ML20043E985

Citicorp 1989 Annual Rept

ML20043E985
Person / Time
Site:	Seabrook
Issue date:	12/31/1989
From:	Jeffrey Reed CITICORP
To:
Shared Package
ML20043E982	List: ML20043E981 ML20043E985
References
NUDOCS 9006140066
Download: ML20043E985 (87)

Text

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Chat to CelobalConsumer 4 GlobalFinance 9 InformationBusiness 14 Citibank's Public Responsibility 15 Other Senior Management 16 Financialinformation index 17 On the coven Citicorp's business is ultimately about people. The cowr sin ss serws le he world. The stories behind these photographs are inside.

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1 Oneteen eighty nine marks the end of an important and complex decade of change for your corporation. The decade of the 1990s will undoubtedly bring more change but will be a period which we believe will see Citicorp cmerge as a uniquely global and uniquely balanced financial organlaation.

I The results for the year 1989 itself were mixed. On the the quality and flexibility of Ouotron's core offering, while

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positive side, the corporation's commitment to the con-preparing new product introductions for 1990 and an sumer business continued to show strong results. The exciting new "Pbint of Sale" initiative. These are continuing business is characterized by a growing household base (we long-term initiatives of your company now do business with over 30 million households world-wide) and strong financials-good revenue momentum.

The Cross Border Effort solid margins, and increasing profitability As with meiny of the other efforts. Our cross-border portfolio j

Our traditional local banking business in developing was impacted by good and bad. On the positive side, we economies also had an excellent yeat reflecting our strong see continued improving economic performance within a franchise position in these markets, the quality and depth number of the heavily indebted countries. During the of our staff, and the continued growth of business that yaar, agreements under the guidelines set down by U.S.

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has characterized most of these 71arkets. The sophisticated Treasury Secretary Brady were essentially completed with finance business in Europe, Nor h America, Japan, Mexico, the Philippines, and Costa Rica. This framework Australia, and New Zealand hac a difficult year as trading servesyour company weh as it continues to permit flexibil-1 markets were choppy margins c 7ntinued under pressure.

ity solunteerism, the case-by-case approach, and room for and traditional revenues were sc arce. The market for long-term " investors" such as Citicorp. On the other hand, leveraged acquisition finance, wnich has been of impor-the cooperative environment that characterized 1982-1988 tance to many of our customers, i.r started a desirable but has weakened significantly The IMF and %rld Bank i

difficult adjustment and, of course, the U.S. real estate operate quite independently of and without regard for market has weakened. Despite this, howevec our earnings private lenders, possibly signaling a more sole and central and returns were good and our relative performance in this role for these institutions. The commercial lenders them-business was solid and in the case of real estate maybe selves, partially in reaction to these changes as well as the even exceptional. But earnings were down from last year Brady initiative, increasingly take the position of simply and the market is going through a period of weakness.

"wanting out" which, of course, does not provide for the Our information initiative reports increased losses. We needs of borrowers. We believe this is an unsustainable, or used the year to start investing in significantly improving at least self-defeating. position. Because of this and in view of the difficult circumstances of Argentina and Brazil, From left to nght neither of which is currently paying interest on its debt, we TCO'IC f' felt it prudent to further augment our reserves by $1 billion,

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which brings our total reserves to a level whn.h we feel to g"lQ be adequate for our likely needs. Many have taken more cy reserves; they have done so presumably with the intention SECTORf*ECUTNE DCHARO S. BRADDOCH, PRE 90ENT f%UL J. COLUNS, WCE OWRNIAN 1

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of "getting out," which can be expensive. We hold reserves borrowing short and lending long, but providing rate risk that relate to our own interest, assuming that we will be and exchange protection for customers became a big busi-active debt / equity investors and longer-term lenders.

ness. The onset of the debt crisis in 1982 brought a problem that was to absorb tremendous efforts and resources Overall Financial Results during the next eightyears, but which also has almost Reported earnings for the year were $498 million, or $1.16 eliminated the interest of many of our competitors in the per share, and the return on your equity was 4.3%, down United States and abroad to maintain a truly global fran-l significantly from last yeat Earnings, excluding the impact chise. This, in turn, singles out our nwn different view of cross-border, were $1.6 billion, up 4% from a similar Corporate banking in the early '80s was indeedjust that.

result last year. Return on equity would have been 17.3%,

During the decade, it has become " market finance," as our compared with 19.7% last yeat Common stockholders' role has been shaped by the emergence of large and equity was $8.2 billion, and reserves were $4.7 billion, efficient capital markets in Europe, North America, and reflecting our recent reserve decision. We anticipate Japan, which are quite willing to accept our traditional l

rebuilding the common equity levels over the next year customers' names.

from internal sources. hr %k closed as 08.875, up in 1980, we were not a strong correspondent bank.

$3.00 from last year, at '1 the dividend rate was increased Today we are the largest domestic and international corres-by 9% to $1.62 per share i.' April 1989.

pondent bank. During the 1980s, our corpnrate bankers became more professional, more market oriented, and Canking in Ge Past Doctde more transactional as we responded to customers. As we it is instructis e and perhaps eve surprising to look back at enter the '90s, these trends continue, but there is some the decade of the '80s. In 1980, our annual report noted likelihood that more traditional bank / customer relation-

"our view that 1980 was the turning point when banks in ships will re-emerge as customers come to see their finan-the United States beganjoining their nonbank competitors cial links as more permanent and more important. Our in the fresh air of free competition." Reg O was removed, local currency business in developing economies con-

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usury laws eased, and a decade of change indeed started.

tinued throughout the decade to be strong, stable, and l

During this time, your company altered its business predictable, probably reflecting the strength of our fran-l significantly and with important implications.

chise and the diversity of our business. In the late '80s, we Our franchise, as an international and money center started an "information initiative" as a way of reaching out bank, was broadened and altered. The drive to build a to the market and to embrace future delivery modes, global consumer business occupied much of our time and has changed your company Living with mlatile and high interest rates in a world where monetary policy emerged as virtually the only tool of economic management forced us to lessen the role of gapping. the old bankers' practice of

'B.ned on Net lixome after ewaoran.wy t.n tenefits of $160 mdhon 2

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extending our traditional back-office computers, informa-faster than the developed countries. Certainly the cross-tion, and networks into the customer's world itself...this, for border issue will be behind us...We think with important both consumers and corporate customers.

benefits to Citicorp shareholders. Underlying the ups and During the turbulent '80s, our regard and care for our key downs of the numbers during the 1980s has been a steady assets-our customers and staff-did not change.

and important progress in base business results, franchise development, and balance sheet strength. We will steadily Citicorp in the 1990s continue to pursue these efforts throughout the '90s; their As we move into the last decade of the century and millen-value should be increasingly apparent.

_i nium, we expect continued change and opportunity Our During 1989, we lost the services of a number of emphasis is on breadth, consistency and predictability talented and experienced Directors. James Evans, retired Pursuing a broad set of franchises seems to make sense.

Chairman of Union Pacific; Juanita Kreps, an economist We remain committed to "Globality" both within the and former Secretary of Commerce; and our colleague interlinked world of Europe, North America, Japan, Hans Angermueller reached our mandatory retirement age.

Australia, and New Zealand and the broader world encom-Each served with great distinction over manyyears and passing developing economies from Afrita, the Middle we will miss them. Charles M. Pigott, Chairman of PACCAR, East, and Latin America to the exciting markets of South-af ter 17 years of Board service, chose not to stand for east and Northern Asia. We serve all customers, increas-reelection. We were sorry because Chuck's voice has been ingly consumers around the world and business and an important one.

government enterprises as well. We are professional as At year end, we announced the election of Richard technologists consumer marketers, or corporate finance Braddock as President and Lawrence ima!! as Vice specialists. Customer service, creditjudgment, and risk-Chairman and Chairman of the Executive Committee. This

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taking skills continue as our central values.

reflects our increasing need for senior attention to the work During the 1990s, the profile of Citicorp will continue to of the company and on our most important customers.

Change. Serving our institutional customers in sophisticated Rick, Larry and I have worked together for years and, with capital market economies will contirue to be a key fran-the 92,000 cledicated Citicorpers around the globe, hope chise, the focus of some of our most stimulating talent and to serve you well.

likely the world's largest such activity even while a smaller part of Citicorp. The size, our position, and momentum in

, - the consumer business are such that it is likely that serving these customers will be an increasing portion of our total activity and a dominant part of our financial results. More JOHN 5. REED

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than half of our business is likely to be in North America, j

but the bijsiness in Europe is likely to grow importantly Our management wili certainly become more inter-national. Our local banking businesses in the developing economics will share in the imprcNed growth of their marketplace communitics, which are, once again, growing 3

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in March 1980, Fortune wrote "By the mid 1980s, Citicorp aspires to have raised its operating earnings from their 1979 total of $544 million to around $1 billion, and it hopes to see at least $ 200 million of that coming from the consumer. That would be up from less than zero."

g For Citibank's consumer businesses, the 1980s can be summed up by the numbers. After losing money in 1980 and earning $ 5 million in '81, our earnings have been on a dramatic climb, from $93 million in 1982, to $842 million in 1989, with an average annual increase of 37% One out of four American families has a relationship with us. We consider our record a validation of the premise we began with in 1975, that a well served consumer is a good business proposition. As we've grown, we've built a set e

of values to guide us. Most notably, customer focus and service quality have become our hallmarks.

But while those are both familiar industry themes, and key reasons consumers choose one bank over Enother, our commitment to these values continues to give us a significant competitive advantage.

The marketplace and the challenges keep changing. Our mature businesses become st?.adily more competitive, while our newer businesses, especially outside the U.S., have relatively low share positions with potential for substantial growth. However, our broad based organization gives us a tremen-dous advantage. Innovations in established markets such as New York and Hong Kong strengthen our positions in those markets and can also be transplanted to markets where we have room to grow.

We call this movement of technology, services, and banking products " success transfer."

For now, our credit cards and local branches, accessed by Citicards, give our customers control over their financial lives around the clock. Our vision for the '90s is to give our customers that same access wherever they are in the world, by cards, by phone, at home, and at work 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day, seven days a week and all this for a much fuller range of financial services than we offer today.

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Consumer Banking Business When the 1980s began, our U.S branches were mainly in the New trk metropolitan area. with an 8% market share We had installed our first ATMs Only three years before.

Today Citicorp and Otibank i

branches have over eight million cus-tomer accounts at nearly 600 loca-tions in nine states and the Distnct of Columbia, the foundation of a national network which will continue to grow in the future. In New trk. we have 13% of consumer deposits and nearly one-fourth of all consumer Citibank India has introduced credit. Nationally our customers have consumer installment loans access to 1.700 of our propnetary supenor access. products. and serv-at its four branches. These 1

i ATMs. with their capacity to do 55 ices we have learned that the key to loans have already made a separate transacDons. and more than customer relanonships is the trans-dramatic difference in the lives l

30.000 shared machines. We're the action account. and the core of our of more than 150,000 miners, 1

market leader in annual mortgage product offenng is OD-One. which railway employees, and uni-onginanons. with $11 bilhon. and totai integrates checking. savings and versity professors who used servicing with more than $60 bilhon.

investment accounts. lines of credit.

them to buy motor scooters provided through our distnbuuan net-and credit cards Our branches extend and home appliances. Repay-work in 37 states.

their reach through touch-screen ment is by payroll deduction.

We work to provide customers with ATMs. telephone banking home with employers making effi-computers. and terminals in super-cient, lump sum payments to markets and convenience stores We Citibank. At an average of offer mortgages through branches,

$600, these loans are small, Mortgagefbwer realtors and brokers.

but in a country where motor and sales offices scooters and appliances are Building a naconal francnise stili luxuries, they can make an Q'g,M,",",*,

reouires us to compete effecovNy in enormous difference in the cKAP E(ECJTNi t L CC+.seMf; MM -

quality of life. In this case, suc-LAwRemn o.ws ss, CMLON E MECUTNE - OfvE LEWEN' Cess transfer means making DCHARD S. BRADOOCx, PEE 9 CENT ilves better.

n=io s.oissou, GRCLP EXECUT t E -MWE ERNk 'Nu PSbVUAN fWA, CAOUP E tEC vE -!N TERN AWM JAAIS$ L. BAILEY, C#OUP E4ECUTN E - L ; 4AOWAACr 5

i each local market, while leveraging U.S. Card Products-a tool for managing personal and the nationa! capability that comes A Great Success Story family finances.The information we from being a part of Citibank. Our The growth of Citibank's card busi-generate about our customers, competition is essent; ally local, and ness, from six million cards in force through their card usage, is invaluable, our customers respond to howwell in 1980 to 27 million today demon-allowing us to offer them a range we meet theirlocalneeds and provide strates our success in meeting of tr. ore specifically targeted services.

the basics of customer service. During customers' needs for this flexible Our portfolio is the largest in the 1990, howewt we will change our payment and borrowing device, bank card industry but size is not by name to Citibank in the markets which is one of the most important itself a strength, in 1980, we built the where we noware known as Citicorp and profitable products banks offer.

first of several card " factories," con-Savings. And over the next two to Citibank has expanded by offering a centrating our resources not only to three years we will be putting together family of cards, each with features generate efficiencies but also to a common product offering. to be that appeal to specific segments of improve the quality of our customer deliwred through a national processing the population, ranging from the service. 5ince then we have added and systems organization.

economical CHOICE card to the pre-millions of accounts, and extended We recognize we are competing mium gold cards, and in turn, we the factorylocations from South in a fast-changing marketplace, have built a family of customers. In a Dakota to Nevada and Maryland, buffeted by the S&L crises, a seemingly market that some say is saturated, we but unit transaction 7'

chronic overcapacity in the industry an added almost five million new card-costs are nearly 30% r inadequate regulatory apparatus, and holders during 1989 and continued to lower than in 1982 other economic uncertainties. While build our market share significantly and 30% below these factors contribute to instability Virtually all the key indicators for the they should also offer us opportunities business continued to grow healthily to extend our geographic reach and We try to grow with our customers.

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product breadth in the coming years-For example, we pioneered direct especially as the inefficient players marketing to college students.We weed themselves out. The combination found that they manage their credit l

we are putting in place-integrated responsibly and that af ter they grad-product sets, national capacity and an uate they make still better customers, uncompromising customer service As their needs and tastes change, we

( _ culture-should serve us well can adapt with them.

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in this respect.

We know from their purchase pat-terns that customers use our cards for things that ordinary families buy to make their lives better-furniture, refrigerators, and VCRs. But our cards are more thanjust a credit or payment mechanism. They are also h

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the inaustry average Savings are International Consumer goal late in 1989 with an ATM trans-l returned to the business to improve Banking-Linking Success action in the branch at Citibank's customer service. funding methods.

For Citibank's international consumer New York headquarters, where our marketing and credit management.

business. the 1980s represented a Country Corporate Officer for Puerto in the '80s. We set out to provide a decade of new markets. products.

Rico used his Citicard to access his better card than our competitors.

and opportunities Today we serve account in Puerto Rico. The interna-(

we've done that For the '90s. we profitably over nine million house-tional Citicard transaction was born.

have two pomary goals We want holds, or 16 mil l ion accounts, in 35 Within the next tvm years. this tech-our product to be viewed as superior countries, a greater global presence nology will be installed in such to checks as well as other cards, and than any other consumer financial diverse markets as Germany Hong by the middle of the decade, we institution Our penetration in most of Kong. Korea. Taiwan. and Singapore-l want it to be seen as a better way to these markets is small. but the poten-And ultimately the Citicard will be pay than cash To accomplish this.

tial is vast we're constant!y trying to learn more The challenges for the 1990s are to about our customers and build on continue growing witnout sacrificing that knowledoe to extend card utility service quality and to link Citibank l

services around the world We took Not all Visa and MasterCards l

the first concrete step toward that are alike. We try to make our l

cards do more for customers, whether it's replacing a lost wedding ring or a card stolen

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during a family vacation, or granting an on the-spot credit-line increase to pay for a visit to a sick relative. We're on the telephone 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day,

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we do even more. When a flood struck Galveston, Texas,

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credit increases for our card-holders. And now, we're providing a special teletype number to help us serve

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the key to banks in everylocation in 1812. In 1985, we made our most funds, leveraging Citibank expertise in where we do consumer business, significant commitment to these real estate, transportation, and wnture We expect to double our customer customers bycombining our private capital. For the first time, our clients accounts, assets, and deposits banking operations into one world-had the opportunity to participate in by 1993, in addition to offering tradi-wide unit-the Citibank Private Bank.

higher-return investments previously

- tional banking services, we're Since then, starting from well-available only to large institutions.

emphasizing such products as bank-established presences in key markets We beltem that the formation of cards, mutual funds, and insurance.

in Switzerland Hong Kong. Singapore, private wealth will continue to be a rap-We are using our U.S. experience the U.K., and the U.S., we have opened idly growing segment of the world's in credit card solicitation and screening offices in such major emerging wealth economy during the 1990s and that no techniques in Germany Spain, Japan, markets as Japan, Brazil, Spain, and Italy other financial institution is better Taiwan, and Australia. We have also With offices in 68 cities in 32 coun-positioned to serw it than Citibank transferred such products as Citi-One tries around the globe,we are Private Bank, accounts, MortgagePowec and touch-uniquely able to match clients' needs screen ATMs to various markets.

with opportunities virtua!!y anywhere Reaching Our Potential Theimportanceof aglobalnetwork in the world.

During the '80s Citibank's consumer is particularly evident as the inte-Each client has an experienced activities grew into an important pres-gration of Europe approaches. Citibank Prrvate Banket who provides the ence both within the corporation and has a network of branches and entree to an arrayof services that in the markets in which we compete.

consumer franchises in most of the includes global investment portfolio Howevec as we enter the '90s, we major markets there.We're looking management, tailored credit in major view our most significant potential forward to the daywhen we will currencies, unmatched expertise as still ahead of usNNil reach it by cord have the most up-to-date ATMs in every in foreign-exchange and interest-rate tinuing to keep our customers'needs branch linked across countrylines risk management, and our unique foremost in guiding our activities.

and " speaking" multiple languages, art advisory service in New'rbrk Citibank Visa and MasterCard and London.

products serviced from two regional In 1989, assets under management centers, and our own brand of rose 15% to $59.4 billion. The number mutual funds.

of clients grew 11%. reflecting a variety of programs in both established and The Private Bank new markets. Of particular note was Citibank has served high net worth the growth of Legal U.5A, our busi-individuals since it was founded ness serving lawyers and law firms in the United States, the largest. and only nationwide service ofits kind.

We also focused on new revenue streams. raising over $230 million of investment capital for specialized 1

The 1980s were a decade of profound change in banking.

lobal Finance Corporate lending, the cornerstone of Citibank's business in 1980, for Developed Markets became a much smaller component. Corporate customers increas-Otibank has developed the knowl-ingly funded themselves by issuing securities instead of borrowing edge and skills, the products and from banks. We had to find new ways to serve them, and we did, services to become the preeminent by designing and implementing creative financial solutions that financial :nst,tution in the industnal-met the needs of investors as well as issuers.

ized world Otibank enjoys a unique it is clear we have met the challenge. Customer surveys and position in this increasingly global opinion polls indicate that we are first in lead client relationships, corporate knance marketplace We loans and back up lines, leverage capital, corporate asset funding, are present in 23 of the 24 industnal foreign exchange, derivative financial instruments such as hedges, nations that compose the Organiza-swaps and options, and cash management. And as commercial tion for Economic Cooperation and activity expands globally, we offer our services through an Development, everywhere the law unparalleled global network.

permits This unparalleled geographic The most telling measure of our ability to adapt to changing scope is harnessed to an unmatched markets is that many of today's products and services didn't exist abihty to handle large. comp!ex ten years ago. Furthermore, if history is any indication, by the transactions middle of the 1990s, 50% of Global Finance earnings will come Because the developed countnes from products that don't exist today.

have become more integrated eco-These innovations are based on the efforts of relationship man-nomically we can design and exe-agers, who work with our product specialists to solve ongoing cute hnanc al strategies that range and extraordinary needs, whlie still providing such core banking across markets as well as within products and services as credit, cash management, and foreign them. both for issuers and investors exchange.

4 Our corporate and investment banking business is divided into two broad sectors: the developed markets, where many customers require increasingly innovative and global financing techniques, and the developing economies and newly industrialized countries, where the market often calls for more

. traditional and local financial products up and services.

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g we haw been ranked number one shown the greatest growth center worldwide by all major industry sur-around a broad range of options and y

[ [ ) I'c veys in volume. quality and market swaps and longer-term hedging p

coverage Citibank's unequaled These are more and more becoming breadth-we trade 90 different cut-part of packages assembled by rencies in 50 locations - means we Citibank. as customers recognize can meet customer needs forjust that in a global economy practically about any currency in the world and every financial transaction has foreign we can tailor creative solutions for exchange and interest rate nsk impli-expenence As the 1990s progress.

unusual customer problems More-cations Thus. Our unparalleled for-global finance will insolve more I

over. our global network gives us eign exchange capability is not only sof]histicated financial engineering, j

access to extensive market intelli-impo tant for customers who need for issuers and for investors alike Both gence to guide our trading while our foreign currences. it is also vital in are our customers. and we have size allows us to execute client strate-most areas of finance devoted ourselves to finding creative gies effiaently and effectively In glonal finance as in consumer solutions for the needs of both As in other Citibank businesses banking Citibank has the un que 1

l our continued success in foreign ability to transfer products and tech-Developing Economies-exchange will come from building nology from one market to another The Growth Market for For example. the European Commu-Commercial Banking nity has committed itself to eliminat-Dweloping economies have different ing economic barners by the end of needs than developed ones, and we

^j 1992 The prospect of a vast inte-serve them with a more traditional grated market has heightened the set of finanaal products and services.

demand for corporate restructunnq based in their local currency The and speaalized finance expertise as developing countnes represent some firms prepare for this single market of the world's best economic growth j

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And. as international nsk-based capi-prospects today tal accords come into force. they will Citibank has been involved in I

put more pressure on international international banking through our i

1 banks to find alternatives to tradi-U S offices for well over 100 years.

tional lending in both these areas and we opened our first branches in and many more. Citibank has years of countnes around the won : in 1914 to service our U S cIsents ir > +ir bur-stanaq geoning overseas busin-Our early

1. d$$'5-expansion established u. as the pre-Nm..wew.NnN m sPJfPt j PHILLIP B. LA1% ITER, W JfEAU "t-Yfn Wf h ^^

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eminent international bank in most Middle East and Afnca-are becom-of the major developing markets, cre-ing increasingly affluent, sophisti-M _'.

ating a franchise far stronger than any cated. democratic, and stable. Their

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export growth continues to be W!

Today we have a presence in 67 extraordinary although their full developing ana newly industnahzed potential remains untapped countnes Ninety percent of our man-Twelve of these 25 countnes how-agement in these countnes is local.

ever, are still in the process of restruc-A banking relationship means and we are most of ten an integral tenng their debt to international maeting special needs rou-part of domestic economic activities.

banks. Citibank has been a leader in tinely. In 1988 Citibank helped When problems in some nations international negrriations to restruc-th2 Kroger supermarket and prompted other banks to leave. we ture the debt obligations of these convenience store chain avoid honored our commitments to corpo-countnes and develop solutions that a possible takeover by recap-rate customers. financial institutions.

meet the long-term needs of both Italizing, while increasing local employees. and national gov-the borrowers and lenders. We feel shareholder value, retaining ernments and we have benefited the debt situation is no longer a cnsis.

shareholder ownership and from it. Among other things this con-it is an issue that is being managed trsating employees fairly, sistency gives us an edge in hinng with growing skil.1 and pragmatism.

Kroger chose Citibank to struc-the best talent in each country thus Citibank's position in several devel-ture the package because of reinforcing our marketplace standing oping economies has been our ability to commit money We expect the major 25 develop-strengtheneu :hrough debt / equity promptly, our service, and abil-ing economies, with a total popula-swaps whose total approximates ity to bring additional banks, tion of three billion. to grow faster

$300 million. These transactions international and domestic than the developed markets by as U.S., into the transaction. In much as 50% in the next five years.

1989, after a successful recapi-These nations - 12 in Latin Amenca.

talization, Kroger picked us 10 in Asia. and 3 in Europe. the again to shape a reduced, more flexible package, allow-ing the company to pursue its icng term operating strategy.

Loverage capital expertise is just one corporate finance capability that Citibank has developed to add value to banking relationships.

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j involve replaang debt abhgaaons in that cannot be duphcated by any Save the Children Federation a countr$ with equiN interests in other hranaalinsutunon Our worv

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has a Citibank account. With loca! enterprises They include a bev-operations in 39 countries, erage compans in Meuco. a forest helping tens of thousands of products business n Chile and elec-l children and their families, tronics companies in Brazd These l

Save the Children is typical of nvestments which createjobs and some 200 non profit organiza-help develop nanona: economies.

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!o come utilizes the full capabilities of Citibank ta provide foreign Serving Customers Globally exchange management, alter.

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with these, our most sophisticated tomers who need them Otibank tunng and other industres. and some custc'mers. provides us with a steady provides dependable processing and that are charactenstic of finance We stream of innovative financial ideas cleanng services. and with member-have built a corporate finance capa-and techniques that can be trans-ship in every major cleanng house bihty that will provide the ful' range ferred to others. Furthermore. their in the world Otibank stands alone of corporate banking services and need for capital provides a conanual TransacDon processing prov! des a products. such as mergers and acqui-flow of investment opportuniues.

very stable earnings stream to the sitions asset secuntization. and for-particularly for finanaal institutions.

corpora 00n in addition. we take a eign exchange. specially tailored to which constitute our other major cus-more expansive view of the market the needs of all sectors of the finan-tomer group than other banks Technical advances cialinstitutions market Trade services Our Finanaal Insututions Group have opened up the possibihty of offered on a global basis is another services the chent needs of insurance help!ng customers make more key service element. Finally of course.

companies. secunties firms. other informed business decisions by add-finanaal insatunons are constantly banks, and institutional investors. The ing informaDon-based components looking for ways to diversify their growth of this group reflects the fact to transaction processing. Otibank is inwstment portfohos. and Otibank that the finanaal sector of the world in the forefront of this transformaDon has access to more investment j

economy grew far more rapidly in the in addition. we are aware that finan-opportuniaes in more countries than 1980s than ihe indusinal sector World aa institutions worldwide face com-anyone else capital flows have increased faster petitive and capital pressures. some Our organizauon is in place We than trade flows. and new finanaal that are similar to those in manufac-have made the transition demanded instruments have created new by the dithcult environment of the demands for processing and cleanng past ten years. Entenng the '90s. we services notjust for finanaal insatu-are uniquely posinoned to serve cus-Oons, but for all global finance cus-tomers around the world f rom lef t to right ALAN J. WEBER.

GROUF hlCUTNE --

FNANGA %iTITUTON; WILLIAM R. RHODES.

SENOR DECUTNE -INTERN ^f CNA GUENTHER 5. GREINER.

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ness as the nextimportant wnture of pany as a vital part of our effort to build make ordinary calls.

this kind. Like ah such Otibank initia-on-line, interactiw delivery of financial Awholly new businessis based ties, the information business is based services on a global basis. Part of the on point-of-sale technology that com-on our experience with a number of task at Ouotron lies in making products bines payment at the supermarket existing activities and our anticipation more relevant to the growth areas of check-out counter with an instant cen-of customer needs in the future. Our the financial marketplace. Globaliza-sus of consumer purchases. Partici-technology has been aimed at provid-tion of the markets means that we pating households are rewarded with ing customerswith rnore command have opportunities to bring our pro 6 coupons that match their preferences, owr their finances, at ewr-greater con-ucts to parts of the world that are while manufacturers and retailers can wnience. As a global financial interme-currently underserwd. And wMe the use the research for marketing.

diarywe haw access to a great dealof equity business has recently t'een information about markets, prices, and in a downturn, other kinds r.f activity trends that affect all kinds of consumer are growing.We are dewbping and business transactions. It is, there-products that address th'>se needs.

fore, a logica! step for us to put more Of particular note is our new F/X Tradet information in the hands of customers an advanced terminal for foreign to assist them in making better-exchange trading thatwill be fully informed financial decisions. We are introduced in 1990.

committed to making this happen.

Other businesses that similarly We envision that by the mid-1990s, our deliver information through devices sit-aggregate information-based busi-uated in customers' homes and offices nesses will make an important contri-are OtiCash Managet which gives cor-bution to earnings.

porate treasurers full command of their balances for short-term investment, and a new service for home use, the Enhanced Telephone, targeted for a limited test market in 1990. Ve see this as theidealmechanism forrealizing the potentialof home banking.The Enhanced Telephone has a screen between the keypad and the hand-set, and a full keyboard that slides out 14

9 Itibank has a tradition mance attended by 50.000. and con-mentally sound and sustainable of public responsibility that goes back certs in Germany celebrating the end economic development to our beginnings when tellers and of the Berlin Wall We emphasize per-Citibank has come a long way clerks of the newly formed City Bank sonal involvement by employees as since those brave early employees of New York volunteered to hel > bat-well as money For example. we not became firefighters to save lower tie the Great Wall Street Fire of '835 only support United Negro College New York, but the message is This strong tradition of public Fund students financially but also unchanged As a global corporation asponsibility forms the basis of our provide them with a Citibank mentor we have a responsibility to the world cor anbutions philosophy Today as a throughout their college careers We in which we live and do business globu finanaal services corporation also expanded our Matching Gif ts with ercoloyees and business inter-Program for employees who make ests in every part of the world. our personal contnbutions to non-profit in April 1989, Citicorp Chair-concerns and commitments are also organizations Emvwhere in the man John Reed participated worldwide. We know that our busi-world where Citibankers live and with ChlCago elementary ness success. both present and future.

Work we can point with pnde at pro-school students and teachers is inextricably linked to the economic grams to improve the quality of life in a demonstration of the and soaal well-being of our markets.

and provide an environment in University of Chicago School customers and employees whKh r>eople and economies can Mathematics Project, which Citibank's total global contnbu-develop and prosper Citibank is supporting. He tions exceeded $20 million in 1989 As we move into the '90s. Cit! bank explained our involvement These emanated from our extensive shares the general concern about the this way:"A financial insti-program at the corporate level as well environment and will increase sup-tution can't ignore the need for as from business units around the fx)rt for vigorous. creative programs improved pre collegiate train-world that conduct active contnbu-designed to encourage environ-Ing in math and analytical tions programs of their own skills."

One area where we have increased our global funding is edu-cation We believe that the future of the world will depend increasingly upon the education and training we can provide for those who will com-

. pose the work force and leadership in the next century n

In 1989. our global contnbutions ranged almost as widely as our busi-nesses We supported a school mathematKs project in ChKago the

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W NMb ')db.36; psWI4,41F3sN3.46Wsm.40p WNetincomeItoss semigr*MW.hs t.ne #$q Mi%$e@Ne'tIncbme(ibss))LlMMMk $h5 j;asq,ineas a i.i82p [:sti.028 c sw959eg%

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item;., mwxe s

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,4 vi:,

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Q M!i C M

Mb$%OfiM q

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J$ M 1.35 b is1

.' 0E @ 8I a1.63 J tsY t1.48:1 M -

Annual DMdend Rate Nr Share at War EndW.

h&t

,i y4 dMk h

N N N

$i h

S b) u k

$k

• v J

st8.274; ass 6.994m;j3.75%EMsr7.5i3 i

%yWp$ Nrcentage of Total AssetsWghf@s;m :w. e es..

mhsdg Commonstocknoiders equityn.w 337%$T RKSM.hMS.57%% st9.864 O $.gspio,o76M 47.613Wp ghmenia9 eof Totamssets%a. Wm w. p w.u4.s7 w 4m %m4ase e4 aog 9 Totalstockholders Equity.14 j p$p%PrimaryCaNtalRatic# / f.%cmeema%p7.69%% esp.386ms36.5 erimaryCastas ;.,.

s am 459%E M6.01.%h W. A M W".

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t

" hW Consumer toans, Net'of Unearned incomeMJM MMM97,075 i 179,705b T6BJ51? %55.795Q 3 Ni? $$Commercialloans.'Netof Uneamedlncome%M9D MM68,8B7WlQ90.356fN58.841Q 358,210556 9W114.689M104.959$%

QM$4TotalDepositsi% '. A..... N @MdM.M M0187,932M9124.072N119,561{9 jMcCommonstocars Equitymssareww menate x25.931 a 22.i2 n2730mw24.733 h gy> 13'.g q

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W W;^ Caicorp, a holdsng compary was incorporated in 1%? under the ;

cein l

WM tows of Delawam and as the sole shareholder of Citibank N.N f, Tmies of North America, Europe. Japan the world's inni. ftional marte1 places. in the Dewtoped Econo-um W

{MeMW mWorsubsidiary; 1

.s n

N ':May Ciucorp. with its subsidiares and amliates, is a global e

' Zealand. Citicorp brings together the resources of corpouse and W 4

Sq% ncial services organization its staff of 92,000 serves indMd?

Jrwestment banking to meet the sophisticated demands of both i ~ a9 gi alais, busineses, gowrnments, and fnancial institutions in over ;

L inwstors and issuers. In the Dewloping Economies and newy AN a gn 3.300 locations, itchJding branch banks. representatie omces,Q industrialized countries, Citicorp) local franchise and pesence inf" 7' '

fy gand subsidiaryand amhate omces in 43 states, tte District of ) '

. the countries of latin America, Asia. Eastern Europe, the Meddie y

1. f ; Columbia, and 89 other countries throughout the world.!., '

East and Nrica senes a more traditional marletplace, where s 1 g

S g g Citicorp. Citibank, and their subsidiaries and amlia:es are sutE,

L business is primarily local and the demand is for traditional cor t S'

$g

> iject ic lnterne cornpetition in all aspects of their businesses from ;,

{ porate banking and finance. Citicorp's cross border mAnancing J iassets and eamings are a separate Ibcus from the local actMt

@p[hp ices and,in some of their actMties, from gowrnment agencies; ; ' M in tre tehn both bank and nonbank institutions that provide Anancial serv g

,m

$gp l Citicorp's actMties are centered around two basic constituen -

1 highly centrallred and is discussed in depth on pages 34,-29.M1 4

y Ng cies: indMouals and institutsons. The Global Consumer bustress e dwith sewralother initiathes @ point-of sale business and a trawls <,

g 1 The information Business cunently centers around Quoton, y -

senes the fullest possible lange of Anancial needs of individualsc M whle the Global Finance business senes corporations, financial.

information service) in dQTieriL T..

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. ' $ l 88.Si

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a m... u +.

f CustornerNetNevenue n.. " $7,778 + $6.899 ' $879: 13 W Other Loans * '.. m '.N

... c hui. : 39.8 ? z

{Mt fOeditCycleExpense v..)$9.9792 $1.746 ;$233).13l Other Assets.. < x,K C. i' ;. ; i.

s i..

94.1 ?

?.

W6 DeliveryExpense, n.7. y 4,888. 4.295 ? 355! 8! '

. g g gg,g ;

t y

• l'IbtalExpense4. j.. < $6,639 : $6.041! -$588E10l j

$ ^ > 92, $ 26 > r 28 s

, Transaction Account Deposits %.. 7. ;, a '.h.:d 8 ! 9F.6 ! ', *

' & ! Other income (Expense). h. ' $ 1198 4

' W Wincome tiefore Tassh,.'. -..L $1,36P E $ o 950 l ; $317 ; 33 -

Savings Deposits w 1 i b 1.h.

=.9.s, Y M 71.8 14 f seetmesoass '.

1.

. ' $ l Set T '$ 626 ' $216 W35 :

Other (includes ellocated equity) #.

m;. q,. :38.4 :,4 s

$phg herage Assets ($ Billions) 4 N 3

8888a8 l M +

9861 4 97-

,91n9 a.00i :.?64? *L.16 E --

p%geia.xmsnweewnw Mpv-Q neturnon Assets (%)Wu y N

N 4

QnetumonEquity(%)"V.

'. o 19.9 16.1"

' 3.0 ' : -

' uncann w e n = o'***rwo kon o u

' wasay na weva t.e m wes maan no tm on cens kuwwn ttShy y ppun on eew a tewd w.aMWg = Wone ty a wded empwed antage eS44

. tewn -. ;

,f 4 6 e

muum denwe osma aw u*=n ete aw neer ce om=*vC g$ g w aasop p**matam;,-

m;.

1 The Global Consumer business earned $842 million in 1989. M g _,J terms closely related to the Global Consumer business. CustomerL

! The above summary presents Global Consumer results in <

h4 m

, "up $216 million, or 35% from 1988. Theyear-to-year earnings t.

l

%@g% ' e net rewnue embraces net rewnue piirt.arily genersti th

" growth rate would haw oeen 26% If the $41 million after-tax loss 6.

incuned in the phase-out,of Citicorp's mobile home and certaini > [,

%;g customer relationships and gains 00 sales of cudomer assetA T

Oedit cycle expense includes riet credit write-offs, tne provision automobile lending businesses in the fourth quartet of 1988 were t Y

y[W @w$lecting past-due or written-off accounts, Deliv

Q foi possible credit losses in excess of net write-offs, and the excluded. The substantial earnings improvement reflected i iWQ expense associated with credit appraisal and the process of col-growth across the major businesses and was achieved despitej,

the continuing slow mortgage market ardncreased net ; ~

d$

Vincludes non-credit related costs of delivering our products and write offs in community banking activities, primarily commercial R"Q s services to the consumer Other income onmarilyincludes

• aeal estate loans in Arizona. The key performance indicators, n W1 tnterest costs of carrying non-customer assets. gains on sales of '

return on equity of 19.9% and return on assets of 0.80%,1...

f lg= </s 4 allocated equity,

improwd significantlyyear-to-yeat up from 16.1% and 0.64% i j b gi non-customer assets, affiliate earnings, and earnings on -

respectively A.'

i

,s g

w,

+- a %,*

- During 1989, the Global Consumer business securitized k

' ' O.y

'I

' $$1 billion of credit card receivables compared with $0.8 billion y[4[' %

4 during 1988;Whlle the impact on net income is negligible, ree e

@kV nue and asser growth as well as credit loss and asset ratios are #

s Ws QV

^

' affected by securitiration. The impact of credit card receivables '

~

. M m

' securitizatinn is described below and on page 42;

.m Af a

Domestic eamings gains continue to be driwn by the credit i

?[W (<,.l Eg ',

card business and the strong New trk branch system lThte L.

$g?,V

~

solid prof:t performance and) ear to-year gains in the credit cam business were the resu; of ongoing successful card solicitation 7 MR

hgM, programs' portfolio acquisitions, and increased share of credit ; ', '

~,

69R. j card purchase salesi s

4 m.

m$ Q-Q:

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,a M Wireernattora! consumer earningsere up 33% oer 1988,' led "

For analytical pur' oset the following table Arcmdes certaini

" performance indicators for the Global Consumer bus p

J m:

s jl;.N.ty growth in Asia and latin America. The international branch businesses and credit cards contributed to the camings grcwth3 a basis which adjusts certain amounts as if credit card receMablese

'g

? Cedit cards have now been introduced in 16 countries outside i

' had not been securitized. The principal acpustments to the table i s

M, e othe United States The Private Banit also recorded gains %

, below are to increase customer net eenue by $206 millson in e,

@ w internauonally s 1989 and $4 million in 1988. Net oedst write offs are increasedJ, M : n n

@& J. ; TheGlobalConsumeraverageassetsrose"ito$106 billion; t orthecorrespondingperiodsbysimilaramountsg 1 a a f

i" s

f from$97bilhoninINB.Creditcardreceivab grew 7% to -

In addition, the table reinstates the securitized receivables !

Q U ] $2l billiort/ het of the impact of Securitizing $6.1 billion of credit

as assets for the purpose of calculating average assets and return Q M'

% icardseceivablesciuring1999and $0.8bilhonin1988.First.

? ratios The effect on aerage assets was $4 bilhon in 1989. The J

?%d mortgage outstandings were $39 bilhon, compared with :

{ effect on average assets in 1988 was negligible. The impact of?,, e

[F g $2bilhonin1989R L

. ?: :

E securitiration 15 discussed further on page 42,r g b

+ C (;

. ! Customer net revenue eose to $78 billion in 1989, up v,_

.s W@$ $879.million, or 13% from 1988. Momentum was particularly! ;

. wumurnum <

seee,-

..seen. <

n D

m o

S W

,j 4

.w sW' 3

Q@? tingr strong in the domestic card and international businesses, offset.o Mk( pass ewnue pressures in tre mortgage business. Mortgage tthrough gains improwd significant 4 1,484W t1,2511 1 183!J.51% F m

, Customer Net flevenue $7,9001. $6,903 g c $ l.081 n f 165 i

3 3',..

l{

g (up$65milhonpar-tosycatJ < ;,. N$ c....

credit 1.oss Ratioa a E i1.59% i gN f D Credit cycle expense grew 13% to $2 billion in 1989., Net credit

' AerageAssets($ Billions) stto.

97;,

113; 13T fd Return On Assets (%). '

.FF

.64.

'.13 '

Ag write-offs were $1,228 million, compared with $1,248 milhon ini f Mq m

3:

b Mgl988. Net write-offs as a percentage of average loans were 1.35% ;

y ';

,m MQ for the pat compared with 1.50% in.1988. The 1988 net credit i j

C a

M ? losses included $198 million from the phas:-out of the mobile '

a w

7, i > $. L, f.

M i home and certain automobile lending businesses. Excluding f.

i i -

s 1

s, N N ' M the impact of this one-time Charge lIhe Det Write-off ratio Would N

iW

>C i

= have been 127% in 1988. The yeareyear increase in the net i/"

s

Write-off ratio is attributable largely to community bar*ing activi-

+

,s 34 g%g ties, primarily commecial real estate in Mzona; and increases in '

. ^.

ar

' /eg 2 cerrain other domestic arf overseas consumer businesses.;

S No a R % The credit loss provision was $1.3 billion lup 11% from,

,l

,3l

+

1

%. i ; $1.2 billion in 1988. The allowance for possible credit losses repref

'~

v, W

'u T@ F lastyeat During 1988, the allowance for possible credit losses had ;

a' f G.

' : sented 0.87% of year end consumer loans, unchanged from,,

o g

M N-t

?,

?

M }. been reduced itom 1.03Mo 0.87% primarily reflecting improwd portfolin quahty and the phase-out of the. mobile home and ;

>M fW 7 J/Ccertain automobile lending businessesa.

W m W ; Deliwry expenses grew 8% or $355 milliort year-to-yeat

i

H

, :" f y.

4 Wp. maintalningthelewlofyear-to-yearincreaseswellbelowthe.

4 If v rewnue increases. The increase in deliery expenses was primar+

'7 3

1 O

W u liy due to investment initiatives in the credit ca d and interna-

'm' 1

M@gby s

'O N1 tionalbranch businessesJ 2

a w?

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Operating expenseincseawd 4% from

')

[,$MN hk.$

OhMb n['

.V di

.., t 3:

?

l ~ 1 The Global Finance business wrws corporations, financial instl<

autions, gcernments, and capital markets around the world. _.

i empenses included $68 millon of sestructunng empenses for the 2

j v@"p@@ J ence in the world's institutional marketplaces in :he D 4

1 Gebal Nnance falls ireo two broad areas, reflecting a basic differi, : United Kingdom equites business. This festructuring wil! cover :.m cthe cost of closing unproRtabic activities and goodwill write offs V H o

! Economies of North America, Europe, Japan, Australia, and Newc in Oticorp Scrimgeour Vickers, which incurred operating loues of j

g ' ' g Zealand, Oticorpbrings together_ the resources of corporate and E'

! $65.millon in 1989. Expenses in f988 included $63 million of clos % q

'. ing or ' estructuring cos:s, primarilyin the equit_ies broierage busi-J ',

e l investment banising to meet the sophisticated demands of both ?

r investors and issuers. In the Dewfoping Economies, and newly ;

Lnessesin AsiaandtheU.K.@ E. y6.

