, cross-border and non-local currency outstandings in
Australia ($2.1 billion) and South Korea ($2.1 billion) were between .75%
and 1.0% of total assets. At December 31, 1995, such countries were
Singapore ($2.5 billion), Australia ($2.4 billion), and South Korea ($2.1
billion).
(C) Includes outstandings funded with non-local currency liabilities where the
fund providers agree that, in the event their claims cannot be repaid in
U.S. dollars or other non-local currency due to a sovereign event, they
will accept payment in local currency or wait to receive the non-local
currency at such time as it becomes available. Such amounts at June 30,
1996 and December 31, 1995, were $1.9 billion and $1.4 billion,
respectively, in Brazil and $1.6 billion for each period in Argentina.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Cross-Border and Non-Local Currency Claims on Third Parties
- ---------------------------------------------------------------------------------------------------------------------------
Public Private June 30, Dec. 31,
(In Billions of Dollars) Banks Sector Sector 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Developed Markets (A)........... $ 2.8 $ 2.4 $ 11.8 $ 17.0 $ 15.2
Emerging Markets (A):
Latin America (B)......... 0.7 5.7 6.6 13.0 11.7
Asia...................... 1.3 0.9 6.5 8.7 7.9
Other..................... 1.2 0.8 0.8 2.8 2.5
----------------------------------------------------------------------------------------
Total (C)....................... $ 6.0 $ 9.8 $ 25.7 $ 41.5 $ 37.3
----------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Developed markets comprise activities in North America, Europe, and Japan.
Emerging markets comprise activities in all other geographic areas.
(B) Cross-border and non-local currency claims on third parties in Latin
America of $13.0 billion at June 30, 1996 compared with $11.7 billion at
December 31, 1995. The increase primarily reflects the effect of short-term
trade related transactions as well as increases in the value of Brady bonds
held in the available-for-sale portfolio (see additional discussion on
securities on page 38).
(C) Includes investments in affiliates of $1.3 billion at June 30, 1996 and
December 31, 1995.
- --------------------------------------------------------------------------------
42
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Average Balances and Interest Rates (Taxable Equivalent Basis) (A) (B)
- ----------------------------------------------------------------------------------------------------------------------------------
Second Quarter 1996
--------------------------------------------------
Average % Average
(In Millions of Dollars) Volume Interest Rate
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Revenue -
Consumer Loans, Net of In U.S. Offices $ 52,942 $1,400 10.64
Unearned Income (C) In Offices Outside the U.S. (D) 51,110 1,607 12.65
--------------------------------------------------
Total Consumer Loans 104,052 3,007 11.62
--------------------------------------------------
Commercial Loans, Net of In U.S. Offices
Unearned Income (C) Commercial and Industrial 8,938 212 9.54
Mortgage and Real Estate 4,515 81 7.22
Loans to Financial Institutions 456 9 7.94
Lease Financing 3,214 54 6.76
In Offices Outside the U.S. (D) 43,079 1,177 10.99
--------------------------------------------------
Total Commercial Loans 60,202 1,533 10.24
--------------------------------------------------
Total Loans 164,254 4,540 11.12
--------------------------------------------------
Funds Sold and Resale Agreements In U.S. Offices 10,382 133 5.15
In Offices Outside the U.S. (D) 3,525 113 12.89
--------------------------------------------------
Total 13,907 246 7.11
--------------------------------------------------
Securities- Available for Sale In U.S. Offices
U.S. Treasury and Federal Agencies 3,223 45 5.62
State and Municipal 1,640 25 6.13
Other 2,475 35 5.69
In Offices Outside the U.S. (D) 13,932 322 9.30
--------------------------------------------------
Total 21,270 427 8.07
