SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 1997
CITICORP
(Exact name of registrant as specified in charter)
Delaware 1-5738 13-2614988
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
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
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
Citicorp fourth quarter net income increased 9% to $987 million on 14%
revenue gain,
Earnings per common share rose 15% to $1.97;
Return on common equity remains above 20%
======================================================================
Fourth Quarter (Dollars in Millions, 1996 1995 Change
except EPS)
- ----------------------------------------------------------------------
Adjusted Revenue $5,747 $5,047 14%
Net Income 987 905 9%
Earnings Per Share (Fully Diluted) $1.97 $1.72 15%
Return on Common Equity (%) 20.6 20.5 -
Return on Total Assets (%) 1.42 1.35 -
Average Shares Outstanding (Fully
Diluted) 480.9 505.7 -
- ----------------------------------------------------------------------
Full Year
- ----------------------------------------------------------------------
Adjusted Revenue $21,542 $19,618 10%
Net Income 3,788 3,464 9%
Earnings Per Share (Fully Diluted) $7.42 $6.48 15%
Return on Common Equity (%) 20.4 20.8 -
Return on Total Assets (%) 1.40 1.29 -
Average Shares Outstanding (Fully 490.0 511.5 -
Diluted)
- ----------------------------------------------------------------------
New York -- Citicorp today reported that net income in the 1996
fourth quarter and full year was $987 million and $3.8 billion, both
up 9% over the comparable 1995 periods. Earnings per fully diluted
common share were $1.97 and $7.42, both up 15% over the 1995 periods.
John S. Reed, Citicorp Chairman, said: "We continued to produce strong
financial results with excellent returns. At the same time, we
invested in our growing franchises, in line with our Business
Directions strategy of serving corporate and consumer customers around
the world."
Excluding the previously disclosed $64 million pretax Savings
Association Insurance Fund, or SAIF, assessment and the $55 million
pretax charge for performance-based options, the 1996 full year
results represented earnings per share of $7.57 and achieved the
following against Citicorp's Business Directions performance targets:
a 12% earnings gain, a return on common equity of 20.8%, a ratio of
incremental revenue to expense of 2.0 to 1 (1.9 to 1 without the
exclusion of the charges), and generation of an estimated $3 billion
of free capital. During the quarter, the company generated an
estimated $0.8 billion of free capital and repurchased 8.1 million
shares of common stock for $820 million.
Citicorp's consumer businesses -- Citibanking, Cards, and the
Private Bank -- earned $575 million in the quarter on adjusted
revenue of $3.6 billion, which increased 11% from 1995, and earned
$2.0 billion in the year on revenue of $13.5 billion, up 9%. Net
income from serving corporate banking customers worldwide was $549
million in the quarter on revenue of $2.0 billion, which increased
26%, and was $2.2 billion in the year on revenue of $7.2 billion, up
9%.
Details follow:
1
<PAGE>
Consumer businesses earn $575 million in the quarter and $2 billion in
the year,
Despite continued high Cards credit costs
- ----------------------------------------------------------------------
Fourth Quarter (Dollars in Millions) 1996 1995 Change
======================================================================
Adjusted Revenue $3,565 $3,226 11%
Adjusted Operating Expense 1,878 1,719 9%
Operating Margin 1,687 1,507 12%
Credit Costs 844 688 23%
Income before Taxes 793 769 3%
Net Income 575 556 3%
Return on Assets (%) 1.77% 1.78% -
- ----------------------------------------------------------------------
Full Year
======================================================================
Adjusted Revenue $13,480 $12,350 9%
Adjusted Operating Expense 7,254 6,790 7%
Operating Margin 6,226 5,560 12%
Credit Costs 3,115 2,473 26%
Income before Taxes 2,911 2,887 1%
Net Income 2,043 1,968 4%
Return on Assets (%) 1.62% 1.64% -
======================================================================
Consumer businesses net income of $575 million in the quarter
increased $19 million or 3% from the 1995 fourth quarter, despite a
$74 million or 20% decline in Cards earnings. Net income totaled $2.0
billion in 1996, up $75 million or 4% from 1995.
Revenue of $3.6 billion in the quarter rose $339 million or 11% from
the 1995 fourth quarter. Net interest revenue and fee and commission
revenue were up 11% and 9%, respectively, in the quarter from the
year-ago quarter. Expense of $1.9 billion in the quarter increased
$159 million or 9%. Revenue of $13.5 billion in the year was up $1.1
billion or 9% from 1995, while expense increased $464 million or 7% to
$7.3 billion.
Consumer credit costs of $844 million in the quarter were $156 million
higher than in the 1995 fourth quarter; and were $3.1 billion in the
year, up $642 million. The ratio of net credit losses to average
managed loans was 2.51% in the quarter, compared with 2.14% a year-
ago. The increase was in Cards, while Citibanking and Private Bank
credit costs improved in both the quarter and year.
Consumer businesses continued to build the allowance for credit
losses, adding $50 million above net credit losses, primarily related
to Cards, consistent with the practice in recent quarters. For 1996,
the allowance build was $200 million.
During the quarter, a survey by "The Far Eastern Economic Review"
listed the Citibank brand as the strongest financial services brand in
Asian marketplaces and the sixth most powerful of all international
brands, an improvement of two places from the 1995 survey.
Citibanking
Citibanking -- which delivers products and services to customers
through Citicorp's worldwide branch network and electronic delivery
systems -- had net income in the 1996 fourth quarter of $207
million, an increase of $83 million from the 1995 fourth quarter.
Return on assets in the quarter was 1.02%, up from 0.61% a year ago.
Net income in the year of $725 million increased $154 million or 27%
from 1995, and return on assets improved to 0.90% from 0.72% in 1995.
Revenue of $1.5 billion in the quarter was up $102 million or 7% from
the 1995 fourth quarter. Revenue of $5.8 billion in the year rose
$352 million or 7%.
2
<PAGE>
Expense of $1.1 billion in the quarter increased $64 million or 6%
from the 1995 fourth quarter, including a 14% rise in the emerging
markets in support of higher business volumes, franchise expansion,
and technology upgrades. Fourth quarter expense in the developed
markets was up 3%, including significant spending on technology
upgrades. Expense of $4.1 billion in 1996 increased $288 million or
8% from 1995.
In the quarter, 30 branches were upgraded to the Citibanking standard
for enhancing customer relationships and efficiency, bringing the
total of remodeled branches to 555 worldwide, or 49% of total
branches.
Credit costs of $155 million in the quarter were down $5 million or 3%
from the 1996 third quarter and down $41 million or 21% from the 1995
fourth quarter, reflecting continued improvement in Latin America and
lower losses in the U.S. and Europe, particularly the U.S. mortgage
business and Germany. The 1995 fourth quarter also included an
additional provision, in excess of net write-offs, of $28 million.
Credit costs of $634 million in the year were down $72 million or 10%
from 1995, and the additional provision of $4 million was down from
$42 million in 1995.
During the quarter Japan's Posts and Telecommunications Ministry
announced plans to connect its approximately 23,000 ATM's and cash
dispensers to Citibank's network. Since their launch in June of 1996,
the CitiSelect family of asset allocation mutual funds in the U.S. and
Asia have attracted more than $900 million of consumer investments.
Cards
Net income in Cards worldwide -- bankcards, Diners Club, and private
label cards -- was $290 million in the quarter, a decrease of $74
million or 20% from the 1995 fourth quarter, reflecting the continued
increase in U.S. bankcards credit losses. The 1996 fourth quarter net
income of $290 million improved $46 million or 19% from $244 million
in the 1996 third quarter, primarily due to higher earnings in the
emerging markets. Return on managed assets in the fourth quarter was
2.02%, compared with 2.73% in the year earlier quarter, and return on
assets before adjusting for the effect of credit card securitizations
was 3.72% in the 1996 fourth quarter, compared with 5.16% in the same
1995 quarter. The emerging markets Cards business, which increased
net income by 54% in the fourth quarter from the year-ago quarter,
represented 37% of worldwide Cards earnings. Net income in worldwide
Cards in the year was $1.0 billion, down $133 million or 11% from
1995, return on managed assets was 1.89%, compared with 2.35% in 1995,
and return on assets before adjusting for the effect of credit card
securitizations was 3.58% in 1996 and 4.51% in 1995.