~ ^

N :i

g n~ industrialized countres, Citicorp's local franchise and presence in

<

' Net commercialloan write-offs in the dewloped economies Rf 48' 7 *95 j the countries of Latin America. Asia. Eastem Europe, the Middle

, vere $ 146 million in 1999 up frorn $43 million in 1988. The t : M ;j 1 East, and Africa serws a more traditional marketplace, where ; +

l increase in net write-offs pnmarley related to the seal estate andj, ' ;;

l C

U

& Q i business is primarilylocaland the demand is_for traditionalcor N, i everaged acquisition finance portiolios in North America.y

Forfurtherdiscussion_onthecommercialloanportfolia,seel y J !

y Spotatebankingandfinance.; /

~p "y

3,1 page324 f a,

A%u, 4g y;y p

+

s s

g,,,,,,g,,

l Werage assets of $80 bilhon increased $1 billion from last pat b ! d p'3.. s Bothreturnonequityof18h%andactumonassetsof 0.7 1

i --- :

4 i declined fromlast veatX o i w : +

E o

N e

Js.auammum.

sese '

. i9ssai ; ' Wb W

%b

'2 "

b 3% iTotal Aewnue t.n.,.. 88,886E $3,898 m $'(42)

(1)'

M

'm

^ '

$Q ^ g Bosneagles C

WW d

$$e, J Provision for Possible Credit 0(J197, ' 431 i l34fNN ~ NauenmC 1

du 0 tossesd.. i. w,92

> v -

< w n 4.,

r,

N MOneratingExpenseiji 12,800 U2,511(.,97; _.14 _

S

' nee :

E Total Revenue 1 ; am. c. p' 81,416l s $ 1,0 g.

eenausses. T..... 4 816891 $ 810 ( $(159) 1 (20) ;

M8 Mrage Assets ($ Billionsh o SS "

l Provision for Possible Cred!tf W'55} ]

f..[

87-J.l..

p 1

g l C 648 s 2600; ;(55)4NM M N Returnon Assets (%) c.M.

s 1.74i f 193; 319)l ID55'S4 W

M~I pperaung Expensen'"??D :

4

-=

1

.s 42 e7<d Mk D Retum on Equity (%)*.* l. L.

98.9?

23.3 L (4.8):

L

. senssoness..... ! ' e. : $ e SOS - 1 $ ' 285b($100; "35 u.,

g p rena m nanuwww=w ows = w a w own, e n newwe ar womt,

4; h ;s wd.numpwowwa.

wm

.as

. _. nf Mrage Assets ($ BillionsJ.m :

.17/

t17J

.m M.i 1

g 4.. pn.n nwa* *" P. M* "*d **d *N S*

Return on Assets (%)m E.

' 3.36 : al.68F.58 iM l N, WV.. nennnocuoemwnewer 96.6: < 41.9 -: 14.7 % e*<M :

~

woamngu j

Return on Egulty(%)*;

. :. ~

4

'^

S A

,4 L appm ownamo.pnuenscungs wawo.nymwwpweverweane

%, y Global Rnance earnings in the developed econornies of ;

c u*t nmmpwo.ne.1

~...

._,.,. - u,

.x W% :( last) eat The camings performance reflected a difficult envirort r

8%n*,"cQ n,*"g~"$"""'""*"" **' *"" **W r W

$651 million in 1989 were down $159 million from $810 millionJ Z ya

E,

<l 7. y, ;.. ' if _

r4 g

w eu = =ngu.

me:

y

. at f _

. e & ment in both foreign exchange and securities trading, a weakert di ' j fing in the U.S. real estate and lewraged acquisition finances Global Finance earnings from th

1. y i ing business in the developing economies were $385 million, up Q* M markets, and a relatiwly poor performance in Europe which ;

' ' included a $68 million restructuring charge for the equities busii.

35% from last jeat reflecting strong earnings growth in Latin M,

. AN Y

f ness in the United Kingdom. The difhculties in these markets are f l AmericaandasolidperformanceinAslae j '

Total rewnue of $1.4 billion in 1989 was up $320 million, a'29WN O

' likelyto continuein1990...

Motal rewnue of $3.9 billion decreased slightly from 1988. Net Increase from iast) eat The rewnue growth was spread across j ' ; 9

'M,

L interest revenue was downytar to-year reflecting the drag of; the geographic regions and was particularly strong in Latin y t i j

, cash-basis real estate loans in the U.S. and the impact of high -

' America. due to local currency funding actMties in a volatile mata N

, Linterest rates in Europe, Customer transaction foreign exchange -

ketplace. Partially offsetting these increases were lower foreignf M o

,d

,y revenues, which are less wlatile and represent approximately; exchange revenues in Asia.*

7, o,

Q ", (one-half of total foreign exchange rewnuesJwere up) ear-to-Nar-to-year expense growth was 7%. Operating expenses 1 m ' ;j tyeacThis increase was more than offset by lower interbank trad-

, inaeased from $600 million in 1988 to $642.million 1n 1989.;,

i

$ g;f ing twenues,which were down in all major trading regions,

'Ny The net of commercial loan write offs and recowries in the t, g ' M #9 lecting a clifficult environment. 5ecurities trading rewnues developing economies resulted 1.n a net recowsy of $7 m!ilion in; e q" :

f 3;Pb % werealsoclownfromlastyeat Feesincreasedslightly) ear-to-1989, compared with net write-offs of $53 million.in 1988. This S,

4

, d9 yeat renecting increased fees in Europe, p&tiallyoffset by the.

. was the result of reduced net write offs in latin America. Asia W 4

@M M fees from the U.S. penslon fund management business which _

1. slowdown of deal-related fees in North America and the lack of

. and the Middle East. For further discussion on the commercial a 3

loan portfolio, see page32.

jdM was sold in the third quarter of 1988. Howevet venture capital Both return on equgy at 56.6% and return on assets at 2.26%'.

j W,

> gains were significantly higher than last year as were the sale of acnieved substantial increases, while aveiage assets remained flat - j g* flease residuals. Lastyear also included $90 million in pre-tax -

compared withlastyeat j

j gains from the sale of the U.S. pension fund management y

,o

, J - 4 businessJ

.l,

$l

.U (h

<W 7 g %,]88; y mL

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m d @d ad K $ h[ [;M %M*N * \\

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e,,,,m,w nov,. Oticorp is one of the top dealers in U1 Gowrnment securities,1 < -

4 the largest and most liquid debt market in the world. M also :

<W; E & 4E8888 $k,

', T

,, y underwrite, trade, anWor distribute securities of many sovereign cp y g loans % h n. o.

m. V w..g:9 Deposits atinterestwith Banis l, ; e, y,p, n. a, ; 8 : 54A -

governments and U.S. municipal go ernmentsL Oticorp assists,.

'4

. through syndica*ed lending. note issuance fa

'.13A '

corporations and Anancialinstitutions in raising short-term funds ; ' '

f NsT 4 Securities? > q.,. 7%.

.y, (9A-4 gya$ng Assets, y 4M m. A c,y;cy-T91 L papet and interbank money market instrumentt M also arrange y M A

long-term Anancing through private placements, rnortgage,

Si H

1,4 cceptances 1, s, a. ;, w.. y m. A i. y 4A-q j Securities Purchased Under Agreements to Resell;.

'SA i backed securities, and bunds issued outside the United States.7 * M 4

, Citicorp also may take positions, within p

(

Other % e. s f, N y :, m, g, g __ 1I.3 L g f

$("?johWMos Specialized Anance is the generic term for our nontraditional h.tMf

~Mogu.......

18999A E 5 esult in a mismatch or interest rate maturities.e R.

g SpesieltsedPtnance " l '

, _1

.5u Nip N

$ ' 38 8 : m bevesFBearing Deposits " $' [' 'i[-Other Borrowd Money '. ' :... o;.

, ; kndng. br exampk, assebbased k% capwa Non interest-Bearing Depos h)

- SA:

n hg, leveraged Anance, and equipment hnance. ActMtes.

3

. Mude the whoksak purchase of aH N

'38.4 M J Acceptances ~ dle[$hre$mhntstoREpdrcf$abN 11.6{

@SecuritiesSoldUr 4.4 w

putblio of Anancial assets, equipment related secured lendingi

• j p% 'Other(includesahocatedequity). j. j m;,, y _ asA.

and km optbns to end es, keraged kasing. tax kasmg. g

,j 1

. 3 -

and wndor Anance to assist the manufacturers or sellers of y a;A

, %]

4 J

. $199A =

capital equipment.'

. 1 Q[ Q;'

M f; peau. :

Mi 7p; pmun=amwrmorwwwomme '

tejw eewnestnuwmanotDeumte Liquidly Insupones, Ptnanstal Guarantees, and Asset,

lnterseedhanen

. s:

'B

,,(g,p a

te f

included in this category are fees generated o' loarNommits W J ments outstanding, earnings from guarantee 4

n y# %( geshalPInanosfeetincessebyProduct another party earnings from financial guarantees re n.

p wmuoeocuC, nor U.S. municipal bond business through our subsidiary AMBAC7W 2

mfd Core tendingM,,, a., m, ;y, g.j;. $s 48

and income from a,sset htermediatbn actMoe R '/Ta y&ForeignExchangeandHedging w..

.t.

170E sales, brokerl..and direct placements." % W t,, KM 1

For newand emerging corppanies, Oticorp has MDebtProducts/MoneyMarketServices. :. t Equity

. Mj j&,

DOS?

.s fNd s Specialized Finance W sn,, &

..,. 1. ;,

'211:

3 d & Uquidity insurance, Financial Guarantees, and Asset wnture capital businesses in tne U.5,. Canada, the UK, France.; x! a%

8

./W Intermediation =., ;,e 7 9.,1 e,,..

121 Germany Italy Australia, BrazH. Mexico, and ArgentinaA NY W8M

% i Equity Products, % A &, ;.,,.,, t 16 have stock brokerage businesses in.lapan, the UX; Australia,1

&@f0j M p. 1 Advisory" Trade, Transaction Processing, and Other.,

'265 and in several other countries oerseas. In the U.S., where wei S ' yjg g' M

, i,,, 6.,, ', ',

8g,086-

. have limited brokerage poet we haw cowrage through Wpa gy.p, our brokerage subsidiaries, Newbridge Securities, a 97-c

lones & Ryan, a domestic brokerage Orm specia 7.

N

%% N M EE N <

institutionalresearch products. Both Arms are members of t

>g

, New brk Stock Exchange. Oticorp may also take positions ;

4 $ q.

SMAl.PImiAfdW WSMBARERS:-

3@a n Corelan eng f in the equities markets within pre-approwd guidelines.?

Y" i

' 1/M y @yNet income in this product family renects our more traditional -

AdvleerWItede, ItermeeWori Pressedrag, apul CIWeer lending actidies, for example, working capital loans, long-term

~ Oticorp has merger and acquisition specialists in 20 countries L WM Ji Q g Anancing and syndicated loans to corporations, gowrnments-to assist companies in finding buyers or sellers and in structuring i 4" ~ sl l yrand Ananciatinstitutions.'.

'thesecomplextransactions,Tracleincludesdirect Anan l

p?q9ereign Badeange and64 edging trade-related transactions, countertradeiand transaction processd 4,

ing such as documentary collections. Also included in' the cate-SM a Oticorp is the world's largest foreign exct.ange dealet Oticorp gory are cash management and earnings on alloca M

@%gl helps customers whose business, inwstment, or fund-raising ~

actMties reach beyund national boundaries in obtaining currency

-njj K

and hedging currencyand interest rate exposure. Assistance is

~

ly d ;? provided through a variety of products such as interest rate and ~

y' 1

( ; * 'f mayalso take positions within pre-approved guidelines in anticle 1"E foreign exchange swaps, futures, forwards, and options. Oticorp y

y jf (pation.of changes in these markets.)

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y g

y ggM'U The informaion Business continues its focus toward a global i X ; L Overall the in8ormation Ilusiness sec

..-. u s

W.' 1 ' r, J

+

W.

y'MM@M integrates batting, electronic publishing, and tele y]#N@%' NAcquiredinmid-1986.Quotronisthecorecomponentof u

' information imestment initiathes, and the acquisition cost ; 4 J d

N (The losses reflect. continued Irwestment in the espansion of :

rwcation services.r T [ Ouotron's products; markets and tednAogy platforms, other ;.. N M; %; m :

L.

Oticorp's infortnation Business. It is most prominent in the

' of ON Also renected are $35 million (pre-tax) in expenses at )

r M y domestic equities rnarkets in providing oreline, real-time financial Ouotror), related to severance costs in response to the overall y downturn in the retail securities industry and equipment '[

%Mp ; information services. It is moving rapidly into additional markets L 8 & ' for information on fixed-income securities and foreign exchange.;

-write-offsfN : M %,..

7' j

. 4 W,

%@ii, 3Other Information Business initiathes consist of the developt J

llevenue of $282.million was down $23 million, or 8% from,

d 0 ment of a point-of-sale information service that will assist ?

. the prior) eat This decline was attributable to increased funding m

p j packaged goods manufacturers and retailers in marketing to

, f costs related to current operations and business expansiorf i f i

4 n !* j consumers, and a trawl information service that will help ;

10uotron's domestic service rewnue was slightly worse than 19889 > '

t 'due to the decline in securities industry activity and the lossW X gp, corporationslowertheirtravelexpenses.y T

i of major accounts.The decline was partiaHy offset by increased L > 3

international service reenues from ouotron and from M9Ae ansonnestenmusiness products < t s K a'....'

f N@gl

~ 9e8 99t. '

,N Operating expenses of $565 million increased 23% from last 2:n w uo m mwee '

soap.

q 1

9 Total steerrJe"I i. W 's.8 382L - $ 305L.$ l23)L. (8)n ' ye8C reflecting continued investment spending in future product i M a[9 Operating Expense....

. 968. 459. ? 106 h '23

( and technology initiatnes, and equipment wnte+ffs and sever L Mf.

N2any

. gppgg: '$l105) ' $ (73) (70)

' ance costs at Quotron. Excluding the equipment write-offs and B f hNhh*ggggggj ;

' branceApegsesincreaseg$71mhon,p5% Ky

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Gf he csosshuder sefinancog portfobo% presents cross-boderi risks!At $3.3billson,therennancingcountresreservecontinuesloj ' N ' '

,^

pd isndng to refinancing countries. Thir actMty has become highly, ' : glw Cit 6 corp the Aembility to reduce its exposure whjie still pro w M congeNaed and is esamined_ separa'ely*from local actMties in :

viding new moneyJustined byindMdualcountry<ircumstan

~

s', W%

q^

i and re6ects Citicorp's almost unique long-term'iotal franchiset ggfthcarcountries? W q/

,t;<

presence, commitments, and prospects in these countries; ' l j f'"

%ft ' % %b o

Medeum-and long-term exposure to rennancing countries was p;b

$k N PENWBSe

$8.6 billion at December 31,1999, down $0.9 bilhon from i -

"7

,gg,

.,,ep.., e G. December 3t 1988c l.

mW,J.y MWf ^;n J

', y 4, orgew en,,4 e

m m R

2 :

4 uy 11btainevenueb;w.A A ? 8i (99) $ 532 $ (622) NM,

• Earnings in the ref!nancing portfolio also renect the crossi #

D

% Ptwiston forPossibleCredit0 $ ! yMW

. border interest payment patterns of certain rennancing countries.h c Xl

,. Lasses ; ;/ ; twt u 4. M ggp1.. L 1. 978 Ttml

. Last year's results included $661 million of Brazilian posstorder 1 #

9

' standings lepresenting nearly two years of interes T: Operating Expense., &J.S : 9 : L PS M 84T.

(9)L ()1)i, t interest payments on cash-basis medium and long term outg i

'N W i

j- @' 7 80stInsasseMassa L.. :419;9Sti $ 278 $ll,429) NM l (8) / 1 Brazit Whlie in 1989 only $170

j Mp g Aerage Assets [$ BilhonsQ,..,Jte.90$g<32

,d99g~

12, t

(!).

! interest payments from that countrywere received, representing j

4 j RetumonAssets(%)

2.

(12.82) ;

n 4 < Retum on Eguy1%)*9 4

' negative impact on revenues of cash basis Arge.ntin. e. loans'was W H

v 8WRR. 57.9-NM f-m?yMnnenw.m

%ne -emen.a..enwiw neepmworm.m.a.w.wp l ;n 1999?. i ;

l' H

$27 million more than in 1998, as no payments were received g ; 9 M mwW%?,

' A My '

j j n' y 4

Net commercial write-offs in rennancing courdes were P" '

g Mld97 WLli!. f G "$ Citicorp's cross-border rehnancing portfolio actMties resulted in N ; $577 milliort an increase of $16 T ' : a net loss of $1.151 million in 1989 compared with net income in -

' losses include country write-offs of $501 millionl including W."f m

M M1998 of $278 million. Included in 1989 is an addition of $1 billion -

E $395 million in Argentina, and reductions associated with actions c -

y N to the allowance for postible credit losses (taken in the fourth,,

M, M

xtaken in restructuring Citicorp's exposure, primarily s Pvaps of rehnancing loans l-., '

Ap QN,pg

i i M quarter) to prodde for risks associated with the tehnancing ports 1/ Fly blio. The additional provision increased the allowance forf f

, For details on the refinancing portfolio, see the Internatiorg ]

- H

$, (lennancing country exposure to $3.3 billion at December 31.1989 i

. Financing section on pages 26 29.M x W

'7 4

4 s

1. y&'%g,%,,4, M

y&,

@@ M,t;l le6ecting Citicorptjudgment as to the underlying economic /

v+

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i M,j Mer-. Corporate Iterns ~

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$ s i Corporale items consists of unallocated Corporate costs and other] " made in 1987. InCorTje taxes are attnbuted to the businesses on a ' W q

SW corporate items, in 1989. Corporate kems resulted in a net loss of ; f ; local tax rate basis with the balance held at the. corporate lewt ?

y 3N J

)l

+ + $51 million, compared with a net loss of $36 million in 1988J k7 ju included in Corporate items for 1989 is a $180 million ($77 million 0 0 7

N W Bea m s iafter tax) gain from the sale of premises in Tokyo. Gains on the

,J b1 & sales of securites from the irnestment portfolio held at the corpo-esse '. 19er i vw.Y 4 C J>

.mumercoum -

4

$W rate level, which are also reRected in Corporate items, increased i TotalRewnue.. / E. o. $130a E60)1 $188s "NMt N

MM $48 million in 1989. Corporate items in 1988 included an extra-

Operating Expense >.. a ' 253 + ' 233.1'19i

>;8; 1

& J oedinaryitem of $160 million of canyforward tax benents related

Oderlames)< J.

' 81811 ' ' $ (36)! ' $ (15) 2

" (42)b" yd i to the $3 billion addition to the allowance for possible credit losses g we,,

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9;:N The ) ear 1989 brought fundamental changes in the straegy for q%p(ments on the hrst o Dunng 1989, commercial banks negotiated preirninary agee e g

managing the internaponal debt crisis, The effects of thosep

% *^ M ;1N stategythat had been foliomed since August 1982,v$en h@D vere underwaywith sewral oth 3 changes, honeet remain far from cleat J.

W'SQ with Mexico, the Philippines, and Costa Rica Negotiations N

p 2

/,

yfMS

'the debt crists began, focused on new money as the comerstone y% iThe itvee agreements negotiated are al! diff reduction agrecmentso n,

$, 1 of the financial packages that commercial barts worldwkie ?

assembled for various restructuring countries. Thois packages /

N differing circumstances in each borrower country The Mexican ;.

l

% provided the countries time, by postponing debt repsfments4 W agreement offers creditor banks three basic options-enchang c 1 and resources, in the form of new money to help them impleh '

f ing debt for bonds that reduce principal, enchanging debt for J,

f ment the economic retcrms necessary for them ewntually to (

bonds that reduce interest payments, or lending new money Thef/

W i grow outof the debt crisis.;

E

,.m 1 n M,,

Philippinesagreementhasjusttwobasicoptionse debtbuy wl," '

a

Theemphasiswasonburden-sharingandcooperationg fg _ backandnewmoneywhiletheCosta,Rican%,..mhasnoC

• i x

2 M

1 among the Vanous partses-Deditor and debtor governments,1

? new moneyoptionJ

, y,, sib d

,t

,M W M 7 the intemational financial institutions, such as the Intemational y p p, ; in keeping with the new strategy the three %,mn u, C

?M Monetary Fund. the %rld Bank and regional development b ;

, strongly emphasize voluntary debt reouction over continuing P:

q[ flows of new money in these packages, all the public sec

$D W K banks,andcommercialbanks.Thegoalwas tosupportstrong L 1 resouices are devoted to encouraging debt leduction3nhance gm QM r a economic reform programs that would allow the Countries to ?

t/? i seturn eventually to the voluntary capital markets'where they]

l ments for new money a'e underemphasized or ignored comQ Q w y' ?

fas developing countries, could raise the incremental fundt they

, pletely Many banks feel that these signals, and others that thefQ A q

i will need for their future growth. New money exercises, which;

-are receMng from some public officials, stress debtleduction 4k ?

,@A i encouraged large numbers of credcor banks to continue lending (

only not new money and they are responding accordmgly $ A

to the countries, clearly vere consistent with that goala.lQ Howewt the resources made available by the public sector toi%

. A g support debt reduction are proving insumoent to meet the@

g

, m tthesametime,voluntarydebt reductionprogramsgrew'in) V expectationsofvariousborrowingcountriesand,gene y

% ;y@ l ( importance. Under such programs, creditor banks may tonert 6 h

L packages for Mexico and the Philippines, Both countries resolw the debt problem. This insufficiency was apparent in the their loans to a country invariably at a Icns, into different instruV

% y ments-for example, into equityin loc business ventures or :,,

WF

• into bonds. The indebted country gains from these conversions" incremental new money from commercial banks to _ help finance W

' N to the extent that it reduces its total debt at a discount to face -

) the debt reduction optionsin theirpackages, Wpq m E y '

1 value, Homewc the country takes the longer-term risk of liminng

.,The cunent underw.phasis on new money raises a more furM l$l 'ih ; b

[ lts future financing: Banks that have taken losses on loans to a f <

damerital concern. Many developing countries will continue ( y W

< orrower are less likely to lend again to the same borrcwet : 3,

to need some new commercial-bank funding over the longer, ;

4

Progress was made under this new money-oriented stratM term, as they have in the past, to complement their own savings,,,'

J % C egy With support from commercial banks and other creditors foreign inestment inflows, and funds from OMclal sources b W4 u

manyof therestructuringcountriesstartedreforming;priva-R y At debt reduction programs--particu arty twse invoMng i g l)y; fl tiring, and opening their economie$. Chile, Uruguay Mexico land i Ldebt-principal reduction -basically encoura lending relationships with the participating countries. It is approg

'xd l the Philippines, all of which have returned to growth, are exarn /

' pies of how the r6ght economic policies can work, There haw i priate that some banks, consistent with their business strategies,? K' /

• l,.

! been a few though small, Wluntary market transactions, by Chile "

choose to go this route. It is also appropriate that such banks do B i

49-i Mexico, Uruguay and Wnezuela.i Li.

'b

so through burden-sharing, by Wluntarily taking losses through A j l ; ' ) Some of the countries, hcwevet have so far failed to make the debt-reduction programs that, unlike discounted sales to third g

; f, W necessary economir; changes, and progress owrall has been s._ _

parties in the secondary market, pass on the benefits of those L +

h pf i

A slower than many of us had hoped, in March 1989f U.S. Treasury,

lossestothecountriesthemselves.NV y s 7 y "65ecretary Nicholas Brady proposed that voluntary debt reduction :

. national lenders, Citicorp included, that haw a commitment top 4 V At the same time, we believe that there is a core group of inter-7 ",'

' f I by the commercial banks replace new money as the centerpiece the future of the dewloping world.These banks would be 2 m

'g

^$ e of a changed strategy He also made the point,largely owrlooked 5 ' t since, that some continuing flom of new money must remain an willing, under the right circumstances, to continue to support l

e

'f, l essential part of that strategy in response to the Brady proposals, those countries that are making serious efforts to re t [their)"; W' r

A. the intemational Monetary Fund and the Wbria Bank agreed to --

economles. ;.

jf.....

7

. Consequent $ commercial-bank financing n*g" should be i a

%gqWoffer certain resources to back debt reduction for countries with L Vlable economic progra Thk backing includes loans from =

designed not only to provide exit instruments for banks wishing

^ ~

y $ ; those institutions that the restructu'hg countries *n use to buy -

to leaw, but also to (mcourage a core group of banks to continue,

wsf L ackdebtfromcommercialbanksataJtountas toguarantee lending to the developing world. If this does not happen, many z b

m f principalandpartiatin!crestpaymentsonnewobligadons -

developing countries will have to rely exclusively on capital flows "

W ^f exchangedfordebtthroughwluntarydebt-reductionprograms, from offdal sources. Recent history suggests that this depen-y

~

dence could sewrely limit the growth of the developing world. =

-Z Specifically Citicorp supports a more balanced financing W

approach for future commercial bank packages-one that, in

,cq,,

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M As g M addidon traciuntary detM eduction, ecognizes the importance[, f As a percentage of Citicorp's %) billion total crrss border claimst

~

S qaf condnuing r7nvurry Dows and seeks to encourage themf j on third partes in these countries, this portion of the allowance ;Mf y'N g%iwWoptionscouldinclude,torexample. trade-AnanceQ F was32%atyeaeend19892.,.nW '

N m

N bdlities Onlending, project Anancings,new moneybonds, debt m X Adding the 3901 million cumulatie amount of count,ywrits c!

Wyk aquy c,onersions, and co-Anancings with the MWid Bank and 3 J offs that haw already been charged off against the allowance, '

i J g egionaldevelopment banks. None of these options would t v together with the $3,205 million aliowance amount gews a total L -

l MQ necessarily seguire the use of creditor-country funds.

y (of $4,086million,equivalentto44%coverageofsimilarly.

A-W

~

4 g$gWIt am further concemed owr sigolAcant increases in anea V ~ L t adjusted medium 9nd long-tarm claims. Country write offs arey

'6 i

g@ Mages in interest payments to commercial banks by a twmber of ym Kthose write y, pq qf 5

q f countries $ince the adoption of the current debt-management /, i debt-servicing problems,as opposed to write-oft related to L A i 9 ' ;

$pps stelear in some cases, this dewtopment may reflect a perception Y > credit pr0Gris ofindividu6l commercial borrowers in the 16 d

,, j Gy p[by those countries that the cunent strategy condones their use of 6

) nancing courstries.%

1

.as J f,

1 anearages as a form of external Anancing. The internationali j

' 6During1999,theseAnancingcountryportionof theallowance5, " *,

@d M(Monetary Fund, for example, has broken with previous policy? 4 by

- was charged with $590 mihion of country write offs and losses ? p %,

and is now willing to disbutse resources to countries that are in f ' l on loan sales and swaps.There were no write offs based on l n "M

C s NW fcredit problems of Individual commercial borrowers in theseJ A d,

hM

%%Mlanears to commercial-bank creditorsJ 6The anearage problem, if not addressed satisfactoriW will haw, ? countres, and the allowance was crS d

VMimportant ramlAcations fbr both creditor banks and indeted W@g. N recoveries of such write-offs tale

^ A

%. VK countries. During 1999, some ced". ors, erm.tuding Citicorp.'. 1,C increased their cedit l 5

1. 4 fef i

@'~'f

~

I

' M@

p hMM e

NQp ings. Many of them cited rneunting anearages as a mgor reascn;, Wause poussM,, M u

4ggContinuing arremages obviously will make it irTreasingly difDCult L.. !

! se.ep '

' 19es ?,

'198F %, b

$QfQ C0mplete future Commercial-bank Anancing packages jbr Mt OahatJw J

6 N#

M 4

Ma the countries in question and, therefore, will fetard the r efforts to ) > r erWIIBMPareteePM N A

'4

'\\

/

5

- w$Q r%

5 Mleturntothevoluntarymarkets/U t.'

29 4

i % Given these problems and the~resulting uncertainties, $we S W' Wuw anH' orQ' %p g! v e -h ; l W' t -

M m

NbEhewe that the cunent strategy has positioned the debt crisis at a f TadeandShortTermgg/i S; qlA:

9 q;

{y,8 gy I

1 1 g

a% turning point. If not managed carefully the strategy could underg Oetteetg 4 %py

• f,. @;s j[

m, r_

yW mine the progress to date and leaw future !inancing for much of-

!Imestmentsinand Funding ofj t uF p W the developing world entirely to governmentM sou:ces. lf man j

: Local Citicorp Franchises.O y, -.7 l j7j MM.8s W

h$ aged carefully howevet with a tenewed emphasis on coopera :- Equitylnvestments% & SS VJE

'F Wu lj Q@k tion,it could alleviate the situation and set the stage for the W-m, M [ewntualseturnof someof therestructuringcountriestothe,

NW*"*DN*'F 1

L &.

2 EThe aedl[icss pr$sion db987 million foi t h

I h '*""Y W$

'"I

[% ] y

@hOlM5MNDINGS PX mpggggggaggggggy o mE

the $1 biHion addition to the allowance Ihr possible oedit lossesj

?

.. s f i 1.

U~

quans. # 4 w-

._w 3,

k - p At the end of 1989, Citicorp's cross-border and foreign currency O1 4, 9,a loan sales in 1999 lreded pnncip'al amounts totaling ;, y

+3 J oumanm in the rehnancing countnes--defined as those, m

.i$269 mlHoon at an avemgediscount of 26%. toan swap transac r, e

+

~

mo i

4 s

p

+

A ps e countries that are currently in the process of rehnancing their awm

> tions inded principal amounts totali"9 $89 million and were r-

- qr m

o%q n exter,nal debt or have completed such refinancings--included ; <

a a

% n$8.6 billion of medium and long-term loans and placements. In 4 accounted for according to the estimated fair values inded, T bv c

c u:

whichmeEgedane_ in ately78%of theparammnGquky

$@d $0J biHion of irwestments in and advances to its local frangFaddftion. Citicorp had $1.5 billion inestmennoMaWn@orQsyamcarriedag, L 4 g

\\j TKu i

8 My o Iowerof costof martet. -

W pyy chises in these countries, and $0.3 billion of equ_ity imestnier]ts : -

1 At December 31/1989, Citicorp *s cro$ot6iderAnd(Seigncur 44 s

qpgobtained in debt-for equity swapso

.,e VO rencyoutstandings in Bra 2il excee6ed 1% of total assets. There were' :

N'aU pg r : At $8.6 b. illion, medium and long-term loans and placements'., t e no refinanc. g Countries With cross-border and foreign Cunency 2 in 4 g 595 Dillion at year end in 1988 renecting country write-offs and '

outstandingsbetweenOJ5%and1%of totalassetsother _ a _

. =>

4 Jin the rehnancing countries were do. wn $0.9 bil. lion. from

..3?

m-w m-y'

,. ; y 3, 3) gypou,tright sales, swapt and repayments of debts; e. s.

g:

e Q gg

/

- - g

'm 4.-

y d The cedit loss allowance at December 31,1989 included ;

U9 J 3"

4 Vp%@Q H-

$j Y$3285lmlHion attributable to the rehnancing country portfolio.4 W* pe %[~

,. ( '

N This represented 38% of Citicorp's $8.6 billion medium-and -

Mg

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d 4

hlonga n av. loans andplacementsin therefinancingcountriesE ',

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W 9 f (1) At December 3t 1999, thee wee re courses Min exaptiocer ye kverin oseenty outaJndrigt termeen A75% ao Ibn or total austs other than h4 etto At Decomter)t ett pe ervy such extey was te 2 h,

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i y@@,,3The following is'a summary of dewlopments in the major refinanci AMICO.....

RA..fJ; M,,E;m.~,.w 3

W 1 Ing countries toward the resolution of payment problems. Oticorp ;

2 On February 4,1990, Mexico and its major cuii ivocial banks for( C, management continues to evaluate these dewiopmmis and their)

. mally signed an agreement cowring all of Mexico's $48.5 bilkon D M.

J medium-and long term public sector commercial bank dette q;

'(g ; possibieimpact on Oticorp's financialconditioyk7 l '

4 7,

g.qg y

(Oticorp's share of the afNted debt is approximmely $1.6 billion Cl

out of its $1.8 billion total medium-and long-term o g3 1

1 SIRAEIL _..

1MV% C %6 "..

WM,11n October 1908, Braziland its bank oeditors completed the signingf ^ ; Mexico as or December 31,1989). The financing package oftered ", 4 W ' f of agreements relaing to the commercialbank portion of tneCw each ceditor bank a range of options including principai reductione #

2 country's external f:nancing plan, The agreements included a total,

(interestreduction,andnewmoneyoptions, f M Mf e, f i;,

f@

l l Undertheprincipal-reductionandinterest-seductionoptions,.. l Ss$p{g of $52 billion in new money facilities (Oticorp's commitmentf approximately $346 million), a Multi %ar Deposit Facility Agree s fceditor banks will exhange their medium-and. long-term loans y v

h y ment restructuring approximmely 562 billion of medium-term debt s j j for 30-par bonds to be issued by tre Gowrnment of Mexico, PrirG p W

(Oticorp's share $3.1 billion as of December 31,1989), and the main %

clpal payments wfil be collateralized by U.S. Tleasury zero coupon f i 4 tenance of trade and interbank comm!!ments of $14.4 billion a 3. f.W obligations or comparable collateral. Eighteen months of interest 7 g;f3 j,L

_ p'eviously agreed upon lewls (Cricorp's share $660 million). Thew : payments on the bonds will be bacled by a coitateral account. ; ; ;

,agreementswere escr e n e a nib di d t ilJ Oticorp's1900 Annual!

s._

, 7. 3..

loans at a discount of 35% with a floming Interest

. J Principal-reduction bonds will be issued in exhange for existing d

i' h

N ~,b fleportandForm10-K.E London Interbank Offered Rate (UBOR) plus %%. The interest-d, R' [.. tinNowmber1988,thefrstdisbursementof $4 bi!!ionunders *.

reduction bonds, which will be issued in extienge for existing j 7

- the 1900 new moneyagreements was made (Oticorp's 1 A

share $301 million). In April 1909. the second disbursement

• iloans at pat will bear interest at a foed rate of 625% The agree a s

" ' 'm.T of $600 million under the 1988 new money agreements was a ment also prcMdes the creditor banks thM select debt and debte ^

W l made (Oticorp's share $33 million)cThe final disbursement.--

1 service reduction options with lirpited value recoery opportunities s

%M Gof $600 million was subject to certain conditions precedent C 4,

starting in 1996 subject to,certain limitations based on Mexico's ?, *

<A

. that were not satisfied, and the commitment of the banks under L real revenues from oil..

such new money agreements terminated on Septembei 30,1989.

,, CreditorbanksthatprcMdenewmoneyvwre'askedtocommit) [~

j %

M in June 1989, Brazil suspended interest payments on its 1 f,4

,- Lowr a four-war period a total of 25% of their existing medium-and ?

long-term loans that au not exchanged for principal-reduction orf Os 7 medium-andlong-termcommercialbankdebt. Arrearages!

x g*

[M J $194 million due but unpaid to Oticorp. At December 3L 1989,1 4

heached approximately $4 billion atpar end, including ' _ (

7 interest-reduction bonds. The new loans will be, repayable in 15 ;u 3 ears, with?> ears grace, and will bear interest at UBOR plus Wif%i L C Oticorp carried its $3.3 billion of medium and long-term Brazil %

New money options will include fadlities for trade finance, onlerxV t,

outstandings on a cash basis.1 _ _

._. i " ~

'ing andnewmoney bonds. _

b

9

' Negotiations on the foreign debt are expected to resume in the E

~ Oticorp has selected the new money option described abow i * '

3 second quarter of 1990 following the inauguration of <,.. T 4 with the resulting commitment to extend $394 million in newy 1 President-elect Fernando Collor de Mel,lo on March 15,1990fQ.a* YM,c Je

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n. nt J. . G _ W n, < ( ( Jn ; pg sh tu <g; - s s 1 Wamoneyof which $231milhonistobedisbursedin1990andtheb 7.OpWIICCM2fTWIES ' ., w m,M ,y Q ; During1989,hgentinacontinuedndt'topiyinterestonitsC ' d, '>' @hg % Debt-equity cornersions'will be available to red!!or banks 1g i ' Qemaindedn1991and1992. .O ~ J medium-and long-term obligations l In the second quarter of 1989.h .J g X structure prqjects to be determined by the Maxican Gowrnment i jhgentine exposure. In the fourth quarter of 1989. Citicorp wrote / l p, ; in an aggregate amount equivalent to U.S. $1 billion of debt ' t.*dcwnanadditional$210millionofits medium andlong-term 6 A, ' y annually owr a three-andyone-half year period. f' : Argentineexposure.Thewrite-downs,whichwerechargedM M f %. against the portion of Citicorp's credit loss allowa

yvw-in s

to the tennancing countries, reduced the carrying value of thej]f, Q M CItancesin ^ - - nin Beaullansi80eutee , youtstandings affected to 60% of face value, t. t a i ,Wg FAtDecember31,1989, Citicorp'scash-basisbanskiArgentin g U uu,moroaus 2 " O, m- ' envio < > ucxicoT 9% $,4esee4snueOuessenengs'NTotal Outstandings at December 31.1988 p.P $3,951r kQ "O' - (3)1 ' 4e impact on 1989 earnings o

of Citicorp's medium-and long-term outstandings in that courytry r q

N s W Net Change * ~. w Z. 7.v 2 T(19); M 7000ese4% 1*E i/ hgentinawas $102 million pre-tax. f.. N A, L '. F a( Q TheaccompanyingtableprovidesadditionaldetailsatDe gM Interestincome Accrued %. A. m ' ~ 41617 ijk JAdditionalOutstandingsG. J-i ber 31,1989 of Citicorp's outstandings in the tenna % m.Q =11i '209 n . and also indicates the amount of local and foreign currency Cash N : MMCollections of Principal y. M fw &. (128 9 J (43 7.u i Collections tsf Accrued interest

• 1. >.w S I i1

- basis loans in those countries, The sixth column shows the < NM W 1 '(211

estimated after-tax impact of cash-basis loans on camings kNhe h$h

$ ';[OtherChangesp. g,1W '. 4 r ; v 38; ' 171 1 i ' Mposaoursenssomsesernecemosase, seer.' $3.927

• r $2.169 +. acar ended December 31,1999.The amountsinclude interest MS+

rew'rsed when loans are placed on a cash basis, plus the cost ofh { WY D ly aspmere trade codes w vmtm orpoun wwh orghs nwuram of one par a m. a$n = wnsm,wwerenrmmoowboraerandw ncunencyeumagniudemmcome carrying the cash-basis loans, reduced byinterest recelwd in; y s Q 3 1use o o i maan n swe and su mmon m uraca and iucn==-n meiw w wsn was ' cash andlncludedinincomet 1 u', P wI mdi' s. $Ms mooncprard and 6214 mooninMmuco u. L, u -luA V i th hcturies stwrt4erm outstanoin0s of $401 millon in Brass and $20i mean b Mexico. H W .ie 5 $ if g y ; itlJg4g/ 'W f \\ay y y 4 , n I NM# ,hs h. M Cl i x' m w r ' ,[o [ ', d d - (, j hj , CA$H,gAgy09d t f[4 : 1 jll $ ,g K' g ( Ef571MatEDil' m xt a ~ Nm " .mc u g f gg W > fi g.s o_ i MESTWNf5, 9 l-h bh-dt. M *y + .P L' N80aDHW1 pgyt,gg ' 2 i 1 s t i um.. 3 4pygg49g ; h s _ g,,gy gg, i...s ON = =F ertow ..t acmssi' < D Q i 1 . g,, y+ maw.m 3,m mo, cmmar n . woum ? MON ~ + j i m,r,oumr. ,g o g, y1, wm m a,. isc,.,nu - y,3 c W'y:A.** - 1 sum - s euw

num -

'sou m. muw a uum ; ' V" ',' ,~ s, jl, J$154)M5 )y e _l 6u .,,. j j b 3 hgentina.J $ '.6 4 $;2i s

$.;4

$l'564;

[%MCazilky.. cc)4' ':G. -t W130)M e& 334 i.4_ - ,11',, ,l' 43,387; o SM f, Chile W, s,,V.,, 2 ~,1 - .l u $d ?EcuadorW&..<. .1 1 125 - 8)F,' 1-1,8! 2-c.) '. I ' c , 31 ' f * (1).i ' Q tApMexico%@1 4 pdhNigerial J .a. ', 138 A 53 f A W 2 55 .4 - < 28 ' ?24 ? i[O / Philippines mn in n-_

.6

.I 4. MSouth Africal w. .6 W ' ;(' w 1 $ Uruguay $. ' g, y _, .3~ 4 u --. 7: 3

, g XI;j i

%M Wenezuela J. -.u. 6, (#MYugoslaviaf..., '2 m 353 '(8) ? $N 2AllOther* K.. ;... .6 S Jheymu, '. $f195);' ' $8.6 : 89.5 $J -$J $4,638: Min MMQ .i M@R4%(1) legally thierg costrisorder arW dure 4pn curencycommOwn NctJthng IMi4cc av country of tie (gwantoc amowned so la2 teoon the Ph@pne$ at Decembern 1999 Commitments wem noitnpretend in ary otfer frenancmg country i M enu w si m uuanednaecuaeauvswes.-, % w@9 pnnaudes tem kxas and tweign cunency dans inchases su47 tr.ii on of bant placements en arare - i 7A 4)eractiets reeect e arduction of earNrgs. '] Qi " ; ( (5)1he remaining I6 countries are as kattuws between l50 millson and $ 500 milson et cross border and tareign eunency outstandirgs pominican tepubisc. Morocca ano rosard. ness than l50 rreors. l 6)?ym qe.Q~,Solhna, Costa #sca Gatert Hondurat holy Coat Jamaica. Malagatjg MontamDique. Panama. Peru Senega!. faire. md Zambia a i2 Y y t

• '_ lM ihhU e

3

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y.; g Q:& &J M. &M y +m fh&! h w msa. i w %f, w&?y? U y %: aM gt h

-3 g2 n

g4 ~., 31 .v q %m-s, 4 4 m s s. + < ( , -. : s w:n, Lvu /* a 'w - #r ; w-m.m W(y. d hk rFWnagement 'k a fundamental Concern M all lenets M..i.. ig[y u xe me, ' $. Every credit transaction must hane the proval of thee lend.,5 M sp e Chicorp. The core elements of Citicorp's risk rnanagement polii "ingomcers,eacheuercisingindependentJudgment.Forlarge c. M <, i cies'me dhersification, decentrahzation of management, strong : J lloans, two of the three lending omcers must be senior cedit ofW * " ' $gf M cies, and an independent renewprocess byan internal audit 2fbglinancial and operati h management responsibilities, whlie the other third me in full-time... @Ed i staff, with further examination i vided by external auditors and L ' risk control assignments, managing credit polir.y and a s 4 a .Y % regulatory bodes throughout ths woride... y ,J

< All senior cedit officers are thems M W g JE Qd g@' capital base," including retained een@t pr Pi These basic principles are supported by a commitment to %

annually!6s@ W 3 qualityinformaion and pecpie Fi_nallya strong and growing 1,, . W large or unusual transactions must be approved by the s i %g b 3 $@$ m#hJ Risk management at Citicorp has *volved as its businessesd Sp sound portfolio standards in each of our. businesses and also / My I$ ablo b unbreseenrisks orlosses.. 3 ,"t, 'M. 5 : credt probssionals. This committee oversees the maintenance off $@( % have expanded. in previous decades, Citicorp functioned main 6y! mconstantly monitors risk by indussy and geographic meaM@ s $M ' 'a WPhin Citicorp's audit dMsion, the Risk Managementilewew C$9 p$g/g $jas a funding intermediary for its customersdaking deposits and mMng loans, and credt risk, operations, and liquklity vbere the i 4 5 ? group conduns periodic independent examinations of both % MM Sp credit qualityand credit process at the lending unit level, TheM % i Mp] tmWor risks to be managed. Now honevet Citicorp acts also as af gg ilngly cornpiex and global marketplace,1b manege the new risks ?, [g members of the gr 1 risk intermediary serving both issuers arW investors in an _increasi 1 H who are on aueting assignments ranging from two to three 4 j 'fyb % imphcit in this change, the corporattori has enhanced its systems i - (years. Theyme also responsible for recognizing anyproblem loan p i, n b JM to monitor price risk, i.e; the risk to earnings due to menement inM JQ % interest and foreign enchange rates, and market volatilities@g < ^6 sRuations.not)et identihed by Eanysubstandardelementsof thecreditprocess.Q MN 1 O NN 9 yimmediatelybelowvnedescribeCiticorp'screditprocess.1 ', p ')TheforegoingtechniquesapplyinallaspectsofourcommerG N @R L following that is a discussion of market risk management,t.. g y cialletiding and investment banking businesses; These include,YO %y Q% Eincluding liquidity and exposure management, and a discussion F 1 for example, leveraged acquisition Anance.and non-funds reisted Mi 'y , - [ of capital.A discussion of sovereign and croseborder exposurei W Y hnancial product activities @.. @ ' s A % o, g]i' W risk can be found on page 26, accounting policies on page SI , 3 l In consumer lendng, our credit process is based on th @y$5@ @j 3, and non-rbnds related Anancial products on page 6SJ , < { concepts as for commercialloans, but the actuarial nature of cony ' d j sW W 4 _A '. O ~ ' y (sumer banking requires somewhat different credit management MM 4 WMdWGODITPRomasN& aA ,e e tools. Rather than nonitoring' the credit _ qualRy of separate loans,7 3 i W Citicorp's comprehenshe credit process operates on a system of ' 4 Citicorp monitors the quaiky of the overall portfolio monthly 4 g @ ? M checks and balances.The focus es on the decision-making skillsgs J using a centraltred management information. system gof thelinebusinessmarugers,thepeopleclosesttothecus ' F 3 Aestrends,deNnquencies,andwrite offsbyproduct.WheneverM A $%g4 fstaff of credit specialists who not only monitor the qua W %g4 ; dp variance are analyzed and remedial action is' undertaken, This %y d credit but also hsure that policies and procedu'es are foHcmed at? y k 4 monthly twiew also enables the line business Mh:f Of Within defined target markets and approved product types as l g Lcommunigt ba Qh every step, l.Ine managers are held accountable for staying l. $ ~ ' ' fine tune and improve their Cledit criteria. in private banidng and ; MQ Mb. en as fbr qualityof credit.; o R 'f, a o, ,s ,ithose described abow fbr corpmercial lendingcy WW, r.Qlg# 9m~ ,a +. w - i y ,e u s h. $i ? i: G M y g$$ 5 h kg agpq. antnemanagementof ascreditponfonos,Citicorpemphasiaes t km

ate recognition as losses of all_ credits, judged 41 T

1the importance of Asset and earnings dhersification, the immedh d i @N j #v] s $/$ m 'l~ s yEdW y, J and the building of a credit loss aHowance for add 4 %hd NYR M that may exist in the por: folio at a point in time b W i M g$'@'!m 7y@;W^f Mih ' i beenspecificaHyidentified.? ,) w,.. ,,..,f?'~ since aH identined losses are.immediately written off, no par-r 1 1 f W $ &. vgf

tion of the allowance is specificallyallocated,or restricted to anyJ

, l ! isp y u, s , Jndividuatioanorgrouponoans,andtheenti y b!hd k ~ avalfable to absorb any and all future credit losses. Howewt for e < @ b ,%" ^ > - b q M !W 4; 4 $,x w >M;m. N i s w, to / y l r&.. g..- { T s, 1 A 8

• ,. i f s'.