--------------------------------------------------
Securities- Held to Maturity In U.S. Offices
U. S. Treasury and Federal Agencies -- -- --
In Offices Outside the U.S. (D) -- --
--
--------------------------------------------------
Total -- -- --
--------------------------------------------------
Venture Capital In U.S. Offices 1,545 8 2.08
In Offices Outside the U.S. 315 10 12.77
--------------------------------------------------
Total 1,860 18 3.89
--------------------------------------------------
Total Securities 23,130 445 7.74
--------------------------------------------------
Trading Account Assets In U.S. Offices 5,492 81 5.93
In Offices Outside the U.S. (D) 11,566 240 8.35
--------------------------------------------------
Total 17,058 321 7.57
Deposits at Interest with Banks Principally Outside the U.S. (D) 12,213 207 6.82
--------------------------------------------------
Total Interest-Earning Assets 230,562 $5,759 10.05
==========================
Non-Interest-Earning Assets (E) 37,565
--------------
Total Assets $268,127
==============
Interest Expense-Deposits In U.S. Offices
Savings Deposits $ 25,826 $ 185 2.88
Other Time Deposits 12,549 165 5.29
--------------------------------------------------
Total U.S. Interest-Bearing Deposits 38,375 350 3.67
In Offices Outside the U.S. (D) 113,763 1,818 6.43
--------------------------------------------------
Total 152,138 2,168 5.73
--------------------------------------------------
Trading Account Liabilities In U.S. Offices 2,720 41 6.06
In Offices Outside the U.S. (D) 2,339 18 3.10
--------------------------------------------------
Total 5,059 59 4.69
--------------------------------------------------
Funds Borrowed In U.S. Offices
Fed Funds Purchased and Sec. Sold 11,548 139 4.84
Commercial Paper 1,735 23 5.33
Other Purchased Funds 2,456 81 13.26
Long-Term Debt and Sub. Notes 14,815 230 6.24
--------------------------------------------------
Total in U.S. Offices 30,554 473 6.23
In Offices Outside the U.S. (D) 10,541 323 12.32
--------------------------------------------------
Total 41,095 796 7.79
--------------------------------------------------
Total Interest-Bearing Liabilities 198,292 3,023 6.13
==========================
Demand Deposits in U.S. Offices 12,035
Other Non-Interest-Bearing Liabilities (E) 38,009
Total Stockholders' Equity 19,791
--------------
Total Liabilities and
Stockholders' Equity $268,127
==================================================
Net Interest Revenue as a
Percentage of Average
Interest-Earning Assets $2,736 4.77
-------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) The taxable equivalent adjustment is based on the U.S. federal statutory
tax rate of 35%.
(B) Interest rates and amounts include the effects of risk management
activities associated with the respective asset and liability categories.
(C) Loans in the table above include cash-basis loans.
(D) Average rates in offices outside the U.S. may reflect prevailing local
interest rates, including the effects of inflation and monetary correction
in certain Latin American countries.
(E) Gross unrealized gains and losses on off-balance sheet trading positions
are reported in non-interest earning assets and non-interest bearing
liabilities, respectively.
- --------------------------------------------------------------------------------
43
<PAGE>
CITICORP [LOGO]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Average Balances and Interest Rates (Taxable Equivalent Basis) (A) (B) (continued)
- ------------------------------------------------------------------------------------------------------------------------------
Second Quarter 1995
---------------------------------------
Average % Average
(In Millions of Dollars) Volume Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Revenue -
Consumer Loans, Net of In U.S. Offices $ 49,748 $1,368 11.03
Unearned Income (C) In Offices Outside the U.S. (D) 48,935 1,605 13.16
---------------------------------------
Total Consumer Loans 98,683 2,973 12.08