Cards revenue of $1.8 billion in the quarter improved $199 million or
13% from the 1995 fourth quarter. U.S. bankcards revenue in the
fourth quarter grew 12% over the year-ago quarter, reflecting growth
in managed receivables, which were up $2.1 billion or 5% from a year
ago to $47.0 billion at December 31, 1996, and spread improvement.
Managed receivables also grew $3.0 billion or 7% from the 1996 third
quarter, primarily reflecting seasonal trends. Charge volumes in the
U.S. bankcards business increased from the year-ago quarter by $2.5
billion or 10% to $26.7 billion. Receivables volume growth continued
to be affected by competitive pressures, credit tightening on the part
of Citicorp, and moderating increases in consumer personal debt
levels. Cards revenue of $6.7 billion in the year increased $684
million or 11% from 1995, and U.S. bankcards revenue also increased
11%.
Fourth quarter revenue in the emerging markets Cards businesses was
27% higher than the year earlier quarter, reflecting continued growth
in the Asia Pacific and Middle East businesses, as well as
improvements in Latin America, including Credicard, a Brazilian
affiliate. Emerging markets Cards revenue in the year increased 24%
from 1995.
The number of cards in force worldwide, including those issued by
affiliates, reached 61 million at the end of the quarter, an increase
of three million from a year ago. In North America, the number of
cards was 41 million; in Latin America, the number reached nine
million cards; in Asia, the number reached seven million cards; and in
Europe, the number exceeds three million cards.
Expense in worldwide Cards of $628 million in the quarter increased
$70 million or 13% from the 1995 fourth quarter. Expense levels in
U.S. bankcards in the quarter were up 11%, reflecting investment
spending associated with enhanced cardmember database and analytical
tools, marketing expenses, and increased collection efforts. Expense
in the emerging markets Cards businesses increased 28% in the quarter
in support of higher loan volumes, as well as continued investment
spending. Expense in worldwide Cards of $2.5 billion in the year
increased $119 million or 5% from 1995, principally reflecting 25%
higher emerging markets expense, while U.S. bankcard expense levels
remained essentially unchanged.
3
<PAGE>
Credit costs in U.S. bankcards continued to increase, rising in the
quarter to $608 million or 5.45% of average managed loans, compared
with $550 million or 5.11% in the 1996 third quarter and $414 million
or 3.89% (adjusted for the sale of certain bankrupt accounts) in the
1995 fourth quarter. Bankruptcies represented 38.0% of gross U.S.
bankcard write-offs in the quarter, compared with 37.5% in the
preceding quarter and 35.6% in the year-ago quarter. Citicorp
continues to write off bankrupt accounts upon notice of bankruptcy
filing. Credit costs in U.S. bankcards increased in the year to $2.1
billion or 4.99% of average managed loans, up $660 million from $1.5
billion or 3.73% in 1995 (adjusted for the sale of certain bankrupt
accounts). Managed U.S. bankcard loans delinquent 90 days or more
were 1.90% of the portfolio at the end of the quarter, compared with
1.86% at the end of the preceding quarter and 1.66% a year ago.
Credit costs in Cards portfolios other than U.S. bankcards, which
primarily include bankcards throughout the emerging markets and in the
developed markets of Europe and Japan, as well as worldwide Diners
Club, were $77 million or 3.58% of average loans in the quarter, down
from $89 million or 4.35% in the preceding 1996 quarter and $82
million or 4.59% from the 1995 fourth quarter. The decrease
principally reflected the continued improvement in Latin America.
Credit costs in the year were $335 million or 4.23% of average loans,
compared with $256 million or 3.88% in 1995. Loans delinquent 90 days
or more were unchanged at 2.13% of the portfolio compared with the
preceding quarter and up from 1.93% at year-end 1995.
Private Bank
Private Bank net income of $78 million in the quarter increased $10
million or 15% from the 1995 fourth quarter, and net income of $279
million in the year was $54 million or 24% higher than in 1995, and
resulted in a return on average assets of 1.83% for the quarter and
1.74% for the year. Income before taxes was $95 million, up 22%, in
the fourth quarter and $345 million, up 27%, in the year.
Revenue of $286 million in the quarter was up $38 million or 15%; 1996
revenue was $1.0 billion, up $94 million or 10%. The increase in the
quarter was aided by the successful launch of several new investment
products.
Expense of $187 million and $691 million in the quarter and year was
up $25 million or 15% and $57 million or 9% from 1995. The increases
were due to higher salary levels (including new hires), reengineering
efforts, and higher costs related to activities in the funds business.
Total credit costs of $4 million in the quarter compared with $8
million in the year-ago period. For 1996, the Private Bank had net
credit recoveries of $1 million, compared with credit costs of $36
million in the 1995 period, as the U.S. business benefited from
recoveries and higher levels of cash-basis income. Overall credit
trends improved with delinquencies down to 1.26% of loans from 2.15% a
year earlier, reflecting an overall decrease in the level of
nonperforming assets.
Client business volumes under management at the end of the quarter
totaled $96 billion, up $9 billion from a year earlier. Growth was
balanced across the advisory and discretionary investment areas and
most other product lines.
4
<PAGE>
Corporate Banking improves earnings 28% in fourth quarter;
Net income up 23% to $2.2 billion for year
- ----------------------------------------------------------------------
Fourth Quarter (Dollars in Millions) 1996 1995 Change
======================================================================
Adjusted Revenue $1,994 $1,577 26%
Adjusted Operating Expense 1,218 1,035 18%
Operating Margin 776 542 43%
Credit Costs (15) (14) (7%)
Income before Taxes 791 550 44%
Net Income 549 430 28%
Return on Assets (%) 1.54% 1.23% -
- ----------------------------------------------------------------------
Full Year
======================================================================
Adjusted Revenue $7,153 $6,536 9%
Adjusted Operating Expense 4,440 4,023 10%
Operating Margin 2,713 2,513 8%
Credit Costs (87) 72 NM
Income before Taxes 2,800 2,360 19%
Net Income 2,179 1,778 23%
Return on Assets (%) 1.57% 1.23% -
======================================================================
Corporate banking net income of $549 million in the quarter increased
$119 million or 28% from the 1995 fourth quarter. Return on assets
during the quarter was 1.54%, up from 1.23% in the year ago quarter.
Corporate Banking net income totaled $2.2 billion in 1996, up $401
million or 23% from 1995, while average assets were reduced $5
billion. These results produced a 1996 return on assets of 1.57%, a
34 basis point improvement from 1995.
Revenue of $2.0 billion in the quarter increased $417 million or 26%.
Revenue of $7.2 billion in 1996 increased $617 million or 9% from
1995. Expense of $1.2 billion in the quarter increased $183 million
or 18%. Expense of $4.4 billion in 1996 was up $417 million or 10%
from 1995.
Credit costs remained low with benefits of $15 million and $14 million
in the 1996 and 1995 fourth quarters, respectively, and amounted to a
benefit of $87 million in 1996, in contrast to a $72 million charge
for the previous year.
The effective income tax rate in the quarter rose to 31% from 22% in
the 1995 fourth quarter while the 1996 rate declined to 22% from 25%
in 1995. These fluctuations are primarily attributable to changes in
the geographic mix and nature of pretax earnings.
During the quarter, Citibank was voted first for corporate financial
services in North America and Europe in a "Global Finance" magazine
customer poll, best international commercial bank in Asia by both "Far
Eastern Economic Review" and "Finance Asia" magazines, best in foreign
exchange by "Global Investor" magazine, and best in cash management,
foreign exchange, and securitization by "Corporate Finance" magazine.
For the ninth straight year, Citibank was named best foreign bank in
Japan by the "Nikkei Financial Daily."
Emerging Markets
Emerging Markets net income of $295 million grew $22 million or 8%
from the 1995 fourth quarter, despite an increase in the effective
income tax rate to 29% from 27%. Earnings before taxes were $414
million in the quarter, up $42 million or 11% from the comparable 1995
quarter. Average assets grew $10 billion or 19%, resulting in a
return on assets of 1.86% in the 1996 fourth quarter, compared with
2.04% in the 1995 fourth quarter. Net income in 1996 was $1.5
billion, up $317 million or 28% from 1995.
5
<PAGE>
Revenue of $903 million in the quarter increased $193 million or 27%.