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.. / 1 2 m%;n v%.w w mne<E Q @qwg-Q3: a 'g i9 . w t _ W M e A g1p,~i 4,adh VpJ mJ cp +4 ,m out d-( w m-mz s c6:l .m h m @ g[ g v., & 4 v 4 h;M bhhh hk SN h h W &jf&)&m M" Y m:b &9 .b 9,p p. . y@ L, inn:f MB ~ W dm' ' r, z;\\;gm a' w n <

• v'T,u n,"

%~im V D r x e yx w y n

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- >f, 2, %m -'s,g;f;y g 2, ' ry vysa i W W.e W. > ; .s c

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>~. a. , %, n.. ;wn fm i kg m.c M W' m. q u ^,2 ? ! / m meg q; t i., ma,a m W 7, m y 1' ',+ aw nw <b m* , t ;x4?i~ ,..:-+ ',', ,s y pm ? y' V qw y Ma ,c-w< <>s < Mn r m 4 t ,V a, - - ' ' - + qQ' Qeanahecal purposet Citicorp views its allowance as attributable tol, DThe following table summanzes Citicorp's r Q @Qp[@yf Z the Ipilowing portions of its credit portfolios. ,7A< Fcreditloss experiencet 4 g Q3 R 0 . m %Q f.g,, e p- ~ + r -a4 os. ? i II ) s .K ; +4 @ %,um m.pnmou, < ogee g nos L -

rw.

stee!

^ Mes g, g. w ~ ~ ,uy s s 'o, ? ' ' ' ' L # @ cas D 2 answM M9 Attributable tot, f ', De M. N1, * /' N, ort $6 ConsumerCreditsy.. g*8 $885?

$ s 786?

'$ 7 819 : yi eims " t = mass n 4 eens ! y sois1 m t ' T - #" ' "" ' "* REAT ; 1 M / CommercialCredan NM 'AL 'W. Re8nancingCountriesB M 3,305jj 2,8767 f;3,275? ]-_CreditLossC s MhQ gjQFQh! Deanestec_ ' > Q % d Other 4g i ' S t 999 W ' '. 543> " '524g ,y L*- f JPWy N,Jy R mKe@' 3 45 m $4,7392 ' ' $4,205 ' s ~ $4,618 ' J Expne Expedmcr : ,T i ;i 4 / L w Qd,.C s e h,' % 1 -J~.W iHighN.Am '1 $21.0? 1 $ [ 9089 ~.4.3% V 4.2% M4 ; $N@MThe total allowance as a percentage of loans was 2.95% at 1 4 Medsumc. MW !13.3 A A i16d f.9%D J23%L o l1 m AW y gg$ya mW l;;i I34'0 i '

• 346d 1 9% U 4.1% % b

<V W-m year end _1989, up from'2.82% in 1988, and down from 335% in D ~

$68.3p%q$1,058 %1.58%9:.I"//S%y L

y %@31987 The consumer portion was 0.87% of consumer loans at the > m.Tota Domestic,"4. ' f 22.57 p 170x s r- ~ g end of 1989 and 1988, compared with 1.03%1n 1987. The come, - c.%- 90 g P ' ; mercial portion was 6.16% of commercial kwns, wrsus 5.81% in,, 1romu ', T. $90.8 - $1,228 a :9.39%i i150 0, 4 g 3W W J @ J%,. M Q 1986and 6.53%in1987. : i M g Within the commercialportion'of the allowance, theamount1 'f %.,e,ans,crune.nsm ; i 6, gwl A,Qp ' gyg '. _ n d j spgL m}giattribuiable to cross-border and foreign currency outstandings 4 ' M While the average domestic portfolio increased by $3.4 billion i Sy bd in the refinancing countries was equivalent to 38% of Citicorp's3, tto $68.3billionin1989,thecompositionof theportfolioamo $ #$8.6 billion medium: and long-term loans and placements in i 1 credit loss experience categories remained relatively unctanged f !t % f thosecountriesatDecember31,1989. Asapercentageof. i from prior) ears. The average international portfolio. WhichM. i * & N Citicorp's $10.1 billion total cross border claims on third parties ini, ; increased from $18.0 billion to E ; these countries, this portion of.the allowance was 32% atparv - 'in the major industrial nations of Europe and Asia.: " WW +.. a d?N end 1989. The amount attributable to other commercial credits o ' + ; Net write-offs as a percentage of average loans were 135% forJ, ;, M A. y#7 stood at 1.10% 'of related loans. p t W M ,w:( - j W o O the) eat compared with 1.50% in 19CS. The 1988 net credit l losses P 1 4 N, E' V included $198 million from the phase out of the moblie home

Q

,, and certain automobile lending bus W,,CONSU885HPONTFOMO...'l &J L $p %The profit dynamecs of consumer lending are such that each -R l product has an expected lew 4 E fied as medium credit loss experience. Excluding the impact. t J } ; M rnortgage loans {first and second) and govemment-guaranteed ; i hl $@ statistically predictable expense of doing business. For exam #c M 127% in 1988. Theyear topar increase is attributa s loans with generallylow credit loss experience include home >. t o communitp banking actMties, primariff commercia! real estate! ? t

in Mzona, and increases in certain other domestic and overseas 1 Q p

%.MS. A R Ni T MN student icans. l.oans with medium credit loss exper_ience are#. consumer businesses.:; 3n., ,... s EfF primarity secured products, community banking and Private 1 ( 1The following table sumrnarizes delinquencie ~ j Banking recewables.De category of high credit loss experience r $<M entertainment cards l and other persoral rewMng-credit prod..- sumer loan portfolio, in terms of loans 90 days past due as a pers d includes such unsecured products as credit cards, trawl and m. , centage of relatedloansi ' e %p" ^, 7 y l E4E g g' K y g JMMucts. Pricing and marketing policies reflect the loss experience., t ' ;i? p U__..______"" 2Dofeachparticularproduct. 9 a X .o o NN " M' N %gi ].,i Consumer loans are generallyWritten off When payments arei [j[ t-delinquent by a predetermined number of days after the contrac-1 y& 's h 4 g g_ % mal payment date. The number of days is set at a level appropri-jo. ]9 % M ate to the loan product and environmental characteristicsJ' mm-mmm ' am e ; wo' }W &,, Domestic Mo e Qes $35J c $.8

2.4%'

12%V H gg '; y - s j g% & - l _Loansi v ' 62/ -2.1[ : 3.4%; 2.9%J ') 42 49p $7,9; 3A%1. 2K 9 4 n, 4.. w-q w c e . ; $ %W m ' ~' . (Moan rnounts he nM 0f unra['ed encomes., r 3 ( t -s -t gn3g 't 6 no. f-% A-y jk .f a, f 3 N(_ f d' ,{ b f3 y _4 9 Myg w 3 3 g 4 3 .a 4 a ~ A m 4 y a -? m',- Q<- g. G 00 E (- jgy@p ' g -s,24,.. 4,, cq. g +

• (1 r

t, , s g/ j l-hei; T W m 4 4 g e 4 M 2) l ; a fb.b

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$g g T e(- . yy-s y h- '4, -).g hif!.' ~I $ W,g 4 M ; f.. 9 b d 4 QN ^i$ 'N d ). .i g%sl ' 'f,,.,, W A .t s.= xL y }} f ll } e m}.' w w } -[ y p e af yy

? O jhhN ' p[,vW@% Cf.3 . ad ' 'M i tb, @ W i + T i & W@pCr x%= h>r <. b h, 4C[h'1 e* 1 m,n% h 8 4 M.. +. ai v s 3

mf4, pv-

\\. N q$ 1 4. 9 y.. - /

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3 5 E!" a g i F/I M-

• k,

, sy- >y ) d 7 i g; y i y n y. a u j%e,N ' s ,~ .x,, e w s ( e. O, (5, h t VQ . w[.Q jk ,j y o i A . s ". ' M I O ,8 L { kl ~'I' w ~j_- 4.' Q't "A , f 7, p q y r w.. - ~ ' f ~. . l' ?f \\ l =,.,, v \\ ~ Wj i a t q , g. x% ? Mortgage delinquencies inoeased considt5 ably in the U.S. CO888MACIAL PORTFOMO n = _ g

g

, ]+ 1, . rg ". during the yeat The home mortgage portfolio is geographically ( 1 n commercial lending, the amount of losses.as a percentage i p 1 '. diersmed,vellsecured,andof relatielylowrisitWhile C ', ; of outstanding lotns can var)/widely from period to period,K j " W ,,i,, (mortgage loans of certain vintages and regions are showing; ', L and is particularlysensi W yginceased delinquencies, the ultimateimpact on future earnings (, o f economic conditions. In order to' assess the risk characteristics i e y M is not expected to be material. The increased delinquencies inj of the commercialportfolio atyear end 1989. Citicorp beliews -

$e # loans in the category of medium credit loss experience. both

:t"9 other consumer loan yp%@ domesticallyandoverseas.v elements shown in the accompanying tablea (,

f pq .N".. W A 4L M ~, dy ,,o @9 %p; Citicorp's policyfor suspending accrual of interest on con : ,L .g F sumer loans varies depending on the terms, security and credit f 7 loss experience characteristics of each product and in consideri ( M N" W W ' > e ation of write-off criteria in place, Consumer loans for which L 4' i .o J -

• A > sun d..

d > ; l interest had been suspended included $783 milhon of domestic ' Y hoe m@on%% @ l ! L4 1 , @ d. 1 mortgages and $1,230 million of other consumer loans at;, + a ' now; - ween] 1 m t year-end 1989. These amounts are up from the correspondin9 N In Dennesus Omses y '

• P F

e M' g(g" 55341 million of domestic mortgages and $865 million of otheri d::CommercialandIndustriaQM4.406$, $ 817 36% 3 MortgageandRealEstate. u 11,791M 39$.33%N .y s . consumer loans at the end of 1988, reflecting increased loan vol. , FinancialInstitutions?N ii 1581 U, t-C W M%. W qd ume and the delinquency. experience shown in the table z <l

%g abom, and also reflecting a chanoe in practice whereby interest '

dense Financing f C T ]2,885 L i2 SS7%5s 13%( [yhj% that are 90 days past due, Fortgone interest revenue resulting ; k rs now suspended on substantiatryall domestic mortgages < , Commercialandindustria"Q. 32 ,au 2 o s 1 pq y gg,,, HpM in from. suspension,.ofinterest accrual was.no.t materialin 1989...y>,. t.St%' % ~ 3% H ^ - l M $ 17,846 ' :$ 145: c,m Jw'9 - v 9m s RA in addition to consumer loans on'which interest has been sus-1 ?- l4.t.43% [c % q = . Mongage anGalEstaO c 3,248 ; j W M -: pended based on delinquercy the foregolng includes carh basisj ! nanciatinstitutions.4- ' Jk

Fi

, ~ 3 3951 r 1019 3.97% =' t76W loans in co,nmunity banking and private banking actMties con : , " Governments and Official ^? ' *+, ' ~ - 1 -.'t ' &1 &4 '7 m- " ducted by G. loans are included in the M Other Consumer Loans - ,H,. ; lobal Consumer units. (in the table of delinquency ;

• d

? " 334 :' 6.834 : 431% r $-z W ! data, these % j; ~ - > J2gg y> asylnanc{ng;. 9y$30.410 j $594 ? 1.9 4033 L D 2 category) Domestically these amounts inc'ude $325 million of J, w U%a MArtrona and Florida.,. ' d vereu '.... O{I. ? $60.073 U $716 ' : tcommercial real estate loans carried on a cash basis, primarily in ! q N .f. ~ ~ $%, Consumer loans with delinquencies of 90 days or more on g )gn,n,,,,,,,n,,,,,,,,n,m e,,,,,,,,,,nu,,c.,,y % 1 V wh!ch Interest continued to be accrued vere $917 million at % " m==noiwwww=pnmewcaeso,mavnenone.sene,w amene=eowmmenu, E so $@g:p. December 31,1989.The majority of this amount relates to con-i 6 ' ' *n*w*m*m*en'Hwneder.ie - + ""*a"5 5*'8a"'""' ba** 'a Ca"*'om a = ononcy osmane m ; g c 1 ggi sumer loan Categories, induding credit Card receivables, that areJ . ne oncw neu.ans wickmed n commercw we nemnows and bra e enancw e 4 1y minuenuest.ciww %%f' y %l 3

i '

f elUrumed econktmwoommettnenna& D,3M automatically' Written off upon reaching 180 days past due) ,} 1 s s g cy - *j fW W c e Desnestle Pee 00stle iM i , y fp i; $s,'M,,1 M M ); y 3 j Citicorp's commercial and Industrialloan portfolio is broadly we - e diersified tejindustry geography and size of customq N Wp ' 4 y r'

Diwrsification has prown to be a successful factor in controlQ a s

/ ~g-L ling risk. The amount of net credit losses on domestic commercial i P y[ 1 "and industrial loans, expressed as a percentage of awrage loanse, 9 g"P ' was 0.56% in 1989 and 0.40% in 1988. hcluding the other cum-? a i jar, l mercial categories (mortgage and real estate, financial Institu-%, 4,; 4 1 4 W j!3 t.. 1tions, and lease financing), the credit loss ratio for total domestic $ ys . Net losses on commercial lending can vary widely particulary3 . commercialloans was 0.41% in 1989 and 0.27% in 1988J L J _ ' f b %l. 3' ' M Q@44 " ~ l within any given nanowly defined sectot Within the domestic y ~

1. 2 r@c

- portfolio, the credit loss ratio on mortgage and real estate lending "

e m

i' s increased from 0.14% in 1988 to 033% in 1989. While losses t ' l M(g r(Q in commercial iending are not statistically predictable, this ratio is L ? ,, q lexpected to increase further over the next 12 to 18 months as a j W =q g grgy , result of the weakening of real estate values in various domestic 1 ( i " ; With respect to the domestic commercia

" 1 markets, but it is expected to remain below 1% of average loans. -

.y y m 's V" Z,,1 l losses will remain substantially below 1% of awrage loans.;

Citicorp expects that owr the next 12 to 18 months its net credit 1 s

Oo, 4 ~ o +q q j my,,* + % y\\ y[ " T " ' k^ + h; ;[ y* hgjb /pq;%p ;.,, - M~: O 'G ;fi b a i 1' i 9 J, s J 9 1 n i J k Mf +9 -,' a s. c ..., _f 3 3 II[ s s w Us q, sl N

gp pMg fW g* g 4, f g n' g Q% s y, .y,W 4 hh {kY Rl, j k l7' i' ;;f ?:X 9 g%yMgG y N" f q'M. s s ,1 ' [.. w + j"g

• W

$ $'g%,-A sh 't % b g q [f. 'y J, N W g ae n 4 s k M.MN W gg %fm ; O% [

Q "'

b. A ' ' f' " b~ w, ^,' Q gym 3 3, 's ,g 4 i ,g MM OveresesFlore8elle 9. _ T tion of lewraged acquisition Anance. As with Citicorp's previous 1; mile the principle of broad dwrsification acts to control risk.

definition, the amounts disclosed for fhighly leveraged transac-c x

QNin the cwrseas commercial portfolc as it does in the domestic

tions" include substantially all claims on the subject company 1

% > portfoho, steps taken in restructuring Citicorp's exposure in ;. s-and are not limited to the lewraged Anancing itself. ) , ;i p i the tennancing countries led to increased feels of net wnte-offsq g

Citicorp believes that the risks associated withlewraged i _...

1". g%N OvereensCosmassebol16stCretSth . sustained period of rising interest rates occut leveraged Anance L s c ( finance actMties can be prudently managed through sound risk 9, . management techniques. Should an economic oownturn or i n mee . me. g@4 y.meenv.we borrowers may expstience a decrease in their Anancial perfor-C J 4ennancing Countries).3,, 7. ;,, t.H $577: c$408 mance greater than that of other borroers, and as a result the b y m gg WAllOtherg. N q. A Q. uyayg, ,17 ' '22 risks associated with these trarsactions may be higher than for h fotherformsof Anancing.Houwvecleveraged Ananceisnotariskh !f 1finsed ', 7 '$996i $430' $NM g& ". m - 4 :,,- associated with an industry it is a financial technique. The many ' % mf, g%y%; Excluding the refinanting countries; cross'-border and foreign ' i o E = agement of this technique includes, in particulat the diversinca- # N g tionof th(portfolioamongindustrygroupsandadherenceto N C M %gp cunency loant net credit losses on the overseas commercial portnlolio of $17 million in 1989 and $ L strict nsk asset acceptance criteria established spedAcally for these i ' l ' activities. These criteria provide guidance on the types of borrow 6 O & Q a, belo*1% of everage loans These net credit losses are expected, hrs and tensactions tbt can be conW howthe Fansacs j> T Sq to increase in the next 12 to 18 months as a result of weakening - tions should be structured, and the loan syndication process. Also# h4 markets in certain owrseas econorrJes. While losses in commer-l ' mportant is the range of expertise that Citicorp brings to bear on i e ' transacticm in both line and rWiew functiont In addit g i plat lending are not statistically predictable. Oticorp expects that y gjowr the next 12 to 18 months its net credit losses related to this ' senior lending approvals required for all large and complex teans 1 !1 41 yegment of its portfolio will. remain substantially below 1%.of: , actions, all leveraged finance proposals are considered by units T W, y average loans.T,.

staffed by specialists experienced in this actMty or in the appro 1

n m g g Refinancingcountries netlosses;whichprimarilyrepresent priate specialized secured lending actMr 's 4, swriteeffs talen based on countries, foreign currency debt - / At the end of 1989, Citicorp was a senior creditor Ibr approxi-Do e ',/ g servidng problems and losses on sales and swaps of loans, are. @ C; expected to continue at high levels in 1990, as Oticorp. continues. mately$5.8billionoflewraged AnanceloansintheUnitedStatesb ~ / c the substantial majority of which are secured, with an appropri s g, A to use the flexibility provided by its credit loss allowance in. ' ate margin, by assets and/or shares l Approximately $1.8 billion of i. restructuring its exposure to these eountriesi' - this amount is irr.luded as a result of the new regulatory denni 4 p% leveraged Asqtatalaton Ptnanos Aselv8bles... 7 M Q tion, most of which relates to traditional specialized secured 1 3 : Lewraged acquisition finance activities involve client transactions. , mately200 obligors in approximately30 industries indus

• tending. The diversified domestic portfolio represents approKiW s

& for the acquisition, lewoged recapitalization, or management, pa. buyout of commercial and/or inddirial companiet yth financ- \\ ' which lewraged finance outstandings exceeded 10% of domestic ? Q ing based on cash now and/or esset sales Oticorp's involwment. leveraged finance loans were media / entertainment {$12 billion) ! 'm. gg gin these actMties includes the evaluation and structuring of trans,

and retall/ wholesaling i$700 million). At year end. there were six3 b f pactions,aswellasfinandng'arriloandistribution.,

1 ndividual domestic borrowers or groups with exposures (includy i 3 n October 1989<the feders) bank regulatory agenciesjoin'tly ? s I i ing loans, contingent liabilities, and unused commitments)1 4 Q j issued a new definition of highly leverageo transactions Addi" . owr $200 million. Outstanding loans to these six customers - ', .f hymtional interpretive guidelines were provided in February 1990" amounted to approximately 1900 millior( and lot two of these i 9, Under this definition, a banking institution is considered to ' g$198beinu:9ved in a highly leveraged transaction when credit is ' groups, there vere condngent liabilities of an additional $j q g extended or an investment is made where the financing transac- $900 million in connection with consumer recchraW tinancing i - arrangements in total, there Were unused commitments'and ' s a i tion involves the buyout, acquisition, or recapitatization of an

g 3 existing business in addition, the transaction must either cause contingent liabilities to domestic leveraged Anance ' customers R ';

of apptoximately $3.6 billion at the end of 1989, a portion of ; '. (gg y liabilities to total assets higher than 50%. or otherwise cause thisg the client's liabilities to at ' which may remain unused or be sold down to other financial f,

• O institutions in the ordinary course of business. There were other2 w pratiotoexceed 75%1

. transactions at various stages of discussion orpreliminaryi - r h The folloMng disclosures encompass a' ll activities that meet , Q@3 the new regulatory definition. The application of the new regula- ' commitment. At December 31.1989, the amount of outstariding & m g domestic leveraged finance loans on a cash basis status was J gy ; tory definitioncauses certain types of traditional specializedC $318 million - g qsecured lending to be reported as highly leveiaged transactions. . Citicorp also engages in similar lewraged Anance activities :. gg Such activities were not prwiously inclJded in OtiCorp's defini-outside the United States, with outstandings of approximatelyJ M'

y

~~ $2.1 billion in eight countries at year end, and was obligated J "O' ? M under unused commitments and contingent liabilities interna- ~ ~ yi a m .o ? yg Ur l

1. Oib '

.j ff ( x3 < wy ;[ Mi ,y W ",~ h h %, O; O L _ l U

%l}GQ llGY l g'f }3 Qi fl & &jff il}} ' j(( ^

• l Ff y

b w gy +Q 4 "Q [,y !, b J y. f. g; j yy, ' gn 4* ' Y. _ s r y o~M M W, 'M b u-G GW M m. o .v 7 ym o W. ',' g/ \\, g, T & l l " ' n'i Y,, ' a / J OnkdY%'l A' &~L fQ6 ; TV ? 8 + + MRajy n .l ( 7g 3 %' < @" ' 7 W W,#P %'s i0~' A R ; g@ @4@, 4 5 i

i M

'. m f5o'., 9 1 +% f tionally for an adclitichal $11 billion. At par erdthere were & Cosh 4 asis and Renegseleted Commmerelal $asins 'j, (q g 3 m % four indiwdual international bortcmers with exposures owr 4 :,, / Cash-basis (nonaccrual) loans are those on which, as a result of : n; 7 t N $200 milhon. Outstardng loans to.these four customers amounted. doubt as to collection, income is recognized only to the extent 1 e J PD apprommatey $1.4 bilhon. At December 31,1989. the amount, ' that cashis recchedsRenegotiated loans are those on'which the c f

of outstardng intemationallewraged Anance loans ona }

rate of interest has been reduced as a resuit of the borrower's

..A<i dnability to meet the onginal terms l.. y, fj.~s p,' 4 cash-basisstatuswas $89million.s Q F ' f The amount of Citicorp's exposure in the foregoing actMties c . o When it is determineo as a result of evaluation procedures that. ,1 M

thepaymentofinterestorprincipalonacommercialloanis; n m H f ' ? Jiuctuatesasnewloancommitmentsaremade,thenasthese..@ commitments a syndicated, and Analty as doubtful of collection, the loan is placed on a cash {nonaccrualj / El 1 basis.Whereinterestorprincipalispastduefor90daysormore.

' 1 then possibly further sold dowrt Citicorp *s general policy is to h J4 f commit to amounts suf$clent to enable it to take a lead position, 3 Lthe loan is automatically placed on a cash basis irrespective of ( ' ' + Q ~ t so as to control the structure and documentation of the - ~ i' collateral or other favorable prospects. Anyinterest accrued on a N r$ I

Y ;!L LM.

loan placed on a cash basis is rewrsed and charged against cur @P,, Ltransactiorti . L, e Citicorp also engages in lewraged 6 nance actMties through :,

rent earnings. Inte6est on cash-basis loans is thereafter included S %

, ' J subordinated lending; and through equity transactions in its Wn( 1 in earnings only to the extent actually recehed in cash. Cash ;MMW j 4g -~ ture capital actMties. The amounts outstanding in these other a s . basis loans are returned to an accrual status when such loans are P M "iactMties totaled approximately $800 million at December 31.19894 f current as to principal and. interest payments, a 'M jf The amount of subordinated debt on a cash-basis sthtus at f S merys are expected to be made on schedule /. y M;.i S 9%: December 31,1989 was $95 million. Significant gains were generu l cCash-basis and renegotiated commercial loans in refinancing ;; o,e %oNated in the wnture capital actMtiesf 1 y 2. ..,. ~ i ;countriesof $4.6billionatDecember31.1989decreasedfromW g n$6 i (The substantial majority of fees recched on syndicated loani ' 154.8 billion at December 31,1988. Included it thepar end 1989 L : 1 cash-basis and renegotiated loans are $3.3 billion of Brazilian and %, ggl <s s transactions are recognized in income only when the syndication ; ,10.6 b!8 tion of Argentine medium-and long-term outstandings.ty - D @ complete, with the remainder deferred, where necessary to '.. T &qg{ produce ayield on the retained loan equal to the awrageyield to - 11he decrease fromyear-end 1 jr the other syndication participants. Fees and commissions recogy ? wnte-offs of $501 million including those in Argentina of ? ^J~ O, % nited in income during 1989 were approximately $207 milliort . $395 million, as well as reductions associated with actions talcen y, Approximately $130 million of fees were deferred at year end.- in restructuring Citicorp's exposure, primarily sales and swaps y ' of refinancing loans. Partially Offsetting these decreas W 3 J Citicorp's credit loss experience to'chte on,lewiaged finance ~

• i W i. actMties has been within the margin provided by retums earned

, Citicorp's decision to transfer $305 million of additional Brazilian % b< > y on the portfolio. Credit write-offs on al!lewraged Anancei . exposure, associated with the rehnancing completed in 1988, tot + fp senior and subordinated lending, net of recowries, amounted J cash basis during the fourth quarter of 1989A L g ), y C, i * ~ +g,4 to approximately $105 million'in 1989,; 1 1 j Cash-basis and renegotiated comrw"clalloans.outside theh, ' ", a Subsequent toyear end, approximately $288 million of loans Lrefinancing countries were $2.6 billion at December 31,1989,y 4 ] to two commonly controlled kwraged finance customers were f L compared with $1.5 billion at December 31,1980 The increasei a ? s Mplacedor)acash-basisstatusinviewof thecommencementof 7 ) from last year reflects an increase of $617 million in dorrestic casM M{pv, ( bankruptcy proceedings. Losses, if any on these loans are Dnt1 ' basis commercial real estate loans, primaril) ad 'ji ' Sg expected to be material;- l i (... .. in other domestic loans, primarily related to leveraged acquisition,TM first and second quarters of 1989, and an increase of $302 million y@D ! While Citicorp's lewraged finance actMties are profitable, they y y y g@ ido not represent & dominant source of earnings for the corpora 3 ' finance actMties?, l1fi yJ lr.( l s WM tiort Net income from senior and subordinated lewraged finance L i Cash-basis and renegotiated loans related to Citicorp's domes J 9 C %CactMtiesfor1989representedapproximately8%of thecorpora '

tic commercial real estate lending activities were $1,165 million i n

"(@wg*g' s reduction or cessation of these actMties, the effect on future ' tion's net income for theyeat excluding the impact of the cross-at December 31,1989, concentrated primarily in the Southwesti border refinancing portfolio, if there were to be a significant ; - and Southeast. Tf e domestic commercial portfolio includes ; f . $124 billion ~of loans primari!y secured by real estate and W ', 4 ($ s operations and earnings would depend on the degree of the managed as part of Citicorp's Global Finance real estate businessa ' W, i reduction and the profitability of activities to which resources; in addition, the Global Finance domestic real estate business # tC m might be redirected. manages $0.6 billion of other real estate related loans. In addition,7 ~ gM '% V t, Citicorp was obligated under approximately $4.4 billion of. ~ f 1 standby letters of credit related to customers' real estate actMties5 2 agy y y g, and approximately $7.7 billion of unused ammitments y MM M,b','. y [- q $^ i Tj, ;R: q to extend credit. .'., Om ,3 m i t v NW ^ ~ r \\fh ' 'y i + K,, (ff "_q, y [ g(k + g s t 3 4 C 'p 3 3 V e i &1 4, q-- ggs , \\. ? > s ', 4 ,g y Q~ h

.y g

-4 + p+, p .mW

j(

qq. w-c g;. o g..~

g

.t ,,OMh ; ', l' N f y} Qi y ^ ll ' N g'< 3 1 .c l, w' V +<i% .] g g p'% ' M. l 4 l$ f :;[f,; '3.;'..= ^ W %w, .a m y

% :/ M M,W & m & P, JE Ci& %,q, q 43,?,e% : +s. 'S WW.w.m ,3 n l Jn x - + < vv um w7% qy ne h,v mag py% ~J:a ~ hk N hhk [:- , xv.h hkMh 'h *e ' ,k* N i FM *4QgM & s,,.~ ' K l;. n x Qa%x y % x. w, &m %,,w+J >P% <n - ~ + M&@p a# ;W..& QXhs W:h; % p+e 3 %p]W' h V A' W W M w y~. s i m;, . y( n' . w " e-m me< n+ 1 A y s w' %e m.c Mc o p a. s.om - ; w' ; y ~ . e 4~e Mt. - 4 f.m. sq.,- .s u 4- ', <;;g.ps ' q \\ ;g + v 4: M, my: < ln a i s y*,,

q t

4 t; .p, s 1 gr a s s g < jgo a v f t g, G g._.. - mc,.... ... g 1h i a ci s v, Wl, ., 4@e. S m. u s. A s. s 4 y 1 M

.w

%#ggy1 Ciecorp's target martiet of #eal estate borrowers includes promi 4 l estate values has led to an increase in cash-basis loai:1, as liquid-t,i V u

r..7%

e + o. m' hQnent national and segsonal developers who (neet a rigorous seti Oty problems have affected even some.Of the stronger participants? i y dhof perbrmance criteria. At the same time, the portfoho ls well intherealestate.marketspA'ncash basisrealest gM;(SMJ?4~f 1 g$g among ofnce, residential, shopping centers, hospitality anci other ; g diersleed both geographically and by project type-that is,M. ' Although the rateof growth'i i slowed since the second quarter of 1989, the lewl is still expected jg pit $ect typei The strength of the Customers and the diersificaq: " i Real estate acquired in settleme to increase in 1990 before overall portfolio reductions are 3een.1 .l $e l.D tion of the portibho, together with the experience and expertise ; G ^ M.18 @ built up in Oticorp's national:eal estate lending network, ' ' ~, , i assets in the Anancial statementsJwas $515 million at V.. My $q %, enhance the credit qualityof t^e portfolio.2_ J, _ f real'. ( December 31,1999. up $ 205 million from'$310 million at ? -

)

f W;4 Despite the credit strength of the portfolio,yeakening os December 3fil998.'; Mg ,i h W * ' - @Sg.y s 4 C(A mr l;,, - ' = m 5g ,Jc gi c, tf s ghhk U

1. N J.

T @ 7 hnewomasposuusaveeeND i ' 9999 t ? 1988 ? ' i L198M@M L1986 S i N05$3 ; 4 r $gyQ inDomest6comces* & W 4$.-MFC R.y7,', c. g ^n ,3 $ 0 868 $)5661 R$7 629 bO.1$f58h J J $1393M % @ % CommercialandIndustrial"!M.;,; pp.,,. gm.. ,t 4.g.

I,945

LS48; 3 25.1 @

304;,

cloli ~ 'd 5 AnalEstate E, m. g6.,q. aw,1 LinOverseasOmces', s W4 ^ JR g J ^yJ J & P J 4 r, u .@p y KRefinancing Countries *m.a, c o. . m.m r. l= c c. 4 ABS t ' x 4,816 l 4,M1 W i 853 h 1.0667 Q1 4 . Ng Other.Owtseasm. W,, 1/. 5741 J401-4 4525 7 " 4 3 844'* '_723,. ) y.' .w. .. w 4 ,M~.0,$M 1WWILW t....... ' l,s. . nc:. .$ 7,342 " ~ $6,331 E$6.046i 1 ^ $2,5831 J $2.283 W ~ c s h$As a%'of Commercial (Dans14 M6 4 W c i [ I t.9% i.... !10.8% - ? 6.0%[ i -L10.4% W l42%?<

3.8%

4 M ?&, w,..As.a%ofTotalloans ? ? T E 1.' # 14.9% ? M. 242%0 ' t 4.4%Y ' J 2.0%S 2 O,? a o i, P' Tmhmassinvaraceewwaspeeweycaugweed. _.....% 1 s. .,..,-__.h .W 2 ate. W Q:' Ai y*; s ,N J mesuswa caroten has nusm tiom um se tegn cwsency bra ano mio nwes caret.m tw* piecemwe er stMt rnman m not sus 2 rreion b nue m.ta mmon e Met i W... E . !: 4 * ,.3-!,...,,,.< . L n. Q; + ( [WA (; lhiheassemaugsamedbarsortelmeenmNet $42anahaneMet. $l4 mmoninMe2 819miikanm1986,and $46meanm Ple5.O a, y. ,1 y y: y, g, tilassi sene acomed n mammwn orsons hkmero m are amain me enancw smemwn w net un mesnmMak avr snommonetus 1 tg . l, 4 Ay pgg; 4 u fm p ...'..s ~ q; y- - n w; m:

vm,

.,y-khgM N M s ._s. M M ,. manner and that market exposures are adequateyand W l qg g W y Oticorg as a financiat intermediary assumes and manages market + ately controlled The Market Risk Policy Committee is a group of a.gf d@yM fisk which l$ a generic term br te closely linked risks-liquidity ( ' ; Oticorp's most senior market risk professionals that establishes and Q y( ' risk and price risk. Both risks are fundamental to the busress of af ( owrsees corporate market risk policies and standards to serve as a y }@Q@f be unable to meet a financial commitment to a custo W 4 finanClel intermediary Uguidry risk is the risk that a legal entity will 9 1 check and balance to the business risk managerrent process 'TheQl f jv ! corporate oversight role of the committee.wlth Jespect to market N hjN;bor inWstor in any locatiort in any Currency and at atT/ time. Price x, j risk is similar to, that of the Credit iblicy Committee,w N g? W@.tink is the risk to earnings that artses hom Changes in interest rates, L ? Within Oticorp, business and corporate owrsig M 7,[ g };j, MyGM] 44 (Creditrisk3, i,

vwll-defined market risk management, respons breign exchmge ran and market voiaulities?...

i 3 MMN1b further strengthen the price ask management process, the; j gh Market Risk Iblicy Committee was established in 1989 to sene an3 . business, a process is in place to, control market risk exposure. Man c n 44 oersight soie in the management of all rnarket risicGhe establishi - agement of this process begins with (fe prokssionals reatest to;jy 1 N apmentof thecommitteewaspartof anongoingefbrttoensure1 Oticorpicustomeaproducts,andmarlets,andexten t y thatOticorp) policies,processe andtechnologiesadapttothe senict executies who manage these businesses and to countryL TdM 'Changertg nature of market risks Irl an efficient and timely

Asset /Uabiliy Management Committees. Market risk positions are ? l

' M y[k $ m$ M W g$p y% ',g, . limits are approwd by the Finance Committee. Which is comprised $$ d MV. - . controlled by limits based on the SIZE arid nature of a business. Risk O. Q f l primarily of trembers of Oticorp's fblicyCernmittee, and twerseenW 7, $m yNg, 4 % l V,,' (t)ytheMarketRiskfblicyCommitteef, P O, 7 p +- %s,hi 1 @p n gda., p 3 c >m "3 V iWhlq. f a ib >it q ' ' f' h? SP fd,);; Y' h g y,,!l ' i. c 1 e au s. MO 'M M, [h. s $) 4m 9 mmh +hg ' s. m ^ ] ~ 1 + 7 + %:. a'.m. s, \\ ^ % m:x' X_] ? 2 + y / w w, c lQh 'M W;. a* %i,. \\ 7 g

f 6

g ", '@ 3, ,e y s; ,$O@pr:g, l Et, i @m i m m

o.,,.

e y 4 s4 e .6 'r .f t g, o

!D, ' " N.

c 1 h, Lk. 4 A Gqvw?s > y W$h] + R M.Q ' _ ' ' 3 Je

N, wnN .+,2 ty wy gm i sw g *~ w s u ki Qyh g>j%fQ'Q Q $ f Q,, Q' M, q((' S;. m ' ff y" ', y '. h. "n T,, b 'L fM i ME. $,$ T a f' , MLe - , s kky y y ;, c u r s Nh T <' % $$7 QQ )g[ '"l tfh .[M ' f f.. I T S ig% JK r m, u s s m 3[ Q. g \\fs: n: X u 4N MORMISTY88ANmammammfT t. m.M M

Diwrsityand stabilityare further exemplined by"the deposit basebe R 3

' 3pCiticorp. defines adequatehquidstyas having funds available( ' 'i b J 4 1 4 Q jp4 %all times to repay fully and promptly all maturing liabilities in 1 w MM J accordance with their terms, including demand deposits and ' AM C9

1. off balance shee! commitments. One economic function peri R %auem oouan < wee :

' Tsese1 , Asses: 9~ M 1 i formed by Anancial intermediaries is to assume liguldity risk by y sg % m,gjw gggg:gE intermediating markets and accepting deposits for terms different . S fy

1. Global.

, _ w,.,,,

g.,py 1

4

d., e from those for which theylend funds. Thus, successful liquidity :

management is essential to the ability of a bank or bank holding l . Consumer 9 $52.6: :,$36.5 $189.9g, $49.2& $28.4 ${77.%p 3,, 6 Global:.. _ ; ~. 4M company to fulful one of its prime economic functions. Effectiw : g g.j g%[,$ dence. attaining the Aexibility necessary to capitalize on oppor-fliquidity managem ' Finance * ; t 14.5y 34.3 - 48.8,y U3.8 A32.7c ;46.54;f Mi ' venu L $67.1J L$70.8.8987.9 4 $63.0:: ;$61.1i $124.1M,

• y, ytunities for business expansion, and preserving a corporation's f y o,,, % _,,, % p., % % % N4

%$p$pitalbasenW., s p gca W L. .E_.a...d.l.. ~ f f, .E: i_ c momme meeysmmmp=waarsw==emucwomew ; % j $y 1M Wehin Cliicorp, the. liquidity of each business and _ legal entity : , is managed through a well-defined process to ensure that all i _ f f As the ta'>le above indicates, deposits totaled $137S billion at Nh9 9 7 funding requirements will be met properly This process includes ; yQ i year end and increased 11% sinceyear-end 1

owrseas e eposits are vwil_balancediand deposits are sourced L M u ( a global contingency funding plan and maximum outnow -

The stabil ty of Citicorp's funding stems most dire globally f0m both consumers and large professionallnvestors.M N Wy limits;These limits permit managers to anticipate wellin advance / ~ hy potentialliquidityproblems2 f, 7g T@O L ? Proactiwandprudentliquiditymanagementrequiresastablei ( small in size, diwrsified across a large bas O extenshe consumer deposit base. Consumer deposits tend to be p ' K@Z and diversified funding structure.To this end, Citicorp's liquidityc > y Dtrategy is to source the greater part of its funding through cus-J - to the extent permitted bylaw are Federallyinsur a N!p?.tomer relationships and to draw professional and retail funds b ideposits are also a growing source of fands for Citlervr":.C ; Uh3 MM from all major markets worldwide. As filustrated in the accompa-L increased 15% in 1989 to $89._1 billion, or 3a%n total funding. irL W d W nying chart, Citicorp has adhered to this strategy owr the years " addition $36.5 billion, or_16% of total funding, was originated 3 gi ' NNand has attained an extenshely diversified and extremely stable % overseas consumer branchesJ L y, 3,, yE f 1 2 jkf dh$@mixof fundsci,

• M m Oticorp's long-term.debtis, by virtue ofits maturity pronie,? ~ g '
• ~

.,f y' 4 U p Q '~ 3 % i y '.so an important source of funding stability Parent company M ' s$pl;y.yClelecep and subsidiary long-term debt outstanding at the end of 1989 C ' Y W 1 a n ,g, amounted to $20.7 billion and is relatively unchanged since 1986b/ A aM c k(pc I Debt issuance in 1989 with a maturity of one year or longerf k 3 % ABIs ;, 'M 4 gymuotsonxxws (3 0,,;. P' i L< 1 totaled $4.8 billion. Dhersification within the long term debb $UM C M ' -e. q 7gyog q 'n y y

g. '

,1 portfolio exists across markets, currencies, lenders ' mat y u 21. M

instrurnents.h..,.

u

g %s % W g 'w' f '

.p7 LN f,.s 4 o + s ?l Asset securitization and loan sales prov 49 iTo enhance liquidit)t Citicord securitizes assets and sells loar z X ...O.y ;' * '.f

• Wi@ ~ 1 l MbM /

Oj @awMsom pec. .1 !, %l $ ' < 17 J't %_ i rnestors and are on-going activities that are particularly impory'j-H i i tant ln supporting new business growth. Citicorp is a market gh y[4 S J,, eg ~/ 6 ' leader in asset securitizadon and during 1989, activelysought to :

j broaden the range of assets it securitized in 1989, asset secu _-

yy qfAg ritization activity more than doubled to $15.8 billion without ? p@p W 5[0M , a l n ',w ? .f,, materially affecting the yields on balance-sheet assetsk ? b d jv a iY V n E" ~ F ^ p. .w

m a

"'1 QNmr' 0 - e 43 OL. . lggg $l c> ygggi }figge flgg k i M 1998 .'1989 - 2j s QW .c.. b ...c' j N me orHERI.MalutiEs" ? m DEPosris-1 W@ME.,, 't

j j Qic,. T mammen,13HORT TERM FUPOINo i

. M foulTY l M@h i 855 SoNOTERMDEBU ,i i 6@MW@7 ~q ly z.; w h pl )< y c. Qa yy,.8 gn +, .C '" V N V W ~\\ ,> geb q p-@ yM m' .) di n &l } 3 N' %n. mi w xy

;\\

, C;Qn, s

l i

}W;Ma Qg ',y j j i gA s," > jy ] I 4J i y1 ti, N ? %[' } l aps = ._e 3 waem %g g , ;g cc unk c .4 yy fp L}

/ h k; T h @w. M,<.

g i,,

x., _ _

^ i 6 _ y )- i,,yj b 4s s.

w_

7.. _

. h<h ph i Q,'f '[ h [fh@ [U, [ l h]j y;? %ggfq w: .m M f jp -,y ]%{g N g 4 w v +l.& i ; Q 4 u % w,a *- S&f, '.' v. &wW>% F W ln w + a v w ~ ,e n x x N i g; .,9 ,,,,cgg;" ,,,,i.,;s, a ~H. .,s 4y ,..[,,,,, i 5 4 ued to market with gains and losses renected in cunent earnings.C i 9 4 NOP PAICE AIBICEXPOSURE 4 g 3' ~~ W;C j Nice risk e@osLie is the sensitMtyof earnings to changes in -. 1ading portfoleos are subject to a well-defined seres of exposue y u, r inlevest rates _ toreign exchange rates; and market miatilities. This / limits that trigger specific management actions to ensure that the!; %lp exposure arises in the hormal course of business of a global.- T : potential irrpact on earnings, due to the many dimensions of A 9 o Q financialintermediaryi c ; pricerisk.iscontiolledandwithinacceptablelimits?, g e #@ S dh 0 Citicorp's senior management has established procedures for ( 1 A portion of Citicorp's price risk results from actMties denom

nated in cunencies other than U.S. dollars, inttudin y @ managing price risk within its business units worldwide. Decen-j mart:s, Japanese yen, British pounds sterling, Australian dollars,4

' % tralization is the essential organizaional principle for managing C ih price risk, and is balanced by strong centralized controis exercised 5 ' Canadian dollars, and other tunenciestWhen positions are notl ' @% by corporate oversight bodies. The level of price risk assumed by j ' l funded in the same currency a lbreign exchange risk results and sa N N / a business is detemWned by its objectives, its capacity to manage ! earnings are exposed.This exposure is managed by the limit M j l ; & g ( riskiand the sophistication of its local markets. The nature of. i ; systems described abo e. Decentralization is particularly impor-) 'lM My tant in the management of Ibeign enchange exposure. With ( ; 1 dhp[the price risk assumed in each business varies according to the ( 7 5 + cowr 90 foreign cunency operations worldwide. Citicorp's Ibeeignj m ervices it prowdes and the customers it selves. Limits are; y 9 established for each major category of risk. exchange risk is significantly dispersed and the foreign enchange J $$ RHistorically interest rate risk arising from lending, long-term " . lc;cvwurgof price tisk effWcthely controlledg' ' g a 1 'u T3 .,,nJ U,> JgG irwestment actMties, and related hedges was monitored through a s Q M intefest rate gap limits. The growth and eelution of the financial l 0, CAPITAL ANAtWBIS .9 y F N M J markets and Citicorp's tranchises haw increased the comDiexity - 101989, Citicorp's common stockholder $' equity declined d - 4 ' %h lof the price risk associated with these actMties such that a gap i

r. $38 million to $8,236 million. This resulted from the $1 billions

- d

increase in the allowance for possible credit losses.