---------------------------------------
Commercial Loans, Net of In U.S. Offices
Unearned Income (C) Commercial and Industrial 10,225 220 8.63
Mortgage and Real Estate 5,684 109 7.69
Loans to Financial Institutions 392 4 4.09
Lease Financing 3,207 59 7.38
In Offices Outside the U.S. (D) 37,559 1,003 10.71
---------------------------------------
Total Commercial Loans 57,067 1,395 9.80
---------------------------------------
Total Loans 155,750 4,368 11.25
---------------------------------------
Funds Sold and Resale Agreements In U.S. Offices 13,186 197 5.99
In Offices Outside the U.S. (D) 2,076 61 11.79
---------------------------------------
Total 15,262 258 6.78
---------------------------------------
Securities- Available for Sale In U.S. Offices
U.S. Treasury and Federal Agencies 2,078 29 5.60
State and Municipal 1,590 26 6.56
Other 1,501 24 6.41
In Offices Outside the U.S. (D) 7,551 211 11.21
---------------------------------------
Total 12,720 290 9.14
---------------------------------------
Securities- Held to Maturity In U.S. Offices
U. S. Treasury and Federal Agencies 1,529 25 6.56
In Offices Outside the U.S. (D) 3,443 61 7.11
---------------------------------------
Total 4,972 86 6.94
---------------------------------------
Venture Capital In U.S. Offices 1,408 12 3.42
In Offices Outside the U.S. 282 4 5.69
---------------------------------------
Total 1,690 16 3.80
---------------------------------------
Total Securities 19,382 392 8.11
---------------------------------------
Trading Account Assets In U.S. Offices 12,422 207 6.68
In Offices Outside the U.S. (D) 10,503 295 11.27
---------------------------------------
Total 22,925 502 8.78
Deposits at Interest with Banks Principally Outside the U.S. (D) 11,567 201 6.97
---------------------------------------
Total Interest-Earning Assets 224,886 $5,721 10.20
=====================
Non-Interest-Earning Assets (E) 48,238
-------------
Total Assets $273,124
=============
Interest Expense-Deposits In U.S. Offices
Savings Deposits $ 24,558 $ 189 3.09
Other Time Deposits 11,793 211 7.18
---------------------------------------
Total U.S. Interest-Bearing Deposits 36,351 400 4.41
In Offices Outside the U.S. (D) 111,534 1,778 6.39
---------------------------------------
Total 147,885 2,178 5.91
---------------------------------------
Trading Account Liabilities In U.S. Offices 2,414 38 6.31
In Offices Outside the U.S. (D) 1,112 24 8.66
---------------------------------------
Total 3,526 62 7.05
---------------------------------------
Funds Borrowed In U.S. Offices
Fed Funds Purchased and Sec. Sold 17,487 245 5.62
Commercial Paper 1,545 30 7.79
Other Purchased Funds 3,438 83 9.68
Long-Term Debt and Sub. Notes 14,439 267 7.42
---------------------------------------
Total in U.S. Offices 36,909 625 6.79
In Offices Outside the U.S. (D) 9,315 380 16.36
---------------------------------------
Total 46,224 1,005 8.72
---------------------------------------
Total Interest-Bearing Liabilities 197,635 3,245 6.59
---------------------
Demand Deposits in U.S. Offices 11,478
Other Non-Interest-Bearing Liabilities (E) 45,117
Total Stockholders' Equity 18,894
-------------
Total Liabilities and
Stockholders' Equity $273,124
---------------------------------------
Net Interest Revenue as a
Percentage of Average
Interest-Earning Assets $2,476 4.42
---------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Average Balances and Interest Rates (Taxable Equivalent Basis) (A) (B) (continued)
- ------------------------------------------------------------------------------------------------------------------------------
Six Months 1996
---------------------------------------
Average % Average
(In Millions of Dollars) Volume Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Revenue -
Consumer Loans, Net of In U.S. Offices $ 53,160 $ 2,869 10.85
Unearned Income (C) In Offices Outside the U.S. (D) 50,810 3,210 12.70
---------------------------------------
Total Consumer Loans 103,970 6,079 11.76
---------------------------------------