The revenue improvement reflected higher levels of securities
transactions, affiliate earnings, and asset gains coupled with growth
in transaction services and trading-related revenue. About 20% of the
revenue in the Emerging Markets was attributable to business from
multinational companies managed jointly with Global Relationship
Banking, with that revenue having grown at a double digit rate from
the 1995 fourth quarter. Full year 1996 revenue of $3.4 billion was
up $537 million or 19%.
Expense of $448 million in the quarter increased $91 million or 25%,
primarily reflecting investment spending to build the franchise and
costs associated with implementing Citicorp's plan to gain market
share in selected emerging market countries. Expense of $1.6 billion
in the year grew $275 million or 20% from 1995.
Credit costs totaled $41 million in the quarter and compared with no
credit costs in the 1995 fourth quarter. Debt restructuring
activities continued with Peru during the quarter. Credit costs for
1996 were a net credit of $4 million, compared with a net charge of
$33 million in 1995, and included a $75 million benefit from
restructuring agreements concluded with Panama, Slovenia, and Croatia.
Global Relationship Banking
Net income from the Global Relationship Banking business in North
America, Europe, and Japan was $254 million, up $97 million from the
1995 fourth quarter, despite an increase in the effective income tax
rate to 33% from 12% a year ago. Earnings before taxes totaled $377
million, up $199 million from the 1995 fourth quarter. Average assets
were reduced by $7 billion, primarily in trading-related activities,
from the 1995 fourth quarter as Global Relationship Banking continued
its focus on asset utilization and improving returns. Return on
average assets of 1.28% improved from 0.72% in the 1995 fourth
quarter. Full year 1996 net income of $714 million grew by $84
million or 13% from 1995.
Revenue of $1.1 billion grew $224 million or 26% from the 1995 fourth
quarter, reflecting strong venture capital revenue and improved
trading-related results coupled with growth in transaction services
revenue. Venture capital revenue of $176 million improved $148
million from the unusually low 1995 fourth quarter, reflecting the
robust U.S. equity markets. Trading-related revenue of $306 million
increased $43 million or 16% from the 1995 fourth quarter, including
gains from the disposition of certain mortgage assets. Full year 1996
revenue of $3.7 billion was up $80 million or 2%.
Expense of $770 million increased $92 million or 14% compared with the
1995 quarter, primarily reflecting higher incentive compensation
associated with revenue growth and increased spending on technology,
risk management, and reengineering initiatives. Full year 1996
expense of $2.8 billion was up $142 million or 5%.
Credit costs in the quarter were a benefit of $56 million, compared
with a benefit of $14 million in the 1995 fourth quarter. The 1995
fourth quarter also included an additional provision in excess of net
write-offs of $25 million. Credit costs for the year were a benefit
of $83 million compared with a net charge of $39 million in 1995. The
1995 year also included an additional provision of $100 million.
Other Items
Citicorp's effective tax rate was 38% and 37% in the 1996 and 1995
fourth quarters, and 38% for both 1996 and 1995. Income taxes are
attributed to core businesses on the basis of local tax rates, which
resulted in effective tax rates for the core businesses of 29% and 25%
in the 1996 and 1995 fourth quarters, respectively, and 26% and 29%
for the full years, reflecting changes in the nature and geographic
mix of earnings. The difference between the core businesses' tax
rates and Citicorp's overall effective rate in each period is included
in corporate items.
Corporate Items included the incremental pretax expense of $55 million
for performance-based options in the 1996 fourth quarter. The fourth
quarter and full year also included investment writedowns of $50
million and $100 million, respectively, in Latin America, compared
with $25 million and $95 million in the 1995 periods.
At December 31, 1996, total reserves for credit losses (including
reserves for sold Consumer portfolios) were $6.0 billion.
6
<PAGE>
Tier 1 capital was $19.8 billion, total capital was estimated at $28.9
billion, and the Tier 1 and total capital ratios were estimated at
8.4% and 12.2%, respectively. The ratio of common equity to total
assets was 6.6%. The number of shares acquired since June 20, 1995,
when the Board of Directors authorized the stock repurchase program,
totaled 59.2 million for an outlay of $4.6 billion. As expanded in
January and November 1996, the program is authorized to make total
purchases for up to $8.5 billion.
Average common shares outstanding for the purpose of computing fully
diluted earnings per share were 480.9 million in the 1996 fourth
quarter, 485.6 million in the preceding 1996 quarter, and 505.7
million in the 1995 fourth quarter, principally reflecting the net
effect of the share repurchase program and employee stock plans. The
comparable full year average common shares were 490.0 million in 1996
and 511.5 in 1995.
7
<PAGE>
======================================================================
FINANCIAL SUMMARY
======================================================================
Fourth Quarter % Full Year %
-------------- --------------
1996 1995 Change 1996 1995 Change
- ----------------------------------------------------------------------
Net Income (In Millions
of Dollars) $987 $905 9 $3,788 $3,464 9
======================================================================
Net Income Per Share
Common & Common
Equivalent Shares $1.97 $1.89 4 $7.50 $7.21 4
Assuming Full
Dilution $1.97 $1.72 15 $7.42 $6.48 15
Common Stockholders'
Equity Per Share $40.25 $38.64 4
Closing Stock Price
At Quarter End $103.00 $67.25 53
======================================================================
Financial Ratios
Return on Assets 1.42% 1.35% 1.40% 1.29%
Return on Common
Stockholders'
Equity 20.6% 20.5% 20.4% 20.8%
======================================================================
Capital (Dollars in Billions)
Tier 1 $19.8 $18.9
Total (Tier 1 and 2)(A) 28.9 27.7
Tier 1 Ratio (A) 8.4% 8.4%
Total Ratio (Tier 1
and 2) (A) 12.2% 12.3%
Common Equity as a
Percentage of Total
Assets 6.6% 6.4%
Total Equity as a
Percentage of Total
Assets 7.4% 7.6%
======================================================================
Dividends Declared
(In Millions of Dollars)
Common $211 $127 $850 $492
Preferred 38 72 162 343
======================================================================
(A) 1996 estimated.
- ----------------------------------------------------------------------
8
<PAGE>
======================================================================
Earnings Analysis (In Millions of Dollars)
======================================================================
Fourth Quarter % Full Year %
-------------- ---------------
1996 1995 Change 1996 1995 Change
-------------------------------------------------
Total Revenue $5,365 $4,789 12 $20,196 $18,678 8
Effect of Credit
Card
Securitizations 389 250 56 1,392 917 52
Net Cost To Carry (A) (7) 8 NM (46) 23 NM
-------------------------------------------------
Adjusted Revenue 5,747 5,047 14 21,542 19,618 10
Total Operating
Expense 3,281 2,818 16 12,197 11,102 10
Net OREO Benefits (B) 7 59 (88) 44 105 (58)
-------------------------------------------------
Adjusted
Operating Expense 3,288 2,877 14 12,241 11,207 9
-------------------------------------------------
Operating Margin 2,459 2,170 13 9,301 8,411 11
Consumer Credit
Costs (C) 844 688 23 3,115 2,473 26
Commercial Credit
Costs (D) (15) (14) (7) (87) 72 NM
-------------------------------------------------
Operating Margin
Less Credit Costs 1,630 1,496 9 6,273 5,866 7
Additional
Provision (E) 50 56 (11) 200 281 (29)
-------------------------------------------------
Income Before Taxes 1,580 1,440 10 6,073 5,585 9
Income Taxes 593 535 11 2,285 2,121 8
-------------------------------------------------
Net Income $987 $905 9 $3,788 $3,464 9
=================================================
- ----------------------------------------------------------------------
(A) Principally the net cost to carry commercial cash-basis loans
and other real estate owned ("OREO").
(B) Principally gains and losses on sales, direct revenue and
expense, and writedowns of commercial OREO.
(C) Principally consumer net credit write-offs adjusted for the
effect of credit card receivables securitizations.
(D) Includes commercial net credit write-offs, net cost to carry,
and net OREO benefits.