}. V' l w'systemisanincomplete measureof exposure.,b address this shortcoming a new price risk monitoring s

commonstockholders'equitytototalassetswas3.57%- W < B

~, W tem was dewloped for non-trading actMties. This system accom? " compared with 3.91% at year end 1988. Citicorp will tebuild i s , j' of non-strategic businesses and appreciated a the capital ratio during 1990 from retained earnings, sales Y l. L.: , % M modates the dtvershy of exposures and exposure management 6 ' 6J @$ systems of Citicorp's various businesses, while providing a mean-; Mingfulmeasure of aggregate riska, ,4 7, .. ly 4 securitization actMties.

m A. m A E i s<

l. Total stockholders' equity at par end increased $212 million to 4 q

M $'N The measure of aggregate exposu_re monitored for non trading ~

$10,076 milliort in addition to the change in common stock-L C 9 1J,

actMties is the camings at risk resulting from. interest rate move..

$ ' l ments. Earnings at risk can expand traditional gap analysis to recf l holders' eouity the increase was due to $250 million in perpetual a M i Citicorp *s primary capita l increased in 1989 by MQ d ,7

• i ognize the price exposures associated with embedded options,7 1 preferred stock issued by Citicorp in 1989c

1. 3..

. g pricing lags, and product volume sensitMties This rl* manage-I 1$18,109 million at 3 ear end. This reflects the chan Wy ment tool has ewled owr the past severalyears.1 holders' equity plus the $524 million net increase to the allow-i s 4f. Eamings at risk, measures the forecasted earnings impact of . J 1 '. the maximum historical change in rates applied to current inest ' f ance for possible credit losses and a $13 million decrease in % L. N N C ment positions, rather than changes tr) market values. The y 0 7 minority interest. The primary capital ratio was 7.69% o x M h hj$ Finance Committee has limited earnings at risk to a percentage; l 1989, compared with 8.05% at year-ena 1988.( ,( %',, lS4 04 ', WM

g;;

W ?gof forecastedannualcamings2? During 1989, quarterly measures of earnings at risk, as a per-m ~ E i y , s ,g . 5a r* y M centage of annual forecasted tarnings, ranged from 'ess than! p P i 1% to 11% The assump!!ons underlying these measures are subject ( 4*n 'A W" P 1% to 3% During 1988, these measures ranged from less than J s ,p p,

• g g 1

Jto continuing rewew and analysis but represent management's 1 ,7., m M' f A current best estimates of non-trading price risk exposure. 7. Jg" J Price risk exposures are also created in Citicorp's trading porte $k, j folios which are managed to support customer needs as well as ' WG to take advantage of short-term market opportunities. T ading a dg7portfolJoscwhich include non-funds related products, are revM- <g 1: y g 1 1 u->p, As s e$g,,<.;i-g t s 1 q + g h Q r )L 1 st ' Y. x yw t + y ib j ( ? t ~ 7q s. 3 M, k r&. 4, ye

p..

+ WG 4 4 ( 3 ,x y sww g

..- m y,, M( k 1y ( y% s9 ;w' yj yg. m . + o m. v r 23, > > W(dV, l&n.n;; tW V** g Ng;s -.g 4 n,', m(.f f,4%mf -, g,.. = yv gi j :, s l'N 67 W i ww

n w' m 'p f,.(Q F 7 " } 2,.' '. N,

, u m Wy n3 w, s I fDG$f ,L>" s,5 o @ l' v a,Rf Qfn

n m

y 3 x i . p x Q-- , ~ ,D M., :, = e w 5, A w' .m e t.;p,$. $m.. ,1, S- -3 y,3.- p 1,,, a i

24., y s

-s; .,g n Si. a i m 4 4 t ,e s, ps-g. ,g i N g, [ it s g f# 3 3 s ~_ 6 i i } _qm a<, [ A ~. ? j s , ( u[h Q 3 ' ~ s' q~.' g 4 Q( u.. a ~ o s - thw ..? tA s,l ' h, c - !,Y ,1 b ?k dih _z y %y'; g"iMc G 1^- a ll ~ c ij r p j F R. ,, Jf. h "4 q g; p , '4 W j ,f,,, fs v s m n s n: y h($f ' ls imum requirement of 5.5% for bank-holding comparse L 8 M [%8 4 1 ?x4 t ' .a (Q QM. Q w, .G. s NN MTne primary capNal ratio was well above the segulatofs min 7 95ee1CEleAd a m.. ~ . m T* f DEJ

I.W twill remain in effect until) ear end 1990 at which time the !4

! + Adjustable Rate & Fued Rate Perpetual Preft' f y,aJ ~ . O menimumenterimrequirements forrisk-adjustedcapitalratios > 44 genorityinterest m 1

• F&'

. JB PN becomeeNect@ ; a4 4f

• E d.f

M Goodwill (Goodwillrecodedprior to'Masti12,1988is? s y J a

ye a v s 1 ? grardfathered until1992)6 K q i%u o s,- hA, M g - 50% 1rwestment in Certain Subsidiaries a,

7 CeepenantsofCapitef n

a M } 419ee2 Capftel "' - d E:, w,E_ u-e,e , sees < n Sas s "w 1 s # LCommonStockand:;;, W,. ~ 1 a WF: i Quaufying Loan and Lease loss fleserves > W1 s W 1t 4 e a. ' ( c Surplusn di%.,. >, Si 3,947 ? $ 2,823 0 $ il24#i4

4. ' 5,309 ' "S,451 i 'll62) ~ 4 (3)i, ' ? + Auction Pretened Stock a 4

M k fletained Earnings M: 1, i+ MandatoryComertible Notesj ' <y c "ECommoriStocktoldersY "! g W. ~.. M , p PerpetualDebt i N %f 3j, j M i 8,336 ' : 82747 2138)N16) % 50%investmentin certainSubsidia W- . Equity F $g 3$ c, lPr.efe,rred Stcbw-[m 9 g, MNI,884; 1.590 1 1 250 1 y~ s N' g4,, + m 7 eeurev. <, 8 ~ 3%.% % % %,,,,,,,,,,e % w g, P @f? g gyuMEEMdW AAAA*. 4 810,874 $, 9,' 64 $p 2' 12; ' 2' p' a M g4 'w, 1 j ff g6, m <g 7 . N @m m. 5: e ,as , _ -.....sM> m ' w, e ,3 3 y;po% a; g Allowance forPossibley-4 ' o ' c lnterim targets have been established for)eanend 19902 g^Gda 2 Credit Losses m6 g4 4,739 $ 4,205 ; $q 524; y.,

12c- { The following table shows how the interim and fina c

4 a fg g

u. '.. sg 'y u MandatoryConvertible !

yn' 2.1 x& . m i A QMMWJ'F &@. Ng& Subordinated NotesMS,349 4 249a, O 3 T EL W "' N ? g ( N W) & E

• / Q"MinorityinterestinConsol%*lm

' 13)M(19 CagleelItableItseelnements +4 % W, , Q. M' 11datedSubsidiaries 6.W 55 M 687 m m Wmtm . i,egfq y Kam e y f jggg,get: $17.386 $ t723 T ' i 47 NierIb,+.i. Twe e. MGW. 3.625%%4.00%f ' $ E 4,.. Nirbariuary.19tf9, banking fndustrp regulators othdailyreleasedho WTier1 + Tier 2 W t s - W.M. R e v v. w. [k O[M th,k-adjusted capital guidehnes fof oanks and bank-holding com9$ E Fc

, gg

# o

,y, gpm .M_h M , ! paniesin thetJnitedStates.Thenewguidelinesarebased uponf Rcapital.vequirementsJtheamountof Tier 2capitelusedinthe6 y 4 Ml M the July 1988 Basle Accord;which was endorsed by the centralt 5 7 computation cannot exceed tre amount of Tier 1 '7. M bank Covernors of the G-10 c.ountries, including the United Statesa. " i m % The objectW is to arrhe at comparable capital requirements forMb inot exceed 1.50% of total risk-a@usted assets aty L l;,. WallmajorinternationalbarK ' U ?R,M L M. N and 125% of total risksqusted assets at yearyend 1992/AlsR M M 2 ' WWAnother objective of these proposals is to incorporate risk Kg&N vdighted capital guidelines that consider both assets and o% @6 in Tier 2 capital may no ff%$ 8 ys ; balance sheet actMties such asjetters of credit, and interest rate i W' interim guidelines, supplemental capital comprised of Tier 2 eQ ~ W ?Cndforeignexchangeproductscq n M M#' % JTnese guidelines redenne bank holding company capital D D &jgAs of W Jas Tier 1 and Tier 2 capital and establish minimum Interlm TierI capitalplus goodwillii i " C V dd V '. WP 7 r W N requirements that must be reached byyear-end 1990 ano mores @ com ak stringeht hnal feQuirements that must be acnieved by> ear end i, j Furtnermo,,, Citicorp anticipates acnieving tne finaliequirements v e y + m 2sTierlandTier2capitalaredefinedas tonowsC @,y awhichbecomeeffectwatyear-end1992withoutCHf p99 y, L;

s,,

.w w x, + n m a w i+ > o,s a ~>m m .3 f i I I l $q K,

• W'N

,,"1 l CommonStockholders' Equity 3.W e,v L 3.SF%) ?3.91%1 A f

• yQ L M.

m. M" .i i TotalStockholders' Equip $. Q.. 4 / ;' q4.3F% c 1446% W 1 y .av n7 y , N. w : PrimaryC pitat. ' . F.e*% 8.05% e@ 4 3 [' ,,k I }l lpyT

• k(7g gj, p 73 y

, ; g( 74)gg ,s M% % ' ,1 ,. : <x # J Tierl + Tier 2 ? f.1 ; .i ' 8.48% ' 6 8.48%Y ' j pM.M I C, $ ' + +, * 'yy a 4 (*si. 1 , a g-A g, g qf ,,',.w. < w" s 1 o m.ov u 4',g h y

• j'i?

Q., ~. , z.%w u 4 -'~Ti 1 ( X 13 i .[x{- [ g- - gy [f ~b 7f g: ?g l > u w.~ by .g 3 j4 ma .; p g. , o, t 5 ~ J9( g; p\\ g;g h. e z.V

q

' ^ C.. ?*ypp 4 w f;:Ty[jg, g,M,, ,,s F 1 [ i' t; y igYMQ. l%,, - xq ; s j' ~ %;: u,44 y', ^7 s J. " r. j -M W3"L%i -.y. 'l .r .t 3._ 4 b. N L g h hh h [ h. b[ 491d q, w ~- m, m '. ~ :

w. c uf"" w;pu[dTQpgww w e

m n y" e,w p) s r[, %~ Nh.jph+g? /wl h. N ~ a Mj @

• tylbf'#.W Qi

.+.. 'N IwM.e 'f pV: h.b e* Q[# { q% Jo

p. J g

~ m m c%'. 1 plr sfde QBq,' ' ','. s gn, Qg 4Jt ' o i v m m + .y s mg a m, u ..r = a a-s ,ggr

y5 l4 iy' @

3r ge @p4pyggfMf,7 4 Tg n , gy a gn g-wy .m % em& L,p9 ~;fu _ r&/.

v% ' t'.. g =l D a a s: g.f

n

• ~ '

i E ' ypagApsgggg,agiggggArgogg E-w i a.. Et a 1 x

sese.

nos- - ' asr ' ner ,,i ne5 7 '

• a v, ' ra.

- m p w m ,,cias t _.3 .4.. ..y o + F gg;ptagepewMathsps 6 WORM ' ' AMOLD# J OHNut : 8Mota# De4Ntf * ' Aht4IL8dr ', be9Ntit Meuuldt ' f_.~ CHANut " 4 Netinlevest AtNeque g:5m 8.'P,800l

$ 1 7.605 ;

20 c $ e 6.3373 (6 E $1 p.904 q 612 i$ E5.342 ; < 2699 & Fees, Commissions,and1 1(8) M ~ ' '40L ' 4,306

• 1 43' "3.018 " ' / 34 b i f i' 4"i %

s C ;OtherRevenue ?..N 6,894 18L 5,413 11 0)

• 6,016 =

Q so e u msvesmas J.. J $ 18,758 ' 6 $ ! 13.018 - 5' $i12353 - 20 $ ' 10.290 231 $ J 8.360' ' 29 1 <r ik t b - ;!'.

• U.t, b[

J b J .ii,....;. i 6 . J CreditLosses.. a >.e / $ 0 2.589 4 90 f ' $ 41.330 e g f Operating Expense McQ, C : 9,690 78i ' 8.981 4,(70)?.$ x4.4101' f f ~ ; ~6.820 Lj 25i3 $!' L825, i47 % e- ; 24} ;Q (1 19" 4 8.231 02 1 5.475i . i f ve n u sspones'.,., J$ 18,819' 19 J $ > 10.311 o (18)E $: 12.6417 ' 46' $" 8.645 t 2 29 ^$ % 6.718 i - 335 y 1 4 +Ny a M' e income (loss).BeforeTaxes? N W' - ~ t v W : and Extraordinaryitem ; :n$ f 1,888 h ;l48)j $ " 2.707j w : $ A (288); s T-l z $XI.645 F :, i $L l.6421 Cl3 k @O income Taxes W:&, - - i tw,, 1,085" 8- '1.009 ' 13 - ' ' 894* '45= 6174 - (10) ' J 683F n12 4 ' l , m b i y.l ' .i .s Ni, ( i N $ 11,028 J $ k $R959) r 147% h % _ tSagesonNneryItsenMp~ 4 O,498! ' llP1j)$N1698' < w ($(l1,182); s

-a tExtraordinaryitem-(r '

O.+.>,' t ,m 160',i w - s L-- @ > L CarryforwardTax. Benefit % f-U Mp 1 M X N ET 8800085fMBBBl.N.' 4 [$ 498i

• 1780 $ '1.858

-* " $ " (1.182)

? ~$ > 1.028 =

27 ' $ u 959 - % 114 Nk J%pergespe s > j., ;, 7 >q* I , y '0 m J. f~ - Earnings (Loss)Per Share *L. y' -,,i M Income (los:,)Before P .. i ',t .N 4 w, ' ?- ^ t m m v< ~ *, 1 s e 'c 4 ExtraordinaryitemW $ f1.16L 4 (76)i$ s 4.87: !$! (451)J J -- - " $ " i 3.46N, c : 2 A $ 03.40 112h $h z 2 y, o {Netincomel Loss): JO $ s 1.16f (78)L$1 536 m n$ l q(4.41); V ' $i 3.46 / ' 12 1$M 3.40 0

12 C e'

$.hM DMdendsDeclaredPeri ' l18)? $ !!.1300I ' @o 10P;, ss fJ,'. ~ ^ .u ?. ?, Common 5ha.reN a. $;9.5000 ( 9-. $ 1.4475 10' $ 13200 . " 43" $" 19225 f ny, %.

2E $207,749 p ; t4 = $200.099;

13. $177.000;.jl5$((

t o g g asse m, w. A $ 28 0,6 48.

9: ; $2l1,657 ',

4 - $ 23,383 -

( 28 '. $ 18.255 t ^24 W 'y M; 6, m f (t)$se Nase 15 to the FmmoellemenentLY s . 7 Ei-. 4.' j' a e t - -l[%g> m ine imno ms pe ine= =nounts seeect a huon mock w*t oroa=d cm oaote 5.1981 1 -... -J,,n., n j[Q ' p) On ut encome ponj aher deduttrig spiel p8efetted stock dudenas or $125 mmon in 1999, SE6 truhasiin 1988. 892 milkn m ith A $75 erviliariM 19AA and SM rrullion m y a w...wenno,,,,a .sua e unoo n emum-m.n-onom y _. ev W; ; y A esynnmo in the incand ouerwe or i9e6 common oMoenai ne consce=a b oeoarauon en 4 ociatet Januay aid Apes nuead or June. 5 pwmte Decemtet and Mattt m ie c k' ', y y - 1omernamceoeomedmtest 1, ,E s ' ~ - Cm f(5) Pncnoars' amounts tune toen #estmed to merct the Change in the MportMg of leturRes told. Hut pt purchased

h e

5 M.sn Q inchades long term det>t, sutnrainated caplial noget a id feovernable prelefted Stock. g ~

p

,.74-a ni %% p, ci-] wr+ ,f g g, q

.} f p

n- 'qh [3 e i } 3 .,. p g. E [.5 j., y [ '- i.,* g. 'h \\i'. t i x vi. ve s .L. r 8. J g j en y . s. f ' i ? ) b~ e 's in i y, en 6 e, t i b \\ l Q +: si s, S >G Qw w { .b o nn t ,.,m M,t s 1- .y @'h. L,W

• I i.

i" av . * + Li%I \\ F y a )W,; %' A., 39 y.. I 9 \\ l { bN Y m

• 3.

L im 2y, hRM .l f M g%assyawresse4\\4 M :M @W v J ranvenius ,& L Pass, coseassaloses, Asso onesa nevampus 5 4 MM $ MEAS 8BOURSn&aNTBASISD i . M. f.. n TIRamsandCosemissioetsqWn. 9, # . y' ,'4 4 3@%@Mfrom 1988. This 3% decrease was primarily the result of t W Wt iraesest menue of $Z4 bilhon for 1989 was down $254 million : - Feeandcommissionrewnuec' i.4 bilhonincreased b - , AL i$487 million, or 13% from $3.9 billion in 1988. The Global C6n-t /Y g% tern of cross border interest payments receled on Brarlitan cash,: Esumerbusinessprovided $438millionof thegrowth,primarilyk ~ ' ? MM@Yof such ctoss-border interest payments, representing approxle basis medium-and long-term outstandings, in 1989, $170 million : i from continued momentum in the credit card business and from ? W' y

increases in the international consumer business and domestic i W* h @g$rnately one-half year of payments'were recelwd from Braz 1 branch banking. Fees and commissions from Global Finance & >

.? whlie in't988 $661 million of such payments were receled. repre, } actMties increased slightly from last yeat reflecting increases in y ' 5i c Q $p psenting approximately twoyears of cross-border interest on 1 ~ = Europe, laun America, and Asia. This wa3 partially orfset by aM 1

1. 8 N Brarnianmedium;andlong-termoutstandingsa.

. ' EslowdowninNorthAmericanactMtiesandtheabsenceof feesi b < t i d M i $3 in 1988, net interest menue of $27 billion, increased ; y' ' ffromthedomesticpensionfundmanagementbusine h ! { F$1.2 billion, or 19% from 198I The increase was the result ofLwas sold in the third quarter of 1988.. Fees from the infortnation F $. Q the recognition of $661 million of Brazilian interest payments in ! y y Businesswere flatyear to-yeaty W w y < J, <. Q f 3 h%) asse/ compared with none in 1987, higher interest earnir4 J , iln 1988, fees and commissions grew,1096 owr 1987's i No ?, 1988 %y ts, and a higher net interest rate spread.( A W f e..,. 353.5 b(ilion lewl, reflecting strong consumer business Qggy E*lud ng the impact of Brazil's interest payments'in 19887 ', f increased fees from specialized finarving, insurance, and l i Ovotron.: b@ W, l t%gg'and 1989, net interest revenue increased by $237 miIlion, as a, SeeurtelesDeding f m,4, ? ? 4 ~ s ,j - ~j result of higher consumer loan volumes, and inceases in the ' p Trading rewnues of $256 million were down $21 milho %gg@gf Global Finance business in the de;.etcping economies, partiallyJ n,$ from lastyears strong 7 ' ', q yoffset by the deag related to the increase in U.5; cash-basis comy ; y y$e 2N mercial real estate loans and the impact of higher interest ~ f WL fresults of $277 million posted a strong $100 million increase e D4 @ j $ N America were partiy offset by increases in Europe. In 1988, trading l [ hg%ratesinEurope.1 7E' guy 41The net rate spread fo; 1989 was 3.77% compared with 4.05%1

• L from !987's difficult trading conditions. Lv E g~,~

~ jH Pgk payment patterns of Brazil, Excluding all cross border Interestj in 1988 ana 3.59% in 1987 a reflecti PereignBashenge 1 n Qi u em Foreign exchange revenuescwhich include both customer A 4Ao

• A payments received on Brazilian cash-basis tnedium-and long-?

' transactionsandinterbanktradi.ng.were $471million,down p ff, , g, J term outstandings, the net rate spread would be 3.68% in 1989,: q $145 million, or 24% from lastyears record performance Li ? Ol$ 13.70% in 1988, and 3.59% in 198Z While the net rate spread was Customer transaction foreign exchange rewnuesfwhich are less y 1 My3bj(Ussentially flat in _1989 compared with 1988, the increase versus q ' (volatile and represent approximately one-half of total foreign J y 9 7 L exchange rewnues, were upycar to-yeat This g y ' 1987 was primarily due to higher consumer loan volumesi. 4 t herage earning assets increased 3.9% or $75 billion, to ;,1 Ethan offset Dy lower interbank trading twenuesLwhich were & s

• hQ4; from 1988. The volume increases in 1988 and 1987 vwre 5,3% and V Rment. In 198% rewnu

$198 billion, as consumer loan outstandings increased $7.8 billion g idown in all maior trading regions, reflecting a difficult envirorw. :, W4 [fg 9.8% respecthely The increases vwre mainly due to expansion i 4% increase from 1987, ayear also'noted for strong foreign exchange kggof the consumerloanportfollon tewnues, increases were fueled by significant gains in Northy MQ 3 ,g ^ %y ; f% g[dm Ws W JAmericaandAsfa0 h pest Itese Sprood pamham==" C Beses) : ,. erwesement SoeurtelesDansese8 ens ' EC L'A w = } Q t inwstment securities gains of $180 million were up from ' w sN* N M wee / ' met 9 987C ( $108 million in 1988. The increase was mainly due to higher? h}k I :InDomesticOfficesC /. )8.94%5 i L4.06%U" L3.!D% ,97% gains on the $ ale of securities from the inwstment portic!!o held i,,j W/ " In OerseasOffices ", i. L 8.49% i 4.03 %

at the corporate level and from North American Global Finance,

j =...

3,yy%?

'4.05%$ 13.5 9 %. activities. In 1987, inestment securities gains were $l95 mil. lion, w vaygg s h m Imamuutkie**pp**wtmdsmemurwe=d a = - ~ Sales have not materially affected theyields on,the inestr9ent M x @ggW pmemwnetweveauneemeinaswe.oc-memee w P0ftrogjos,: 4 ~ 4 a ,a w OeneeRevenue +;; = s j 1 + 4 d,,< t um athe enn W em reest wpme sewng to ss7 we emwed - . In 1989, other rewnue of $1,113 rnillion increased $588 million j." a g,W J from lastyears $525 milliort The 1989 results included E i %4 $233 milhon from wnture capital gains [versus' $75 million last? '

• 3 9%

fa year), $180 million from the sale of premises in Tokyo, and L , O R$% M 7 yTN ' y ,j !E[, Mi- &.fh! z,R .O N 3 -@ Ed 's,

• j gy[

.y( p '. f"i j f5 'j 1 hQj? y

\\

y / ,l .n , ;yd h,h,,. j sb@v nhp')M bl ?? k +1 w,y&% ?jh N, 'C.k h,< o. r

c m -

'i m 'gg v ~*s ?.. dip $\\, N A(l: N,,Ml;b b (p,h j.,%<O 91 Y. ~ Wg i % Q Q,.;+ -Sgy ' 'h&&S 1 ' ;., f '? $ . j%' [% ', ' s ~ Qi? [ ~ , if n ' ' ;)0 %:(b M ,e x ,)%(h 3; s' #., + g _ x[h,y , p k.Ne d h[ s ([h NN, jy p E 9Q' p.bh[D #dd, b,( s h[k [ hh I bi ?$ .N pyg/,g[M t n m. +. w .e ~- ,w n ,S M* NN' a 4 F. '()Q Yp V4 ;O y.., % J ' &, %, y.$a s x. , Q pl114/ ? U '+N'C p I t wgg y y;m s. m %pyy a ;i 3 y%- Ty o

pc ym

ry;w y

'y! N q; .mim i. o W@y,Lf ' y.a - y Q,," ' ,H3 iG,' yy y Y C. i Ml jn', r u ' e p .w, im i s 4 ] < -j!. ' l + - g., m ( < > ?, i ' F= y y; , c. [ $M9'million hom' sed 0ritized csedit card recehebles. Also( M, ' Net Maged Psevielen N y. ? See PosetteOestlasses M@ corneuting to theyear to$ ear incease were higher affthate M y? ;f enmings and increased gains kom the sale of lease residuals and, 4 g , x 1,,,, j e,,, "4 g 7 , mortgage pass throught Other revenue in 1988 included a 4

NeNe-Offs, <

4 D s$90 million pre-tan garr) 8om the sale of Citicorp's domestic peny 4 Consumer + K%.y.M.f,830 <g $ 1,248 g $ 1.024 g,,4 ; v i g 1 q M onWmanagementbusiness.1 CommerciaWp % Q( SFF) . % > @270 g 9 .in f987, other revenue of $1,673 million ellected the unusualg j 94 j 7 m st"ro'ng gains arising hom Oticorp's plan to increase capital after i, fiefinancing Countnesg y. 4 m M8o 1 JJ the $) bluion additional provision relating te reAnancing country ' Mpeu R '.. d tlj i M.v. 89,944 $1.752 u $1.497(,,H ~ 5 J ' empocure, including the recognition of $301 million from the J ' . Provisg/ pw '1

• 1 h a restructuring of pension plan liabilities and $469 mulion from the

4#

M7 M. u.203 $1 OW 2 ,1 Cons m. w.3 %. f y. c, g.

Q yg,j*o

$W} sale of a condominium interest in Citicorp's headquarters comi 3 y %@y,; plex. lt'also included $295 million from the sale of mortg i ( nwda eg se8ecte. d high spreads on mortgage pass-thmughs, ,c iesp. q: $3,339 i '$ 1,3300 nancing w ,y ,3 s ~- y' m nymu 7.. K.6 ag, g u < 4..gggge g evesnese M gese,! i nes' . nef. 1 J, E'4 W, M r ' J r'om $1.248 minion in 1988 and up = Net consumer write offs totaled $1,228 mlHion in 1989, down... y m ~ wm. em m, f d, 2 AfilHate Earnings yW.W. R.: $ C 1FI C ( $ 129 $ : i 81 write offs as a percentage of average loans were 1.35% Ibr'the VS 4% $Gainson.Saleof flesidualValue; y ' [19;' 42; 'yeat comparedwith1.w%in1988.The1988nettreditlossesNy f { M y ,, yQMofleased Equipment c,..;. y,..477 i included $198 milNon from the phase-out of the moblie home 4 e f hlW y' Net Gains on the Sale /Dispositionj n . i i124 L727J and certain automobile lending businesses. Excluding Q, of Assets kw;.u vTe.J. De 3 "989 impact of this one time charge, the net writeoff ratio would : 76 NetGainsonSale of Mortgage ; s

have teen 127% in 1988. The year-to-year itxtease is att@utable ?W '

" y ;X Pass Throughs6 o.9 73 T. D.T ( ' I98n.127; _295- 'lar gely to community banking actMties, prim 7 ' Wenture CapitalGains W y, w - 238 s 75 - c147; estate in Mzona, and to increases in certain other domestic and y ji $n 1 ; Gain on Pension Plan flestructuring 4 ? ~ "f 301l In the Global Consumer business, the prov fcherseas consumerbusinesses, ES1,s 6 ' 5ecuritizedCreditCardfleceivablesf.( /149 'i1" HJ $h J,f' Other items L. M._ A. :.w.

193 140

80 '

i credit losses was $1,337 million, up from $1 7+ . I.. e $525 " $ 1.673 ; yque u .. g io and $1,066 million in 1987. Included in the 1988 provision was f g. $70 milNon associated with the phasecut of the mobile home d% ,yJJ,w t

1. 4 PROWIBION POII POSSIBla CIISINT LOSSES

palbie creditlosse> relating to the GlobalConsumer y

n and certain automobile lend #ng businesses. The allowance Ibr i

1. 4 h M in 1989, the provision por poss,1ble credit losses was $2.521 mlHiork

improwd portfolio quality and the 1 remained at 0.87% of year-end loans. The percentage was E,,~ #

' %p provision of $4,410 million in 1987 The increase from 1988 to 1989 : W up from a provision of $1.330 mHiion in 1988 and down from a m l reduced to 0.87% in 1988 from 1.03% at the end of 1987. reflectin nJ 4 3% (C MG primarily#eflects the addition of $1 bilNon to the allowance to pro-2 ~home and certain automobile lending businesses Q f $/ 4M f i "5j 7WMide for tlsks assodated with the refinancing countries' portfolioQ v i Net commercial write offsinsefinancing countries weret. 7 3 m y 2The decrease between 1988 and.1987 was due to the $3 biNion L V$577mlNionin1989lanincreaseof $i69millionfromlastyeach ' ? U$ WJ ptcMsion relating to reAnancing country outstandings recorded in : These losses include country wTite-offs of $501 million, including? " <1 f %g 19827 l N May $395 million in Argentina and write-offs associated with actions v 7j 4 qi J c .taken in restructuring Citicorp's exposure, primarily sales and J g W : y .My M~ 4

swaps of. refinancing loans. During the fourth quarter of 1989, then Q l i

M %/ hg, F~ 9 allowance for possible credit losses for tefinancing scuntries was J s ?j a s 40g #n _ y 19 . increased by $1 blIlion, bringing the toral reserve for refinancing ;, f 3 4 77g?t73 4 country exposure to $3.3 biHion. Medium-and long-term expt - y j ' [_. sure to refinancing countries was $8.6 billion at year end 1989/ i @%@p&' f fl s F, m-1 down $0.9 billion from 1988. ' 1# ] yyl u Net commercial write-offs in non-refinancing countries.,.. 6 Increased by $43 million to $139 mlHion in 1989.As Md> l',, 4 1 Msf h~ y! ~ of average loans, net refinancing and colnrderClal Write-offs %ere C M M>F 1,19%'in 1989. 0.84% in 1988. and 0.78% in 1987, Excluding refi 1., g 7% nancing country write-offs, the percentages were 027% in 1989c g r-mw 431

6 / +M

~ Y 0.19%Jn 1988, and 039% in 1987.

j

+ + ,1 + L 15 5 i s* efN'

• Gi y

s M >Wh.., 9 d d? py g ay ' ;, i %sW 1 s 4 p %.-; 3 r' 7 x s '~' 4r y 4, ,s u ,a e 1 .q. ev 7 m.m 9 + + ee e x h~ ch N, J4 D . [,,[w u; y ;*. w gj

• ^

i Y [ <W M n g. p < g j. u o Sp m e _e x-w y m y 3 g, 3p y y '7m , 4, n + 4g 3 3g 3, y NN, yh $U w + m p4p t IN% (qq; + 1[ C UM A.., 8 1 lYJ $@p e c ~ d Y : ~ M ' \\ lMW@s a- .-~:n-. - ~ +u+ -er ~ js /* DM '.i C , %)(( [ 'g ~ [ d6 p + ' % w W jf cu , " " >W 1f, (" a w fb ,i, j jdk [] y kh { f f', . 1 b% 1

3 Mb %

~ y y[' 4[ &[ <, MN +

a mi,. Ly-LT y

w< gn h l(.., MM [g 4 ( @ "h;f a mm mr x + a.,. n n n a ah,, m.... s. y 1, '7 L y .L, 5 s : .u 3 e p ' 'g 4 $y W OPER m 88EMPWlBE 4 i , etionof theincomebase,thelewiof foreigntaes,andthcMi ; %$M Citicorp's total operating expense was $9.7 billion, up 8% from amount of tax eermt income. Foeign income taes increasedf 4 a~ T !$$' i slowed to 8% in 1989, from 9% in 1988, and 21% in 1987 included 1 $9.0 blilion in 1988. The year-to-year rate of expense growth f L

in 1989, as compared with 1988 and 1987, due to higher foreign i. H j earnirigs. These Ibreign *amings in 1989 included the gain on thej A J n 1989's operating expense were $68 million of restructuring.

k sale of Citicorp *s premises in 1bicyo which were subject to high 6 M, i foreign tax rates.p i f d T 1 @ $; costs associated with the UK equitts brolerage business and = 9 Cl ' $35 million of sewrance costs and equipment write offs in u

On December 19,1989, the nevenue floconclisation A j@hf(Quotron, Operating expense in 1988 included $70 million of ?

. wassignedintolawTheactprincipallyincludessevenueraisingl 2, d J sestructuring costs, $36 million of which related to the equities W, provisions and temporary extensions of expiring tax incenties.f ' W: 4 ~ broierage businesses in Asia and the U.K.1. 1 1E, 7.Some of the more selevant prcMsions of the act that may affect ? !) N,.h; U 9% in 1989 versus 8% in 1988, primarily due to investment initiaf i Cperating expense in the Global Consumer business increased < Citicorp's business are the reforms relating to the treatment of y $g inteest on loans to customers' Emplojee Stock Ownership Plans,7 %y i b ties in the credit card and international branch businesses.

the alternatie minimum tax, and the calculation of kweign tax i D"

Np$ ; Global Finance's expenses increased 4% in the dewloped econ L, Scredits; Citic i omies and 7% in the dewtoping economies. The inIbrmation ; . y impact on its liquidity or net income. N g. #,.,, 4 hhy Business's expense increased 23% owr lastyea( or 15% excluding' 3 : f1he potential future impact of Statement of. Financi; hyA i severance and equipment Write-offs,,elsUis on-going product - e ing $iandards No. 96,fAccounting for income lhes", is discussed ( .n. In Note 20 to the Anancial statements.) @gi td 'i; g $j M/fT development expenses and geographic expansion.. ; ' E p~ V, " n v'

Total staff expenses were $4.5 billion in 1989, up 5% over 1988's

m ~ ,e 1g . lewl of $4.2 billion.The increase primarily re9ects normal com; i , NWNWMM ,jK,; W [t e pensationincrementsandincreasedstaff benefits a . HSCERMMES$. g 1 y@ h j ~, , 6: Net premises and equipment expense was $1,760 million, up i. Securitizatson of credit card receivables does not how a signifi %, y : o$ y 7% from 19Ks $1,641 million, tenecting expansion expenses in i Cant impact on the earnings reported for each period; Gains onf % k'%M the ciobai Consumer business and expenses rei ted to tne cost;

the saie or credit card,eceivabies are reco,ded monthiy as reaie.,. ' -

$j of temporarily leasing space in Citicorp's headquarters compien f ized over the term of each securitization transaction, the terms of 4 [isold in 1987, in addition, this year's expenses included costs asso g , which haw ranged from three to eight years. Due to the revolv-y j clated with the relocation of various businesses to a new tnlKb (ingnatureof thereceivablessoldandthemcnthlysecognition f?x N ping in1.ong Island City part of Citicorp's headquarters complex in j ' / of gains, the pattern of gain recognition is similar to the patern vy gg CNewWrlG L ., ( E y

that would be experienced if the receivables had not been sold.' ',1 f4 i '"

M ; from 1988's $3.1 billion.This increase tenects newinitiatives, pri-f Other expense of $3.5 billioriwa Howevet because secuntization changes Citicorp's irwolement 1 % n in ho# the rewnue is reported in the incom ppJ J from that of a lender to that of a loan servicec there is'a change 4 ', marily~intheGlobalConsumerbusiness.3 L J o C p >, " N8CO885114XES $ w < [, T J securitized receivables, amounts that would previously have L co M;# been reported as net interest rewnue and as credit losses onQ g, @ ~ y / Income tax expense Ibr 1989 was $1,035 million.'compired with : y loans are instead ipperted as fee and commission rewnue (for j 31 ^ i $1,009 million in 1988 and $894 million in 1987. As a result of the - i servicing fees) and as other rewnue (for the remain!ng cash ( N9 d d 4 l flows te which Citicorp is entitled net of credit losses) Becausek j W (g' i net loss reported by Citicorp in 1987, accounting rules limit the (U = enues owr the terms of these transaction credit ic.sses are absorbed against such cash nows. Citicorp's rev p W exteht to which the future tax beneAls of certain recorded trans fy'f X actions can be recognized in the financial statements. Due to i $ ', Jtheselimitations,approximately$300millionof U.Sllederaltax( i upon the credit performance of the securitized receivables & = Howevec Citicorp 4 exposure to credit losses on the securitized z ; y ?@!N "p ; benents generated during 1989 were not recognized in the finan- % w ?clalstatements,andapproximately$700millionof taxbeneAtsc receivables is contractuallylimited to these cash flowsc L,, 'N generated in 1987 also remain unrecognized. The total of approxe During 1969, $6.1 billion of credit card receivables were sold? Q' ~ bringing the total amount of receivables sold to date to k cimately $1 billion of unrecognized tax benents are available to. f reduce Ui federal income taxes that would otherwise be pror < $6.9 billiort The foliowing table shows the impact of the securin a i vided in Citicorpt financial statements in futu:e years. During - . tization and sale of oedit card receivables on the statement ofl? M 11 " f 1988, $160 million of pre /;ously Unrecognized U.S. federal tax ! y'- ? operations line items, average assets and return on assets: ':g 4 1 9 U f i benefits generated in 1987 were recognized as extraordinaryi <. ~. 2 $m Fincome.' 4 4 N . Excluding the l'989 and 1987 rdditions to the allowance' fort T"""

• ?

i M@*J s '< !possible credit losses ano tie related tax benents, the effecthe tax. Q' rates were 42A% in 1989, 37.3% in 1988, a6d 42.5% in 1987. The* = Fee and Commission flewnue L, ~ 'V $(414)i q

Netinterest flewnue...' c,...... L :, o

...;.. ?99e :i 'Other llevenueb,?.. '......,..... J1491 j " variations in the effective tax rate are attributable to the composi.7

f306) w.

, Provision forPossible Creditlosses. u. u, ,A, m% W+,J ,, '. W.N' et income Impact.of Secuntization <. & ...%s$ 'Oc t em., ., f:

a CLg<4 g >w,

" ' qc r am w. 1, g "W ' D . o .o . ;, (4);, ,a , p pg[ g; EAverageAssetsl$ Billions)@[...c 7'. j; 7 }fleturn on Assets (%).f] .2 ~ n . wel% j p a?: 4 ' n a n n m.,,, e., - n u n s -,,,,e a m +h 1hY ? e x D'y l W~ l. l .h 'W k ~ .k f0 5 [0-$ QW yQ$h QS ygV !}W : g(Qfy%gLp%p. m _[ ( ~ nh J %)Egpmvn%gdb$ &a ly% Q ? 8, d A 4. i.- ~* s at a m f; 'y' WYWf e f, mg QQ gf P QW( d t 43 q % <fQ ~ T ' %gggq[@,Ep S - h e I, Ph. WA' y %k y. u m a m y. wr c e ., h_y ffDY f : 'mx wa,ly'?wlf??s n< q @% M{?mllsms f_f.f g7ffN_ m ,p _'j f bh l: N ! mm,,ll w m% } w& @& JR}O + u-layl&N(b, w.$ ?&w uig W % Qf ' ., k ;?. em m + Qqp f. w m a W,V w 'S %n&,;Mn{gW, D l:i W$p$y[ y w & w. ; p ?,'

• L 4lfn,q.G i

L. @4 ; g, g ' %,%u. WW j i i Y .D u ,a o*. M, m ( spg' q;m',' j, m l V:gg 4 gy l '9V 93

Q 4 - %cEy; w".w... m

,s' 7g g ' i s W km p/ p ,M., a - n. u ,aA,. T u. F, +- n' - r + r y@ Qt - y..: np

yl,dn.q. % ( ag- ;.