Commercial Loans, Net of In U.S. Offices
Unearned Income (C) Commercial and Industrial 9,179 424 9.29
Mortgage and Real Estate 4,552 163 7.20
Loans to Financial Institutions 453 14 6.21
Lease Financing 3,216 106 6.63
In Offices Outside the U.S. (D) 42,240 2,313 11.01
---------------------------------------
Total Commercial Loans 59,640 3,020 10.18
---------------------------------------
Total Loans 163,610 9,099 11.18
---------------------------------------
Funds Sold and Resale Agreements In U.S. Offices 10,161 260 5.15
In Offices Outside the U.S. (D) 3,457 242 14.08
---------------------------------------
Total 13,618 502 7.41
---------------------------------------
Securities- Available for Sale In U.S. Offices
U.S. Treasury and Federal Agencies 3,264 92 5.67
State and Municipal 1,618 51 6.34
Other 2,256 63 5.62
In Offices Outside the U.S. (D) 12,918 601 9.36
---------------------------------------
Total 20,056 807 8.09
---------------------------------------
Securities- Held to Maturity In U.S. Offices
U. S. Treasury and Federal Agencies -- -- --
In Offices Outside the U.S. (D) -- -- --
---------------------------------------
Total -- -- --
---------------------------------------
Venture Capital In U.S. Offices 1,556 11 1.42
In Offices Outside the U.S. 320 14 8.80
---------------------------------------
Total 1,876 25 2.68
---------------------------------------
Total Securities 21,932 832 7.63
---------------------------------------
Trading Account Assets In U.S. Offices 6,180 176 5.73
In Offices Outside the U.S. (D) 12,351 531 8.65
---------------------------------------
Total 18,531 707 7.67
---------------------------------------
Deposits at Interest with Banks Principally Outside the U.S. (D) 11,916 403 6.80
---------------------------------------
Total Interest-Earning Assets 229,607 $11,543 10.11
=====================
Non-Interest-Earning Assets (E) 38,622
-------------
Total Assets $268,229
=============
Interest Expense-Deposits In U.S. Offices
Savings Deposits $ 25,587 $ 376 2.96
Other Time Deposits 12,605 319 5.09
---------------------------------------
Total U.S. Interest-Bearing Deposits 38,192 695 3.66
In Offices Outside the U.S. (D) 113,700 3,659 6.47
---------------------------------------
Total 151,892 4,354 5.76
---------------------------------------
Trading Account Liabilities In U.S. Offices 2,807 82 5.87
In Offices Outside the U.S. (D) 2,113 56 5.33
---------------------------------------
Total 4,920 138 5.64
---------------------------------------
Funds Borrowed In U.S. Offices
Fed Funds Purchased and Sec. Sold 11,895 285 4.82
Commercial Paper 1,718 46 5.38
Other Purchased Funds 2,411 172 14.35
Long-Term Debt and Sub. Notes 14,675 464 6.36
---------------------------------------
Total in U.S. Offices 30,699 967 6.33
In Offices Outside the U.S. (D) 10,230 655 12.88
---------------------------------------
Total 40,929 1,622 7.97
---------------------------------------
Total Interest-Bearing Liabilities 197,741 6,114 6.22
---------------------
Demand Deposits in U.S. Offices 12,249
Other Non-Interest-Bearing Liabilities (E) 38,479
Total Stockholders' Equity 19,760
-------------
Total Liabilities and
Stockholders' Equity $268,229
============= ---------------------
Net Interest Revenue as a
Percentage of Average
Interest-Earning Assets $5,429 4.75
---------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Average Balances and Interest Rates (Taxable Equivalent Basis) (A) (B) (continued)
- ------------------------------------------------------------------------------------------------------------------------------
Six Months 1995
---------------------------------------
Average % Average
(In Millions of Dollars) Volume Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Revenue -
Consumer Loans, Net of In U.S. Offices $ 49,387 $ 2,704 11.04
Unearned Income (C) In Offices Outside the U.S. (D) 48,067 3,090 12.96
---------------------------------------
Total Consumer Loans 97,454 5,794 11.99
---------------------------------------
Commercial Loans, Net of In U.S. Offices