(E) Primarily charges for credit losses in excess of net write-offs.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
9
<PAGE>
- ----------------------------------------------------------------------
Earnings Summary
======================================================================
Fourth Quarter % Full Year %
-------------- --------------
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Consumer $575 $556 3 $2,043 $1,968 4
Corporate Banking (B) 549 430 28 2,179 1,778 23
-------------------------------------------------
Core Businesses 1,124 986 14 4,222 3,746 13
Corporate Items (137) (81) (69) (434) (282) (54)
-------------------------------------------------
Total Citicorp $987 $905 9 $3,788 $3,464 9
- ----------------------------------------------------------------------
Supplemental
Information:
Consumer:
Citibanking $207 $124 67 $725 $571 27
Cards 290 364 (20) 1,039 1,172 (11)
Private Bank 78 68 15 279 225 24
-------------------------------------------------
Total $575 $556 3 $2,043 $1,968 4
-------------------------------------------------
Developed Markets $286 $344 (17) $1,094 $1,164 (6)
Emerging Markets 289 212 36 949 804 18
-------------------------------------------------
Total $575 $556 3 $2,043 $1,968 4
-------------------------------------------------
Corporate Banking
(B):
Emerging Markets $295 $273 8 $1,465 $1,148 28
Global Relationship
Banking 254 157 62 714 630 13
-------------------------------------------------
Total $549 $430 28 $2,179 $1,778 23
=================================================
- ----------------------------------------------------------------------
(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.
- ----------------------------------------------------------------------
10
<PAGE>
- ----------------------------------------------------------------------
Consumer Fourth Quarter % Full Year %
--------------- ---------------
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Total Revenue $3,177 $2,974 7 $12,098 $11,421 6
Effect of Credit
Card
Securitizations 389 250 56 1,392 917 52
Net Cost to Carry
Cash-Basis Loans
and OREO (1) 2 NM (10) 12 NM
Adjusted Revenue 3,565 3,226 11 13,480 12,350 9
------------------------------------------------
Total Operating 1,879 1,714 10 7,259 6,790 7
Expense
Net OREO Costs (1) 5 NM (5) - NM
------------------------------------------------
Adjusted Operating 1,878 1,719 9 7,254 6,790 7
Expense
------------------------------------------------
Operating Margin 1,687 1,507 12 6,226 5,560 12
------------------------------------------------
Net Write-offs 455 441 3 1,728 1,544 12
Effect of Credit
Card
Securitizations 389 250 56 1,392 917 52
Net Cost to Carry
and Net OREO Costs - (3) NM (5) 12 NM
------------------------------------------------
Credit Costs 844 688 23 3,115 2,473 26
------------------------------------------------
Operating Margin
Less Credit Costs 843 819 3 3,111 3,087 1
Additional Provision 50 50 - 200 200 -
------------------------------------------------
Income Before Taxes 793 769 3 2,911 2,887 1
Income Taxes 218 213 2 868 919 (6)
------------------------------------------------
Net Income $575 $556 3 $2,043 $1,968 4
================================================
- ----------------------------------------------------------------------
Average Assets (In
Billions of $129 $124 4 $126 $120 5
Dollars)
Return on Assets 1.77% 1.78% - 1.62% 1.64% -
================================================
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
11
<PAGE>
- ----------------------------------------------------------------------
(Dollars In Fourth Quarter % Full Year %
Millions) --------------- ---------------
Citibanking 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Revenue $1,495 $1,393 7 $5,764 $5,412 7
Operating Expense 1,063 999 6 4,086 3,798 8
-------------------------------------------------
Operating Margin 432 394 10 1,678 1,614 4
Credit Costs 155 196 (21) 634 706 (10)
-------------------------------------------------
Operating Margin
Less Credit Costs 277 198 40 1,044 908 15
Additional
Provision - 28 NM 4 42 (90)
-------------------------------------------------
Income Before Taxes 277 170 63 1,040 866 20
Income Taxes 70 46 52 315 295 7
Net Income $207 $124 67 $725 $571 27
=================================================
Average Assets (In
Billions of Dollars) $81 $81 - $81 $79 3
Return on Assets 1.02% 0.61% - 0.90% 0.72% -
=================================================
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Cards
- ----------------------------------------------------------------------
Adjusted Revenue $1,784 $1,585 13 $6,681 $5,997 11
Adjusted Operating
Expense 628 558 13 2,477 2,358 5
-------------------------------------------------
Operating Margin 1,156 1,027 13 4,204 3,639 16
Credit Costs 685 484 42 2,482 1,731 43
-------------------------------------------------
Operating Margin
Less Credit Costs 471 543 (13) 1,722 1,908 (10)
Additional
Provision 50 22 NM 196 158 24
-------------------------------------------------
Income Before Taxes 421 521 (19) 1,526 1,750 (13)
Income Taxes 131 157 (17) 487 578 (16)
Net Income $290 $364 (20) $1,039 $1,172 (11)
=================================================
Average Assets (In
Billions of Dollars) $31 $28 11 $29 $26 12
Return on Assets (B) 3.72% 5.16% - 3.58% 4.51% -
=================================================
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Private Bank
- ----------------------------------------------------------------------
Adjusted Revenue $286 $248 15 $1,035 $941 10
Adjusted Operating
Expense 187 162 15 691 634 9
-------------------------------------------------
Operating Margin 99 86 15 344 307 12
Credit Costs 4 8 (50) (1) 36 NM
-------------------------------------------------
Operating Margin
Less Credit Costs 95 78 22 345 271 27
Additional
Provision - - - - - -
-------------------------------------------------
Income Before Taxes 95 78 22 345 271 27
Income Taxes 17 10 70 66 46 43
-------------------------------------------------
Net Income $78 $68 15 $279 $225 24
=================================================
Average Assets (In
Billions of
Dollars) $17 $15 13 $16 $15 7
Return on Assets 1.83% 1.80% - 1.74% 1.50% -
=================================================
- ----------------------------------------------------------------------
(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 2.02% in the
1996 quarter and 2.73% in the year-ago quarter. For the full
year of 1996 and 1995, the return on managed assets was 1.89%
and 2.35%, respectively.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
12
<PAGE>
- ----------------------------------------------------------------------
(Dollars In Millions) Fourth Quarter Full Year
Consumer Business --------------- ---------------
in Developed % %
Markets 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Adjusted Revenue $2,580 $2,393 8 $9,842 $9,217 7
Adjusted Operating
Expense 1,342 1,265 6 5,212 5,056 3
------------------------------------------------
Operating Margin 1,238 1,128 10 4,630 4,161 11
Credit Costs 767 582 32 2,758 2,176 27
------------------------------------------------
Operating Margin
Less Credit Costs 471 546 (14) 1,872 1,985 (6)
Additional Provision 49 44 11 185 170 9
------------------------------------------------
Income Before Taxes 422 502 (16) 1,687 1,815 (7)
Income Taxes 136 158 (14) 593 651 (9)
------------------------------------------------
Net Income $286 $344 (17) $1,094 $1,164 (6)
================================================
Average Assets (In
Billions of Dollars) $89 $88 1 $88 $86 2
Return on Assets 1.28% 1.55% - 1.24% 1.35% -
================================================
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Consumer Business in Emerging Markets
- ----------------------------------------------------------------------
Adjusted Revenue $985 $833 18 $3,638 $3,133 16
Adjusted Operating
Expense 536 454 18 2,042 1,734 18
------------------------------------------------
Operating Margin 449 379 18 1,596 1,399 14
Credit Costs 77 106 (27) 357 297 20
------------------------------------------------
Operating Margin
Less Credit Costs 372 273 36 1,239 1,102 12
Additional 1 6 (83) 15 30 (50)
Provision
------------------------------------------------
Income Before Taxes 371 267 39 1,224 1,072 14
Income Taxes 82 55 49 275 268 3
------------------------------------------------
Net Income $289 $212 36 $949 $804 18
================================================
Average Assets (In
Billions of
Dollars) $40 $36 11 $38 $34 12
Return on Assets 2.87% 2.34% - 2.50% 2.36% -
================================================
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
- ----------------------------------------------------------------------
13
<PAGE>