%, og; g' i g; e q, ,y W ; o a. fmy t ra

• w r

,, at + - s. p, 4 p ..M g,, q e u 4 . x. ,a, .,n, N~ M S M OPIWWWEM, /

0ctseas operations esultedina'netioss of $467millioniori '

.~ V GAWWIWlISMB, AWAM @' regionsbasedoni

1989 due to the $1 billon addition to the allewance for possible tl 3 opospmesbusesascamings'so c edit losses, taken in the iburth quarter of 19e9, associated wrih1 a

~ C g{ the domicile of the customec Unitedincluded in their especthe geographic amas. In the accomparyN wd l - edansse ;

the sennanctng portfolio. Excluding the impact of the $1 billion. 4 g,

, ;1 ,

• Qing table, the North American region includes the United States <.

down from net income of $925 mrilion in 1988. The decrease f ' ? N4 % 4 and Canada. fleder to page 64 lbr further discussion of the princi-? ' in earnings reflects the cross-bordet interest payment patterns, o ~j % ipWac$ustment andallocaionsthataremadetopresentresults;

• i of certain refinancing countries. Included in 19881 esults was M 9

& ' S on a basis.; y,164 m tM M 1 s $661 million of trarihan cross-borderinterest payments on cash 4, ^ s, Wn North ican camings of $965 million were up from last s s. J baQ medium and long term outstandings representing nearlyi 1 - 4 Q (years $933 million as increased earrengsh the Global Consumerj < twoyears of interest due hom Braell; while in 1989 $170 million of M, ' P, ' business were offset by lower Global Finance eamings and g increatedlossesintheindbrmationtusires,tM Mye ( ( - ; such cross-border interest payments were rec _ 3 approximatelyone-halfyearof payments.inaddition,the nepag a, M, North American rewnues'in the consumer busines; contime w ! the impact on menues of cash 4 asis Argentine loans was $77M", ~ ,,1 @ C be drhen by growth in credit cards and the strong New1brk L i million more than 1908, as.no payments were recehed in 1989.F %pp branch system. Tne solid perfbrmance andyearic>) ear rewnue C lleenues from owrseas operations declined slightly with the ? 's d 4 gairs in the credit cad busiress sere the result of ongoing sucV Edeceases in refinancing courmies' interest payments primarily Q. "'j g _ cessful cod solicilmen programs and an inceased share of credit J K orfset by strong local cunency funeg actMties in Latin America.i 1 ? America. and the $180 million gain on the sale $ card purchas* sales. These gairs were partially offset by menue " &Q possues in the mortgage business. Rewaves in the North i Mb American Global Finance business were down jear to year as,

TolgoA 4 i W TRE L ' ;,'

{.. T q p ' inaeased enture capitalimenues were more than ofhet byL " Oerseas~operatingexperueincreased.1ti'rsbusinessyT d 9 t ,= l Ricmer $preign exchange and securities trading rewnues, the drag P expansion costs of the Global Consumer business Also !ncluded i % y 4

• p N of cash basis real estae loans, and flat frerAlso contributing tog L in overseas operating expense is the $68 million estructuring l,

Wq i the decline in revenues was the lack of fees from the U.S. pension l Charge for the equities business in the United Kingdom, Total ( 4 'V. s , %[j$The picMsion for possible credit losses in North American ( fund management business, which was sold in 1988c s ' * " ' overseas average assets decreased 4% in 1989 and 2% in 1998i w f c; + f , L,. # Excluding the impact of the $1 blilion addition to the allon 1 J operations increased _for the) eat reflecting increased net writen

ance for possible credit losses, Latin America eamings were ; je;

, L! j' M offs in Global Finance actMaies, primarily related to commercial L, 5 $95 million, Europe, Middle East and Africai earnings weref f ,j ' ytreal ertate and leveraged acquisition financing. Net write offs. W " $4 million and Asia / Pacific earnings were $306 million.The1 ' 4 I Mkin the consumer business declined compaed with 1988, a result j / i decrease in i.atin America earnings, reflects the payment patternb *

f,d

> p )hdecline was partially offset byinaeased net write offs attributi of a one time charge lastjear related to the phase +ut of the. g )K mobile home and certain autornobile lending businesses. This, 4~ "M of Brazilian cross bord1 L strong local currency funding revenues and net c.redit recowriesy dc in the current year compmed with net credit losses in 19 Ms; 3 MRable to community banking.tW NT#g, a ' ? i Europe Middle East, and Africa earnings reflect the equities J K W M North American operating expenses were uplargelyas a result ( . restructuring charge and lower funding revenues with offsetting ( e, % qi f of investment. initiatives in the consumer busoess and increased 4 ' - ? Imptowd trading results. Asia / Pacific performance w ~ N$dThe information businessin' North America recorded a net loss g? exchange and sec l jd] MJindbrmationbusinessexpenses>;u ME g % t by the gain on the sale'of premises ln Tolgo and higher earnings": in the consumer business, panially offset by lower, foreign L W g N of $173 million in 1999, compared with a net loss of $94 million U - ( din 1908. The losses reflect continued investment in the expansion L ? reflected a restructuring charge associated with the '4 1 @ g" Linebrmation investment initiathes, and the acquisition cost of 1 ~ of ouotront products, markets and technology platformss other ; < < businessC 4M 5 @' J b d '9*n c# -i i o g 3 uotron/Alsoleflectedird999are $35 milhon(pre-tax)irp ' Q g' y a A*@,eMpenses relmed to equipment Wnte-offs and sewrence Costs at P - l A y' 8? Quotron, which was in response to a heightened competithe 7 Muwareorocus M seep 1 ,resse, 'igeN ljq4 (( environment coupled with,an oWrall dcWntum in the retail secu 3 No4h America ;. 3g (-.., w. W $ f 968j, $ 19,33 i $ 't.152" ' 1 g titiesindustryM a, Mm a., e y?g(fAlbtalNorthAmericanassetsgrew10%in1989and9%in19084 M'A ' Caribbean, Centraland, + 7 gThe 1999 increase was related to both higher consumer loans N E0 rope, Middle East,and Africa T271M (F237'1 j 11F 5 B C) hg and increases in Global Finance assets lwhlie tne 1998 increase J jAsia/ Pacific, '.' t. d !-.. $ t. 490.,$ 1.8 i m A primarly related,to higher consumer loan volumes.5 ' ' w- .1 Kr t 1 7 m m +( "i y* M m. ' y TgyeALan. cSN% .t 4 q e m r t a s y' i,* 3 ' + w, 1k q p) testated to letect organtranonal changet ame# m the change in the seporting of iecunues.. , ;[ g, s "g s jh J [D i"',%qQ ' (g J.D lokf,notyetpufchased. ; fJ', ].&.. ?,.'lg> W. 'Q g f l2) The 1988 sesults helude an esaarputy llam of 840 mmon of carrysorward tan benetis i d L) k' f,1 -) NO <

• W

%hn h

3,. T' n [, n[ k c bhs A[ t [ "k gQ - w % c? c) N k y 3[ry[ m j,.; g' t w

ewy

.h*g f 4 i ,, e c y, m;Q M A o g*]f ~ g W A 4, M f^ N=Q6 "w &flX J g W yy;;. 0% V 'g%qghYS RN%' ;Y A f <r

11 M:v wf l(( b.

n + w.&. 1 ndN,y,x w m. ^[" % p,, f = o' g 'y&lf] ~k ? q: - a, x ww ny m s,ym ~u a m ,m em kh p Q b ia '? -[.i ~ h,:!d b ' 's, -68J'I', [ h Yh? !h 5 ~ k. k em bh:f e n?Y ... ~ x;c; .m.. mix. _. _:,, a-. _.- - - - - - - b, Y , i. QA W n- ~, ,u w M hMNhhhM4 fNVl["',dV:gh, h[f hy@ h['W4 [i s M[,Mf [ $Nh [ kf[ h O WM ; Mh ! M, 4 ff f q. I_ [ $' ' f, fThemanagementof Citicorpacknowledgesitsresponsib nQ' i Npi[ ? e is 7 fg?' 4q+ g 'e g, s frueANesALREPefmMS RESPONMemJTY MM b 9 = v-R the preparation of the financial statements and other financialN: n Q,,, p,r g,[ 'g ma cnntained th annuairepor The company 'i C Citicorp in conformity with generally accepted accounting princi-S t:@ ,: Certifed Public Accountants! - e'- @'~ 4 g' '. a fples appropriate in the circumstances. Where amounts rnust bef i based on estimates and judgments, they represent the best esti-U l,4 32 r A [% gtmmesandjudgmentsof management ThefinancialinformationdO( g, % ' F i fg y %(, g$,

7 g M Wappearing throughout this annual report is consistent with that.

9The Board of Directors and Stockholders of Citicorp:f, y Q@ tdinthefinancialstategentsa$%The management of CJticorp is also responsible fbr esOblish-W ,f s Rq& h.- j;[ J a

We have audited the accompanying consolidated balance sheets U h, % ing and maintaining a system of Internal controls which we $

c of Citicorp and subsidiaries as of December 31.1989 and 1998, the % ftiltelated consolidated statements of operations and changes inV 1 M % beleve is adequate to provide reasonable assurance that the s J @4 6and maintaining accountability for assets and : hat assets are i ' Mptockholders' equity l hnancial records are reliable for preparing financial statements) jended December 31,1989 the related consolidated sta:ements of Rf 9[QQThe system in use at Citicorp provides such reasonable assurancek A D . V safeguarded against loss from unauthorized use or disposition.? V cash flows for each of the) ears in the twoyear period ended ' s, g M My%2 supported by the carefui selection and training of staff, the estab t N changes in financial position for the year ended December 3l /hf Milishment of organizational structures providing an appropriate L fp 1967. and the related consolidated balance sheets of Citibanin 1 g ' d NA and subsidiaries as of December 31,1989 and ' yi$ W$,9 and vwll-defined drvision of responsibilities,;and the communl-n Ollnancial statements are the responsibility of Oticorp manage 9, l cation of pohcies and standards of busiress conduct throughout e mment Our responsibiliy is to express an opinion on these finan? MS QtheInstitution? .e. . N jg *L 4 Theaccountingpoliciesandsy;.temofinternalaccounting ? l Tclalstatementsbasedonouraudits.M f MV $ d ' W A 1controlsareunderthegeneralowrslyh!of theCiticorpandl L, N % We conducted our audits in accordance with generally ( Mi@ Qccepted auditing standard 1lThose standards require that we Q W . Citibank Boards of Directors, acting t.hrough the Audit Committee. ? plan and perform these audits to obtain reasonable assuran , # } described on page 80,The committee is comtced entirely of = p 6 directors who are not officers or employeefor Oticorp. The ChiefQ J about whether the financial statements are free of material.misy 6 ' i!pj $statemert An audit includes examining, on a test basis, evidenceg, 3 <,' FAuditor of Citicorp, who reports directly to the Board of Directors. conducts an extensive pro g' % greviews, worldwide, carried out by a staff of resident auditors andg l ments/An audit a O i 8, f evaluming the owrall financial statement presentation. We E ' G( pndependent auditors, are engaged to audit our financial? ic - .T f i

• lsstatements.1 a dfPMG Peat Marwick obtain $nd mainta;n an understanding of Sin our opinion, the financial statements referred to above M ' 4 w

y

• l present fairly in all material respects, the financial positio D>

? our accounting'and financial controls and conduct such tests and s L Citicorp and subsidiaries as of December 31,1989 and 1988, the S iother auditing procedures as they consider necessary in the cirF ,,fcumstmces to express the opinion in their icport that follows) ! resultsofitsoperationsforeachof theyears.inthethree-yearp %j , ; f 9 KPMG Peat Marwick haw free access to the Audit Committee, / , L period ended December 31,1989, its cash flows for each of the o

, y dwith no members of management present, to discuss their audit' jears in the two-year period ended December 31,1989, the F. L J

. W and their findings as to the integrity of Citicorp's financial report-

changes in its financial position for the) ear ended December 310 (ing and the adequacy of the system of internal accounting j 1987, and the financial position of Citibank, NA and subsidiaries Q '

Lcontrols., ~ . as of December 31,1989 and 1988 in conformity with generallyg

• ay accepted accounting principles.',

,f', 'NN'- s cg . As discussed in the statement of accounting policies lIn 1988 L +- e W X ;' Citicorp adopted Statement of Financial Accounting Standards, ~f y

(SFAS) No,95, " Statement of Cash Flows" as amended by b & ;

b@$ Johns!Reedj SO4 A RChairman +f f y- . h NewYork,Newbrk 9 rW Tr in; l nuary16,1990 T' l Controllerl@' ' gj %:Q ~ p p, h lQ Y I my a' ,,y_ j . s,, m m e y ,v g ~. \\ ,o w %k.4 NJ " ~ M mydM4 t% 1 7/ S ' 2n% M @y + s yyky C .[ l l. 4. : - 5t fww p.;: m, .. h. s c lm yQ M- _sm, vn m' + -r ... s.. L, mm ,t ;-u p . 'm wb. !v,, p.,. ' - ,ey , av mJ - e _-m.4j, a m p m s N s }; y' u se 4

4 g lyx; s

610M80tmMED 81pW50MBff 0F OPWWW50005 ' WOTICOr.WDSUB90MMESNy J 2' s ~ w (o 3, ..-m. Xseep? 99es - Ny tw7y ;4 Om %g humse,ownesort=wn,mm 4 U Gutesset Beweguse d f-m@M t m.3 V l

v..

A,. c. # $#$38,888 ?,1$20.575J M;N ,164% f h ~ w E interest and Fees on loans?....m M s c. $17 n.gp interest on Federal Funds Sold and Securities Purchased Under Resale Agreements;. Z. h, inteNestonDepositswithBanks Niv JA y. i . L. U. w..A H c ._ 4,188M 1.234 5 VO72% 4 ? M interest and DMdends on trwestment Securities (Note 1);.f.1.. Q. W:h M. MM9,865L, E E 1.234I $1,I363 8%y i M+ interest on Trading Account A.ssets4 i.&.-.% &.h. . m. r &. $1A89s e 2.534 4 Wl 831.M~, s, ij . J, p,") 6889,9764 y v q(, Mrs dt

• $26.939/ ;$22.217@

j h~ '4 enesseseBaggenses, c 1 % NWe 4 < 3 , M t SNOW opinterest on Deposits b i,. W. L. .;i: .v s h / .;W.t,a3:% E $$$8,880 M,$ 10,6024@? $;9,109i$ j 4:.,. g .o>. E ilnterest on Securities Sold. Not Wt Purchased '. U338 352 d h C hh W 499 % t .W.% l$ ' Y8,888.T'" 12.611#y n; % *Inte,restonlong4e,rmDebtandSubordinatedCapitalNotes(Notes 8and9)i V / e intereston'OtherBorrowed Money (Note 7) whw. +,, 5.78L ~ mms %y ,747L 1022.499N M 3 m 3 - - 1 r 4 $15.880$s $y gg

w. %m vE s

g34,3g3 l 3 $ 39,334 t i- $ '6.337[i,f 4

Q.PessensvensseneveNus .,c < J 8 P,890 ' o $ ' 7,605 b r.. w. ... ~ m -m .s Provis W. v. , -f. M;,,' ' i 8 3,889i N$01,330 9,$ 4.410%m u @p ion for Possible Oedit losses (Note 4) f. % a. i

l t

m, $ 1.927 4, m 9, . !"L. $ 4,887 3 I$ 6.275 4_ .w x 1 seer estenestasvamus ArtsR recuseoN Pgg pnamaan a CaeDir 608838 t 1 lN ',, Y '.-l h, Y.s, $ h: n \\> M YFeesandCommissionsl Note 13)l c.?....;.. , L,4,..% 8*4,874R y $i3.887S $ $ 3.518 %@ M (. .3 g iltading Accotth.-.A. WW. '. %:.. : i t i......,. T. 'i y W i

896 4 %p 616) [ 1453 M s %

2771 D 177[ i df Joreign Exchange r,-.i. d jey. J'. . r. 1 ;, &. d. & : u!479a ik (frwestment Securities Transactions (Note 15) N :, # , :..., c.54 f. L 1801, 4 108 : 11957 d .~,,.. g$ Other Revenue (Notes 5 and 1419 i r., W. A,c.T. 1,

v... d a. g. g : 9,118%

525' x1.6_73,f,.j ,3 - sm < q \\ ' $

• 6,894 :

$ 5.413 - 0 $ 6.016 L N D. o h %OeBeerOposesdagRapense L 7

e,

. A is$

1,, N 4 g, i" s W 15atariesW. : L o.s i, .1 :,. n. r, c. ...t , O ^, y 3 6 8 ' 8,688 i ? $' 3.483 "$ 3.213P .. u c.. P g5teff Benefits (Note 14)). (%, f. 7, g. 5 g, w... 2, p ii n t 4,. Q ' 884i ; 7744-i 663} < g,j s l t 1 Total 5taff ExpenseM M. v... . A,', T, O. 4. $ 4,487i L$~ 4.221 , ; $' 3.8767 Oi .N a: ( Net Premises and Equipment Expense (Notes 5 and 19)j w. .. ;3, x, .l 4 '. 11.641 1.466t - 7 9 t,760 &. 53.113) f i.889) Tji y@Ot,her Expenseb.54 i M,f;c .f.g.y.r. j 8,481-

• 2 j

. y..,. J, Wyc,,. $ 9,698 ? 1 $ 8.9811 $- 8.231W e M -,I s f, M income (Loss)BeforeTaxes and Extraordinaryitem i. -.......s... 7 L8 1,588 : ; $ ~ 2.707-1$3 (288);,, * ?; jk,iincome Taxes (Note l5) '. +, r . o <.,,,,, i s 1,085 ~ - 1.009 : ' 894,E d 1 ., ~. e hesesse(Loss)BeenreBasroorunnaryleent. -498i ' $ 1.698 t t $ l1.182)1: P $, y$Extraordinaryitem-CarryforwardTaxBenefits(Note 15). w cl60 't -- 4 M (.jj_ ,y#. pWy NETB8 COA 05(&OSSF. 3 r. $ (1,182)! 4- !! . i 8 '498? S i l.8581 zy w-s 71 f,s Q;M,sehrsecessap.,,. 9 ass) Ansan. Ass.a rom commeDN SfoC8tMOtBSa5. 1. F$? 878: .1 s 1,r t 'y .$ l7534 c$ (1,274) a w< v ~, p; . Barnings(Lass)Per Share (Note 16) a, J B u. f income (Loss) Sefore Extraordinary ltem. 1.16' $ c 4.87X i $t l4.4!) - j @hNhm wg mooes eno w=mwnmes onpages im um an negw pm er nnaw uemen MNetincome (Loss);. 1.16 $ " 5.36' ' '$?(4.41)L j LQ:; h t :

E d

QW ~^ ' p ej m hi +, r ~:% v ;-N -i 4 l &&, - f'. .J:- g a4

.l: - $ y:.

i g + i q o L i 5 t 't r . i 4 '~g i4('js. 96 g pn x A;;; y g4q: 3 $y-h(y - q; $ / W 'j 3 fig - f w W ' - :. r r n y '.- 4g j w 1 t N)P htA d n, + . p. h a }i4 .s~ ..a 4 Jg d w w.tv or 'mm:o% s.a a a .w a. ~-

• G.

i - - -- L- .-s gq.r pg v.w.ggy g,pgg g+q s?_;g ggp + % m,.s;p,73 }w;w;M p f ; c ay g py m:h t' 4 x s ' [y n%0e O A~ r m4Wy;; y. y. ~, vc., - g Gyy%: ' ,- p M, , A.:q~, , y t -ad ma i 8 a ' 'a : + 1 a, 7 p t n m; .ja Q sQQ,'Q m fy, K eg

f. r r

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• 2.

$YYkhhhN ~ ,', ;ngg n@Ap o is rp y K ]g, 7.]a, e $ {jg%jP W M,.q aH g@V , 1 C%3 ,lv' p @g n %.j p j % p rQt yf - - WVb 4 + 9 4-WhY kh 9 V' a x < ', a$$~N ~ am + e a: 2*hhf x n. ~. c ? w.s m s h m$h W w; - w qs g4 4;ac. s. mc =

1. y%y w<

J.ji[q j g,pd ig l T-y.gp' $pyggg' g[, ifM( %ag7 y ' + f J ,!,' M D&- t g y,4.. _ g-s3* M,1 qQ? ' OTICORPNC SUBSIDIARE.S.mCM 4 3; - 4 i 4 s y , pp gg s p y _Jg mgiggggggW@ W W.e "S; 'T ^ a tP S E ~l MD 4 $n & +EW .a.=a 1 - MN iN N.QQ 4 < < 49 ;+/- ~ i y n ; N %@=~i:a :.M q:;c. s sqqg: t

• i r

SY f

• ? ffiff b{ %

~ ' O,-h kd ?, i amsaman Yyf ' ' ' M < Cash and Due from Banl3. ~...Q,.y ; % M.yll SNd 4.9 J b;b; w t.5'4, M w. M i;N f $? ? 6 '.,i .q. 4 WWln.), M81 M Msi 98,818 $10.706% WfM Deposits at intesest with Sanis. MM. Mi % inestmentsecurses $4sehetvalue $15.225in1999and $15.464in1998)(Note 1) Elm....<. f d t 14,699 M15.217i &,

P,epp$dh7.915p '

. @gr,derW Funds 5oldand $ecuthies Purchased under ResWe Agreements @g. l,i,We %w&J.

9,018 M 1tading Account Assets. +. ? ;4 W.Wm.CM4QC,

b. W*. :.9 3;q, & A%g6,441M@ g 4 8? 9F,078 4*Ml90.35M Wj U? WP 4 2:M i MW$;@WR a. c A loant Net (Notes 2,3. and 4)d income of $1.9831n 1999 and $1,811 in 1908).w m. 4W ! 4. J ' 5 8 "*P Consumer lNetof uneame W 48,08F 498,84140M %y 7(f Commercial (Netof uneamedincomeof $302in1989and $22 [w[ w. Em - 8944.,118 yf$1.49,197 MNetofMincomedMN d70MM kMY m .w a. sm0w ON i i8ess,ses W$M4,992 % $ i ; itaalLoans.Netb. w.d@d%MM/EM.f. hd.;.%sh r.4 a 18,406M&3.439MN $ NMb.f.iY Gim i;W e.i 1 i Customers' Acceptance Uacilityh Interest and Fees Receivable y o WMW[.j v 4,N9 M@fR3.337% , % ' L Premises'and Equipment. Net (NoteSIM.W (QWQ.;. msy.%.SU M L.v.4Mn[.y 28,W9$ B ;;. M.,.. ~. % 9 J S.. g g.' A3.448MM 1M 12,881 " Il0.944 M W, ; Other As. ts (Note 6) C,.. %W..W$&y.J:Sh.. ; g%..M. i.,. e 3 w.u-w m y . e I,a. f f( i, dh s h _1,., !![ t ,cNk 3 , !] ; ' );7 (!Y, [h ,,, / p ', - h b 2 hl}Mf h. m U.f s {. M, 1 .m e h i @eMW4[MIA h I ka 5 7 J '~

• M4%SPFg f 4 [('7 N3 Q

p., i,w$2gagegges' J-W 4 y- .q., M Non-la. rest-Bearing Depositsin Domestic Omces %.", e,

2. A.R8 98,9FFWM2.190dM t

s &@%@@ interest-Bearing Deposits in Domestic Omces W.9 i,M;y n0; ,s. V;%.Z ' 94,09B %g$%;$0,819@ m,,- JJ77,dQNQMQ.% 4,PeeWes.oes % s6.ves%gd 4.065 b_ M, m: intere. st. searing Deposits _in overseas O,mceWT.&. o.1. Q.'. c h.v.s.,:T;i w, e.1 aA . J.0R$ $M3.991d.$pl d.(. sl

hhhh, i.

%b I)..@(.h J b. h4 .hy }k C W} Securthes Sold, Not Mrt Purchased M MR $$1. QR 4 P.*[. h N l e d @ Q q s$y. M. c; w 4. g. 8,966 44;W b AcceptancesOutstanding&M @@9@%;%. ?.!. A <.g p ;wWlM N. ? f 6,996(W32.889M . m g 4 E W. 5 7 i96,988i T Wy/. PurchasedFundsandOtherBorrowings( ote 7ll. Q@. ") WNM c@. g .x. W M M W. % f9 8,699 $M3.856gy Accrued Tames and Other Expenses (Note 15) W, %5.037mg R m%long 1brm Debt l Note 8)S%,. $.MM.' h, w.. - J. #. M h.M.%wwe other uabilities mm A.v. m d,G;O.N.. % 4 y,

. WW.s pd g

MM 7 liedeemablePreferred5tockl Note 10]l /M.1 t M@ awW' a;,Mi.dni MW wm 5ubordina.d Capw No.s iNoie )m.1. w. ms.1. w.w#u. g.1.w _ s nee n ..40h W4,, R,,.;. gyhWE.,. p Ama.:. V.$ $M1,840 GM@$b61.59 ' A ,i* T < M h v MM ggg" tPreferred Stock (Note ll); ih @NW ( e n em m e'eq u h y y $ g.y, m346p w. m a ssa w% A W % n~ 4 common $iocanw0paruumo izm. u.. ge'.x..^. ',w w.c "t;; ^ %, EO e&s iwned sa,nws w. :.w% si.y(. 7 tM 5urplus NN.Q Q. 1989 and 34 4J lssued Shares:352.266 %3in . h J: .v .xy ss J l0, 7.. w. s.. #. m m. w,s,ase(48. ) PEM'.45m -42 .e.nw.m.1. $ c ;CommonStockin16easuryatCost MWh.m,;.s y. 31 v, ;.c w g, W ;G 9 a WM a 7f? V" Shares: 27.523.600 in 1989 and 27,260.266 in 1,988 L, i; .. g. ; j w s-g jVaw;'. 9 y 8 ?$0,87 0 41J$? 9,W h 4 : ue,.w .w +... ~ $a ft '4 .. >talStockholders'Quy meu, '. 7 P. ' '.' ' h} l. (g;i a 3 .,,ac. .J ............. /. 3 8290,64B M l $211.657 4,, [r[Q~s u c ,:s /;, f' b[;7, ~ F my' u v y Q,.s j' mg g' w g.

ws s

w 6 b, t , '., ?;b &x,"4 @l

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• s i t 4

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ph n i

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p -

no~ .. m; w n wa=n so m v m +# g$g52BOMkWED SWWWRWW OF CHANSBS W STOCIO40LDERS' BOUBTY " sw v co ~ o 4 .ru u 1 %go e - um ~.. ; e c., pagygmu s &s - ~., g. m* uo m w

• s --~ W

.o x 4 - 41987 q,W-.pl g-m. r# 3 ouw w h xv 9999,. +' 'o s 1988.u .w a,4ss990cet(NoteII)& ~ &#d & " WQVg: f K M;, &

• A QAm,A

, % Isawnse'at 8eginning of WarW$.., QF r* q%. 4. '.w+nMw, i?4 ,y M 4 ca.n L$A9902 * ($l1,5909 R$1,365F W 3 missuanc.e of Stcck.- % M M, c @ p J 4 W M, M. A c ; W g ~ L g:.l. P-* ase7 -7 # <225 m, xm dm + - e r .x c,e + W;wamtalCBMaleDePVBARM Vf 4,0 ! M W.'. .d

I. o. W /., $? 1A80M$ 1.590J 1$1.590( wh_

r' u q QT m-seStoset($1.00ParVaiUe)i($C,%$a

• i gh@ Shares: 346 322,787. in 1989. 343,995.863 Iri 1988, and 150 m ty Note 12)M q

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• J gg Y$6WR T2 W 13plTM MN@issuanceofStocki MM@&2.e,c W@## "d, d.. %

Shares:.5.943,676 in 1989/2.326.924 in 1988, and 1,547.958 ini987P; ' ' 17 i 'W% , J @ je~ $ ?liW Q y Q=b $h f:. e% T 7"lssuance Pursuant to Tw:i-fbr-on* Stock' Split (Note .a. i cgW N ' Mp J G e Q@dIV( h@dQlIleductionofParValue@O 4 Sharest 20.000.000C:OnG ,4 V R r20 kW ~ NESN M 172 $ % Uf V ' b M l f k Shares @.870,075 NMQR ' ~ ' 'l; f; 4 .,m [i m, ~,@. %Rch # " ?. .'.9% m,., ' o-J *,W Wh. i 45 i l W A sw o. i 3 L w,i352,266.463in1989,M6.'322.787in1988,andE N63in1987? % %,,.t. w. m. .. v m,u r w$gu4 e &m. y Shares i .1w A: MWMWM a ,s.,s ,e. A. m...w o4 yb-TM8eerplutsWRn dgJMQ$w S $ t' -M Y ,$@$8alance at Beginning of WarWMgmpg. :nl$pWWx a r,cw,Vor, s.w.7. j $ , m$ 2866@W W[i M@[g M l c$1,421 ( $ issuance or Stock Under Savings incenthe, Stock Option, Stock Purchase. Executive incentiw? % ' g ,M%p MM35 SJ G W W W W@ 3 M@@NidAeskicted Stock Grants. Net of Amo s&& Th.,, M18Di D " >i $W 4 i 44 ? 552Wh ? ;(6)J W l(9lgh(llQ Pitder'ed Stockissuance Costll% 7dn,l.. Note'14)(, fc cs:,.fn.

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3 ....', M M' %,1 .J$f(484)L y$f(431); %(387)? VH $WU Shares,47.2(,0,266 in 1989,27.767,138 in 1988/and 12.962.986 in 1%7 ? '4 Wm W N 1 $j% %)[n o'9 c %g& Snares-263 #14 Jn 1989, (506.872) ln.1988, and 1.931,183 in 1987 ;. i,c,,.g . f.,,$ s ja? neasuryStocir Tansactions, at Costh,. f.a W., i ma. m. I $7j g l44 7@ dd a -- C N :3 7 3ML a, s ,g

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5 W'g ^ MMd{ ijt i d Wa r v v. , c ' ~ $g4: 4 4. 'm* * - - -l -. a- . x (&' M tt 'v' l-tITN.t.g a eb e . n f o - @. y ; 1s ' 34 & CONSOURWD BALANCE SNEET M ' ' ' h... / .q_ r $ ' NW ' q< t ~,n@g yUWi s i, aim, N / %.6 + M:> ') t' n l' E

v. J s m y r

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. wr WCITIBANK. N AANDSUB5IDIARES MF W, o* > ' m essamens g osuus=#4 W[y%&~& iMy Q%$lfWuumsm64 ^ h.k x. .uru %. < 7, rp3 a >+ v s nee- , igassy 'We M a:. s ,.. - $?\\. .,Q WQ,gjf Q::$ p gjy-

• /I~,

Jn Ql;' MMM Cashand Due 6cknBanks.}yn. &{ ii. LOR %;/:yMWC$t 5,438L 3$03,639W s . 7 Wn s M., g&g%, $[.l 4 WMW18,8787@10,4887 ..., -. 3. in Q M o( '. ldM g [ Deposits atint'erestwith Banksh U q).. 4. . :V 9 E xi;A, l 10,4946010.947M W 9WW Investrnent Securities (Market value '$ 10,850 in $69 and $11,101 in 1988) : FederalFunds Sold and Securi:ics Purchased Under Resale Agreernentsj '. W.. m/q 7,M@

5,9 8 7 & A M 5,846 $ e Mk $1ading Account Assets;Q. A G, jct,.. f. _ g;4.QW.Ti E Q pr%m:r$oans (Net of unearned income of $1.942 in 1989 an

'c t 4,707 f SR 6.657M j MF y Q;. ' c's g / y g W.4 4 %.7.

(3,788WM3,248 M ig O. kss:Ar;0wance br Fbssible Credit lossesi /. 'p. o WEWCudomers$ Acceptance UabilityQ.rh). N.Nhd. hgw#; %)

+. - kh N$ Soars."NetN L JM.? i. *

N[hMkg jM,h $101,878M$193,893Md

~ Un. wl. M w MAM4,216%:44,064W k#% I Premises)nd Equipment, Net AC%sWMM " W<h.6% .l. 3.1,dMGMMch,M M2,0063dM2.040Ef 6 MWInterest and Fees Receivable %,OMWh J. wA W, nM2,877W@e2,5$3& 4 NNN.O.therAss,etsh i t. /,.)c..M NMj.ys.; g UJ.U. :Q $ W h: W 7,481 M i 6 226 % 9 i voeu. %, :g,.m. M ex - m

n

. A v ..M 4~'.V. c F .>.1 m '. W.. x9W. / s stSS,36f e gy ~ n $ 146,353 1' g, e %rm '.? . ii ), %a,gh ' ' yQi f(gup; -i kr

y.,

.yX V ,b,' W 'o i:/ :o, 2 ls i t a ww pug se s rwm 3,w, a m.. s 4 4 1p.g , U e. , h) hh/ s 'b! bF I ,h k) y.h [' y> M, M[OJlpW.t4Non4nterest-Bearing Deposits in Domestic Offices s,',m,y 2.'. hy @8%)Winterest-BeanngDepositsinDomesticOffices %6g ! '. m if.J m $ i10,385 ? %$19,933C y .Mi # 2Nortlnterest Bearing Depositsin.Owrseas Offices! Q.i. 3m e,. $J. M, g7 a 4,738 L ~f d .MTotalDSpo$ltsMddwdM.N N [,.[. ).9. [N[%$ W. QMg >99 s MMInterest BearingDepositsinOverseasOfficesi. y J. , V;m 4 5 54,315 2 W[%5ecuritiesSold NotWtPurchased w d NVW.b$. 0[$100,968S 2$102.445$ y .WR:

M, ; yy.'p M, J 1,978p.13.433p 9 w@eeu,cnasedrundsandOrnersorungw.g%.-. Acceptances Outstanding. M, w. w o oi9,46s ml s...

1 w. wmm ,N 90.s i g:. w. N, f (4,2284 44.0611A @ Nitong-TermDeb6M.d !.hU s%' WWEi;. M4 e,.$.4..k.i ? J Mkh7. 4 3,408f N ' 42,789$ M h@Mr:$Acclued Taxes and Other Expenses @g;W bgs b ;,. g :. L X.,. W. . o; W4. v.y m $gd 19eoskhoMedSguky(Note'21h % f i y ,.>4 y%.; y @yp c4,tssNgN:'5.535# J f 8,100 ;, 5 < lf Other Uabilitiesk 4 3.m To.M. 3.486' 4 m%m 3capitaistock($20.00 pac em a.m. ;.h, *S [., W, Ky@4@; AQCW i ? q g + 4 %n + $ g75

p.. g gg~ '.

JM%. M.a ' SF W t. y9 qa% Outstanding Shares:37,534.553 in 1989 and 19,88 <..e,,. > " '

u m

s .s >~ ,4 s. mp, N.. u W y ; 3,236 y < ~3.220 r. 65. . A_ j. m#;. AW<. #. 9, Og. M_3,441 M ' d2 sDdI Surplu.sN.d.,,M....'[a.N $'. M.. .,{, $n u J i. M.. y w i w,ih e 4,197sg~ m aR:WiauN.m..,@ v. g .,,4 y n %... Retain,ed Earnings i g! TotalStockholder's. Equity'J w,S., ,O,,1 AJ. w,. A.u. W[{ *. g, ; }. <;y V m A'. W Q,$.,7,6284 R$ Y8,168,W"W g,. .1 ~ -,g % 4.. n w- - aN, , i c. v w-. <- e a*- ~. < > -- 2r-f t ,t ws . n b s ( ri 3 c o s', fd ', . ~ , Q M~L6N:..i'.'. ' ',. ;. L $ $$$,361 d $ $ ]46.353 b, ~@ ,s c d Mm[,1gygg, M.M b, @ Q~ ? ,g< ( .i..,-7 -ag 4 k s .A t e h J y'

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.~ I h$ 9 ~ hhhNS$Nh$kkb f k%l?YfhhYfkhhkNfff h % enene m sesa m m m& u& kh h h ;f ffblhhk swas cugawns io deimecums wid ia now purenased me gw # QCidcorp, itsl wholly' owned subsidery Citibank, NAand their @$ N[drities sold, not)et purchased $%1he consolidmed linwicial stmements include the accounts of also valued R market and recorded on the balance sheet as secu-MM Q $M mqlority owned subsidianes, after the elimination.of all material & 4 ' presented as intces gp %41rsescompany transactions &t M% eas O f ichased;in previously issued finanaal stmements, Mh fhMNildstes that are 20'llr io 5050wned are carried under the M9 0 tions were recorded as a coinporect of trading account assets J equity method of accounting 'and the pro rata share of their y$p$ income lloss)is included in other revenue. Income from ine$1 fano the related interest expense was, stMM% trading account assets Prior-years' amounts have been.restateds p

• hments in less than 20% owned companies is recognized wheni gto conform to thelcunent year's presentation This change /wh s

!Qdividends are received hwhw QN t #QyM se!Iects prevalent' reporting practice for these activitigdoes not $ tr 7 .Mn Gains and losses on disposition of branches, subsidiaries l ~ 5 finvestments) and charges for management's estimate of perma-yygoptions and similar denvative products me valued at market..with ~ g$ greent impairment in value me included,in other revenueJ _ mm ; botn realized and unredized Kf $ # Foreign canency translation; which represents the effects of VM account rewnue, except for those designated as hedges Gains

SQ l}QQ"j,ltanslating into U,5) dollars, at current exchange rates; fina Mg statements of. overseas operatons with a functional cunencyfdQ interest rate swapt options and sirpliar derivative products that d a Gother than the U.Sidollac is induded in retained earnings in the

~ P@ iQedge and tax effectsagig AWW MMg@$py are designated as hedges a Jaccompanying consolidated balance sheet, along with related Qment to, interest revenue or expense. Fees related to these finan M, ' % f M clal products are recognized over the term of the. agreements.Wqb ~ M 1he effects of translating foreign cummcy financial statements gM It is Citicorp's policy not to make transfers between inwstment yWg, c Mcu,those overseas operations with the U.S. dolia/as dg. @$P Mi?M rrency i.ncluding those operating in a highirinflationary envi@ kO ' 09 m WQhggg M MW QMM 3fonmentfare included in lbreign exchange revenue, along with Qtt CONSUMBR 804NS AgS My a$ggelatedhedgeeflects.Foreignexchangetrading positions;includ jg sTheconsumerloanc (thmarket rates on a net present value basis,'and the resulting $1ng spot and forward contracts,'are valued monthly at prevailing $ ' (Ci.ticorp's Global Consumer business.M yt TyWK gsqd @Q@f@ing Standards Board, Citicorp inJ968 adopted Statement of9 Qand losses are. included in foreign exchange revenue.7@c M, 7 determined number of days past due on a contractual basis.The Af s ln accordance with the requirements of the Financial Accountp $ydFinancial Accounting Standards (Stas) No. l 4 G Cash Flows,5 as amended by SFA5 No.102;;95/ statement of#y%e%su by 4 3 er loans varies depending on the terms, security and loan U@%Q;f y! ona prospective;g %i loss expenence characteristics of each product and in consider-QhMM P f basis, Under SFAS No. 95, a statement of ca 4V W yVpH@ d$% place of the former statement of. changes in financel position. r W&1'@%s TNQ gMiW ' ydPofl defined as those amounts included in cash and due from1E 1 i %fW WQ $hme When it is determined as a result of evaluat %p%pbanksygNiMh@n@Mgdb%$% 's 7hMth y M% h+ iS%N s 7 MNR!##% $$ doubtful of collectiort the loan is placed, on a cash (nonaccrual) K d Q; % BlWESH88NT SECURITIES ANDTRADINS j$ $@% 3 basiscW MM B N@ ACCOtalf ACTIVITIES h@in.both the Irwestment and f q 4-Wp@: S the loan'is automatically placed on a cash basis inespective ofdd6 W collateral or other favorable prospects. Any interest a Debtandequiysecuritiesare held f%9ading account.portfoliosJhe distinction between the two'isi G y loan placed on a casn basis is reversed and charged agai;n &M; primarily based on the intent of management at the time the QMrent earnings (interest on ca Q q parion of short-term ' market movements and are' held for,In anticWj in earnings only to the ex gsecurities me purchased: Trading accou.nt assets are held p:hh customers.JricontrastJrwestment s'ecurities aQurchased asR resale to Mbasis loans are retumed to ariaccrual status when such loans are Mi b ioneermirmsunene swm r wmennareexpeacetobe madeon:scneduw,futu 4 current as to principal and interest payments'and W .w% Debt secunties held for irwestment a' e carried at' ' cost ' adjusted ? h N / h [U < @J > ? ',, w @ w < ? -iMM[$bt"arportiZation of hemiums to the earliest Call date and aCCreb QQ 4 MA" ii R Kg -Ml tion lOf discounts to. maturity Marketable equity secur r Sdhf i d $f 'qd II ('+ r g 0@ W+4 i- ' r[ p $ Q $ Q M %r, g,,4 imestment are canied at the lower of aggregate _ cost or marketc 4 PR c', Kg[4 Gains and losses on sales of irwstment securities are computed r e* ' .',i, M,N Wi K,, y n 7onitspei:lficidentified_costbailsW,( 1;Wsf;W My@ market instruments, are valued at market. Galns and losses, b 'fn, l@ W. M 1 $P 9 'l 7 :y m 4 W yWaweq and unreamed. are inciuded in uading account revenues.. m ar 1 6D interest kitrading account assets is included in Interest revenue.i I hh }5 bhh 7 $[ N %gg a m a m, u, o ~ ^'3 a4 n. u o - 3 e s k J. q>' b ..+ w; _ y " i -MMM. ,,i g%g &g}2 ; v ai n, m ' @4 4'Y-@ .s g. ~ ,M YM ' + b hi NN $ ' '7 $1~ pkn M'M k_se' < < + a e + '. ...,. _. _...... _ _...W % %, yW W_ w%w%M b~

... :I w.