Unearned Income (C) Commercial and Industrial 10,429 457 8.84
Mortgage and Real Estate 5,803 220 7.65
Loans to Financial Institutions 366 7 3.86
Lease Financing 3,224 118 7.38
In Offices Outside the U.S. (D) 36,857 2,114 11.57
---------------------------------------
Total Commercial Loans 56,679 2,916 10.37
---------------------------------------
Total Loans 154,133 8,710 11.40
---------------------------------------
Funds Sold and Resale Agreements In U.S. Offices 13,333 383 5.79
In Offices Outside the U.S. (D) 2,021 126 12.57
---------------------------------------
Total 15,354 509 6.69
---------------------------------------
Securities- Available for Sale In U.S. Offices
U.S. Treasury and Federal Agencies 2,065 58 5.66
State and Municipal 1,603 52 6.54
Other 1,453 45 6.25
In Offices Outside the U.S. (D) 7,864 409 10.49
---------------------------------------
Total 12,985 564 8.76
---------------------------------------
Securities- Held to Maturity In U.S. Offices
U. S. Treasury and Federal Agencies 1,557 51 6.61
In Offices Outside the U.S. (D) 3,384 124 7.39
---------------------------------------
Total 4,941 175 7.14
---------------------------------------
Venture Capital In U.S. Offices 1,438 16 2.24
In Offices Outside the U.S. 273 8 5.91
---------------------------------------
Total 1,711 24 2.83
---------------------------------------
Total Securities 19,637 763 7.84
---------------------------------------
Trading Account Assets In U.S. Offices 13,277 450 6.83
In Offices Outside the U.S. (D) 10,684 512 9.66
---------------------------------------
Total 23,961 962 8.10
---------------------------------------
Deposits at Interest with Banks Principally Outside the U.S. (D) 11,216 382 6.87
---------------------------------------
Total Interest-Earning Assets 224,301 $11,326 10.18
=====================
Non-Interest-Earning Assets (E) 46,788
-------------
Total Assets $271,089
=============
Interest Expense-Deposits In U.S. Offices
Savings Deposits $ 24,498 $ 368 3.03
Other Time Deposits 11,513 400 7.01
---------------------------------------
Total U.S. Interest-Bearing Deposits 36,011 768 4.30
In Offices Outside the U.S. (D) 110,388 3,666 6.70
---------------------------------------
Total 146,399 4,434 6.11
---------------------------------------
Trading Account Liabilities In U.S. Offices 2,822 90 6.43
In Offices Outside the U.S. (D) 1,177 55 9.42
---------------------------------------
Total 3,999 145 7.31
---------------------------------------
Funds Borrowed In U.S. Offices
Fed Funds Purchased and Sec. Sold 18,351 502 5.52
Commercial Paper 1,753 52 5.98
Other Purchased Funds 3,353 164 9.86
Long-Term Debt and Sub. Notes 14,452 532 7.42
---------------------------------------
Total in U.S. Offices 37,909 1,250 6.65
In Offices Outside the U.S. (D) 9,512 688 14.59
---------------------------------------
Total 47,421 1,938 8.24
---------------------------------------
Total Interest-Bearing Liabilities 197,819 6,517 6.64
---------------------
Demand Deposits in U.S. Offices 11,543
Other Non-Interest-Bearing Liabilities (E) 43,322
Total Stockholders' Equity 18,405
-------------
Total Liabilities and
Stockholders' Equity $271,089
============= ---------------------
Net Interest Revenue as a
Percentage of Average
Interest-Earning Assets $4,809 4.32
---------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) The taxable equivalent adjustment is based on the U.S. federal statutory
tax rate of 35%.
(B) Interest rates and amounts include the effects of risk management
activities associated with the respective asset and liability categories.
(C) Loans in the table above include cash-basis loans.
(D) Average rates in offices outside the U.S. may reflect prevailing local
interest rates, including the effects of inflation and monetary correction
in certain Latin American countries.
(E) Gross unrealized gains and losses on off-balance sheet trading positions
are reported in non-interest earning assets and non-interest bearing
liabilities, respectively.