- ----------------------------------------------------------------------
Corporate Banking Fourth Quarter % Full Year %
--------------- -------------
(Dollars In Millions) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Total Revenue $2,000 $1,571 27 $7,189 $6,525 10
Net Cost to Carry
Cash-Basis Loans
and OREO (6) 6 NM (36) 11 NM
------------------------------------------------
Adjusted Revenue 1,994 1,577 26 7,153 6,536 9
------------------------------------------------
Total Operating
Expense 1,210 981 23 4,391 3,918 12
Net OREO Benefits 8 54 (85) 49 105 (53)
------------------------------------------------
Adjusted Operating
Expense 1,218 1,035 18 4,440 4,023 10
------------------------------------------------
Operating Margin 776 542 43 2,713 2,513 8
------------------------------------------------
Net Write-offs
(Recoveries) (1) 34 NM (2) 166 NM
Net Cost to Carry
and Net OREO
Benefits (14) (48) (71) (85) (94) (10)
------------------------------------------------
Credit Costs (15) (14) (7) (87) 72 NM
------------------------------------------------
Operating Margin
Less Credit Costs 791 556 42 2,800 2,441 15
Additional
Provision - 6 NM - 81 NM
------------------------------------------------
Income Before Taxes 791 550 44 2,800 2,360 19
Income Taxes 242 120 NM 621 582 7
------------------------------------------------
Net Income $549 $430 28 $2,179 $1,778 23
================================================
Average Assets (In
Billions of
Dollars) $142 $139 2 $139 $144 (3)
Return on Assets 1.54% 1.23% - 1.57% 1.23% -
================================================
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
14
<PAGE>
- ----------------------------------------------------------------------
(Dollars In Fourth Quarter % Full Year %
Millions) -------------- ---------------
Emerging Markets 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Adjusted Revenue $903 $710 27 $3,437 $2,900 19
Adjusted Operating
Expense 448 357 25 1,645 1,370 20
--------------------------------------------------
Operating Margin 455 353 29 1,792 1,530 17
Credit Costs 41 - NM (4) 33 NM
--------------------------------------------------
Operating Margin
Less Credit Costs 414 353 17 1,796 1,497 20
Additional
Provision - (19) NM - (19) NM
--------------------------------------------------
Income Before Taxes 414 372 11 1,796 1,516 18
Income Taxes 119 99 20 331 368 (10)
--------------------------------------------------
Net Income $295 $273 8 $1,465 $1,148 28
==================================================
Average Assets (In
Billions of
Dollars) $63 $53 19 $59 $50 18
Return on Assets 1.86% 2.04% - 2.48% 2.30% -
==================================================
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Global Relationship Banking
- ----------------------------------------------------------------------
Adjusted Revenue $1,091 $867 26 $3,716 $3,636 2
Adjusted Operating
Expense 770 678 14 2,795 2,653 5
--------------------------------------------------
Operating Margin 321 189 70 921 983 (6)
Credit Costs (56) (14) NM (83) 39 NM
--------------------------------------------------
Operating Margin
Less Credit
Costs 377 203 86 1,004 944 6
Additional
Provision - 25 NM - 100 NM
--------------------------------------------------
Income Before Taxes 377 178 NM 1,004 844 19
Income Taxes 123 21 NM 290 214 36
Net Income $254 $157 62 $714 $630 13
==================================================
Average Assets (In
Billions of
Dollars) $79 $86 (8) $80 $94 (15)
==================================================
Return on Assets 1.28% 0.72% - 0.89% 0.67% -
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
15
<PAGE>
- ----------------------------------------------------------------------
Corporate Items (A) Fourth Quarter % Full Year %
(In Millions of -------------- --------------
Dollars) 1996 1995(B) Change 1996 1995(B) Change
- ----------------------------------------------------------------------
Revenue $188 $244 (23) $909 $732 24
Operating Expense 192 123 56 547 394 39
--------------------------------------------------
Income (Loss) (4) 121 NM 362 338 7
Before Taxes
Income Taxes 133 202 (34) 796 620 28
==================================================
Net Loss $(137) $(81) 69 $(434) $(282) 54
==================================================
- ----------------------------------------------------------------------
(A) 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.
(B) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
16
<PAGE>
- ----------------------------------------------------------------------
Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios
- ----------------------------------------------------------------------
Total 90 Days or More Net Credit Losses
Loans (A) Past Due
------------------------------------------------------
Dec. 31, Dec. Sept. Dec. 4th 3rd 4th
1996 31, 30, 31, Qtr. Qtr. Qtr.
1996 1996 1995 1996 1996 1995
- ----------------------------------------------------------------------
(Dollars in (Dollars in (Dollars in
Billions) Millions) Millions)
Citibanking $ 66.2 $2,320 $2,527 $2,770 $155 $160 $196
Ratio 3.50% 3.87% 4.23% 0.94% 0.95% 1.20%
Cards
U.S. Bankcards 46.5 886 809 732 608 550 402
Ratio 1.90% 1.86% 1.66% 5.45% 5.11% 3.77%
Other 8.9 189 178 141 77 89 82
Ratio 2.13% 2.13% 1.93% 3.58% 4.35% 4.59%
Private Bank 15.4 193 247 307 4 1 11
Ratio 1.26% 1.61% 2.15% 0.07% 0.05% 0.32%
-------------------------------------------------
Total Managed 137.0 3,588 3,761 3,950 844 800 691
Ratio 2.62% 2.84% 3.01% 2.51% 2.40% 2.14%
Effect of Credit
Card
Securitizations (25.2) (501) (499) (440) (389) (360) (250)
=================================================
Total On-Balance
Sheet $111.8 $3,087 $3,262 $3,510 $455 $440 $441
Ratio 2.76% 3.07% 3.32% 1.68% 1.64% 1.70%
=================================================
- ----------------------------------------------------------------------
Supplemental Information
(Managed Portfolio):
Developed $104.0 $3,218 $3,377 $3,665 $767 $711 $585
Ratio 3.10% 3.36% 3.58% 3.01% 2.79% 2.32%
Emerging 33.0 370 384 285 77 89 106
Ratio 1.12% 1.21% 0.99% 0.94% 1.13% 1.50%
================================================
- ----------------------------------------------------------------------
(A) End of period, net of unearned income.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Consumer Loan Balances
- ----------------------------------------------------------------------
End of Period (A) Average (A)
---------------------------------------------
Dec. Sept. Dec. 4th 3rd 4th
(In Billions of Dollars) 31, 30, 31, Qtr. Qtr. Qtr.
1996 1996 1995 1996 1996 1995
- ----------------------------------------------------------------------
Managed 137.0 $132.3 $131.1 $133.7 $132.3 $128.1
Effect of Credit Card
Securitizations (25.2) (26.1) (25.5) (25.9) (26.2) (25.2)
---------------------------------------------
On-Balance Sheet $111.8 $106.2 $105.6 $107.8 $106.1 $102.9
=============================================
- ----------------------------------------------------------------------
(A) Net of unearned income.
- ----------------------------------------------------------------------
17
<PAGE>
- ----------------------------------------------------------------------
Cash-Basis and Renegotiated Loans
- ----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
(In Millions of Dollars) 1996 1996 1995
- ----------------------------------------------------------------------
Commercial Cash-Basis Loans
Collateral-Dependent (at Lower
of Cost or Collateral Value)(A) $263 $ 588 $ 779
Other 642 809 755
-----------------------------
Total Commercial Cash-Basis Loans $905 $1,397 $1,534
=============================
- ----------------------------------------------------------------------
Commercial Renegotiated Loans $321 $330 $421
=============================
- ----------------------------------------------------------------------
Consumer Loans On Which Accrual
of Interest Has Been Suspended $2,187 $2,333 $2,660
=============================
- ----------------------------------------------------------------------
(A) 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.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Other Real Estate Owned and Assets Pending Disposition (A)
- ----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
(In Millions of Dollars) 1996 1996 1995
- ----------------------------------------------------------------------
Consumer OREO $452 $464 $ 529
Commercial OREO 614 492 625
Total OREO $1,066 $956 $1,154
=============================
Assets Pending Disposition (B) $160 $182 $205
-----------------------------
- ----------------------------------------------------------------------
(A) Carried at lower of cost or collateral value.
(B) Represents Consumer residential mortgage loans that have a high
probability of foreclosure.