FI. h y y g y p & f p #l [ 2[ %y Q ) 9 f L R g & ; ' ' , W 9 7 % <, Q ; W M%%y ? Widh; $ $yy& %*Q hWWh? ,Qh 3% \\&?, & %g M,M _Ks i L JW S i2 M MgISASEPINANCINSMhN e@, s 4 illR / at the per-share book;value at the time of sale but which has ?~i n lease financing, included in loans in the consolidated balance i s 4the same wtiridMdend/and liquidation rights as market valuelyn hM@gsheet lepresents Oticorp's share of aggregate rentats ~ lease ftnancing transactions and residual values net of related [ ' J' d(granted, subscriptions entered into, or new inwstm gNc permitted for the purchase of book value stock. i 21MMM Mg unearnedincomet @@ MCg 7 .A.* dgp[glease AnancingtransactionssubstantiallyrepresentdirectM, ' MFor outstanding options and subscriptions involWng onymary j y %g 3 financing leases and also include lewraged leases. Unearned k w f ket value shares i 9 the treasurystock methodC E ( Lh ; @?g@:@ e $%f s(income.b amortized under a method which substantialif results! ydb Qrecovered lease investment @db, j.' A A u W > >, c. TUnder the stock option Ef7 In an approximate'lewi rate,of return.when related to the un-f also been granted in Wndem; and subscriptioriagreeroentsIhawl $;$py6 Gains 'and losses from sales of residual values of lea My y fixedatthedateofgrantorsubscript . to purchase either market value or book value shares up to the end OAmentareincludeoinotherrewnuesp M A3W' ?< j ( of the option or' subscription penod at exercise or purchase priceQ %y% 8 @ M J' W @ ' + 4 E M%N, MAlAcel4NCE POft POSSIER.E CIIEDIT' LOSSES W)

• I 8

ah i 's % g${h Additions to the allowance are made byJneans of s S clearly represents thel economically preferable alternative to the % s Ibr possible credit losses charged to expense. Credit losses are de- !

staffmember,theearninos-per-sharecalculationincludescorMh j g$ j ductedfromtheallowanceiandsubsequentrecoveriesareadded/

Q gdetermining the appropriate lewi for the provision br possibleQ M by the treas pgThe level of net credit. losses br the yearjs a significant factor in i ! mon equivalent shares representing the dilutive effect, computed k $p p qdy credit losses, Based orynanagement'sjudgment as to the approi ; ((option or subscri c priate lewl of the alloMance for possible credit losses, the amount f bnok value shares is the staff member's preferable' alternative lthe$$ M +h actually prowded map bel greater or less than the %d lbr theyeac The determination of the amount by which the prom ] earnings-per-share cakutation according to the two-class metho Mg$4 Wh d VThis method recognizes the fact that there are effectiwly two 4jd M ;y$% vision should exceed or be less than net credit losses is based on1 d y [QMf$p management's current evaluation of the anticipated impact of ( domestic and International economic conditions, changes In thef > ? of stock whictlshare in all earnings, and anothet book valueW yt , i shares under option or subsctlpuop which EfN character and size of the portfolios and non-funds related finant [$$cial products, including commitments, guarantees, swaps,1,, itributedearnings.W gMMM$h $MM M Moptions, futures and forward agreements, past and expectedj f j For the year ended December 31i 1987 common equivalent SQQi 6FW$ future loss expenence; and other pertinent indicators. This evalu-p

shares are not included in the calculation'of los3 per' share sin 4,

theyare antidilutive&[M _ . $ y J M p; M % f gj $ %fh';iation includes an assessment of the ability of borrowers withljforeigricurrencyoblig $gK ' ^ ' s i paverage number of s_ hares of common stock outstanding used toQ d igdhMnecessaryfororderlydebtsendcing.W ' s <: M Tjcalculateearnings(loss)pers are.lgQ '@iggupghs h W gpp g w %giW Ois, 7 f W M Y #T Upon issuance of shares Undet the savings ince ggwpagNWITS AND EAfMWNGS SOS $p / optioniand_ stock purchase' plans,' pro eeds received in excess)f

R d Q %PERSNAfts @ M Q y@ H G 4 % (?

y g / g& Staff beneAts expense;lncludes pnor and current. service costs hpMM retirement plans, which are accrued on a current basit contri-b M under the exec P MN b' tions under the Savings incentive Plan,' awards under the ExecD the amount'of the awards owr the awrage cost of treasuryshares u g$$utiwincentiveCompensationPfarf andcostso otherstaffj%. ?lscreditedtosurplus;l y Pl f% g%i $ ';~~ f t Wm Qg $. '2, Ng, 9M gi d benefits. No ' hage; are reflected in earnings due to the granting 1 '

g@X My scription for or purchase of stock under the stock purchase plans SKor. exercise of options'under the sic'ck option plans'or the sutQ '

j INCOME TAXES.MM; JhMMMQ KTM , (expense reported in the financial statements LProvision for deferred taxes is made for items of revenue and i, O jp $hhyf Common equivalent shares'are included in the calculation of i, f than for tax purposes,= including an approp $%ggearnings per share to the extent that they are not antidilut%g c on undistributed income of subsidiaries and affil h%dhCommon.equivalerpt shares represent shares issuable under they t investment tax credits on leased equipment are recognized owQ enecutive incentive compensation plan and the dilutiw effect of K Qjdg$optbns and subscriptions to purchase shares under the stock ? f gg$ a" period of time related to the recowryof thelease investmentj gy y(7w ' _ jgM MQppoptionandstockpurchase plans Options and subscriptions may : which gives rise tosuch credits.1 u 4 yygp N be for either,marketvalue or book value stock. Market value " W - - W" l kstock is Citicorp common stock that is not' restricted by Citicorp as j $ Mr(hto resale but can be sold by the staff member in the market. Book l, Ny ~ Q M $phfequal,to book value per share and can be resold only to CiticorpMvalue stock is Oticor'p c M j& 1 3W y 1 m .n 3 x ~ g e a nww a.. quc ~ < d; j 4, v M,yg % kg*S MO# 'y Lw MMW Ep % p _L'M v H e1 R 16 bM,M[M1 ' ; $,wm, '.. dN ' 0 8 1 4 d d %e g @e ~ j "i + s e. 4qw w ~ Nh b .L h N i k h ewe %w4 4 = a ys w#Dh) w x NSMDOMb N\\,U;g, s 'IU

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$m'p{ u m' c a mo e s <' &} k )9..  ;.YT'{d . wm m,[ u. cer i. m,., j ' l's v wp mw m mm i a,; c . n',' lq{h), g, I'J' E # "a([h-- I ? i/I . - hl'- be. U I Y.. .-..O ,%7 b @ M > MM@s s' /m"M i k FTQ Mn wmhMW$$ #sn@)-(':MQ '. ^n w'/hvi@?;pMGMG m{' f .F-' i Sf sw .h gi( s w;. ; rnad"2.,a h WMd:ngs < m% m';,. y g n x c .s AW 5'4 g m .b; yu ~ ~ " ~ ' 'N6tes to MrsanciatStatements s x

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mana, i m an ey;nU.5;Treasuryand Federa(Agency l:&g'.pge.b1. w. %fy W. -i u 'h . s s l 8,118 4 8 8,385$ ? $ 3.4051 j$c 3,400; 9" y 3 m s3 m en,. >. 2 ( ; %, d. b. g g 1,630% 9,636 9 . :1,776 k I,762 +,'g W s%,y _thed WJ W %.,T:,,4 / ud 'in. a-yState'and MunicipalAM WW.g&. V. c a ; ( ; 1 Ws x O

T 9,966; 10,874i < J10.036 MO,302?>

$g[@UT MN Oecemeer n not gross wve.mndgains sura us mmona,oip% < < wscam48m meon,..h. &. '.% ? 8 94,699 h 815,288 b $ 15, 4 u ms s m s 3 muu h 6C rd ri'.C M.aJ:o. #_l T s m a p i is ; & W J,9 t,mM A.m.,.sh g e MM s J X. ? ' W -. ' 5 .r' vn.N.O ' ' " V . w: .._.c 4 sa s r & ~ o .s

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/ 'J J @MMinent securities totaled $20,1 blillort.Of this annunt, $11,9 billion vW During 1989l cash proceeds from sa "y y ,L,.y V,- m "M,, 3 MN. a ia ; M!e g, &%W, T@- Q %t ? ' W ;%se ..o m j $ 4, ' ,9; Mn4velated to maturlties and $8.2 billion 'were. related to saled D'JL'm.

1. @1 mh4%, WAW'.y%

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Mp M 'M_ J <m ( St 'A/ h NM ~ s cy; b Ur 's t v a ir y lk N O' \\ 'l h ? h<

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!P N DT198N A li?88i #'N67h+ [k j l$j 284 d $7fU.S."Reasuryand Federal Agencyn.P i _,p.. A.,L, u@.J. ; c. y$u, ', y AW ? " f f18 j C1 kQS'ateandMunicipal(Substa,ntla,llyallexemptfromfederalincometax)! f, #s N o.g M $s274:: n124y'g i8164 N 824 g 1 N d M%Other.V, g,.Y J gm.. @. V. m,'.1;.I b J M. W S,4 ;f's878?' .4.m.jf.y,q. mw $ 1mmus,\\fflTN"n?l1,@. .Li 89;265 i - $ 1,234 k >$1,236M, [ M w& ~ u ( mQ,l7R_ WD GLW ' s d, J e h "+m. G Db ?. ?Q; &a W - n s.$ 2 ,? Q-j p: ; ',, d $uM3(CONSUMBRI.OANS(, i j 3 %...,, m h' m ) s w m ww

v..

u. 93 s 3 s-.g ., {g ConsuusseloansM, ;^-g M, WQ w i M @The. con, surner loan category represents loans. managed byl. &.< a-, ~. -, m <y a~ 19es>W.L M ue M w .s EWCiticorp's Global Consumer business. This is generally defined as l c oomm ; i,t In Dosnesses OMIsos.j, p, , O N. -g e L,s $ 3 d %@dmeet their borrowing requirements for. housing. automobiles,11includingloanstoindivid MortgageandRealEstate%;,f p l8l38 218f$37633h {% s d %h andotherpersonaland familypurposes Theconsumercategoryg, Jlnstallment, RewMng Credit,andP M ! Q s qy j. a

32,895g31,932p 1 Ed

@hdealer floor-plar)lendingiand loans' generated through the t : i l$. Other Consumer Loans 3 t505lL'pygj Maiso includes indirect types of consumer finance, such asi _ ase Financing [. Gy ,q q M communitybanidng and private banking activities of the Global 9,, ' ~ ", % i ? l @{S, "g. i8279,888W$70.070b 3$ ,.? - Pp$. 2 MM d5h mby p M'M + JWwM g@? y( < N in OvessoasOnises 3MortgageandRealEstate%a 'w ;8190,8845$ie,333 A y7 o = y/NM QW J M ' 5 Installment,ReeMngCredit.andi' V MT +, is O M dib h hd. @y o h% [ MNDfym %. t ? h < 1.[S[Othef ConsumerloansM / l O A 15,878 M: blease Firiancing ~,Q K,o M M D. 9681 h.13,060 y$4M@NYM _ d ' [O d 5 ^U &PM ? A i % MA ^$ 27,aasR$22.097h MM s h%,WQMV@ g-, 14 h m< R. $ t 99,088 ; 7 $.92,167.[, < 1 w' 41 LUneamedIncomeJ. %grJe "(1,988)i 41,811)@h,s o9 .....r - < ~W ' t M s MN-Wi i 8 - M,MS:t t$% 3% :' lY-b

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%p so p # -d 4 G F o*7..z wy wm, w;h , +a, wM *n* ; s ' 4 M .3 1 " + m. mp q u y w m. w .o mg g w ~ WMNg,manaamilCIAL MbANS OM %u+&s. s ~ -mm ?4.CHANGESIN THE A&&OMMNCE PORPOasantin ' CARDITLOSSES M Lgmg &e& ^ ^ ^ ~ ~ ^n;, w 7 ' m iC ~ w s. f$ Nth l s M m. q S WMLUONSOF D0 dang ~* _ ::1999 s i 1980 WW 1987 & w< m %q, % ~oroo m, m, wm ,g s ' 19e9,g 19se e w t c %q ' ; Ba!ance at Beginn!ng of Wara. 9/:c $4,388 G$4,618 s '. $1,698 i : 0;p M W anDosseselsOfesos,, x ", Ma -. MMM@Commercialandindustriaf$ @.1$18,488; $13,451L *G " w, iwm v ' ,%c <1 AdcNelens' .?

V W.$

.4 d d5NlW@ <M, Mortgage and Real EstateN ;l j. ;j; 312,575}, :11,161 C i Provision for FoWtNe CthM i$sesY $ 2,831 O $ 1,33dNi4.4106

j%j$MLeaseFinangingg 3y@g loans to Financial lnstitutions p w$ ;,

g t ,3484k. c 608 ~ 7 c, 7 gr q y@ Dedussions b, < ' W[ s 01j; dhM2;js@N ' c $

• AW ' O,V 7 O

M $29,682 t t $28.098 t i Consumer Credit losses !.m hi $ 1,902 R$ e %QMh jnOwneseasOfAses a a Consume,r Credit RecoverieM {", { E (274)W(304)@ : (247 W* .~ r h & Commercialandindustriafa fid;, c -t S19,887 L )$ 18.277 4 E Net Consumer credit tosses., L 81,238 R$ 1,248 M I,024U -%pgloanstoFinancialInstitutions1n a : n 4,870 >l _ r3,569L iCommercialCreditRecoveri gfMortgage and RealEstate%%gj 74,889{h ..- > tn m .8,971 P _ $w/ i"M. ease Financing:L 46 ' 1 M .g i W& Governments' and Official Institutions 1. ' 1 g@w.. 11,090 N >,325 - 7 N'et Commercial Credit Lossesi.,' l $ k 716n $1504 g $f4]3 in y z 5 - ~.. 4 900 i +% & a m n,. a x,. t ,o , mp m r v 8 - ~ ~c-Mh%mUnearnedi.ncomeo- 's v M ' N i 888,707 -~ / $30.968 ' OtiM Netiki E bi" M FMEN N'/M f m M A A. a E. @1 (868,889 J$59.0661 MwesMseioorvsARG [ N 84,729 ? 44.205#$4.618D s W, a e,mm ' a (802)? 93ica is,nnon e,om me % a u.noe,,, no,,,,nd c,u,n wie,no 4m m yy - {225)s-y gn g W. r.. < / $68,087 o -558.841Y

rouunessesy '. t. $7 r.s..-, AmEs w w1 JWA6 h YIh amm8m WA8hNsT1.

s _ h.; %gWMkcas*d acorermmcunentWwentang g . pi rnncipmymmes e secwied oeda caid ransacnons er which an approonae portion w ww M. MM . ' amance has been ran*ned to other hatWires br me dusmen W me ransaden4 M((W Y p i,' ' 9.@l gy 12) educes lohns not CAnenne Separa$y Carg0rtr% g g

Q 4 ; W Pnncipany Maes m moWance bmances of acqueed Cornpaniesand trandmonof owrMas h L

I ~ W $ $, W 4% dlylica'ssecuedprima9bywaimaw ^ W ^ dNC JP; mowance. twances y <* ,A ' we Wh a s. w n c s mmm A m > - s 'N'me1 s om 'w( +y p, fp +Wf i 1 S 4. G@m,, n M s S n.M d viCiticorp's cash basis'N,'\\..dand renegotiated commercialloans -, Vb NN mm,

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G.L W JM + J M amounted to $7,242 million.' $6,331 millio'n.!and $6,046 million at ; 1^6 E Moecember3U1989;1986,and1987,respectively Renegotiated = J, w@lW 9 has been reduced as a result of the Inability of the borrovver to :b. h-n ans are those c ..m% J M;WWi Ulo ~ .~ $ % M;B M N:S$ a. x ~ cv w-L ~ e" <.<ai, 1 mig w a. W+ L 4 J' MNMmeet the original terms of the loan, Foregone rewnUe from cash 4 G3@%@%@@ . sy j%a@m + and renego_tiated commercial loans was as followsF .~; .a basis ~ 7' @ L 3 3;%+- ogw qkg 1.< np,- i e : 'e r e w w, y Q-., p,g: - L } }h ; i dy;W...-u .a r~....<.m.m. y*; * < " g m,. p v

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t. 1988 % C1987 :

$OL 'W- 'W V s >dMWON$0FD0uAftSFOtMYEAlt dIntefestIncome thatWould HaveQ

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? a @$' % + s ; yoi N 1 M,',, l K'n m 644 ye j tG -W[h}h + &hF Beenhccrued atOriginal[ c 4< h : - U., T " ,L _ 5%g' 4% s' ip$ < ]$x$ M f a + _ nd y$@j@Mmount_RecognizedasInterest,' y$~281,0904$8ll63$70li " %'f ',, ' gdContractualRates?;i MQ i ..U '- t k hkhnC%g(j @;Q,, s.' j , @.. 8W!r 250 : W . ' j% *,, g, %p yM?g( ?478: 1 Mh+Meaecmensvsmus nt < rv+ c s s 6 a c S(83 F $45 n hp4 m hesudes svo muert IM6 mnen,and $se annon indomestic omeet and 5820 rniil ors 1670 e y< . n w -.. ~. =. M %g l%p anorund s6a mmon in owneas emces in r989. me. and mi n speway : ' '" 0, w, 3 y

p m s w dig ;? lh nepeserts innest conecwd on ca*cass loans and sneerest acaued at reduced raes on iene-pt,

'o i g gotimeo cans :Mi meets sao muon, and sse mitenindomeste emces sm mmort ' s y 1 @, - y%q > aMAissi9 rnimon and U92 mmon e owrseas omces in 1989,19% and 1981 n spectney M fVT >*a ... )$ Q[. k M&,'M _lM h $ ;pHndudesapprawnmey52meanofinterest retArg tothepar m?on 8raMan x ~ 9edium and iong-term outstan$..ngt q A, Q' 4)tjh g ;S s '"3' ' ' # a y'. 3 g }c 7 .p e MidfN'N ( " M M W. +,,.,'y s hh k I J s ; + s r J,, { c k pp .n-.. e q @T M W ^m A s< b U b . cyw u.gm Q ny x if cy.g 8 h d l( k1 Z, J @w p @m n ~

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W w QM ?mnx &% GyW. W M o <, M: '~ 1 + u,AhmoW Pht M W ';N,$M MW %, s v%4 % f & g1 4-qb - sMMe&Nw W,,. 4 %au s %s + i e y' 4', '; c tt y p m w -- @+7 W<t*h ih g? W %mmm M - 4 r -4 9 aut. t c'Dg - me 4 1 - 4. i-q' i -w ' <M 3 s nOS/ [w% yg,m o Q f5 ' P 4 i MNp: : e M - h w .'CV < < +T" 3 st-m. a s e +s 3 WP t wm*r. 4 a'e 1. fw a 4 M lM$N .La .I P E Depreciation and amortization of premises and equipment was V N ( Other; assets lnclude goodwill, which represents the excess of MW C; N V6614 millionin 1989,.5611 million in 1988/and $560.million in 19873 ' ; pu_rthase price kg$Generall)l depreciation and amortization are computed.on a ye@ hhleaseterm.9% y f jg 2 jY9P j '. % s

• L$972 millionand $1,081 mliliorpespecpvely Goodwillis being kg$ Tin December 1987, Oticorp sold a condominium interest in its a Myof $%9 million ($283 million.after tax), which was_ recorded iny' y j

, iamortized;primarity using the straight-line method owr the peri + &3 g headquarters complex in Manhattan!The sale resulted in a gain) ' ; ods estimated to be _ benefited. The remaining period of amortiza h@g bother rewnue! " @. - 4+ Ee ' & ? v:D % W' December 31,1989h ' % W ' ?Wt.M @AfD i M,M ,M-sh$ "; 9 @ MMP ? ' + 4%R' D i Msb, A mhN M6 ^@. t a% ! es. P.w,8 CHASED,PUNDS AND OF,HER EIORROWINGS WW

• W TM s,.; w n,b A%. uw.m%gh @M_. m

, eWm C r + . NP uIN A n o ,# n,+ w v %gsw e ..~ w~ s,m.m. ,.s .4 ~% ~m Vgyp sehesed Funds and Other Nd.ge, Original Maturities of less Than One War 0

• rW'

- W W"" i n $t. M. ~. n m e 4 .s sa ~ - . ve m u N~&w u. WW 'L % w 1eeeb WnaeT ~ fne W_, 4 ' amdo&u2 " ' WM'M. ** %WY c Pedesel Ptands Pusehesed and Securistes Soed Under, S i, Ny ph(fRepursheseAgmessents"R s&g&@#@@ M. 6 MMQ 7 Q 4 k

w <, m 9

.,':$16,101s MS '/,720$, $11.733g)i "

e lit i@

• O 4 j%$ AmountOutstanding atWarEnd p

E. WQMwerage. Outstanding During the War.jyit%@p..Q.. p.4.g. l g. ., i$16,054Q$15,27Cy$13.490M6N, s o $@ Maximum Outstanding at My Month End M M J E;; .Af.y,a . M t $16,884 i 4 $ l.7.456M}314l759$A 4MC l U N'/WNs ; ' 3 \\ i-N l" A,, %,..M4 VnW l. ib #M @,MM. omunercia Paper _ - ~l A,Am.ount Outstanding atWar End. E.%. n,M.,. 4.. : e,; vm h ns.E_,1 mm . e..;c_. M, i,4 L 7,116_N, f$ t 9.346M $i 9.058.M,m. *~ y. m. W ys [$ 9,694Q[$ d.9,309 M m - erage Outstanding During the Warm ; / _ O %_ W.,,, s ; $i 9,169 !_ WlL RIMaximum Outstanding at AnyMonth EndE.m. 3;g; M. 2,%.nM. W $10,482 ? 4 WTOther.Punds B.orrowedW+., ' ~. ' . uI

• i WI3,823M t-
• ))N @'

d@@ mount Outstanding at War End WM,1,y;h. 1 ~

• '"" S N,

&.M L.,O,L F f.M:".,.' EJp10811,7161 ' D M AWE, $10,899M, @ + g.m s.i A Ny. ~ m s 1811,7233 %$1_l.871kg$10.261%& erage Outstanding During the WarMug, a. y&,= w. y.M.? 818,0981 < c $ 13.823 % 1 $12.5667 %, .4 NW Maxknum Outstanding at Any Month End ;. i '., i A'.1 w. e%s. w .4 s Illhghed awage irneetnae ' as st4m during 19e9. 2i.70% dunno 19es, and 1394% aunng 198% 3tio% a yea +M 689. 92m% a yen ena 19ee and pos.myes end 19eI sleported raes reaechne,W J" l[Q h M(2) Wrighted meUge intefest rae was 9 60% dunng 1989. 744% dunng 1909 ano 6Mi% d p HMr impau pt the locs inwes raes pmedng in terun Lan American counmeO 1 m yJ . _ JJ El g [ J,, / ~ W. t, 4.. 3d Jjn;Odi > ik W7% y y 4 m

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• &a me mnnm

, d r: pa w m-n Aen%g- - y Mm$m $m m S M &cagessa Detst, Original Maurities of One War or Mose@ W & A ~ " & tese m u m W nos M Sm-mm M _ m. a ! 1. u x s ..e ha y: + 4~- p)#mM(g(p.pn s w yx n w db-Q@ C W9QM s ( P f,WDN;GV -TX:p / u EVAs0U5 0,, . RomNaws ? "Q '@JA V b"f[?C i 'l , @ W M 75Q % i6u 'VW15 % r tphid(; p %.1;N M f( M f W M ., vnet>wt ( fD eM@%n wamw0N50FDoww$AnWENqDZM + ' %;M" W N WWFM +4 ' M1056#+ t DisTceuMn0N5 . Ot8 MeuGARON5 % v W; - y\\' hY" $M f.h. .v 2 J

• W' 8PiW1h s $' 3,139$@

y ua e M@#ikDuein1989t Wm. meg & C WND Ep '

MSW, QA@CMDuein19901% ih4, f@!.MWM ? @@4 N

t $ J3,595; M T M 1,363 s M l;7813 " d 3734i ? Dusin1991OGd lw ,#f ,,909 W lr y' @ha,9061 ^$MN2,403Nb JM$h<DueIn'1992WMC@ma II,990 9 ". d M9708N;A A %e (393& 4h", @yM9,799M ,1,326h Dueir{i993M.D JUS @i:Jf;$.. if /491 7 2,899.lM$MM2,027M Q$NXDue'in'1994$2 3lMg,iiR@M h@n f 48lC ! k 1' 796MQMhk d104W > ' M MW ,2,313; y /p J1,266Mf&dd ?S,579NMM%$N3,400$5 QMMDuein!995-1999sdG ! $$ d Duein20&2004dM;P@p Mf.5 Q@W( N 41203 / @ M @ S 948 M M W 7 538 b M a 420L i egf r929L V . t,830? N K ? it520 W k M$3 1Duein'2005, andThereafterV W 7 @-@fg~~,W ' "591; % 895,684W WAM 515,89.e, WW1 w: .s,w ~ www 4M

1. m m # TE d m -

1 1 $4,448 0L , w A < W W, u~R l i i$11206 " '.S utaleM asgos ' %_. 3 % @q h x 3!Q L j g %. :Q - .#m gM%[M yDuejn'l989s QM.$i 7.[kl;M@g;Mg[(J$J F,t $@V9N $(tsy 5 M6f5y%MgpNMM% d y Mh y$i1,551N M x $w@ $$ M: 41,889 g n g$ W l,150 W M Rd% Due in 1990 t CJ WWW h,. W W$1,332 J + %M 498 i fM (177)t f MT446}h*@$y@d@ [@WE Duein1992rirgN f O don,1'2;, yM". py Mil 516( 1 ? T j"f225 U $dDuein199tt.Qff.QW7 TJ R %4073@ l09; $43B? s $8 , % $ 382 w '4 4 M 291e y / r Elf 300dd WhgDuein1993$ '.M@E i, ~ WMD W. 13154(6 7,1l125% R Qi M279; @dW$%832[61' %MWDuein1995-1999;, M&m&C C D < 1 J[M269h d ^ f" Mg,Dueiril994Nd h.. $QOMM : W $ 159 % 4 4+AjaP9@W@dh Q7yi 1980Mi. MgMDuein2000-2004M(.jgj JM@y k,, E301 Ne60$ 7 *^ ' 1219flxI t6794 + ? mWM t 4 wW" 4 --M WWDuein2005aMThereafterb Wga.140 + -4 ?E c1P' ~' hMhMc%oMy 21 V : Si 5,0674 WWA$54.819Mk M.v w$[w a[$: j J 3,0145 @u 9 $2,033 x w awmc q 4 pp J.,y M/da, K W $14220 WE, ' / $6.481% ' J;$30,709 W W!* 3 $20,709 M,, w%ua, ; nymu M tg MF;. e d m e 9 7pgopsiu,,iy,.u.onns.ouponm,.au.onen ceu,=o.mhoenupsieeon,6paanormowemuewivau=oin no.iory%mopay.nenneanw%M@ ys w ~ 1%m.m d g ",',VisuedM W MWE~;s&..~. &,. n >e.p. v :m x,:x.;)., u. y, p n~p b a m,'. m~ ~? ~r ' . fA f NL lb T T,@.m &,a v 4 U g o,* v3R i,c ,4

1. Ma em g!n A

nr <Veen, 8 w Y m p m9a h, m, ye' 's a m-u > wu e ww xm c MsggCiticorp's fixed rate long-term debt of $14,220 r7illHon matures $7Q, +ys m, guaranteed bv Citic 4 w e%n - +nu.,wm s pn a u cy- ,. k c. 4n mo. 5 cp s %m Am ->;r + mn w

y m r

i e - @ ppg 7 over the period to 201Z The hterest rates on f N i Mgsranged from 430% to 2125% at December 31,1989 and 2.78% to? 09 At Decemuce 31/1989 and 1988,5%% outstanding convertM M#i $24,99% at December 31/1988, representing rates on issues %!MY flbie subordinated notes.due in 2000 were_ $2.9 million andOtm !s; g% denominated in U.S. dollars andyarious other cur $g%Rp@T 4 3 December 31,1989 and 1988, respectiwly C ' s. onwrtible notes into 31,339 shares of common stocign 1989l@ g u ~ s 8@W Witicorp) floating-rate long-term l debt of $6,481 million matures 7 Mmon stock in 1988. The notes are convertible &( the,ophon of ? % L QMcally byIbrmulas based on certain money market rates.oc in cert ; $20.50 per share, subject to ad in Mover the period to 2035.The interest rates are determined periodig , the holder into Citicorp, common stock at a conversion price of ( i fMgp; R tain instances, by minimum interest rates as specified in the Q3,, ( Certah of the agreements under which iong-term debt obli-ygV ?l MW ; agreements governing the respective issues. Thelnterest rates ont. gations sete issued prohibit Citicorp lunder certain cot iditions, j i L@p@@s(floating-rate debt issues ranged from 3.00% to ~ ?E ber 31,1989 and 3.00% to 26.82% at December 31l1988, repre-l " ; from creating encumbrances on such s $} senting rates on issues' denominated in U.5;dolladnd variously )The company has debt denominated in foreign cur 3primarily in lirecAustralian dollars;)en, french francs /prenc Dsterling. Deutsche marks, and ECUS, equal to,approx Lother currencies. The weighted-average interest rates were %gkf, Mand 932%atDecember31J989and1988,respectivelyE. J.17% l ounds y' W, MWpMg ' % pgThe weighted-awrage interest rates on subsidiary long-term 1, j17% of totallong-term debt.i OM % T MM @Jdebt were 1035% at December 31,1989 and 11.08% at December?

• m'

%@%n '!.! ary k>ng term debt was guaranteed by C ticerg Of the debt not J g+ g " 3ll1988lAs ;of December 31c1989, approximately 33% of sbbsidi ' y m'.f.. i 4 y

,m q

u > e#- .. - m n$ r "8 ( D ' - 11 M e ~ m."h h ~MN., *- &&8 AQ ', 4 lg.g i i kW a pk W;h ; - .sids y ( i s,. <t 1 Q d v,, i k" i 'g 3 i f; W ,3 dN y; E,, 3 UG 1 h Nk* vi ,8 , Y \\$H t N __; :,[J r k, m /,h>. w%'t h 7' ,db h 4: M,, I NhMW 1 y w" u ',i I, (A a,)-- I A 4 / g

a. 5-y

? m y f-f( + ht s y ( 1 ~$v Idk .f.)" 6d bf: kh i G.M / ^ G' d ". - 'd ,9 - >g i I M M W {h, $hlh-0 0 k)h ' ' ' lf. N NTM \\ Q, Nlh na b

Y; s

24% + ? b < s - -% .1e ,m, c y,. u $ ' ?' $ &l.~&n rv nr-T m .,,,..,,,,,,,g ~ , AVY .Y& Y,sTW% VN ' &W W re 1 ?a,sy?Nhf*W.4:} NV & 6 f %'iy Yk'? ?) N> > ~ 't WPh c 3 < = f' ? ? W U WWY W L gA p q >~-n s M L8 $RO&}?QUNNNWh'Q}k%v@(M:@.ia%Q QW d h W

N V;{WO NW A

? \\ ?;f-M d!L WNW b [w e %n m &"wxmp y me nnn wwu msgWymgbx w c(a, m;#&c 3 nnm ~ ~. %g m p'%;m,-., pp r .y. me M R '$N$ b @N[pt%x w #m;po4ny rw ,mx wupw ' QW i.Qs %"'y m-m e %* MUP 4m m?*o e^g we H MO%w W bs Yn %w: Mh& n.i h k h k h@ S N M d b $ h h h N k h y d QL W $w$ f $ p w @ h $ W pu y@ b N k.M W J JMx hhb NhMrMMkN')kkh' 8 i MT RW 95WWNdQ$9 k Lf b M33ponomuseDcArmaseosuse m e ~ ae@wa nm n SJ AlternsMy the issuer wiH uncondibonalif undwtake to seq$g. caphal securitiee on behalf of the holders,who elect to.recele @ !M W% gMempeeracum~aveme.se # W ..e ov .w -t t eSe< " 1998 W l W $ C&sh for Capital eCurities upon ari eMchange of the notes /in ann ~ % (( h 9055l ale : N B DMlsdk$ Mf[ ' $ f%eting4 tate, Subordinated Capitalsgg@8900% $i 500 s iof citicorp 1 amount sufRcie it to' pay the principal of such notes lBecause j d q$ # dMM idMftlesDue1996MM%#WmW J s kM96 Subordinated Capital Notes Due 1999&d80 s300t m because the amt unt of securities to be issued will. depend onk

• M m 99 % e m e.sf2i M s N @T A Mh 9%% 3ubordinated capital Notes Due Etheir future mark t values lthe amount and type of securities toin Cs #

m@W 90@%w% f mined If common tock is issued;so m0 beusued a mwa mempf tne nmes canna wetWW ph 99toanng itate subordinated Capital q@$w 400 W$ 1.6 ~ g g $e$ M Q@ M p$m% $m e NoteswithNoStated Maturtyy 0 N '500S L i / ' W % WWM %M M93 it Citico p's consolidar ' ret L m cA Ahg$dhaligggplesW g;% gqqgby -m~,.m saccountsbecomenegauve.thesubordinmedcapnainoieswit i gjfi9AW. s am(NotesguehfQj4$y3 subadgapha th e m z7ne ag,eements under which the notes are is 6securitiesof Oticorp,asdiscussedaboved g P&W %% hpPtoseng4 tate subadirated CaphaW$g@pp .me4 P Megg~550 a d shares of Citibank capital stociF sInWN M y loses,Due1996g g,x.wA eoticorp undercertainconditions;fromp QpQ W W5 t4 8 W MrD ggWNotes.Due'l997;.. gaggK pt gJ %% - %y wg s %dg - M ringungatme 5ubordinmed capitaly $,yg%g ; 5003 ' MIBDEBRWEB P0tBPBSBRBD STO q$%% 5ubmlinated Capital Notes Dueggy MM m%m to re 4 lAt December 3L1989 snd 1988,400,000 shares of honwungNN wdemenkMWW:r$i.649 a recem=* prened suessued ahd = manas subjectes wwmg w wwuaw hhppgl bb b.'kb.N kM Mi $3.2A9 $ sinkir'g fund.:In March of 1989, the 400.000 shares of AdjustableNQN

Itate Cumulative Preferred Stock (the "First Se. r,ie. s").weree a 3 TNdgw.

qw . yp %n1_ae,y g F n 3. mz , -- m mg n .m a ,3 mg x ,' Wha $ b4MEshares'of r ning N~p%mWm - v , %, M,.,,~n 4 3 y g p g p *,. ' ' i red stock designated as Adjustable Rate Cumulative ~ m

7 j

!$y@@jumenteedonasubordinatedbasisbyCidcap& 3 ' i3ubordinated Capital notes o Mk M

Stock; 5eenth Series; which shares;are subject' to the'same LMN 4

]MpTneinterestrates_onthefloating-raeissuesatdetermined > aby formulas based m certain mong in redemption requirements as the First Series. The exchange was N%D Mg ayy censin. instances. by minimuminierest raes. as specined in tne 9, z in, o,ed due to a, change in the y,o,no,,,,,s determined. From 1990 to'2005/ $1 milson DM$Nm Jpagnements goveming the respecthe issues. Cittorp my deteri V must b(retired eachyeac and from 2006 t payment, of interest on the. subordinated _ capital notes with no E 7be retiredeachyeacQM n3@% 4% @YMM Jgg@${ist Citicorp stock in the preceding six montheeThe i g' teedngvate issues ranged from 8.64% to 9.29% M f k Novemtier lil988 and will be determined every threeyears on M$ m gAssageinterestrateswere8.76'ItiaDecemtpe(p$1,1999andg i uo%arDecember31,19884 ' WAM di 4 p@ mat maturityof the subordinated capital fetes, dr in th$ case ofqQ," market rates. The dividend rate es pgthe subordinated capital notes w!th no stated maturit/ at the! $ applicableuntil2013:Theweighted-awragedMdend'ates q r MWelectieri of the holders in eachyear commencing in 2016, or at. Sib

1988 and 1987, respectiwly Citicorp may be required to repur-b MJ M WJee10Clion of Citicorp in eachyear.Commer1 ting in 1991; the;f a..

g$ e* notes will be exchanged for a secunty of Clitorp that,qualines asE chase'the prefened stock at $100 p W b timmf capital This capital will have a menet value equal to the I ' circdmstancesW~ ' -* M *>s "%. ' MQ 9 ount of the notes. otunder cenarn acumstances i c 'm m prindps arn'emed. In whole or in part; for.ChiAt the' option of f. ' M' %f)Kpy M [;e e% L dhpfngtie(ftde .,'W*, "[ M$the iggust the exchange;may be for commorQlock/00nredeem-7 ' N 2 A' m@" ~ W s $9gableputmed stock, or other marketable cap securitis of ,d,, O s / MsiticorpAM$ ~

• j d$ MMQ MNf y#[h i + ".

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4 'r &;O Whp% 1 st wp 'y Q " c s J.Q ypN u m W p4oyam 1 w,gt tg q 9 h maq wg e a,t-3 p 1 a s u qb '3 c:e 1 m w q Mb Ap c ?gQ g y, m ga wqepgr a g + s s - g m., . gg r u &mmin!Mp,g" m > (m%'Q m%.m& !d)% - g,;. j; m,A-.g e gd y W ,la n 6 &.. ~7 ' 4 p%m ' 1,; in . $g$,M,- 5ff ;fh'el 2 ? s N o m n> .r 7 4. of

• A; - 4 yg L.

. N. ',d S,Mo JM 'ai' ? su ~g 8 q, 2'.m 9 95@N g.h fp, t .M My - Td f i % i h skp 3. v 9m fv+" 6}eq@n ~m.s i pnm [ 4 H i 1, w;ig o 4 r '. s m - &,y < mr[ ?) # w' ]*j Q 2

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&ph N fpW; w ?V W@f,&E?%q] r v. + ? MM MW % 4 i eM,e .N.' d 3g.k MQ,3Ijf MjjkhighWN%y( , ML[ a h j ? n% 1 g-. ? m 4

• w@w ngW ^

W M% 0kk, ~OU,{. w U QQg .y l ..., L s r h k% Dh h h kb k fh khh hkbh~ h hk &l Q Q M W 4 [Q[ j? S.N hh Mf$Q8Nh [? [3' A Q^LNQ;frfjQDh[j $ Wpl &&Q& fk@W$%M UG&LnmVy[bly& 9' + h M % 4 %% y dhgg,pggpasmBDSTOCK9;AlQ}WMg% f f,W> M M, % /;R[ August 15,1992JNter August 1 8 y ' W d} K through i i $tp s 1 August 15,1995, the dMdend will be declared at a rate equal t6 V g}1.$/gWowmmme < 4 o. + ~,, f r m stop S M8M the Three War Treasury Rate plus 125% per annum. Every three i >b' ge AdjustableRatePreferredStockh2x WWW MW bears, the amount added to the Three War Treasury Rate hcreases P 1 gNyg t econdSedes,3,900,000 Shares .. i$1890g M $?390? J byMof1%toamaximumof 3% perannumforalldMdendperKN 5 [k[MThirdSenes;1,500,000SharesM f. t y 5150 P c150 R Nods ending'after August 15/2004; The Gr'aduatEd Rate Cumulas a PriceAdjustedRatePrefenedSt6ckMQ M ' 9 'A M 0 tive Preferred Stockv5eries 8B dMdends are payable ' n a quarterlyM m o %A @ourtn Series?l.000,000 Shares y4 g' 1.00 g,100h i basis initially at 8.75% per annum through August 15; 1994;NterM bghD Sede$ 5A through 5GJ5,7505 hares'. N f Monep MaAet Cumulative Prefened Stock' wA ' August 15,1994,'andpriorto August 15.1999,thedMdendWillbe6% \\ ., ; 575 i fdeclared at a rate equal to'the Five war Treasury Rate plus 1.50% S{ f 575@$ fl50% iperannum, Everyfiwyearsitheamount'added to t %m Jg5eries6Aand68,1,5005 hares % w ~ 150y ' %kRemarketedPrefenedStockWE C M +, ; .t,3+ D MTreasury Rate increases t)y M of 1% to a maxim ~ 2251 $ 225r Q:a gp 5eries 6C through,6E.2.2505haresy4lf 4 annum for all dividend periods eedits after August 15; 2004.' F f% NN g/kgq5tockSeries8Aand.889 %" 4 radumed RateCumulatiw heterred W 4 ^ 9 36 0 b6th Series 8A and 8R the'dMdeshi rate for any quarterlydiviM G > C f i..... t 3135jy;L M; C Jdendperiodendinglonlorpriortohugust15;2004cannot g 7 h$M411;250.000.5haresmpg,Q f +, -?%than 7% pei annurn nor greater than 14% per annum, and for yN hhyYgt;sseries,9,5000,0005 hares @ $@$ ~ 125M

• M ibelessthan8%pe p 3t2%Prefened Stock Ph%

l 4 .>' cP 7% ' Nk ma.9d!0. - %.k 1 M t &$1,840P t $ 1.5900 M 9.12% Preferred Stock' dividends'are payable on a quarterly basisis y (atanannualrateof 9.12%hd W f ' MM% Q d[ghM. %@dt5bisihbebthre( @rN,ieMm3dbpnNerie$tEk? O gnag y aw w 1 u y (Citicorp may at its optionitedeem the Second Series until Feb: fg, R ere $121imillion in 1989l $101 million in 1988 and $88 millionV N Huay 2R M3 at $ @ per sham, and at $@ pershare hreaft gy pfjnj987 V n# * ' > + < " - 6 i

• g may at its option, redeem the Third Series untK August 31.1990 % c m dhgoiyd' *M;orM5e$d3hird,'ahd F'oOrth SEliis'of'preferrNf, r ' jat $102.50 pu share and at anants p

y% M stock"are cumulative and' payable quarterij at rates determi r NDQQuarterly by brmulah based on interest lates of certain U.S. Treg Meem Mounh Sedes at any time at $100 per share.% d %Mehsury obligations. DMdend(6n the Second and Third Series of P 3. ' gENective Apdf 22,1987, the Money Market Cumulative Preferred g y h6M

1. 9

'gadys [ - y&d preferred stock are subject,to certain minimum and maximuml ML

• bkT

' Cg .E. P* 30ticorp"may atitso'ption,WWC Ni 'redeemtheMoneyMarket rates as specifed in the certificates of designation.The_ weighte& h@k Mhwrage dividend rates on the SecondcThird;and Fourth Se p re &OOO%J2000 Wand 9.407% respectively for 1989.2 %ti e Preferred Stock; Series 5A'through SG, for,$100,000 per shareg p MO@W@M DMdends on Money Mstket Cumulative Preferred Sto N5A ttirough SG and Series 6A and 68, and Remarketed Preferred g S$100,000 per share, plus accrued dMdends.-iryhe event that the g j gMM5tock 5eries 6C through 6E.Iare cumulative. Rates are determined q 4dMdend rate should equal or exceed the 60 e%festy;49 days by auction unless Citicorp fails to pay any div'idends N ' %ommercial Pape _ 36 @gy M%gs g4 [ECiticorp may atits oppon,re ' MMor redeen) any shares fofwhich it has gi en notice of redemp0 . khtior( in which cese the' dividend rate will be set at 150% of U N#' 1 &y@M Londorjinterbank Offered Rate (UBOR), On Remark fered Rock, Seks 6C thmgh 6E,jin whole or in part, at $100,000g d5tock2 holders riiay elect a 49-day dividend period or a 7kfay divi- : ) per share,plus accrued dn/ldends or)anydividend payment datepp ~ Oticorp may at itsl option, redeem in whole but not 10 part theg jy Mp dend period 4The cunent maximum'dMdend rate in ariy auction gE ls 120% of the 60 dai "AA" Composite Commercial Paper Ratei y Graduated Rate ;Cumulatwe Preferred Stock. 5eries BA and 81% ongt; , yany of the dividend reprlcing date QDuring 1989,Lthe weighted-average' dividend rates on Money -

• $@ per share plus accrued dividends. After August 15,200p y

M@# Markht Cumulative Preferred Stock, Series'5A,58, SC,5D, SE,5F,p g Citicorp may;redeern in whole or in part the } eams Imm unejo uneg, mag,$enes,8A and 88g and 5GMhich'have different dividend reset dates, were 2364%h Ok@@7457% 2238% 2305E2303% 7.342%;and 2332% respectively' ; f? Citicorp may at its opbon, redeem ir! w heWeighted-average dMdend rates on Money Market Cumu-; ' J2% Prefened Rocuees 9 On any da(aftepmbeg hl mhat,ive Preferred Stock, Series 6A and 68, v0ere 2319% and 2352%L

1994 for $25 per share plus accrued dividends.wg gN74 3 espectively and on Remarketed Preferred Stock) Series 6C7 m

c All series rank prior to common stock as to dividends andg g 7through'6E were 7,305%s.: liquidation and do,not have generalVoting rights MM$DMdends'on Graduated Rate'Cumulatiw Preferred Stock; y ? Authonzed prellerred stock (issuable as either redeemable on. $ S$eries8A and 88 and 9J2% Preferred Stock are cumulative. The. Gra Jnon-redeemable) sivas 50 million shares at December 3f?l989 e hl Tare'duated Rate Cumulative Prefened Stock, Series PA dividends - and Wotal shares of notwedeemable preferred stock issued ( pa d, gim yable or) a quarterly' basis initially at 8.5% per annum 3 and outstanding were 12,659,500 and 6,409,500 ht December 31; _1989 and 1988,l respective $ At December 3ll1989 and 1988/ 1 p D9

h(? mm % ~; h [gEP

• I 4

' 400,000 shares of redeemable preferred stockhere issued and FJ u outstanding.- am hhh d a : MVuk; 2 +,, MW ' OWN3 < 8Akw &pMDy$, l ~ h d e W y' hY\\ ? l 8 [(('R Q Wyy Gy q"h@f % Q M Qp4 Q p M Q f 4 % g@@ & M W :M 9 % @l h,, pfQ gp! whbw ci Fx %w%s-Q,M y*W yM Wd& 'M % #n:n%fQ}:m > A ~ ' ' s W e N' p a %glf 3fd 4m L' T b% M f3 y % %m a W d; % hkfQQQQ i & g,&:(x$W@w' kf'w s@& ~A Q: Q w u N w;o & " MWW MW M t w Q A em v 3 vn n W n W< v 1 - u s ~ v u' m w epn ' 4...~m; p"I ' am, u w ka v[ y $wd d ? "J" 'h, r se e + ;M_, M [ $ {g"M'{.M-w"" t. N$m ~2M

• N~m w

t y r n.4](i.@7jb6 M I " ~~ $ U '.k. D y =b"O 9 [ Nk.d FFe n s vM h aMf - } 1. .dUAby EE-J,1_4A U 14e a' M GW;i 'kd JI O[W' dJ ' W': % Q W m '4 f2 D 5 j,

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/ NM '.h 7, hg q 9fMggdy)T'* ! Ma%a, d-. 3 bp,;yWh% yfUlM@v ns L / 8'k t-N I, g& W ', 'M x 'Q@W b Ar - U 4's u-A" f A<i F ' N' ' W4 y}p 1 'f AC1 14 i <.t j-4 g ps im . !L. s a 5 l(184 PBBS AND COAMMS800sdS wa g =.. UQW m WW m hY" h Q Q f;L Qlu