- --------------------------------------------------------------------------------
44
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period
Ended June 30, 1996 Commission file number 1-5738
CITICORP
(Exact name of registrant as specified in its charter)
Delaware 13-2614988
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
399 Park Avenue, New York, New York 10043
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 559-1000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Citicorp Common Stock........ 473,163,674
($1.00 Par Value) (Shares Outstanding on June 30, 1996)
45
<PAGE>
CITICORP [LOGO]
- --------------------------------------------------------------------------------
FORM 10-Q CROSS-REFERENCE INDEX
- --------------------------------------------------------------------------------
This document serves both as an analytical review for analysts, stockholders and
other interested persons and as the quarterly report filed on Form 10-Q with the
Securities and Exchange Commission.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I Financial Information
Item 1 - Consolidated Financial Statements
Consolidated Financial Statements, Schedules, and Statistics
Statement of Income for the Quarters and Six Months Ended
June 30, 1996 and 1995............................................................. 33
Balance Sheet as of
June 30, 1996 and December 31, 1995................................................ 34
Statement of Cash Flows for the Six Months Ended
June 30, 1996 and 1995............................................................. 36
Calculation of Earnings Per Share.................................................. 41
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................. 2-32
Part II Other Information
Item 4 - Submission of Matters to a Vote of Security Holders................................ 47
Item 6 - Exhibits and Reports on Form 8-K................................................... 47
Signatures ................................................................................... 49
</TABLE>
In the opinion of the management of Citicorp, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of the results
of operations for the six months ended June 30, 1996 and 1995 have been
included.
46
<PAGE>
CITICORP [LOGO]
Item 4 - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the annual meeting of stockholders of Citicorp held on April 16, 1996 the
following matters were voted on by the stockholders:
1. The election of directors of Citicorp to hold office
until the 1997 annual meeting and until the election
and qualification of their successors. Each nominee
was elected to the Board of Directors of Citicorp by
votes cast as follows:
<TABLE>
<CAPTION>
Against/ Broker
Name For Withheld Non-Votes Abstentions
---- --- -------- --------- -----------
<S> <C> <C> <C> <C>
D. Wayne Calloway 399,061,319 247,915 0 1,083,688
Pei-yuan Chia 398,946,352 362,882 0 1,083,688
Paul J. Collins 398,973,525 335,709 0 1,083,688
Kenneth T. Derr 399,158,119 151,115 0 1,083,688
Reuben Mark 399,169,364 139,870 0 1,083,688
Richard D. Parsons 398,913,672 395,562 0 1,083,688
John S. Reed 398,936,959 372,275 0 1,083,688
William R. Rhodes 399,200,581 108,653 0 1,083,688
Rozanne L. Ridgway 398,942,245 366,989 0 1,083,688
H. Onno Ruding 398,955,311 353,923 0 1,083,688
Robert B. Shapiro 399,161,783 147,451 0 1,083,688
Frank A. Shrontz 399,176,788 132,446 0 1,083,688
Franklin A. Thomas 399,090,689 218,545 0 1,083,688
Edgar S. Woolard, Jr. 399,174,665 134,569 0 1,083,688
</TABLE>
2. The selection of KPMG Peat Marwick LLP as independent
auditors of Citicorp. The selection of KPMG Peat
Marwick LLP was ratified by votes of 398,300,157 for,
814,076 against/withheld, 0 broker non-votes and
1,286,538 abstentions.
3. A stockholder proposal relating to cumulative voting
for directors. Such proposal was defeated by votes of
238,700,644 against/withheld, 83,882,143 for,
66,593,372 broker non-votes and 11,224,612
abstentions.
4. A stockholder proposal relating to the appointment of
a President and Chief Operating Officer. Such
proposal was defeated by votes of 316,578,801
against/withheld, 11,360,052 for, 66,592,575 broker
non-votes and 5,929,343 abstentions.
5. A stockholder proposal relating to a limitation on
salary increases for and grants of stock options to
executives in the event of a cut in the dividend paid
on shares of common stock. Such proposal was defeated
by votes of 305,961,768 against/withheld, 21,918,252
for, 66,927,866 broker non-votes and 5,592,885
abstentions.
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibit 4.1. Certificate of Designations relating to
Citicorp Fixed/Adjustable Rate Cumulative Preferred
Stock, Series 23 (incorporated herein by reference to
Exhibit 2.1 from Citicorp's Registration Statement on
Form 8-A, File No. 1-4041).