- ----------------------------------------------------------------------
18
<PAGE>
- ----------------------------------------------------------------------
Allowance for Credit Losses
- ----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
(Dollars In Millions) 1996 1996 1995
- ----------------------------------------------------------------------
Consumer $2,079 $2,036 $1,944
Commercial 3,424 3,424 3,424
-------------------------------
Total $5,503 $5,460 $5,368
-------------------------------
Allowance As a Percent of Total Loans:
Consumer 1.86% 1.92% 1.84%
Commercial 5.46% 5.44% 5.71%
Total 3.15% 3.23% 3.24%
-------------------------------
Reserves For Sold Consumer
Portfolios $473 $481 $486
-------------------------------
- ----------------------------------------------------------------------
Net Write-offs, Additional Provision, and Provision for Credit Losses
Fourth Quarter Full Year
--------------------------------------
(In Millions of Dollars) 1996 1995 1996 1995
- ---------------------------------------------------------------------
Net Write-offs (Recoveries):
Consumer (A) $844 $691 $3,120 $2,461
Commercial (1) 26 (2) 148
--------------------------------------
Total Adjusted Net Write-offs 843 717 3,118 2,609
Effect of Credit Card (389) (250) (1,392) (917)
Securitizations
--------------------------------------
Total $454 $467 $1,726 $1,692
======================================
- ----------------------------------------------------------------------
Additional Provision:
Consumer $50 $50 $200 $200
Commercial - 6 - 81
--------------------------------------
Total $50 $56 $200 $281
======================================
- ----------------------------------------------------------------------
Provision for Credit Losses:
Consumer $505 $491 $1,928 $1,744
Commercial (1) 40 (2) 247
--------------------------------------
Total $504 $531 $1,926 $1,991
======================================
- ----------------------------------------------------------------------
(A) Adjusted for the effect of credit card securitizations.
- ----------------------------------------------------------------------
19
<PAGE>
- ----------------------------------------------------------------------
Consolidated Statement of Income CITICORP and Subsidiaries
- ----------------------------------------------------------------------
Fourth Quarter Full Year
- ----------------------------------- ---------------
(In Millions of
Dollars, Except Per % %
Per Share Amounts) 1996 1995 Change 1996 1995 Change
- ----------------------------------------------------------------------
Interest Revenue $6,007 $5,858 3 $23,349 $22,963 2
Interest Expense 3,189 3,298 (3) 12,409 13,012 (5)
-------------------------------------------------
Net Interest Revenue 2,818 2,560 10 10,940 9,951 10
-------------------------------------------------
Provision for
Credit Losses 504 531 (5) 1,926 1,991 (3)
-------------------------------------------------
Net Interest Revenue
after Provision for
for Credit Losses 2,314 2,029 14 9,014 7,960 13
-------------------------------------------------
Fees, Commissions,
and Other Revenue
Fees and Commissions 1,445 1,372 5 5,469 5,165 6
Foreign Exchange 224 175 28 864 1,053 (18)
Trading Account 217 196 11 637 559 14
Securities
Transactions 64 67 (4) 210 132 59
Other Revenue 597 419 42 2,076 1,818 14
------------------------------------------------
Total Fees,
Commissions, and
Other Revenue 2,547 2,229 14 9,256 8,727 6
------------------------------------------------
Operating Expense
Salaries 1,296 1,124 15 4,880 4,445 10
Employee Benefits 358 302 19 1,364 1,281 6
------------------------------------------------
Total Employee
Expense 1,654 1,426 16 6,244 5,726 9
Net Premises
and Equipment 476 438 9 1,843 1,698 9
Expense
Other Expense 1,151 954 21 4,110 3,678 12
------------------------------------------------
Total Operating
Expense 3,281 2,818 16 12,197 11,102 10
------------------------------------------------
Income Before Taxes 1,580 1,440 10 6,073 5,585 9
Income Taxes 593 535 11 2,285 2,121 8
------------------------------------------------
Net Income $987 $905 9 $3,788 $3,464 9
================================================
Income Applicable
to Common Stock $949 $836 14 $3,631 $3,126 16
------------------------------------------------
Earnings Per Share:
On Common and Common
Equivalent Shares $1.97 $1.89 4 $7.50 $7.21 4
Assuming Full
Dilution $1.97 $1.72 15 $7.42 $6.48 15
- ----------------------------------------------------------------------
20
<PAGE>
- ----------------------------------------------------------------------
Consolidated Balance Sheet CITICORP and Subsidiaries
- ----------------------------------------------------------------------
Dec. 31, Dec. 31, %
(In Millions of Dollars) 1996 1995 Change
- ----------------------------------------------------------------------
Assets
Cash and Due from Banks $6,905 $5,723 21
Deposits at Interest with Banks 11,648 9,028 29
Securities, At Fair Value
Available for Sale 26,062 18,213 43
Venture Capital 2,124 1,854 15
Trading Account Assets 30,785 32,093 (4)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 11,133 8,113 37
Loans, Net
Consumer 111,847 105,643 6
Commercial 62,765 59,999 5
---------------------------------
Loans, Net of Unearned Income 174,612 165,642 5
Allowance for Credit Losses (5,503) (5,368) 3
---------------------------------
Total Loans, Net 169,109 160,274 6
Customers' Acceptance Liability 2,077 1,542 35
Premises and Equipment, Net 4,667 4,339 8
Interest and Fees Receivable 3,068 2,914 5
Other Assets 13,440 12,760 5
---------------------------------
Total $281,018 $256,853 9
=================================
- ----------------------------------------------------------------------
Liabilities
Non-Interest-Bearing Deposits in $14,867 $13,388 11
U.S. Offices
Interest-Bearing Deposits in U.S. 40,254 36,700 10
Offices
Non-Interest-Bearing Deposits in 9,891 8,164 21
Offices Outside the U.S.
Interest-Bearing Deposits in Offices 119,943 108,879 10
Outside the U.S.
---------------------------------
Total Deposits 184,955 167,131 11
Trading Account Liabilities 22,003 18,274 20
Purchased Funds and Other Borrowings 18,191 16,334 11
Acceptances Outstanding 2,104 1,559 35
Accrued Taxes and Other Expense 5,992 5,719 5
Other Liabilities 8,201 9,767 (16)
Long-Term Debt 18,850 18,488 2
Stockholders' Equity
Preferred Stock (Without par value) 2,078 3,071 (32)
Common Stock ($1.00 par value) 506 461 10
Issued Shares: 506,298,235 and
461,319,265, respectively
Surplus 6,595 5,702 16
Retained Earnings 14,303 12,190 17
Net Unrealized Gains - Securities 676 132 NM
Available for Sale
Foreign Currency Translation (486) (437) 11
Common Stock in Treasury, at Cost (2,950) (1,538) 92
Shares 43,081,217 and 34,030,205,
respectively
---------------------------------
Total Stockholders' Equity 20,722 19,581 6
---------------------------------
Total $281,018 $256,853 9
=================================
- ----------------------------------------------------------------------
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
21
<PAGE>
- ----------------------------------------------------------------------
Net Interest Revenue Statistics 4th 3rd 2nd 1st 4th
Qtr. Qtr. Qtr. Qtr. Qtr.
(Taxable Equivalent Basis)(A) 1996 1996(B) 1996 1996 1995
- ----------------------------------------------------------------------
(In Millions of Dollars)
Adjusted Net Interest Revenue
(C): $3,484 $3,330 $3,351 $3,263 $3,106
Effect of Credit Card
Securitizations (650) (613) (615) (570) (537)
---------------------------------------
Total $2,834 $2,717 $2,736 $2,693 $2,569
---------------------------------------
- ----------------------------------------------------------------------
(In Billions of Dollars)
Adjusted Average Interest-
Earning Assets (C): $262.2 $258.8 $256.8 $254.6 $251.0
Effect of Credit Card
Securitizations (25.9) (26.2) (26.2) (25.9) (25.2)
---------------------------------------
Total $236.3 $232.6 $230.6 $228.7 $225.8
=======================================
Adjusted Net Interest
Margin (C) 5.28% 5.12% 5.25% 5.15% 4.91%
Effect of Credit Card
Securitizations (.51)% (.47)% (.48)% (.41)% (.40)%
---------------------------------------
Total 4.77% 4.65% 4.77% 4.74% 4.51%
=======================================
- ----------------------------------------------------------------------
(A) The taxable equivalent adjustment is based on the U.S. federal
statutory tax rate of 35%.
(B) Excluding the $64 million SAIF assessment, adjusted net interest
revenue and the related adjusted net interest margin were $3,394
million and 5.22%, respectively.