7

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$e$0 I SWODl NQl&d W dem.coaM80NSTOCAN@L i MF M;lj W1@ W NW MWoutstanding shares at December 31,1989 and.1908 include [ Ny Trust, agency and custodial fees included in fees' and commis(n 9MQ l $hf2.6 rnillion and 6.7 million book value shares, respectheW issued Msions were $477 m yHNN,lW QW in connection With certairi staff benehi plans, Under the terms of Q $514 million in 1987/ _ i $$the plans, book value shares sold bacl( to Citicorp are settled inj i s A M V 4WMW NC <1 h M niarketvaldeshares.igpgMM.1 ~ QW i f314(81APPBBNBPITSC ]jR M r 9 MG g ;&Under Oticorp's Dividend Reinvestment and Common Stockix% A , h? , J FoHcWing are descriptions of certain of Oticorp's principalstaff( h[y Purchase Plan, which became effective on January 1141990, s:ock pR g iholders of record;without payrpent of brokerage fees, commisdg~ tions t.o. purchase, or elections to invest in either m f WWdMdends in shares of common stock and make optional cash $yp :; book value stock of C ti sions or service charges, may reinest all or part of their.quarterl , 3 no further options are granted, subscriotion agreements en %$ purchases of such sh&res. The shares'are. sold at a discount of 3%) Jinto, or new investment elections pen nitted for the purchase of Ig pp - Q below current market prices (as' denned in the plan) wheri purf$ 2 book value stock lUg$YWM %, SWM, chased through reinwstment of dividendscOp fitesteammesaPlans Aq g ; Mg _ C 4 ; fW dQypurchase additional common shares at Mt~ hases of up to $20,000 per month may also be made to C E ^ fM $jk(TMt December 31,19893 hares were reserved fo(issuance as? q, [f Under the principa Mq[h Withoutdiscount).MMCAg@j@McQg y (foreign _ operations participate in various local plansf[ ' Ngy g $( M fol_ tows; on conwrsion of conwrtible notes, 0 lfmillion shares; AC (years'of credited service, ths highest average compensation $asjy D q under the Savings incentiw Plan,23,4 million book valueshares;. jing strategy has been to maintain plan QMbeen granted in tandem. a maxirpurn of 1.1 million sha

not only for, benefits based on service to date, but also gg FMissued at market wiueland a maximum of 1.4 million shares if 4 1

gNp QN f!Kissued at bookvalue[Onderthe:1983 Stack Option Plan,underf b The following table provides a breakdown of a untsrecoggy $s M3,lfmillion shares 3f issued at market valuefand a maximum of1Qwhich options haw been granted i; iended December 31,1989/1988, and 198MW W 3p& 3% ' NR %E W 6 M sdr MO @W@l48lmillion shares llf iss'ued at book yalue; under the 1988 Stocki j/ * ~ gmX Purchase Plan,23.8 millio,n shares!.under the restr!cted stock. plan, L < C-- ~ ~~ of Biot Pension Bapense/lineosneP mm"v% Y t ? O. U +a o= %yy 0.2 million shares; under the Stock incentiw Plan,24.3 million 7 gsharesidnder the Dividend Reinve'strrsnt and Commoh Stock i !

mmoic40uw Ni F 4M '<> hee,G W M NeH W '

Ibh' hyPdichase Plan,10.0 miHion sharssiand bnder the Executiw incenN(,. 1 5ervice Cost;-Benefits Eamed During " r %gMfeserwd in tandem; a maximum of I.3 n.$on shares /ifJssued at F Eln'terest Cost'on Proj dtive Compensation Plan, unde (QVh treasury shares hagbeen 3:theWar3%. k JN." e p i 4"'/ "W 4 I W %ggbookvaluca luN,, Oh g%gWfjmarketvalue,anda,maximumof 04rnilliogsbres,if!ssuedatl , C Y L SAssurtM Return'on' Plan' Assets %tuald 4 'W%Y9b gs gg During 1988,' Citicorp restated and amended its cedicate off Y retuEr$vas$257In1989l.$1111n1 7 Nh h Yg incorporation tv increasing its authorized common stocn pg j[NetAmortization N N% and $4inj987)sC bd@%""MX ~(9)h(97]b(105 Mg to 600 million shares at December 31A988 as compared withi M~ ~ ' "F*W* {ll (4 NG500 million shares at December 3fl1987. AdditionaNy Citicorp has/ ' k NE a .. wen h d$ authorized but not issued l20 million shares of Class.B common ggstock with a par valde of $1.00 ' nd one' vote pershaie3 a 4* Mhe assumed long term rate of retum < N a Mt j kgdM A.Two4or OrWcommon stock split in the brm of s;100% com- ! d dpfl mon stock dividend Wss declared on October 5,(19Fto holderso 3gjf determining het pension expense /(incorpe) was 10.4% in 1 h of recordon October.30,1982 J ^, - 10.2% in 1988land 9.65% in 1982;The transition' net asset isF QM M ."i being amortized over a 14@ ear' period.6 ;. ~ N,3Q yp $jy M s in 1%7, Citicorp settled cenain pension.oblightions of the prinq OQ h8K w t s %gb$gMd p3$@#,O L cipal plan through the purchase'of a non-participatory annuityk /M ^ ' icontract. As a result /a gain of $301 million ($163 millior) afterrtax)W W s f m[6 a +. ?g!M,4$ < ' j 'l- 'W m. Nh y[b i $ !?4 M M s (f b yp 9 bb4 n{h ' j (;tK[y M s EN 'A $ m\\ .] gypC 'a + t '#kWs s( [.,,,* (' 4, J ' ' i1h h,il$[ f k' ', em f hkh ; > *

• ye> m[mh$

hfd.y ( k NJ Df EU h @W m &[ M o $y#"%' 8 m. i h 9 r' p q! " yh ? W@ A" e6 M; J Y b f k ws;&u ; A nk s ' r.* v' 4 aWmym y>g*c y hy, -k> m mm w w:%:- n'g w .W MJ %+* w'>~ .,: s , wV, y i mp+W u, %S!; f fA + b vf%je wfVQ wq_ ^e' n r w'A w ;> & pf,lr'yM" h 'W V' *&}~.['.r p r %c e

• w" " M; VL; w:

t,2

4 v y

gM r a 8 .f %.. s l'U, nLY* MOg i 1 , '&n' m' ' o* : M W Y :w,ft f iUy% ly % c s n-_ MV 74 m % g,;j @% n ;74j %WW h - t-cm. 4 & cuY s y nt u; w~wRbg;g qx%Rm* l w. ,+ p,1 m%w%@g^ 1, . ww qp gw -- egg y y1 - -. m,e t .v Wf GQ% ( ip ML l% Mjy @ whicn the fund acquires ln the open ma ' ;Q(N 1 ' gW'Q;id.b@Q~%e >\\ <[ ,n _r.. Am "V - $, ~ ;. m; g%u 4 g Wa 4 .a w . Q 7 4 n.n c w s x g@Q S M M M @ Qs.m%p6The following table presents th,e prin m ? y d 1988l book value shares' issued by Citicorp;The expen Q unded status at December 3ll1989, and 19885 C~ h t 7atedwith the planamounted to $8'[millionin1989, $69,milhon[y S M M*J

• iJ

.g @ g 987 g \\ y $['$Nh{.MoroaudMi Pundedsessus 7% ' s W {' <tweeE M noe:. :DuringJ988.the"shareholdersof Citicorpapp U e@ , s incentive plan, retroactive to' January li1988, to replace the 1983ymd $W Plan Assets a Fair Value, Prim. arily Usted 6 4. 4 s p Stock Option Plan (the *1983 Plan"), which expired March 31;4 MWb s' g4s Stocks, Fmed income Secun. ies and 4. w 4 t t ~ Sq Commingled Fundsh5. J,eb d W 8 basa E $ 150K'.W the issuance of options to purchase sh =- - s I d $wo 1 F .e.u A w v s m % 3dhActuarial Present Value of Benefits forL M ' y X 3 stock'orshares of Class B common stock at prices not less than NM dhypServiceRenderedtoDateb.h% @y qb ' W 50% of the market value at the date of grant llncentive stockf ', 7E MAccumulated Benefits Based on SalariesMF ~ b M,. e < A" Q'r ioptions/ stock appreciation rights;

kpgkyto Daeilncluding Vested Benefits ofM M S $1289 M combi q, p M-j unit awards l any of which may be granted Singly'in tandem l or inh

[ g$ggAdditionalBenefits.BasedonEstimated/g6 $342in1989and $167.in1988a m (8y489 I

SOS > 403 C

$2A millicin at the date of gran.tlwere awarded in'1 ~ ~ f. . m [ stock, with an aggregate market value of approximately hi i ' 1 7 h @%%[/q(gutuyeSafaryggy gym hQProjected Benefit Obligation QMy w ? $ 9 947-- ; $t 692 ' 4385,000sharesof restrictedstock,withanaggregatemarket; % @ PbriAssdtslrUxhedofPrdectbBerEfis ' M mg Svalue of approximatek $7.5 million at the date of grant, weren f M, $Nhh ObligatlunMe,SNW .. %M 3089 $ d 3217 jawarded Q1988.Theseyhares were. awarded to,keyexecutives N %UnrecognizedNetActuarialLoss@ C i ? $3275M237 j 3contingentuponthe rcontinuedemp M, Nh MUnamortized Transition Net Asset %M; ' :P' J (985b ' ; (204) J ; periods of up to ninejears.The value of the sha 6#w ' ? grant is amortized to expense owr the restriction penod. The 37 -s mm +<m; 4 ' (expense recognizedfortheawards'amountedto $12 mill,ionir fj ' k hk A80815 ?$ 949

1 89 and $1 millionin1988.1 142 yaAyu;47 e 19 83 M p mg%wb<a,m,,n'.

' kq $$p%n@c% >,~m 4The weighted average discount rate used in determin;ing theWRM, 1 s m a

t. Plan (the 31973 Plan"l las e'xtended and amended) options have ?M W g

6 actuarial present va.ue o( the projected benefi.t obligation was B > L beenpanted to keystaff members for terms Up to 10 years ton, + d M@Qyh82%'in 1989 and 9.3% in 1988lFor both years, the assumed ratey

purchase common stock at'not less than the fair market value off, # $

$g;i of Jncrease in future compensaton levels was 6.5%d 7

b ' i the shares at the date of grant. Options previously granted under% QMg Posereelsemesset Heatth Case and LBpe Insuranse, J W the 1983 Plan and 1973 Plan las extended ? j % g ?EbeneAss % @ W d M % @ mlgy yC_iticorp currently offers postretirement health car -h i d ~ - MJ ~ ~ ? Dmaybegrantedundertheseplans.Basedonthetermsof theM o

pdfance benefits to most U,5. retired employeescCostsl incurred % 'M 0ptions granted Under the

~ ) d to provide these benefits are charged to expense when paid.W c DPlan,(asextendedandamended)50%'of the' ptiOnsgrantedaredb f 9@%Pbstretirementhealthcareandlifeinsuranceexpensewasi t V i o i exercisable beginning on the first anniversary and 50% begin%hW , $ hh$11millionin1989,$12millionir 988,and$9millionin1987Q n's: ining'on thesecorid anniversaryof q$ MpSawingsinsonalue. Plan ' q'sW,,.1i A y Win addition, the 1983 Plan and 1973 Plan (as extended and J ;,- Ag gMUnder the Savings incentive Plan,: eligible staff members receiveN l' amended) provided for the grantinglri tan ~ M - (@Myawards equal to 3% of their cowred salary Staff members haver i fchase market value shares at not less than the market value at theO skythe. option of receiving thelt award in cash or defernng some or 1 ' Jdate of grant or a proportionate nOmber of book value shares atir N $phhaward equal to the amount deferred by the employee. Severali + ' o proportionate 4 N g I based on the ratio 'of market value to' book value per share at the h,d4 gNjphOnestment options;are available, including Citicorp market value , jdate of grant 3 4 Q,, f _., d"C, ja W9 gf g g g p *t C ' ql1 !I g@3 kMJMi: s In the captions " shares under option" an optionsgranted"inb$. f %}p m*',", t bMG Y the accompanying table, options granted in tandem are; included ji ' Qh L on the basis that represents the economically preferable alternat f; s 9d v%%T tive to the staff membet' '<D ' ~ l t December 31l1989, cptions to purchase 7,550,915 Q Mf D' A hgSh JL were exercisable. At that date,14210,838 shares were available fori a, WQl%t&m a + u S e&e QfL T b & + M& 4%2 kkh$ M[ 3, Q 5]}$j w$F y i f.g J-OL i kb i,

4 h a

% Ji g$0 y, 74 MSQ ( v $q w y%,,, M s r . Mh;dgf h$[%'N ) h N k 1 ' i 1 W %y q;&qq m g @W W W @;;M; &m W ' :m;3RWW<%'@C m rM8MKW%W MTBb %, s:@& iW%: MbWW m d u%ug.%;3lp W Q&% M eM WF Ar W,, WS M m N.v w Wts p Mn%gKydNyx %g g y yp xqy . v *4; % k fy M? d M.y'- . w" n. n;4; v'uybyR q' i n, mgq,. y Ri W n, y " ~h h ~g a . ~Mw m i a 3.%w'l F; ~. n 1 1 r ~ w.g b [e ~,. c s &v &s y(g [M.j4,e n +$t w na u w *',4 [n[ w w' E[ b 1 . ~ ~ ' e#. u g m>ithd Y M cP' My I NI U, .I u 9 w's 0; e' W,'F b' E - : p. =, v[. k

• h' N ih NN N

M

4. %,LI'h :%y m' n'

'q m-Yk I J ,3 >, o :1 p% x Q Q 4 ,m., 4, W

n..p k g Q [ &p %;H ;h;a t

L q

90

9

; > s. y s-

Q Wygpf0Qk

/kus,n,,.-Q~ m[%w q&w d payn &f:py.; &H1 e ."' W kW rl j. y H k , '%:;;m. c? Q4.en s T %;g2 m WJn u s m' m

4 n ;spD r

s a ~e

• fm w' V,.e g< h, x Qg 4. %% m y _.K

'Tk -Qg ' ;4- ~-;r-h s ^<1 s + A1 N:Q fx g e g#p MW f;M.G ' V,, %; y;j g y i f f( e,am-j q WgqMg%sg%g m t. 9 i 4 q,@, y 2; --r m 2 s y % 1K W .e

i

. o Wo ' e 7,tg,e w p g,~ W 4y 4t - g g.. a mqgggggh m w m .r ,4, r. e, <y a,#,stga, Mg my, mtieyMtingdch. hsliipuc5se%p %n >g,g q g 4a th a+ y .,o m m ms-c k ' market value shares or'otheti 3 $93 rniyion at December 31,1989/may be used br the purchase g, a p- ~ SMbrms of stock-selated awardsAdditionalshares may become L l. t of shares at $24.75 per snare. UnderJhe terms of the June 30J. MdkausilablE br grant under the 1988 Plan to the extent that presenth } 21, M[9 s outstanding options under the 1983 Plan terminate or expire; ~ g4 expireL 3 @Sy)ag +% $e jy jO # @ p 5 unenercised " 4 W lM N 4 : s WK " M ~ W on March 31;1990.7 A.JM, m f.. WN q UndertheagreementsenteredintoonJune30(1986brthe(Q% ^< + g fpurchase of market value' shares at $29.625 per share and book

o*W" L book Value shares were purchased in dkC. BDER9es In Opetens Ansi shsess M Optione

?value shares at $26.784 per share,388 market value and 13,568 Q$ y. Wpgw s ge &b segs s wm ; value and 73,218 book value shares were purchased Iril987 W ggw w = ma a r ,m u 4 QF December 31,;1988 g e &;, ' y 16,497,265 q $i 9 to yk SharesUnderOptionat@ W@A A1 . TheseagreementsexpiredonMarch31,1988.M1Mr qS c... yyW;Decembei31,1989gg 124,447,358g$ 9,to $2D ' 'BUnder the Executhe incentive Compensatio y 9 pgh 4hM1.- M?i Options Granted 9(&Cp L cash, or in market value shares, are made to key s $$[1989Mdyg g%Qgy y6,500,525 J:$26to$33b ? payable at the election of the participants; or br elections maRM MW1988W@. ". WM.C 1,939,325y $19 to $26? 5 prior to December 31,1987, book value shares, in one installment i T? f D % 19878#b WJ4, Q7,569,633M9 to $25 3 br awards made in 1989 and 1988 and in two installments forW s ~ @MNOpt' ions Exercisedf C N "s q% ! WZ 9 to $30 i T aJvards m

/

1 ~ fL M 1989hN%;e, y,, me,, M.4,661;264 0 $ , AThe aggregate amount of the awards was appioximately 9h @ y$1988 M 4 7 %, g& WW c1,306,088M 9to.$274 $25 miilion in 1989;$24 million in 1988;and $12 million in 1987.jp M L @MCOptions Expired or, Terminated N@y l, M9877 $ Wf M2,3297999 $; 9 to $32i 80estr6stess StosetPlan i 'My M 9-3CQ lThe Restricted Stock Plan grants aVvards of market value 3 MdWl989MW, MMgf . Si l$}OfQ 1988 g&yh5 qWW"g4599,826y $:9 to $32i %7,306 dg 9 to $31 ? iover aiestriction period not to exceed teny key Executivesicontingent upon their continued employment.bl / Wy ? 424,885 W $ 9 to $31.'[? restriction period No shar W@h#h, A < ' Plan a $ d 1987 F S N Y. G ' 5. shares at the date of grant is amortized.to expense owr the$h 4 Z @M4 W M M 8eos h erstkase Rh; WM @muY, i Restricted Stock Plana total'of 228.000 shares with'an aggregateQiW ! 4 6 hThe1986StockPurchasePiarhl fireplaceithe1983 Stock Purc - swere awarded in 1988;and.64,000 shares with an a (narket value of approximately $4.4 milhon at the date of grant 54 Mhsse Plan lprovides for two types of offerings: fixed price offer-t * : market value.of approximately $.1.7 million at m T Mings' arid periode purchase offerings. OnJune 30;1988, a fixed, Awere awarded in 1987, The expense recognized l N@$$ subscription agreements. to purchase shares at the fair m T[ years employment with Oticorp' or its' subsidiaries) may enter into t price offering was made,"iriwhich all eligible staff members (two ( (amounted to $0.9 million in]989, $0.8 million in 1988;and fpgggg 7 y' $tomillionin,1987.; "o 7 4(*j'+%g yg%)y ' "4pghg r [$$ va!U6 on the date of the agreements. Such shares could oenV$ purchased from time to time p' r g:q~ y;f" f [, A,g 1, y d M yg @y M+eg 4p$g( o 4 BJ " s f s y @ December 31/1987,eligiblestaffmembersenteredintoagreet f y 4 J, ig@ ' mfQ[g ,q^ ghifnentsfunder the 1.983 Stock Purchase Plan, to purchase shares at 5 y " , Q@ j Mgg g[^.g@[ m T WWeither the book;value,or the, fair market Wlge~on the date of tfie. r A !;; y'43 Q ' j g }yX 4:g.44 y @g s ptagreements.m ( w r:c. ; e ww a.. nW y 7 gAgreements aggregating $139 milliortwere entered into on "'m m ggp3ggg g@ dl@h@A.e ' ; Q+; & yn

• JlMune 30/1988. Outstanding subscriptions, which aggregated)

% r y's/.T \\ g*, 4 A p %g ~ - c ,,p:

) ' '

mi, W; af a p> 9,. fk - ' i N h* h WNdh8%gml wm },) y

n

an s

g N Y ' ~,' # > NN n' D m&egMR j L pg m WW %1 1 t pus + m% Q QnNW% c l $fmWME %s,'>n( ,;4 '. 'g r a. %gmJ 4 ~~ h I. ggdh m: e a 4' W%s -u 4GP,mw%m, % a 4 pM ggy[m p a t

h. mL = t w r y'd N N, h. M. 7 f j *$

n(pqnr n - 9 1 y 04,. ty$$WQn y =. a pp h L, y 3Ql9 :, 9

1. W;n!M M

@$ nMW m g i y W m;j < .;y' y m A;M.Q. = g c mp;;h1/ 9 .t (,

• k J;ge%gew4c n 4..m pwm m

WWy <qr ',Yihhff hh s %. d ; Jw 1 %- m-- Q ~s $$@y &gy ', P @ph;@tg;@hMW NG W y a W yg@gg@gg d, ey $d5VhN[N,3, eM M N W l W' A y yL k pg. q gb y ~" %wp; M;J<%u;p.),w'?%',M,,w@gj , ;;g t W .i; qq;. >y.g4 gy;, h; F @QWw@;p%fk hhh@kipay@g%)'g;jg&%e phq w dh Q M b ';% M s*i. n q' N M vtg g ; @ g( g;f $y9R N j @k ' N ' y M g f :gQ3 em v mga > ,4 Wwg "E _M, o W qs We e m 4 b U M < % :$xi Q ip W '"4 _y e h,yk v ,b s h~M Q+ g@ %n D , L p Q X M m M g 9.4,,/",; @ " ,a%, o 4M1.'*# l D3, & i M; C + $@QW~Wy~hy:g%,q,$y!@mhh 9%$y+ < We hw w -l"g:yn nmy

+ -

r m= m w a M, imp $ Nd M Md 000 < Mh M $< I'1,E[ ($ NNN .W,N,h h~. M Q Jgf ~r w m w ,x % w. Rs M ', f,,*, <>r n; " + T nn %,,;WQM;U, i MQy JM o m u, m, ~_..,.mm muW.

1. 4 qq MA$g$ M M OWW ~ ' A '~ ' I W #

w- , 1 g,,. y ( 4 itions and credits; Reclassifications have been made between M:MdM + > 198k s current and deferred tax expense for 1988 and 1987 to reflect th69 WQ W:w, morpoemroewvwe +e, % s aE am w n n a 4U H <*u

• 1999a

1988 ><

w g eeu i s - mcme< ~ w ', tax returns as filedm%cwisidrt the Ouieffecioffrwestm p ,..Vs. shb;$g Nk3 Provision.forTaxes <J."> M W income lg!M,onh 4W f 6 Q, 4 ($894; R ties transa:tions' amounted to a provision of $62 million in 1989M R 3 ' EWithin the total A:@ A hM%lncome Tax.8enents Related@ 481 885g ($ 1,009j of y' "/ 7 $39 million in 1988/and $88 'million in 1987.,c 4 @[. % CAs a U.S. corporation, Citicorp is subje Mgfg Kto Foreign Currency D#! D@g% Jg. ~ bg@panslationlieportedI.ny.W ! currently on all of its foreign pre-tax earnin o:. m Ngj Stockholders'Ecluig (40 1(13 9 - (43) ?

eign branch or when earnings are effectively repatriated if earned

[4$f ([ Extra 6rsnary1ternMD@m%ggg RM d@ V g~g~ # y 81,0810 ($(996c 5$851S

by a breign subsidiary or affiliate. Itp addition, certain of Citicorp'sW $

gRi ' J _ R,," Jdomesticincomeissubjecttoforeignlincometaxwherethe .. gi@VVAY kk3 CarryforWardTax Senehts7 h%kygygg naama'as Nutes id S[E $ 1;0SI IL (f(0) A s 4 s payor of such income is domiciled overseas. For purposes of disyggj closure under rules of the Securities and Exchange Commission,qQ L $ ' 83c,' E $851 >+ 7 oreign pre-tax earnings (loss) approximated $427 millio i 4M f fy@gl98.Q, D_ _WINWm%fs m - @ AA.M i 4 L M WQAgule> 4imit tne extent to wnich tne futu.re tax benents of certain ? hh h U result of.the net Sss reported try Citicu p in,1987, accountirfg ' Deferred taxes result from differences in the timin rbcN aginition or,eyenue and expense fo, tax and,ina g $@# $gi fnents, Due to these limitations; $301 million of U.5, federal tax 2 Wdeferredtaxesby@typeof timing'd 4 recorded transactioris can be recognized in.the financial state < e ipurposes. The bliowing table' presents the components of hNyd q hy beneAtsgeneratddduring1989perenotrecognizedin thefinanO / y ,, O ' pgj% a UMM cial statements, and approximately $ 700 million (at current /[ ( MS $$[bnized tax benefits are'available to reduce us federalin rd a%,mw& Ww 3,,,4 %,seMM#4ssH$g statutory rates) of tax benefitigenerated in 1987 also remain t El J of Deferredhuses e f 4 m g % unrecognized,Tletotalof approximately$1billionofunrecog, N ,a ra $ 8 .O $;fh[statenients in future years. During,1988. $160 rpill,on of previously; taxes that would h 8-s on ' E(N)MN(35d 9 eg J<%?M n interestincome$NbdrNNYN{f8 ' 7 h:kn M V 4 , Q Q unrecognized U.5J federal tax benefits gene ated in 1987Were ; ( DomesticTaxes r disg$g/[D @zedasatraordinarypomen. lecog gp m ' PensionSettlementWQ4[.126Sb, J 61$N M4$

Income! d. JW. W a

/ j - J 9 - M W )49 f & WM N Wb %: R CasuponentsofEstalIresonne1 buses Is n% l Mortgage Pass-Through Sales % /48iM #28WM$34Wpig dgWh. ey i heb [ Tax 8enefits Not Recognizedc, # 301/ e' ?87 PM + a. x .m e-),M N u ^ a9884 M-y%$=me ma5**** Othern Ni JM m i x 181 ' 5 (135)pQ s h h h D esnestlej yl d % gj f @ C M E <,fMg{n /,venu f. . 7 7 c asces; ($31'99 ?$9(69)Mk A ,t @T b b us.tn N%diCunen $deral%NT# "= $ E1046 f$ 120 % i > i.~ MW , i V ,4 % o - - 2%~ W &c,1 M Mp3 2 y m .,m ,~ s F Wih ~ m: kMbM I a The following tab'le reconciles the U.S. Federal statutory, tax rateyg W@~hw$5tateandLohlM~ % der dA71ii O74: . i 82 L, L to the effectiw tax rate on inco mM We A % $ f N N, 9 @, M 8R175i L$ '202? 7$ 188i ' [dinaryitern4 ( i SD J "W P f e @43'd-9(W 4 @!gg;SS;FederaOQ y g& $(%@20( ($ 2552 w Deferrediyp4N$ MV $ _ f ' " ,F~ "o ~, .'WM Mi 3 WQ Myg%%5tateandI.ocal; 2., ?,N, i $1 5

$(122)J, Analysisof EWestivellutitatew

<$ M [ w ,,? Wh4 64 - 1 53? A ...,P <> see P. Mgg khhhh h [a ', 9 E'M @N k$A 45 M L$ 319? ' $ -(69); pmm m gy 44 kd!Qg$[J *'8D8hh.7 $~qhm} 52(. iStatutory'U.S. FederalTax Rate L, M~ W 34.0%W34.0%[f(4 1 ML g - Changes from StatutoryRatef ~ ' l[JQ y' ~ 0 bQf 9E9f9n ; W W fQ

Resultingfrom:; J

.. ;; $W x M gM(Substantiallycurrent)i se. 17910 0475J 7320 iTax-Exemptinterestlncomen., 5(2.5)! 0(1.7)i c(26.1)#; W 1 h U[ '$1L05I1 1$9961 l$ 851; tincome Subject toTax'at CapitalI ~ _' 7 g:JfQ,ijh

h. Q @b k N $ M U

g

!ggueraiendinarpateenW, ' ' "Im Gains Rates /i.,,.... .-t w 116.0); O %J5 arryforweruf1but7 d3 State and Locallncome Taxes,f j ' g: x w :: bC gp s Net of U.S. FederalIncome' h, %w sene'Iss tw.y+. a.~,. . +e -Y w O (160), Tax 8enente..~..... n o wx m . 33. <,37.6 +o :@"y 4 = ' 3.9 l $W%ym70eumeccansTAus"s. W L$1;081! a $-836 e$ 851

Taxes onincome of Owrseasi aW 1

h gne s.~ m., @MP$Alth6ughnot affectIng todl income (Mesl current income tax . Operationsi, 9.8j i3.Y 4 0.47 i% 9 @ Nyments mapdiffer from the amourits shown as current as a ~ Nter-Tax Basis;.... s.. Income from 20050% Owned i' NM Nfiliates included on an : (.6)_; ~(5.4) q q MMhd result of the fina! determination as to.the timing of certain deducb c(1.6); $$$ ng; ", w - ^ y; T L ax 8enefits Not Recognized ; j: -- Other ?. 19.6 L 332.4 E g phN es% 4 ; 4.5 -(1.1): ' U18.6 5 i 1 $h$w$ -arrscTwETAX RATE. s 67.5% D37.3% 310.5 % ; 4 4 e%pge n; ww, a- - um m .e . 9 x . #v ! t % 'L,%N. > "'i } M s M 62 A,<e'w %,+ A ~ es . :d h . m.hn.k. h.,. N... Me _, h_ :.., dM !,,, + --g- M &p 5 M ei vd mm mf:n:. m g:n s3.%m %w# p n:%{m &w p.w,~w&m ~;J, aps p vg na 4~ m%, - w' ~ +. m+ m e w 9, mgw #w :w. p.b u w n pa %w m%,4p>50:pdn u n m mm % m,,,og: g.,, y 1 wg m wm 2 h.% u ce1 e %m ' e mw -H n sang e - y -g

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, su., ,ni 1988 g W.. ...n ..L M W P. ,W 7'76> w test ) y %ed,%ysmucumtnmnumcxeM o %$%'ist 4peeene (Ames) Ameliable for Comunon Stoettholdiers W N $ % ' %,. tug yU@%dW, vw.J.W @Qgg., d@) ${510C:,$$h46M $$D93%E KlMW MM %@htf h Undistributed Portion Belbre Extraordinaryitenfh. a i@n a.a Qa.DistributedPortion(Dividends)WS V g N.,1 "e-uw n v-w-www 1 1,653)6W &. l35)P M 1.133G ? $d e 1 gg/(income (Loss)Nallable for Common Stockholders Before Extraordinaryttern G l: u@N$s in w-a w -m:: fi Ng@$c. Extraordinaryitem) y@m@:: w@wn v ahRwdhM Md. '. f M@: WWW % .+5 8 r 375,. .160 MOW $w!S, e{ N ) W Nya C W M D Y. N W M As WQ/MG$F m 4 W$1754 W.$(1,274) %ne M. y xw y up,, ~w .4 Egu m n&q ?y pfh$j 7 fk_ h llh :(5 Y WeightedMrageCommon5haresOutstanding9MarketValueMwJd, _ f iMMj4Md316.2Rl f3fl'6DM82.9M lh l l hhY h 7% h [ ll, i kg%Wei9htedAerage. common Shares Outst N M Book value y;%ggg 4QWSM% 15.7{ & 6.5MM 3@6p@0g. M4 r s m&w% m,W i 4.5 f WQ.36 M W D TpQy u n$tock Equivalents";M;w.. M % Common $m ,n smu umw vy &w v 336.0P. yd320.4% 289.d hy gUd. Shares Applicable to Distributed Portion!.D lMCM ( d cM7 W.NW Book Value Sh r gm mw,< naawm-n . a n. y < ay e n w... 1330.1 % @iNR e Shares Applicable to undistributed Ibrtion ! @a ?M. M,% 4WP ~,7m? Y ' 5332.5 %, ' yv; d289.0 MM , y%WfMh@hk k Earnings (Laos)Per'Sh$re l[ ?, U g, < hykMa}d DistributedPbrtioniW@MM'Extraordinaryitemt,Mi * ', M . s. 4,., l $ 1.57%$w,,44 $ yl.31 ' W 4:[::ma ' [!(A1)1 " ' c3.43@MM1 W1 .m,gS ,J, K.x.w a W A Nti+esUndistnbuted Po.dion Before . m, y. 4- .ww m a 4m, s..~ ,a Mg. $@w$@ps"4Q$ht.161, k$44.87M, p$ hpgtneense(imes)BefoseExtreenI0nerylesen6 mg, FW .m.W~w 0.49). WM?yN @..%@Mf c+eiExtraordinaryitemW,u.W2r x, min. i s.4.3 ; ( ~, o 1 w. 4 'i ?4 '. W&yu. W $ 11.16 V NS US 36V 5$14.41)aQ Mi% ma- _.. #s % meeg asETINCosIEt&OSsPM i NW, w i., m ~m m, c 4 y 6 # 4g W,1 @s is.+ war purpmes or cawang eanos fusi per stwe. neyncome possi adaNe a common stonnoom h 4aed u ine at=rmsena eewenn o n i& D & f i(M sl@A _i M E A M M$g a p W:m,t nenowcompensmonpaarM77 A L C i '. mcommon saw equrets eenewne stwes enme mder me esecutw wenew ' %W e n' N AlcS"MyM]M$NkMS %%fRMW.% D f.W.9k/$:# bMW 4&g"'?% i Q$""P"* "T9 *""*"* 5'9 *** % ' ' ' y g p * % ; &' M g '$' Q Q N %.% NW! % W f.d: Q diluted. earnings per. share, assuming corwersion of alt.M &C M,W w M$% Fully 3 %$4 ~ W N c m m y Nu p s:g W M M#[h outstanding corwertible notes and the maximum dilutive effect n %, @*( 'E; I QL gy dp O$Q h of commor) stock equivalents;have not been'presen_te'd becausein 4 y %yh@, Mahnthe effects are not material and, for 1987, would be antidilutive,: sWi W ; Wv 7 %@g2 m @, g@f y" Q f ; gp $@dh(The fully diluted ainings per shars computation would en,taiM, adding the number of shar ^y" e _@M M? W g.? r 9 4 '. f y 1 c, YT I

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. h ? 5h pg@hY hgEMINWSB fl408)e AND ASSETS 1w FMC M Miosses recoided in 1999,-$160 raillion of tax beneAts recognized asM% gjp f: Citicorp attributes total revenue / income (loss) before taxes andh M an extramdinary seem in 1980 and $259 million d tax benens MM!kh fjggg extramdinary hminet income (!oss), and awrage total assets tot ' > related to the $3 blNien provision recorded in 1987; l4) allocationN ~ pyhoperations based on,the_ domicile of the customet U.S!possesMSR ? of the diftNerice between actual' net credit losses and the pr#WM dhq@!Jons a5:ncluded in their respective geographic areas @k & % siori for possible cs guggbie'to maloe'a' precise.separmion, and various assumptions mu pgg 8ecause of the integration of global actMties, it is'not practica9. ft costs lolherthanthosechar he'WNM MuRN / i No portion of Citicorp's cre'dit loss allowance is SecificapdNM M$ g be made in arrMng at allocations and ad.justments to be used inC J,; Mallocated or, re M@4P'ese'iting this.dataMA%MW M.. Wll) charges for.allband the e qQ ~ M$ M%;@6Mhe principarallocations and adjustments arefunds employed.that are not generated lo gggpamount and nature of the assets and based on a marginal cost of Mgrapnic p ~ Mqdfunds concept; Citicorp stocidK2ers'equityis treated as gener 3.2 Cincludeyear-end sanwance amounts of $3,792 million for 1909%D Whg@ganothedncludingadministrativecosts basedonmethodsj y g ated and earned based ori each area's percentage of total assets % 7 m 23 me ge penses incurred by one a,ea on bena,f on ioss,,o ionamoon,o $1.202, ,,n ; m 0,,,,on u NWA h1988 and $3,33s inigion Ibr 1987, in addition 4ppK MO @g$Mgegensesdncludog allocatiorl to lbreignlactMtles of. $39 million PM{ tion'of.the'apowan allowance'was transferre60 the gintended toreflectservicesprovided;l[3)allocatiorlof tax % M, $300milhonof the to foreigri opermir',is in 1987MENA! $ ppb w AmM&mi y awwww wwc m'waanu w %g sin.a *no-.es n u u m w m e mem o Ahbhpkkh?h, hkNm +Y : b h h d A Y k N ! E $ p w$ Y Y h iwi & $ w $ h f S.q nf k f um A h N wiyanAhp4 + mm,- == m-e ,nsam g p%d

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e x w yno ~ m w I h hD hhW k 5 !&w%m& $'pr % n 55 MMP c i WalC'gwe d;N@ HWY b ¨ iS%v > Y, %wa. ; %q.mg%N05?0l$ n! &. g h

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' p/ n e w . c, m + w Qm..MW f d W J JMb . - an .m.m W:3 e * ' sy, SW %ww{Ww n,l>Ws %3 GMWi% e @n.e wn M W b. v rk m m . e + ,Y , hB l d,NWhiCh are described bel 0W Nas approxinWely.$14.6 billion andMiff( % ! Mg!Oticorp' offers various financial products to its customers to meet ! %$ $10.1 bill on at December 31,19 amounts, approximately 85% at. December 31 1989 and.92%gl@ %$ $@4 their needs Ibr liquidity credit enhancement, foreign l exchange. a@j at December 31,1988 rel y / @T g and.intesest rate protection. Many of these products were denlQ' foped in response to the groMag sophistication of the financial S st Oticorp also' has secondary recourse obligations 'under servic-? 1,y%f mallets and customers' needs for flexible ways to manage fundM s ing agreenpents with t ? P{W(of these products maysene to reduce rather than increaseQ ' * ' Z[ ng costs' and foreign exchange exposure, in addition, the offering ( ' residentia(mortgagesatDecember3p989and.$7.3billionatM L 5 / q

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@$2 VnotbeenmarerialWWW p _ J$$MP %&p%%y y N(W All products offered by Oticorp are subject to its normal stnrW Q b gent credit standards, financial controls, and risk limiting and( , f provisions related to the sale of participations in pools of creditV:' M%M y$ present or futuse fundert asset or liability positions lbut areM '.d~ ' On 1988).The monitoring procedures, Many of these products do not entall t g j card receivables of $6.9 billion ($6.1 billion in 1989 and $0.8 binion Ly $kjhcontracts. JMR yf W NbM&Lef M4, j transaction:The excess servicing, fee repres 3 instead in the nature of commitments, guarantees, or executory 4 excess servicing ' fees that Will be earned over the life of each sales Ngy:M Qj jp (&ollowing are discussions of certain significant products, with F %and is based upon th gg 5VW indications of gross volumes.$M QMfw is t 3 i Mreceived from Um.iieoiders less theyie%f paid to investors <transac 1 gfj/WNWR$ MdWCA: _ '

• 3&n Mtioncosts,'creditlossesiand a normalservicing fee,Whichis%dM MQ% 0 Xalso retained bycertain Citicorp subsidiaries as servicers. As specli 7 s

h@%@4 men N '""'* - =* M w R Y 1 M Q f W A.f J each month ls deposited in an escrowaccount, up t i fled in each sales agreement, the excess servicing fee eame m9 Citicorp andJts subsidiaries had outstanding unused r;ommitn %psy tinderwrieng facilities, or to extend credit in the %Qments to'make or purchase loans, to purchase third-party Mi ? 4 determined maximum amount, and is available to reimbursea% f $M receivables lto prowde note issuance facilities or revoMng n .s M

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l amount, excess serviciry fees are p ggfinancing of $51.8 billion at December 31,1999 and $48.3 billion m at December 31,1988lThe majority of these commitments arepn $g$ continge' nt upon customers' maintaining specific' credit stan-i ) subsidiary that sold the receivable and are no longer available tcQ f credit in the form of retail credit cards / check credit or related dW6dards. tirtuded from these amounts are commitments to extend b f absorb future credit losses, The amount available in the escrow 9%wc. $$gplans?in addition, Oticorp and its subsidiarles are obligatedj ' 4 (approximately $ 12 millio ~ M lwas approximately $209 million at December 31,1989 and 6 Rdi $g C Q gp under various recourse provisions related to the sales of loans or monthlyexcess servicing fee camed was, net of $206 milliottofifM% hc4 salles of participations in pools of loansJhe maximum obligation h 9 fcredit losses /while there were no j% under recourse provisions related to the sale of all types of loans >w; H(eN J%y;q%g / 3,ja j Q Q y h gsil-l g g s g fi g MM egept sales of participadons irYpools of credi.t card receivables ' KhWMhm ' W, J % Ml# Me 7 Mm M , M, 't & cm fA P' W W

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, b, W g% swomo~' y 3" y b gwaumaceomwsnweee u-Cm,e'" 7 ' num & c anus s A sus + useo z: 4 4,w m t h n. k Mb. h' bN bN b <d,. ^ki Ghh 'i t NM$86dGuarantee,Performanceywg' / T,9@o,. v > $ 1,653 $e6A48U$i4,8650 s - J f < P2,100 0, fl66$)" ';$ 03393 ~ L (9.57%R,Q2,346Q .W@. j $t3,553! sa 180N34.86%f f %"hinsurance,5urety @p@andMunicipalSecuritieO OcanPaymentMiMMgf. p MOpcons.PurchasedSecurities, Escrow?.1;m. M 4% i 234 D11IM4,82%W $718 M 553 Ul y d 4 4., ... %,, W Vd 9597 M S 6,762#l l p @!%8ackstopstate Count .s .763 [. s200 l,'Ol7 T $45%% 1,300N b A2,106" ' 14,607@e2,138@l6;46% ? @N$AllOtherDebtfielated L: J. ". Ni$gysuiD@ M.o M. N,,. N... f512.837' <$7,69I f ($5,503D 9830%[ < $26,0313 ~ d dMnA m a r W u; ~a. F. % ' x q xw rm: 1 x s ;i 4p,iw%g. ayp~,h .sy W m a o ~. Q Stonegdettersof Credt A _,<.f ,* ;p,rovide a payment mechanism for a customer's third-partyobli9, j pWB$[ enhance the credit standing of Otibank customers. Standby l y 5tandby letters of credit are used in various transactions to f ? gations; to act as a substitute for an escrow account; to assure y d RM 5 4 l payment bya foreign reinsurer to a domesticiinsurer;and toX M >q $ h ters of credit are irrevocable assurances that Citibank will rnake i g assure payment of specified. financial obligations'of a customeO Q gd Jobilgationstothirdparties.:% payment in the ewnt that a Otibank customer cannot perform itsig ~' . t W Cof creditJI.osses haw not been materials m a TU 4 ~"

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? , w 3 ( , "_p,b ',wg4 F4> N NDMaje % ~ - a > wh 9 pN y%yiMW&aw(t+ a s gmm y i Y. h%.n,..yMTf M@n-@ + <~~ M. @, G.;m , wm i. 1 r v. r f5 Y b IN ? M,Wy F 7 P % eN f. aMLJ k _hfMiiis; W h. M,:h@ h kSh %~h @ @r $p Mm L n7 }ym M 93 em ww ~ 4 - w e ug y [ i f h M k j [k m % g f<(M[kMYN < kin)M" h ( 3[j }h ( N .s, f h8 QIb$h$ $Mh3[I' h O7 pA gf kW&M ' ' MW i %:& 4 # insuranseAsahrfstesOAh ? '5%og&&, WNW >MM:!y&& Q:; %wrd ? %WMg% Q = qM2 M@n % ";W ~ g i