47
<PAGE>
CITICORP [LOGO]
b) Exhibit 27. Financial Data Schedule.
c) Reports on Form 8-K:
Citicorp filed a Form 8-K Current Report dated April 16,
1996 (Item 5) which report included a summary of the
consolidated operations of Citicorp for the three month
period ended March 31, 1996 and (Item 7) the calculation
of the ratio of income to fixed charges (Exhibit 12(a)
thereto) and the calculation of the ratio of income to
fixed charges including preferred stock dividends
(Exhibit 12(b) thereto).
Citicorp filed a Form 8-K Current Report dated July 16,
1996 (Item 5) which report included a summary of the
consolidated operations of Citicorp for the six month
period ended June 30, 1996 and (Item 7) the calculation
of the ratio of income to fixed charges (Exhibit 12(a)
thereto) and the calculation of the ratio of income to
fixed charges including preferred stock dividends
(Exhibit 12(b) thereto).
48
<PAGE>
CITICORP [LOGO]
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITICORP By:
Registrant
/S/ Thomas E. Jones
-------------------------
Thomas E. Jones
Executive Vice President
Principal Financial Officer
/S/ George E. Seegers
-------------------------
George E. Seegers
Assistant Secretary
Date: August 12, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the current
report on Form 10-Q for the quarter ended JUNE 30, 1996 and is qualified in its
entirety by reference to such financial statements and accompanying disclosure.
</LEGEND>
<CIK> 0000020405
<NAME> CITICORP 1996
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,066
<INT-BEARING-DEPOSITS> 10,554
<FED-FUNDS-SOLD> 9,889<F1>
<TRADING-ASSETS> 29,882
<INVESTMENTS-HELD-FOR-SALE> 22,710
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 167,873
<ALLOWANCE> 5,424
<TOTAL-ASSETS> 266,824
<DEPOSITS> 175,783
<SHORT-TERM> 17,519<F2>
<LIABILITIES-OTHER> 8,477
<LONG-TERM> 19,477<F3>
0
2,078
<COMMON> 505
<OTHER-SE> 17,347
<TOTAL-LIABILITIES-AND-EQUITY> 266,824
<INTEREST-LOAN> 9,097
<INTEREST-INVEST> 819
<INTEREST-OTHER> 1,611
<INTEREST-TOTAL> 11,527
<INTEREST-DEPOSIT> 4,354
<INTEREST-EXPENSE> 6,114
<INTEREST-INCOME-NET> 5,413
<LOAN-LOSSES> 973
<SECURITIES-GAINS> 141
<EXPENSE-OTHER> 1,930
<INCOME-PRETAX> 3,010
<INCOME-PRE-EXTRAORDINARY> 1,866
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,866
<EPS-PRIMARY> 3.68
<EPS-DILUTED> 3.61
<YIELD-ACTUAL> 4.75<F4>
<LOANS-NON> 3,899<F5>
<LOANS-PAST> 1,058<F6>
<LOANS-TROUBLED> 335
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,368
<CHARGE-OFFS> 1,178<F7>
<RECOVERIES> 305
<ALLOWANCE-CLOSE> 5,424<F8>
<ALLOWANCE-DOMESTIC> 0<F9>
<ALLOWANCE-FOREIGN> 0<F10>
<ALLOWANCE-UNALLOCATED> 0<F11>
<FN>
<F1>Includes Securities Purchased Under Resale Agreements
<F2>Purchased Funds and Other Borrowings
<F3>Includes Subordinated Capital Notes
<F4>Taxable Equivalent Basis
<F5>Includes $1,354 of cash-basis commercial loans and $2,545 of consumer loans on
which accrual of interest has been suspended.
<F6>Accruing loans 90 or or more days delinquent.
<F7>Includes $128MM of commercial credit losses and $1,050MM of consumer credit
losses.
<F8>Allowance activity for 1996 includes $(44)MM in other changes principally net
transfers (to) from the reserve for Consumer Sold Portfolio and foreign
exchange effects.
<F9>No portion of Citicorp's credit loss allowance is specifically allocated to any
individual loan or group of loans, however, $1,809MM of the allowance at
December 31, 1995 was attributed to operations outside the U.S. (See note 10 to
the 1995 Annual Report).
<F10>See Footnote F9 above.
<F11>See Footnote F9 above.
</FN>
</TABLE>