(C) Adjusted for the effect of credit card securitizations.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Consolidated Average Balances
- ----------------------------------------------------------------------
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
(In Billions of Dollars) 1996 1996 1996 1996 1995
- ----------------------------------------------------------------------
Loans:
Consumer $108 $106 $104 $104 $103
Commercial 61 61 60 59 58
----------------------------------------
Total Average Loans $169 $167 $164 $163 $161
========================================
- ----------------------------------------------------------------------
Total Average Assets $276 $268 $268 $268 $266
========================================
- ----------------------------------------------------------------------
(In Millions of Dollars)
Common Stockholders'
Equity $18,321 $17,950 $17,713 $17,362 $16,166
Preferred Equity 2,078 2,078 2,078 2,367 3,169
-------------------------------------------
Total Average
Stockholders' Equity $20,399 $20,028 $19,791 $19,729 $19,335
- ----------------------------------------------------------------------
22
<PAGE>
- ----------------------------------------------------------------------
Calculation of Earnings Per Share
- ----------------------------------------------------------------------
Fourth Quarter 1996 Fourth Quarter 1995
---------------------------------------------
On Common On Common
and Common Assuming and Common Assuming
Equivalent Full Equivalent Full
(In Millions, except Per Shares Dilution Shares Dilution
Share Amounts)
- ----------------------------------------------------------------------
Earnings
Income Applicable to
Common Stock $949 $949 $836 $836
Dividends on Conversion
Preferred Stock, Series 15(A) - - 4 4
Dividends on Convertible
Preferred Stock, Series 12
and Series 13(B) - - - 28
--------------------------------------
Income Applicable to
Common Stock, Adjusted $949 $949 $840 $868
- ----------------------------------------------------------------------
Shares
Weighted-Average Common
Shares Outstanding (A)(B)(C) 467.2 467.2 426.3 426.3
Conversion Preferred
Stock, Series 15 (A) - - 3.1 3.1
Convertible Preferred Stock,
Series 12 and Series 13 (B) - - - 60.8
Other Common Equivalent
Shares (D) 13.5 13.7 15.5 15.5
--------------------------------------
Total 480.7 480.9 444.9 505.7
======================================
- ----------------------------------------------------------------------
Earnings Per Share
Net Income $1.97 $1.97 $1.89 $1.72
- ----------------------------------------------------------------------
(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 0.9 million and 1.0 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.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Dec. 31, Dec. 31,
(In Thousands) 1996 1995
- ----------------------------------------------------------------------
Common Shares Outstanding 463,217 427,289
===================
- ----------------------------------------------------------------------
23
<PAGE>
- ----------------------------------------------------------------------
Full Year 1996 Full Year 1995
------------------------------------------
On Common On Common
and Common Assuming and Common Assuming
(In Millions, except Per Equivalent Full Equivalent Full
Share Amounts) Shares Dilution Shares Dilution
- ----------------------------------------------------------------------
Earnings
Income Applicable to
Common Stock $3,631 $3,631 $3,126 $3,126
Dividends on Conversion
Preferred Stock, Series
15 (A) - - 62 62
Dividends on Convertible
Preferred Stock, Series 12
and Series 13 (B) - 5 - 127
--------------------------------------
Income Applicable to
Common Stock, Adjusted $3,631 $3,636 $3,188 $3,315
- ----------------------------------------------------------------------
Shares
Weighted-Average Common
Shares Outstanding(A)(B)(C) 469.6 469.6 411.5 411.5
Conversion Preferred
Stock, Series 15 (A) - - 16.8 16.8
Convertible Preferred Stock,
Series 12 and Series 13(B) - 5.2 - 68.1
Other Common Equivalent
Shares (D) 14.4 15.2 13.8 15.1
--------------------------------------
Total 484.0 490.0 442.1 511.5
======================================
- ----------------------------------------------------------------------
Earnings Per Share
Net Income $7.50 $7.42 $7.21 $6.48
- ----------------------------------------------------------------------
(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 0.9 million and 1.0 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.
- ----------------------------------------------------------------------
24
<PAGE>
- ----------------------------------------------------------------------
Other Revenue Fourth Quarter % Full Year %
(In Millions ---------------- ----------------
of Dollars) 1996 1995(A) Change 1996 1995(A) Change
- ----------------------------------------------------------------------
Securitized Credit
Card Receivables $249 $254 (2) $907 $988 (8)
Venture Capital 176 28 NM 450 390 15
Affiliate Earnings 102 51 NM 290 208 39
Net Asset Gains
and Other Items 70 86 (19) 429 232 85
-----------------------------------------------
Total $597 $419 42 $2,076 $1,818 14
===============================================
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Trading-Related Fourth Quarter % Full Year %
Revenue ---------------- ----------------
(In Millions 1996 1995(A) Change 1996 1995(A) Change
of Dollars)
- ----------------------------------------------------------------------
By Business Sector:
Corporate Banking:
Emerging Markets $164 $150 9 $746 $658 13
Global
Relationship
Banking 306 263 16 909 1,079 (16)
----------------------------------------------
Total
Corporate Banking 470 413 14 1,655 1,737 (5)
Consumer and Other 73 70 4 254 252 1
----------------------------------------------
Total $543 $483 12 $1,909 $1,989 (4)
==============================================
- ----------------------------------------------------------------------
By Trading Activity:
Foreign Exchange (B) $239 $262 (9) $932 $1,124 (17)
Derivative (C) 110 116 (5) 544 472 15
Fixed Income (D) 137 10 NM 150 65 NM
Other 57 95 (40) 283 328 (14)
----------------------------------------------
Total $543 $483 12 $1,909 $1,989 (4)
==============================================
- ----------------------------------------------------------------------
By Income Statement Line:
Foreign Exchange $224 $175 28 $864 $1,053 (18)
Trading Account 217 196 11 637 559 14
Other (E) 102 112 (9) 408 377 8
----------------------------------------------
Total $543 $483 12 $1,909 $1,989 (4)
==============================================
- ----------------------------------------------------------------------
(A) Reclassified to conform to latest quarter's presentation.
(B) Foreign exchange activity includes foreign exchange spot,
forward, and option contracts.
(C) Derivative activity primarily includes interest rate and
currency swaps, options, financial futures, and equity and
commodity contracts.
(D) Fixed income activity principally includes debt instruments
including government and corporate debt as well as mortgage
assets.
(E) Primarily net interest revenue.
NM Not meaningful, as percentage equals or exceeds 100%.
- ----------------------------------------------------------------------
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
- Exhibit No. 4 Second Supplemental Indenture, dated
as of December 17, 1996 to the Indenture dated as of
April 1, 1991, as supplemented by a first
Supplemental Indenture dated as of November 27, 1992
between Citicorp and The Chase Manahattan Bank
(formerly known as Chemical Bank).
- Exhibit No. 12(a) Calculation of Ratio of Income to
Fixed Charges
- Exhibit No. 12(b) Calculation of Ratio of Income to
Fixed Charges Including Preferred Stock Dividends of
Income to Fixed Charges
25
<PAGE>
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
(Registrant)
By: /s/ Thomas E. Jones
-------------------------------
Thomas E. Jones
Executive Vice President
A Principal Financial
Officer
Dated: January 21, 1997
SECOND SUPPLEMENTAL INDENTURE
Second Supplemental Indenture, dated as of December 17, 1996
(this "Supplemental Indenture") to Indenture, dated as of April 1,
1991, as supplemented by a First Supplemental Indenture dated as of
November 27, 1992 (the "Indenture") between Citicorp, a Delaware
corporation (the "Company") and The Chase Manhattan Bank, a New York
corporation (formerly known as Chemical Bank), as trustee (the
"Trustee").
Recitals of the Company
Section 901(9) of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without
the consent of any Holders to cure any ambiguity or to make provisions
with respect to matters arising under the Indenture which do not
adversely affect the interests of the Holders of Securities of any
series in any material respect. The Company wishes to clarify the term
"creditors" as used in the definition of "Senior Indebtedness" for
purposes of the Indenture.
The Company has requested that the Trustee enter into this
Supplemental Indenture pursuant to Section 901 of the Indenture. All
things necessary to made this Supplemental Indenture a valid agreement
of the Company and a valid amendment of and supplement to the
Indenture have been done.
NOW THEREFORE, for and in consideration of the premises, it is
mutually agreed, for the equal and proportionate benefit of all
Holders of the Securities or of series thereof, as follows:
1. All capitalized terms used and not defined in this
Supplemental Indenture have the meanings assigned to them in the
Indenture, and all provisions of general application in the Indenture
shall also apply to this Supplemental Indenture.
2. (a) The definition of "Senior Indebtedness" in Section 101 of
the Indenture is hereby amended to read in its entirety as follows:
"'Senior Indebtedness' means any obligation of the Company to its
creditors, whether now outstanding or subsequently incurred, other
than (w) the Securities, (x) all other unsecured and subordinated
indebtedness of the Company, and all other unsecured and subordinated
guarantees by the Company of indebtedness of other Persons, (y) all
obligations incurred or assumed by the Company in the ordinary course
of business in connection with the obtaining of materials or services,
and all obligations of the Company in respect of any guarantees of
such obligations of subsidiaries of the Company (provided that
obligations described in this clause (y) shall not include traveler's
checks or other unsubordinated financial instruments) and (z) any
other obligations as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligation is not Senior Indebtedness."
(b) The last sentence of the first paragraph of Section 1501 of
the Indenture is amended to read in its entirety as follows: "The
Securities shall rank pari passu with, and shall not be 'Senior
Indebtedness' with respect to, the instruments and obligations
referred to in clauses (x), (y) and (z) of the definition of 'Senior
Indebtedness' set forth in Section 101; provided, however, that the
Securities shall rank senior to any such instrument or obligation to
the extent, if any, so provided in
1
<PAGE>
the instrument creating or evidencing the same or pursuant to which
the same is outstanding, as such instrument may be in effect from time
to time."
3. This Supplemental Indenture shall be effective as of the date
first written above, to the extent permitted by applicable law.
4. The Company makes and reaffirms as of the date of execution
of this Supplemental Indenture all of its representations, warranties,
covenants and agreements set forth in the Indenture (except as
otherwise provided above).
5. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture.
6. All covenants and agreements in this Supplemental Indenture
by the Company shall bind its successors and assigns, whether so
expressed or not.
7. In case any provision in this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
8. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same
instrument.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of the day
and year first above written.
CITICORP
By: /s/ Ann Goodbody
----------------------
Ann Goodbody
Vice President
[Seal]
Attest:
By: /s/ George E. Seegers
-------------------------
Name: George E. Seegers
Title: Assistant Secretary
THE CHASE MANHATTAN BANK
By: /s/ Patricia Kelly
----------------------
Patricia Kelly
Vice President
[Seal]
Attest:
By: /s/ Gregory P. Shea
--------------------------
Name: Gregory P. Shea
Title: Senior Trust Officer
3
<PAGE>
State of New York )
) SS.:
County of New York )
On December 17, 1996, before me personally came Ann
Goodbody, to me known, who, being by me duly sworn, did depose and say
that she is a Vice President of Citicorp, one of the corporations
described in and which executed the foregoing instrument; that she
knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that she signed her
name thereto by like authority.
(Notarial Seal)
/s/ Michael P. Casteele
-------------------------
Notary Public
State of New York )
) SS.:
County of New York )
On December 17, 1996, before me personally came Patricia
Kelly, to me known, who, being by me duly sworn, did depose and say
that she is a Vice President of The Chase Manhattan Bank, one of the
corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
(Notarial Seal)
/s/ Annabelle DeLuca
-------------------------
Notary Public
4
CITICORP AND SUBSIDIARIES
CALCULATION OF RATIO OF INCOME TO FIXED CHARGES
(In Millions)
YEAR ENDED DECEMBER 31,
EXCLUDING INTEREST ON DEPOSITS: 1996 1995 1994 1993 1992
------ ------ ------ ------ ------
FIXED CHARGES:
INTEREST EXPENSE (OTHER THAN
INTEREST ON DEPOSITS) ...... 3,435 4,110 5,906 6,324 5,826
INTEREST FACTOR IN RENT EXPENSE 150 140 143 147 162
------ ------ ------ ------ ------
TOTAL FIXED CHARGES ........ 3,585 4,250 6,049 6,471 5,988
INCOME:
NET INCOME .................... 3,788 3,464 3,422(A) 1,919(B) 722
INCOME TAXES .................. 2,285 2,121 1,189 941 696
FIXED CHARGES ................. 3,585 4,250 6,049 6,471 5,988
------ ------ ------ ------ ------
TOTAL INCOME ............... 9,658 9,835 10,660 9,331 7,406
====== ====== ====== ====== ======
RATIO OF INCOME TO FIXED CHARGES
EXCLUDING INTEREST ON DEPOSITS 2.69 2.31 1.76 1.44 1.24
====== ====== ====== ====== ======
INCLUDING INTEREST ON DEPOSITS:
FIXED CHARGES:
INTEREST EXPENSE .............. 12,409 13,012 14,902 16,121 16,327
INTEREST FACTOR IN RENT EXPENSE 150 140 143 147 162
------ ------ ------ ------ ------
TOTAL FIXED CHARGES ........ 12,559 13,152 15,045 16,268 16,489
INCOME:
NET INCOME .................... 3,788 3,464 3,422(A) 1,919(B) 722
INCOME TAXES .................. 2,285 2,121 1,189 941 696
FIXED CHARGES ................. 12,559 13,152 15,045 16,268 16,489
------ ------ ------ ------ ------
TOTAL INCOME ............... 18,632 18,737 19,656 19,128 17,907
====== ====== ====== ====== ======
RATIO OF INCOME TO FIXED CHARGES
INCLUDING INTEREST ON DEPOSITS 1.48 1.42 1.31 1.18 1.09
====== ====== ====== ====== ======
(A) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1994 EXCLUDES THE
CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS No. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT
BENEFITS", OF $(56) MILLION.
(B) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 EXCLUDES THE
CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES", OF $300
MILLION.
CITICORP AND SUBSIDIARIES
CALCULATION OF RATIO OF INCOME TO FIXED CHARGES
INCLUDING PREFERRED STOCK DIVIDENDS
(In Millions) YEAR ENDED DECEMBER 31,
EXCLUDING INTEREST ON DEPOSITS: 1996 1995 1994 1993 1992
------ ------ ------ ------ ------
FIXED CHARGES:
INTEREST EXPENSE (OTHER THAN
INTEREST ON DEPOSITS) ......... 3,435 4,110 5,906 6,324 5,826
INTEREST FACTOR IN RENT EXPENSE .. 150 140 143 147 162
DIVIDENDS--PREFERRED STOCK ....... 261 553 505(A) 465 416
------ ------ ------ ------ ------
TOTAL FIXED CHARGES ........... 3,846 4,803 6,554 6,936 6,404
INCOME:
NET INCOME ....................... 3,788 3,464 3,422(B) 1,919(C) 722
INCOME TAXES ..................... 2,285 2,121 1,189 941 696
FIXED CHARGES (EXCLUDING PREFERRED
STOCK DIVIDENDS) .............. 3,585 4,250 6,049 6,471 5,988
------ ------ ------ ------ ------
TOTAL INCOME .................. 9,658 9,835 10,660 9,331 7,406
====== ====== ====== ====== ======
RATIO OF INCOME TO FIXED CHARGES
EXCLUDING INTEREST ON DEPOSITS ... 2.51 2.05 1.63 1.35 1.16
====== ====== ====== ====== ======
INCLUDING INTEREST ON DEPOSITS:
FIXED CHARGES:
INTEREST EXPENSE ................. 12,409 13,012 14,902 16,121 16,327
INTEREST FACTOR IN RENT EXPENSE .. 150 140 143 147 162
DIVIDENDS--PREFERRED STOCK ....... 261 553 505(A) 465 416
------ ------ ------ ------ ------
TOTAL FIXED CHARGES ........... 12,820 13,705 15,550 16,733 16,905
INCOME:
NET INCOME ....................... 3,788 3,464 3,422(B) 1,919(C) 722
INCOME TAXES ..................... 2,285 2,121 1,189 941 696
FIXED CHARGES (EXCLUDING PREFERRED
STOCK DIVIDENDS) .............. 12,559 13,152 15,045 16,268 16,489
------ ------ ------ ------ ------
TOTAL INCOME .................. 18,632 18,737 19,656 19,128 17,907
====== ====== ====== ====== ======
RATIO OF INCOME TO FIXED CHARGES
INCLUDING INTEREST ON DEPOSITS ... 1.45 1.37 1.26 1.14 1.06
====== ====== ====== ====== ======
(A) CALCULATED ON A BASIS OF AN ASSUMED TAX RATE OF 29% FOR 1994.
(B) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1994 EXCLUDES THE
CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS No. 112, "EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT
BENEFITS", OF $(56) MILLION.
(C) NET INCOME FOR THE YEAR ENDED DECEMBER 31, 1993 EXCLUDES THE
CUMULATIVE EFFECT OF ADOPTING STATEMENT OF FINANCIAL ACCOUNTING
STANDARDS NO. 109, "ACCOUNTING FOR INCOME TAXES", OF $300
MILLION.