1. f he /W J 4 eWtime a financialinstrument or currency at a'contracitiprice CCN f

i $$AMBAC/a wholly cwned subsidiary of Citibank.provides' default E ?which mayalso be $6t0ed in'castt based on differentialsWDMT6 $b insurance on bonds issued by U1 rnun cipalities, Under.mbnicit. s between'specified indices @ w6 Lfhf$MN $p%pdfpal bond insurance policies, if a bond issuer defaults on an r n;Wq in most cases, Citico W DSinsised issue, the insuier promises to pay the principal and interMh 1 products as part of its overalijnterest rate and foreign exchange ph [$ % est in accordance with the original payment schedule l Acceler@ itradng actMties which include both funded (asset and.liabi!)tybb Ni 4 @i hjQion of paymerit under the insurance policy by the insur O y M3Mh!i9cnous credit review along 'with.an ongoing risk monit 4h!M.AMBAC's$% W%Ni.jn ML, i permitted. % g securit91n ijs trading portblio and at the same time have futures nsurance underwrking procedures include a % ', gcontracts.to sell that security The tosses on one position may sut y Q Q only invastment grade municipal bonds, by drwrsifying its nsk % yy Rq' p7 process! AMBAC limits its exposure to. losses byunderwriting MM jy {. Qby obtaining reinsurance, Fremiums are recognized over the te

portfolios as hedges ofinterest rate

gaps and forei

? A geographically by type'of bond, by single.!ssue. limitations, and [, ' ) positions 4% J@@My$$$t@gn jg&E of the insurance policy The amount of uneamed premium was ; " g ilces are also present in [h g sery-p e hMW $357.6 million at December 31,1989 and $325.7 million at w ithe various operating risks that exist in all financia @y %FDecember 31,1988 Resenes for losses are provided for when : i h p Price risis is the exposure created by fluctuations Jn interest and % 1 M @k ( $ldefau$ b9 the bond issuer is reasonably anticipated; f have not been material. The principal amount of munidpal bonGP the volume ' pinsurance in force retaaned by AMBAC was $312 billion at A M4fment, and the volatility of thel underlying interest rate or pp Q h iDecember31,1989 and $27,3 billion at December 31;1988 The C Aexchange rate; Price risk is'affected by the mix of the aggregatef gj i ; /y%,(municipal bonds insured had a weighted-awrage life of 15.6V9 % portfolio and the extent to w j. %) ears at December 31,;1989 and.162 years at December 31J988, l3 / ysures The price risk of an interest rate swap, for example, willbe h phhMCapital Markets Assurance Corporation (CapMAC)Ja wholly-f g reduced by the prese Tif MM ovvned inderect subsidiary,of Citicorp, insures the timely payment 4' dinterest rate swap8 g Hj of principal and interest for hsues of corporate bonds, deben-7 }j ucts on.a rparket value basis that reco manages its trading actMties in these specialized financial prodg (gi ytures, notes,' asset tiacked financings, and other taxable obliga4.. 4 hytions, in addition, CapMAC may underwrite'otreinsure financial > j? or losses resulting from changes in market inte g Q@ guarantee insurance for tax-exempt securities,4, p C W ' W rates; Trading limits and monitoring procedures are used to'conW dd CapMAC hms its exposure to losses b) underwriting only J. . itrolthe di$hnvestment grade, obligations, bydAersifying its risk geographiO A7 j Citico.owerall exposu My.u/dF, rp utilizes a variety of techniques to measure and ma L f Mg cally by type of securit,ies, by single issue limitations, and byg < f age its risk exposure in interest and _ foreign exchange ' rates.' WhilejMi@ QQMobtaining reinsurancef CapMAC further limits its exposure to A L ' ( the complexity of Citicorp *s operations pecessitates customizedM Rf flosses by requiring owr collateralization, or a pledge of a standbyg q rish management techniques foithe various businesses ith@p J ' N hu3 etter;of credit or other third-party guarantes2WQ, - j. O engages in, the monitoring procedules generally entall art objecM l @ OE{? age as risk is reduced. The amount of unea NhjPremiums are recognized owr the term.of the insurance cover

tiw measurement system, various risk limits at appropriate control e

{ Ngt& 31l1988 Reserws'lbrJosses'are provided when default is re g v p ' $blyanticipated; losses have not been material!At December 31.Y :

l. niques enable Citicorp to prudently manage themaximum and g j

$. h 01989 and 1988. CapMAC's principal amount of insurance in force %L.

historical and current implied interest and foreign exchange. rate f gk g detained was $2.8 bilFon and $1.6 billion; respectively Thep &

, ivolatilities.N $ /MjM,$@% fi. 'iO g > l M@k. Qweighted-awrage life of the insured instruments was 9.9 years & r Credit risk is the exposure to loss in the event of nonperibrd$ 3 ? Dabilityof the'counterpa Mat December 31;1989 and.16;4 Wars at December 31; 1980s ' f pF% Interest itsee and Foreign Exchange Products i mance by the other party to a transaction and is a function of the

f yj ' g Citicorp. offers interest rate and foreign exchange futures, forwards,H

i ~W % XQ %$g u y"' 4 h ggoptions.land swaps which snable customers to transfet modifyJ ' QN Nd j < q j, $w7m%,4 e7 g@apd forward contracts are commitments to buy or sell at a future = or reduce their interest rate and foreign exchange risks. Futuresi t 7 g i m y; < 3 gpM $ Mdate a financial lostrument or currency at a contracted price, and - , Mg 9 'a / E m ,f % y 'C 'd q; kmay be settled iricash or thro 0gh delivery Swap contracts 'are f ~ 9 i >, tcommitments to'settid in cash at a future date or dates, based on ; ) ' $p$sdifferentials between specified financialindices, as applied to a - 4 4 ' E q" . ;j

i'

• f

?H 'n NQ 4 i ] [ Sh%notiorialprincipalamount.Optioncontractsgive'theacquiret fora?, ' 1. 2 4": ' @d [ M %y < a,, s, p, # @M fee; the right but not the obligation t,o buy or sell within a limited i dy 4 W v am , x. g p y4M P,w,s ,g i y g: 'p g gp.mh ) 3 I ',b h, h < 4Are,J w,QD ", + ' "e l YY Y 4 .am 4A m 6 pem@ffjj a~' c / e-f&ff&w.v Q g g%fg w hlQm <e GY ?p%lg

• Jg :

p W m l~ lzmfNkhhh~hff ll{'f, 1 . ( 1Sv>.. DMN MW ~n e r e o i .m. a - - M y %nW]: %#W Wy%m M W$p$qJqm %m%g5<wi@dHyyp?4 L gg# fMRMgpp, D 'c+M% hc@g'y& Qt a Q W pn" lW Q1 JW ~T . M; e4%,4vWgg M Km 7 A A.<qML L whMugi 4

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% g% O $>.., 4 % "ML -w OM %S p & d M g % V@ ' N % m# < %+ W e ' J g$ $s %; j +' JM @Q ' n@bw? %$gqN '/N M,IhQfMy'jfYq$hN.m ( M#s - I h4 ; ;r b <t 4 M %y JQ W, WO% $ N g,Q e% w yZ 9, A0 1 a W % W. , ;.'^gg, e M 4~ V*N & qV < J T f; rL o MMMWN J J Qu%. dN i !dh "MMdu'e to the counterparty will change as a lesult of mowments in j$ er these specialized A g menet rates; and the amount subject to credit risk is limited toi : 1 (in December 987, J ACCOUNTIING S1ANDARDS, NG q @@iV W gf C this nuctuating amount. Citicorp controls credit risk through credit? (FASB) issued Statement of Financial Accounting StandardsJ y$]hk approvals limits,-and monitoring procedures, and the recognition) ; j No. 96 " Accou in earnings of unrealized gairs on these transactions is depen-j, ? nificantly change the method of accounting for income taxes.fory Qf $yad losses related to these interest rate and. foreign exchange prodQV$ ta iK dent on management's assessment as to collectibihty Credit. t. *

financial statement purposes;without affecting the actual cashWi 5JJ L' yd& Citicorp has a significant presence in the interest rate and fora @ fi S

utts haw not beenmaterialA% jfjg7Ly-for the tax consequences of.all cents that have been recognized y; J enacted tax laws / including the tax rates in efrect for' cu 6 ' [elgn exchange markets,The aggregate notional principalM i future years Deferred tax assets whose realization Js dependent dh h samount of Citicorp *s outstanding interest rate contracts was D J " q s yn J $392.6 billion nd $287.4 billioncwhichincluded interest rate Q~r L on taxable earnings of future pears would not be recognized $ ; ge a swaps of $187,5 billion and $138.1 billion at December 31 19891 . J in December 1.989< the FA58 extended the effectie date of & f$ @@f and 1988frespective19 The aggregate notional principal amount ,75FAS No, % to fiscal) ears beginning;after December 157,911 and n OM ? %Qof Citicorp'soutstanding foreignexchange contractswast. _ e ' }announcedits intentionto reconsidercertain significant provlW4 jg 1 9 sions of thestandard. AlthoughCiticorpcurrentlyestimates thatL M. > . $p)n $588,4 billion and $4342 billion at December 31,1989 and 1988c '. lespectively Notional principal amounts are often used to expresp i the impact of adopting SFAS N A y ireduction in stockholders' equity of approximately $350 millio% M

1. $ythe w;lurne of these transactions, and do~not reflect the extent toj 9

J lthe ult! mate effect may be different depending which positions rnay offset one another These arnounts do noti K extent of the modihcations to SFAS No,96 that are decided upon% ji iepresent the much smaller amounts potentially subject to riskJ - gpN Citicorp's exposure related to interest rate and foreigo l gvalue of the cost of replacing at current market rates all outstan s up ay MgMU uA i w bytheFA58C M = ! w w[2b[! @;hy $ change products can be estimateri by calcWating the presentT ; g 'NN QW pr IiS 'M \\ pd% - g M i ing contracts' this estimate does not consider the impact that Wi J Authorized capital stock of Citiba$ was 40 million $ @kfuture changes in interest and lbreigri exchange rates would have? iDecember3L1989/1988 and19e7e14 ,a wz M orlsudhcosts, AtDecember31,11989,thegrossaggregateunreaW

• 1 j *

> " W "(: Mb Nl%wdfSMFA( ggy {& h pized gains on dontracts; based on these current market values, g ,,; g,, wqw ere $3.1 billion for all Interest rate contracts (whkh inclucles ' = E. QWw$2.5 billion related tointerest rate swaps)and $11,0 bill _ ion for Alb wuometcouns s ' Win M d M 3,ee9h it N G w C

• h j# %

kM,,. O.,,,,,8 Y,m,DeO.,k, rs u[r h {a. lance'at8eginning< war $gsan$ pays $"*"9 hN 8a m s a m e e pMt n3 (Netincome(Loss)<W. W3mJ83222 )$ 1,583 f Knon-cancelablioperatingleasesforpremisesandequipment,S " 4 Citicorp and its subsidiaries are oblicjated under a number of a Contribution from Parent Compng.E $1 Wy 2 $178 p h most of which have renewai,or purchase. options" Minim.um ig, [gt i Add {tions,Netg jpp 7 414e S 15 n 011ggg 1. %jirentaicommitme'nts'on non-cancelable operating leases, net of / i R / A @ f,' W - '*q c 8E287%$ 1,6004$? il20hS% Dedueneda\\'. '. N@ @r Mkb ,f psuolease income /are $329 million in.1990,'$788 million in $251/million in 1992; $204 million in 1993c$177 million -

1. 1DividendsDecl$rst db,& d$$750 !@$M950%S00h M (p,f1991,1 i oreigriCurrencyTranslation NYNd" dh 'i"' ?"49 W 523 %

yr } 7@ expense was $,532 million in 1989 net of $49 million sublei 1994, and $734 million thereaftet totaling $1,983 milhord 41 L F W BS Net'AmortizationofIntangibles O ' M/ V MOC p MMp F I k?' 4 rental incomec $525 million in 1988 net of $36 million suble ne h ' MAssociatedwithAcquisitionof3. c N y$gdrental. income, and $372lmilliorun 987 net of $66 million .: Subsidiaries'and Affiliates?~W ', " ' 48N N9')i ' i(ii)fM $ psubleaserentalincome.1 m $irWeOment's'ecurities,trad ng"' I x[1. y bhDtDecember313989/cErtair $ ^M, $t980p$ F 54%a@m$J w1 m> o s h if accounessets/and' therassetswithacarrgngvalueof aALANCEArENOOFYEARM ' U$7,438s$ 8,168h$i7,548E o o $p,683 million,were pledged as collateral for borrowings to h. e, ,9,.ps I Cititunk charges retained earnings with tile adunt of gdddN ?; (% pg, subsidiaries. Citicorp management considers that the secure public and trust deposits, and for other purposes. p/arious legal' proceedings are pending against Citicorp and its ' I will associated with investments by Citibank in subsidiaries and1N i! ) j a affiliates to the extent required to carry the investments at a value*' d ]h p 'pliabili$f ary resulting from these proceed,ings will not De - . not in excess of underlying book value, in accordance withi ( ' 3rgerfalM gl 4, generally accepted accounting principles, such charges are notj ' ( rgyh reflected in the Citicorp financial statements, and the related i dh@hh@jp%N y. i Q Fg a3

amounts, net of amort lzation, agcyegating $302 milliond J

- $303 million. and $352 million, at December 31,1989/1988, andI bdMT MK Fh ' 1987, respectively are included in other assets in the Citicorp con-agd k.,, jd 7N 'S* solidated balance sheet. Citicorp's equity investment in Citibank. g ' amounted to $7,930 million, $8,471 million, and $7,900 million at y i g( {d @ id.,'s. y December 31,1989,1988, and 1987, respectively. $ #{hMV,; \\ W _____c_________ y' e m a 4 f +ng g h h.s(C3.N U, h M k M. v,t+,w e st ^6 n' J ' a % a hn=- Mg m hSMhhh,[mikN bh Mhh S M ya an - o n a!p!CN@n $Nk g g %n&n ~my w m n,,< n. n, m m% @g h + c a;c - N~ a a aw y m r-iM M ; NNS-ves n iwng mj -WFN%MIMWj U, %u,u, , - - +0 Q+ $ NM M 3 Y MMY , r GM',i< aVch 1-w:;n s, -. .k N ,.y. u,. r m.8m o ;mw , 4 a x > n wh.w - w +p,"Z' lp;q,.\\ c 1f -[ r x-o ( t o s

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&*4 M:CM &R;a'.%ha Q M W H" & W @ Wl"M:n?' MUW M V CendensedBalanseshootS, W%n:%MXW % h f*(? h~ / ' Wi %*R' MNS38.OmcomP(FARENTCOARPANYOMa%&7(J, dN f y; d WMvA. m ^ n'. u s w w & M's s .4 M dCondensed90stententof C+- " WM ~ e%, M_, w~M,

• mesamma mauw%s14

& %=mermu# - ^ W LM893 = Ige, m egg - o x b hybPN b NbYW h k9W) I [ hh.. h, . N \\/ -k ' a, 9 I;b-MMlW 4 mm m c4 jw DepositswithSubsidiaryBanks,PrincipaW 4 h. Wi %O N kbh fr$mNsbihbbd8 N, 5dM 500 K UnteesbBearing qMQgyg8 G,05 $h333 bQ N, M DividendsfromSubsid,iariesOtheAr N M~ w %. CfI ifpstmetSecWesh eqygggg g' <gg%yg N.O4,N305kd964 S y ggm m (Maeketvalue$1,363in1989andmih@m:u ; 3. y g gn. k; bl, NH g s gy w$1.018_in1988)4% MS[fQ! g%1}96f :1989yff r Ar'leb$ ,884 fromSu i y " 78"" " 99 ""%estments in and Adeces to m W i, p4 0th e @M N 3 .y mm - 77 $ "' mm .m. mag s j e@gg* $8,8860$3.4695$ 3.071[ $ Subsidiaries Other Than BaniM ; hMIM85,897 R 7 %ddW O h(%Bapense.i i.J ' N xmMi ~d5 $1994L' WOtibank,NAandOtherf [ Q]M@n

Linuestments in and Advances'to L Wh MSubsidiary BanksNag; WNT Interest on'Other Borrowed Money i $1;3081@$ L I hhinterest and Fees Paid to Subsidiaries N306C$lnterest'onlong-TermDebt

[@M$hSubordinated Capital Notes :. WW 1,5775 11.537 ? ; 1,509 f 2745 q p C 686t .: J s nyam.1 M i% 6f.", '. & 14 889,976? $44.3G3 WM JW 49 +e n& MobMBelesand m ' - %w,.' ~ t ~ uw Expemn g,g,m. "g' g' w"' y"* 1* 9a" ~ 1o 5"n?'2,7874 [ Purchased Fun ' 21 "' f Seoskholders'Squliy' jd W Mgp m a g y,J Wm W ' $8,8800$2,931 E$ MMnincomeBefoeTaxes'and EquityinMhM(Fyif,, 4@#ghMUndis WW " M'5ubsidiaries%q/.% Gd; $2 Other uabilities W. W@ Q o.a W1;848.Mt.470Mjg 9%dincome Tax Benefit-Current MW 88233178 @ 3200 WNotes, and Redeemable Preferred Stock # LNNW MM Equity'in Undistribdted incomeg lah yL j@$M, [w ' C i(Notes 8.9, and 10)&

f Nd (Loss)'ofSubsidiaries@

gym @8eforeExtraordinaryitem' g %ppCW Stockholders'EquityW p.fy,jl0,076W 9.864pg h}@gp@Mhlt Mdneomme(&ses)Sofore @y,.g S(2700 N 982 U (1,786)l M( i; j $$, u 3MM y:$89,976s$44.383QF fMW& eb i,wvc f y*MIMSWP ' g, j%a

4 e

+ i6,BusanonNneryleesa5 QM$$ 498X$1,698.$11,,182); ' 7; fg @s mlf @ h3 "y@ t' g ;' +4 1 @' m rPEquityinExtraordinarylM 4WWW9 % W f' NMQ M embfSubsidiary hdisshnscossagdes@M@QQ&MCiW. d&.! $ Y4984 $1.858 $ll.182)f, Q}g " W K4 Q s, - %Qh @, @[p 1603 W gg 3 ,Qgd Q pg j$% 77 @W bk&Wkb ? NMYW lln+ ?-Larious legal restrictions limit the extent ko which certai suby p ,R4 'gg U NN ?Y E h N@5 Qg@@$ subsidiaries and affiliates < in addition; the' approval of the O_ff .w W m * ' W 4 pgg, 3, lWpg y y W <g ,gd 4 y@f@%gof theComptrolle(of heCunency(OCC)hrequiredif M g a, XQ W < J t ' p.# g dends declared by a nationai bank in any.calendaryear exceed a 7 " ( g - %y, ' g, gqq y WJmj"V M(s }d% retained,netprofitsfortheprecedingtwo.caleryW)earsJUrxler! 'JP Q WC the bank's' net profits (as defined) for that year. combined with its 3 db, M Mg A:WJW n ,Q$@((g[ ~ s' / * $ W the Ibrmala as it applies to Citicorp's national bank subsidiaries ]. i g 4h&@y (which at December 31,1989 had combined net assets of approxQ

i 0 (l

Q s .n1 y % yp w )$$$in 1990 'without approval of the Comptroller of, the Currency ofj ' '$h imately $9.5 billj p QMO? T, o y' '1;s Qg 4 Mg 3 k}{Q((W,approximately $1.1 billion, plus an additional amoun 4]y N, y'" D gh ep / g h their net profits for lH0pp to the date of any such diddend dec-N 'y' b~ y <W g $laration.The OCC is currently considering an amendment to its

• AM definition of net profits. Citicorp does not anticipate that the pro <

w eyg g'm $p%@R posagt adopted in its currentform.;wm haw any material effect c h On the ability of its national bank subsidiaries to remit dMdends." ' - 4 4 w p aon c4 4_m IO M, 1) h@n:y%g),Tb 'W[jyh =- n/ ir e r, i L, CpdV%pd Q= ' _i 4 m m,. %gw d.,,, ',, Q'fl m : k. ~ . um ,4'y1

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MTotalloanseA: '... M '.. M. N $ i 878 " L$1,7704 : < E $ 2,648 9 % $1.220EW { $ 2.150M $ 3.37_0M: - 4 k.4h PMRds Seid & $3mmada Agygggggggg, "y 570 W $ $ 113 ,$ F, g'~ 3..$ U174 3 }: pf@Qy y180;V$f 56W H.$h. gN gGj Q4 Qg 6: ,,, 4 iM g, s dVinDome.sticOmce.s.1M. aia m_ ;Me u_ s h$U: m ~ . W a ~7 u MMin Oeseas OmcesM%%ush,3/ %. tl4361. hl.283 - 1 E2,719 A " ? 411_ ' 7355 V, <mr !396 M M t h, evapw a v m-re W M iZ iTotal W. W- >. M i.;. i t, et". .f $ 1.442 M ' $ 1.457 4 W $ 2.899 G$ 297' W ' aSL 412 E Q::$ 6:509 G2 t Qp w N MhinvestseentSecurities]!!n 1 o ,1.. g1. &f% ? y; f%Q @d?$ y [p%~S~rTotalE.4MinOverseas,0f6ces%. A~ OnpqinDomesticOm ' $((28)/"l ($?: JI7)$$}105? @;${(26%d$l1131%g g 25{ '.(44)i % 83pwWe(127)n > I L 24 ~ c, r: e. pe - n N.' 1/1 J. 2 ?$ '22i

$ @ (4) J,

($ e 18V $. 616 L $T(57)0 W f $ M!M 4M~m i g _.i I -. d 2

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3 lnDomesticOffices"!?g.. 4,t i K'@ g j$s911,M 45's 144F J t $N135r' X$1.f 4D.M$040WAW$O44@@ gjm@inOverseas' Offices"QjQ;;4 g.>,. 9. '. d> i M L(459)- Ek(782) T C(1,241)a G(298)W&5945t F V L647MV d%ngW OTota W. W %, ; k .YN i. IS '(368)? ? $ J(738)s b ^ 0 $(1,106)? v$ f(294)U S i $ 0985F ' s$0691 M ca .q- -n w [N6. hlR$80980= Seer $Rg Deposits,w$~ PrincipallyLinO, wrseasoffices!.0. ".['Wm, wTT$ $ f h. l $T343W@t $W171; W$'(152)b$ ( A.M gf MM@ _ E' M yr r M W $P253ib d$ 410l by .$q D~ountarrsnes?Ravsenar... ., ' /c. L$ I,802 T W !$2.828h i$ 4.6303 x$ ' 932 P ' ! $ 3,743 W ' ?$ 4,675@4@ 4.. mm kk .,;]Y .'..?,, 9hlY' k f,,fhjk,. kk f h.Yhfkk @@)illnOwrseas OmcesMa2M.J. pin DomesticOffices WiM%;Mg, l N $$?.390% @ln, l 601 @hl$ tij9917ME415 % $155DQ$ ' < dl,237i h t(236)G " El.159es P1923%s WW ' i4131 > M 824f zeypw w, ggew' - as off M G Total b. W. K s 7 4 / @ n' i$18031 a 51,425 t ?$ 2.228W$7179 ? %$il,314M R$11.4936 h:, S Securftles Sold) Not We Puruhased Wa f$3 ( N+)% ^ ,$ %,.., ~e N$ O(13)EyW $,r 212 E M~WE, N +, m. W y. @f wWinDomesticOffices 3s N. w....M .1$7 542 ' $ A.l9-- 9 n.,. t 61R (l J ~ "15 f W ' U20J w$u@ng ve,rseasOfficssMfs. ;' m. inO 1 153 10 F f(23)T h 9 (13) @ .,.,.., n.- my p

• M. -

. u$1?474 v s$ 4(14)ih M M # Total /. . $ 1 L34 4 < E$ W 8l? ' r$1 "(3)T n$L 'ill)2 o g@j@MPtsidsDorrowed W I $q M j k t ..... M ..f. em .ZM ^ in Domestic Offices;,.. a c. 7.<. ' $1110); $1531 A ,$n421L t$F330; LSD180i $ 9510W c 1 shqMinOwrseas Offic,es W..,..e.. 444. xl;710? D2,154u %(112) !1.577 t 'i@ 1.465 C p u QMyw nf W Total h+ M.. V /...' - $ 334 $2241J -~ ~ < $:2.575 ' $ 7 218 c - $ 1,757T ' N$.I 975i; @y a, 3 Mi<.h.. L,tomulNTERESTEMPENBE"R - $ 1,184 '$3,700 2 L$ 4.884 : c$ "394' $ 3.060 ; M3.454NN 9 et p q lf 2 4 y MUM;ANETINFBREST REVENus... . '$ : 618 - - $ 4(872F. ? $D (254) ^$ 1538 x$A683? * :$?l.2215: ww S/ Mm hwhoiume WrwWienocated tased on its perceivage =lanonssp or ownges in volume and ownges in te to tne IntA " net change? - N W 4 % Jg mPncryns'ancunahavebeen=dmeeo tocorermtocunentveaspresentaixn - ' -.4 ms n m n= =nue ano nei nm eenue we inauoe app.m% sm mean oi ne manna mne m en sman meeum ana ionenn eutsunangs cened on msn esse w m enorveramounts nae teen estmoo maect ine cnange mne =portirg or se:unces sou notyet pun:nasea g(whf b.h s f i s ,~ Qh IY >W H e 0; y, ~. a 'ty q; i t. w.-wm y h' QW. A. ) u&. 5~%lC%., <, 4 s N h.. w,l 74,;fN. e< ,? hN .h J y W.Wyg Wy.i!yy,, ON h d W ,. Rg 3 n f., m n wx w M;y %QW, j% n% a Q,+.y,, py+ +, ;'c'\\ m g m ,m L'c.: Q : yV .,m, pf.i M i

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J. - b _ s t J s p, yL tn t g (49 ,.. p$, b !. . ~.;+q: v. y g ym 1 g ,8 y , d, ' ',, M h 5 ' Mf knf 8 ) Q CAMMNG VWE ANDYlELD"Wr MATIAITY CNE A50F DECFMBL?.31.1999 %. ' ' - j e D N R.J ' ' LMO W-i gm - 43 3 W ' g' '(', ts.et : Wi% 'a -n e -.? ~ ~ ;... 7lk* i .i +,i.. "c. ; : .,~[.,l'!' lr ,M i } Q tgeggyg - g\\. N<.ii* f gg g ,. gg gg [ 1 ( "q, ,9 f eQg r y =

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w .,,g. -- a - DA.m eg e mutuMessqctu ; s. q. 4 86tillb% 80t*CT -

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ti 3

..y s ,,g ' m r 1 m-n i,j DueWithin t War s .,.o e p y syn 3 C.Mr 3.. L$f c 638 : x.19.09% S $ hy 58

161%;

$?1.9754,f( ' 514 M9.27% y* c 2751 ' W23%? 13,304 % . 2 m ;MeerlbutWitNn5 Wars $.s 4.W@. O, a@W F i.: y 3 m c 392- " 8.66 % 1 16.84% Je c 1.6541lW & LWier 10 Wars'i n.t,.~ n.i.. l,.: y.W. N,e. r 1,569 t, '. [9 53% ?, W 3387 ^(728 Co. m 3 M ; #ier5 butWitNn10WarsE.a 1 ? - t 49493+ t 9 1 y s s g%m *Seen....... , W.W m..,.. W. " $ 3,113 : ' 9.39% ? U $ 1,4_30. ? : > 7.99% 1 J 9M J n ? - n m y, mg S $ r 3.405 < 9.669E_. 6012?h *

666%W4 W

Carrying Value and Yield 9 as of December 31.1998. .+i = n i$ 10.036 J s 9.67W $ 1,7931 < M 7.15% e,i n 9.9?6 k > M M Carrying Value and Yiele as of Decem,.ber 31,1967 ?. 15 a 3.627 pgW wcewmo g ee,,w ci aneie,=mme weemona .s u - = e aps. N w', s, e cmonvoweto unpowueveneomeww f. 'e1 e f'e 'QrM enmm . e w .w ny y c 1 f

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' N A; y a i 4: o" .f; i. ., g- ,a " ;', n .~my ? w-E Mn w Q49e w% ' " v'. R'g, gin. 6 5 i. ' i <\\. i' m. cp., s.w y i. >t a h39y n,_l ~MM %g - y.

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.m. + .- ns s a ;i I;) / J 'f *hl ;'". E" .f e ;iUi. P t' 'k... dg... ? @ x 95 ,7 r i t 6-FZ M 6 iinDomesticOhices3 4. S o + d%, Mortgageand.RealEstate% 4.N ;. au;y ..g 8 '30,393? t$ 37,633 ($031,523J i $l 27.99lE ($ 21,719E " # N, s %' : installment. RevoMngCreditiand Other W f, f%4 Ng,33,495 & ; 31.9324 L 31A79}, L 29,700;c 'e R, f 4347c 1 243~ ' 17354 ' t 505 D - . J. ' L y..,,,,,.,. .4 L Lease Financing.c.-,i. +.y t. ~., t,~'..l}...~ i 8 71,838 y $- 70.070f $ 63.349 a.. $157.934 $;49,265i. i m $f,InOverseasOfficesJ.,1m,;' % ' Y T ~. ' ' 37,335 ? X 22.097 ~ 19.512 i % 14,520 '. 10.468 NM $m L.. 2 8.99,488 " ($ 92.167i, - $ R2.861 L ' $i 72,4541 $ 59,733 M6, 3 % iA O1., x o-3 D m e,

k.. N Uriearnedinco.meM m.:&, s-

.,A1 c?.N.,.. w' It 988) ~ 1 - (1.811)! " J- _.156) (3.703)i " (3.938) J,.sso k,e? ArVsumer Loans--Net 1. \\... ? F '... X. 8 97,075 = " $ 90.356 i 1 79.705 f $ 68.7514 $. 55.795 ; 3 o i F. v i +Nin Dumestic Omces, Cessusepeleitaans s 4 m o -1; vt o .i. t.. r. TM E JW' .1 J<q n m.... E / "i -4 i %,1; + + + g CommercialandIndustriaPA & +

c. -.. r. :,

.o p s $;I3,4882 f$' 13,451 N$);12.6'47 U$ d5.903! - $ 13.25 9 M %[J DJ Loans toFinanciatinstitutionsi.1.y.,... y M,. J A E NEMortgageand RealEstateN.. a w. i 4 ..,N j 13,575( ' I I.16U < ; 9,y@:

8.471L f 6,1651 $yd i ( 4, ~% Lease Financing 1 ( q.w. Fe y

.. j . A. 7.:. 's, tat k87C".M, 111; v a84a 3919 a WM N 484 1 6081

y h,

-..58 ; -

1289' ' M 1.198 :

5 e ? 8 39,633 ?. $ 28.078. $ h 128 $ 26.547 ' $ 21.48(i 1; - WW ,1 s s3- %#@d inOwrseas Offices: T w. ;; c y l 8. t9,387 f 1 $,18277 L :$i21,2615 1 $L23,101 l ?$ 2 L. a > i QM iCommercialandIndustriaP. . : 5.363 g gi c 2.143 ' 3,971 1 2,897-2.441 72.330 L WS$: Mortgageand RealEstateY ,:-.. M, i y3 1 3 i 4,309 L f 3.569 L o4,110? .4.3751 $ & L? loans toFinanciallnstitutions. N v.- ? e... tA SiiGowrnments and Omclai Institutions : 1T.,'.... 4,370 L ' f 5,325 s a5.061y 4.562$ ' / 4.865 L ~ 3 Q glyleasefinancing g.7,, .f i..:. i t,090 ' } ; 900 ' 898-21260 7

1214. yghj i g$p a,,

',' W 8 33,707: ~ $ - 30.968 ' $ ' 33271 ? ; $ 35.628 V -$ 39263 ij 1

afm 8 63,339, 5 59.066- $ 58.499. $ 62.175

$ '60.757% d )M.u WC

1. Uneirr5ed i.ricome?. n..'.,. <...,

(303J. 1(225) (289)' ~ . (187) r 'l173); d

f. M

~ -ommerciM toans-Net J. 8 65,037: ' $ 58.841-' $ 58210 $ ~ 61.988 i $ ' 60.584 ~ j f+G %, h 1 s 8 ' l4,7198 <$ - (4205) $ (4.618)- $ (1,698)' $ (1235)' M - Ilowance for Pbssible Credi_t Losses... <.,. 'rN > isg,ieuimen.see n....... 8155,483 ' ' $ 144.992 $133297 $ 129.04 I ' $115.144 l ~ b f d hMedmeed io contym to Meni yea's pe1erum l [ h i^ i, SLorasecuedNimanlybyftWeumec j W f S puncwesloantotteceweesepametcaegonreo VL,<^' n s )t - 1 1 @, ; 3-}} ; q oa s r.,,.sa 1;' 2 l ([ ' 4 [ 3' l n;f 3%g ?L,. Il M MPl$ y ' "I 33,2 ' Y. Mr y N., y., 1 cp

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• g= g6' f? '

7.y ' y gp t j 1 l pp/ProvisionlorPossibleOeditlosses i '. '. J. . '.. ~. . $3,531,.,.$1.330 W$4.410 D $1.825 6 ' $ 1.243 ; 6i $My% ' W y ; 4 p> g' 2 mo 9' %a&. t '7" '. 7 m ,i M,,4@%i.. SWOCTISAN -? ' fly ? o ' W ~ ~ ',, ". - 4 L,' " N x, 2 i ,,a

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,S" m .m a o m f@u W s emessesserr& asses J,, 7 ,,,t .K. l . l-f f Dengannerm L . m 81,3571 $1.3521 "r$1.075 ? "l$1,050 3'6' M inDomestic Omces% : N ;., J. 7. ~ mm 4' S Hf,,4, 'c.4;J ' b@d7 ClnOeseasOmces V. 4 ,c. Gd J.J Jim. 0 345b 2200- '1% M cl22 d V 77s I i c3., Jiu i 1; Y.O M.. < M. ? e, o, Ceaumesetal.. L.' ? .. w y. ~N, ' y ',o,1 4 > y g .gg M M - in tic Omces M j 'f%. . and flealEstater , 7 ji. 7"

M2 7,>

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12185 i 136 9 " T37{ $ 44 WMM GovernmentsandOmcialinstitutions(inoverseas omcesh.. i'. c,i ?, s.

' : 334 y: Y 'tet ' : 271 ' D< 29 i [ i 10 =, W 19 y 3 y$$3!41.oans toFinancialInstitutions ([in overseas omcesh,. i '. 4,f J.S. q,'3 ~ .(0 M ? f y Nj d 1 gMCommercialandindustdalQ4 M MJ

• iC' g

Py%p$ ' in Domestic Omces NSM6@47% W 910 g .y '. p.. in

• 1336 L;lat, j',W 89' d fl07H, M 100y 184i A

4 f!bQ;CL i inOverseas Omces %,.W70.M i A,... m, s.J y p} h anserrescovmees f C, ;%, e ?p ' ew # 6 - J246: /308: 1300 V ?278 ! b ', Q p i M% nw 4,,,M wp j + w y $3,348 e / $2.156b 5.1.888i $1.661" ; $1.161Q ' h(y&g{jginDomesticOmcesb %Mif Mb 4 - ~ o " M jW J b' ^ ' Wg/ d ' 3' ' N 2,f~ + G? u AQW fy CaenunnerW: j % - u hQi V iau(wi . 8 j 199 ' ;$-l 219 : $ J 184 e L $F174O $QIlh d ? /p Win Overseas Omces &A W./. :R'n'e. 9.. . 1. p i. ;.; - 75; (85t' 63t

40 W ? 23 M q(#M$gCeauneratel Mb s f

L ? ' M,V %'7 M' w w' W ~ i M i IP '7 i andflealEstatef a, 'y' % W in tic Omces J.M h. M Qw3 i.,'.. !2i 1-A A cg %j%v$$h! In Owerseas Okesi, v.w 6 J.hi, f. A j.1 $2k , p. a o. m /4; 3$, l 14J, . 3. +, ' ? I s;p MkD[WGoernmentsandOmclalinstitutions(inowrseaso

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'2i % 0 Sp: hhhin Domestic Omces y,% ~. m 4:, c.i.ks. I. +. m..' l ,1.. M Mt G CommercialandIMustrial: % W' l40)i' W i. M ".25 8 37! " L 30. %@f $ b N +F %,[!M S $ N; 4 27 % hjk in OveneasOmcesM Z.,.,.3 6; y. ja.. in i :. J,. L. 'St!- )64 % /64i ' V41 M29NM h,, N ' $y4 apresself teesst b ,; ~ u . ' O -' 399 h $' 404 b ; $ ? M n1 y-c' -9 1 s 4 W-NE, 3 @ s + q%WioM in Domestic Omces #. %c $W 3,inOwrseas Omcesb. i ;,j. s.f.....om. m.,3 x.' : $t,980b i $1.2074' 51%2 '$l 948 I ;$ <,590M . J. e i,s......,p. 73 764 545 4 5.45 - 423? 3720$,, S yn ,m. AwtApSWW 41,944 J ? $ 1,752J $!.497 : o$1.371" =$( %2 M 1 M 4 p h N M. $%AV;j%wOf94R-NEft A......./1. i ~94 'aam,, d t w -m. + .s

188 7 9C S7* /

D 37%

p. m%m@,$euunsecs pea poemesa caesar seeses Ar ano enaAa ' 4 84,739 a $4.2057 : $4.618 ;$1.690 $1;235 y:

DM ltatio of Consumer Net Credit losse_s to Aerage Consumer Loans.. 1.35: 1.50 1.43' ! 1.57J ? 1.22Y M 0 %+D.ftstio of Commercial Net Credit losses to Aerage Commercial Loans - t.I9 - .84' . 78 .69 "

163 < : o s

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t f 4v x y v hMc - .?O, m 1, !!i& %m % #< V w,,P U ' /WA w-- . m my c $ge, %w+L m, ; s R" A f %w sd, d v3 s ,/. 1 '; u; y y-y r;: u o t 4 .a .w m ,e#s e, m ip ' m 4' k, # 1" e, m% a ,wgn wm >4, x4 j 'g,91 % J J : l ~ Gj-g ' ' q y~ .y^fy 4 ( y. ~ %ff '~ M MM MyQ M M M M' Mt R s Maluntes of the Gross Correnetciallaan Pbrtfobo as of December 31,1999 ! W / oi p w;, &,. .k yy + r -p 9 A s 4 ou, , g m.

f. n f

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a..

E$ S,738. S $. 2,431 H $03,400 M s W mn@j CommercialandIndustrialloans's,g y. NL,: m 3 o w[ 4 :.... W $ 5,314 ) K@@ff Loans to Financiallnstitutions3:. ; %.i!@.. # 6. + W. :. 44 . 759l !3,930pOM 'l773M;92,878$,y#

i M Mortgage and Real Estate (j n; m n c M. x.

.1. ..;G !4318' '! 6,5844 i .y ' '226L i E 134 P D 94: - 404 h fW LeasefinancirW., gyt#G Alp,f.,. M y:.Q.

1. py dn Owtseas omces D.,W A.. -lia. g.W,q, g.d.. e. ;.m.

, m ; ha 19,213 7 ~ 7,5491 6.945 l SR,797WF, $Q u. .,m.. .a. y r . ~. Li. ' '!1 s "%PT. .4 ....... $29.416-- $21,921 $12,002 $48.3391, M ' W ~ 1 e u C id n a m gh ; $ensitMty of lot.ns Due After One War to Changes Mf Q. Wimhy loans at Predetermined interest Rates to W 4(n Interest Ratesti t f e. Z.W. i 17,313 ' ~ b .w., u. h, e, rh '

• c

$ 4,608 0

$ 2.251 A i A % m

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A i '1< TIME DEPO 0fTS W SOAABSTIC OPPICES AS OF DSCSAABER SI,1999 a s Ta psu mQ M p o l m am enmut4g w y ; ; mm, ow,,. %my, i g;; tmuscoewem ,g, & ema . c,. n o e om.c.,4 e,y g-v #. ;... e s u g., $3,050 L 'v$3,174$14- $ ' M under3 Months v.W.wn,ms. 3,." .s. . p u. $ W3 0 6 Months % %@. W.? W.' W.y&, e,a ; ; p. . ', d i.. l u J g. c 11,163 - ,l87l g % 1.a ( 6 to l2 Months.).j @j f y. M@A., < p;i. y., ..,1.u,-.>.e. . ~ n. D 675 > W 416 E R a4 '3.334' i 3,810 @n,;gy , ' ; Oc l2 Months.. .v. < - ct. g g (, ,.j, ~.e '. i 1 f l g,E lrk* J' k, I I g t* $ M >g 9-q.7 p JWERAS2 DEPO 0ff LIABIUTIES W OWERSEAS OPPICES > 71 w H-s n ; o, ' nee - ner ' - nem ' 2.n w,... 8 -,.e ++ m m mv 3 n 1,

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ma w,,,, 'p 3,' , "w m 3 :y; ;, , weset ( weerst M ' + N. ~,<3, ,.p' Amunast suggsest 5 Mact ' : Meetst 4Wth.y h W.. ' memore t, ttwWtl esEAasg8 4WWW ' ' MLANtf WE i MLMt - %' }l6Sanks*.: i v. V ;&. - m u. A r.3 a 9. ',1 i 898,389a 15.76 $13.903 ; 12.97. $17.222 915.06Q Q%. 14,145 % "6.74i' 1 .I 13.723 J ~ 5.06 L 13.549: . 4.38yd g$ f V Other Demand Deposits A._ M '. a J,a w 4 s JOtherTime and Savings Deposits

• D,&,V.T,.', c.

W ,s: ' 49,879" t8.98 < ' 36,741 12,58' 33,283 J .9.02 4 g,A, n W ...W.4 848,00s"'ta.asc $64,367 J - 11.06' ' ' $64.054 7

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., ; voeu. t v. bh N(kMlO SW h ?\\( f ! f ^ l sN f (( 1 {y } t 4 - h;,lvi mnng conmis et me certecmes ce oesound anei ome depcetan oenonmacre et mooo ce vu. 'o 4 .c %r s /~p ' #E6 WPSCTS OF WPLMION yd:h' % JThe impact of inflation on Citicorp and other financial institutions ! ,u; J 4 gu j is significantly different from that on industries that require a high $ j $p 4 Qr f 1 , gj proportion of investment in fWed assets. The assets and liabilities ' fp of a financialinstitution.are prirtwilymonetaryin nature. During. 4A ' d P~e ofinflation,monetaryassetslosevalueintermsof purn t j powet and monetary liabilities haw corresponding pur-y@ ' 4 u ww power gains. The financial statements and other data" g Qappearing in this annual report and in particular the discussion 4 O tof price risk management on page 37. illustrate hcw Citicorp y operates in an environment of changing interest rates and infla-q [, f tionarytl ends.m n c i b[ k 'r "y ? );e i 1 j W %9 g, "[A i c._' f 7 _f \\__ [ A 'k' i 'N ^ '} g f l

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7v v ,i,..,;; >+ ,,p, 3 - 2 jy 39 ,s nN CONOWNOPINDEPSNDENTAUDIT4NIS > 1 D0sseldorf, Buenos Aires, Re de Janeiro, Sao Paulo, Mexico Ory J *. s S y.j ' y", 4 ',, y9, c e,,,, M, , i San. juan, Caracas, Hong Kong l Manila, ario Seoul /Apprtmi-1. 1 'i 1' 1 n

mately45%of thespaceOtibankoccupeesworldwideisowned/ W a a

[G,EPsstMarwickC * *i itaes ' '"' """ '"**" ' '*** "?' "* """ ' s d M,s m W - ;. C" P M ,M S b m E3DNBfTE, PWMNCWW, SWWERIENT SCHEDul58, q 4(lJ . ^ ' Certifed Pubhc Accountants, EN W q q(- 'L U

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' i Finane.W Staements Filed for : M OticorpandSubsidiariesu.* V $.d M t :l f 7' if~ fThkihardo' DNectorsL' g' f 2 ConsolidatedStatementof 0perations c " % .A ' Oticorpy

• 9 nl

,( fL t Consolidated BalanceSheetu ; y, oj 1;f Mconsn'tbincorporationb, "i J ce of ourreport dated Consoldated Statement of Changes inl j 7 7 ' y; ;,, , ; -[ slidated balance sheets of J Stockholders' Equrp, _~ j dy,y.lanuary 16,1990, relating to tho,W ' J Otkorp and subsidiaries as of December 31c!984nd 19 Consolidated Simement of Cash Flows c n_, ',i ' ' Consolidated Statement of Chan P pf, ;relatedconsolidatedstatementsof operationsartchangesin1. _ ,%, ' Rij j, 4 ' i Jp l-stockholder $' equity for each of the years h the three year penod i ..On October 24; 1989, Oticorp flied a Cunent Report on Form MM ended December 31,1989, the related consolidated statements of _' t 8-K [ item 5) dated October 17,1989, which report included a sum-R y yg, # cash nows for each of theyears b the two-year period ended - wk

December 31,1989, the related consolidateo statement of i

> maryof theconsoldatedoperationsof OticorpforthenineE.- m ' ' ' 4 l changes in financial position for the year ended December 31,1 ' months ended September 30/1989. Ori.lanuary 17,1990, Oticorp% o u %

1987, and the related consohdated balarice sheets of Otibank,7 filed a Current Report on Form 8-K (item S), dated January 16,R %

h[ 5 NA and subsidiaries as of December 31/1969 and 1988, WNch;

1990, which report included a summary of the consolidated s E,3 ME, report appears on page 44 of the 1989 Oticorp Annual Report !

? operations of Oticoro for theyear ended December 31,1989/ o" f and Form 10:K in the following Registration Statements: of J Calculation of Ratio of income to Flmed Charges is nied u g, E, & Oticorp,Not 2 77058/2 47648,2-58670,2 58679,2-47647, herewithi .A>' ' i11,;, u % 1 iM L 2412298,33-5564 ~ 33-21332 and 33-21311 on Form S-8, and, :

Oticorp's significant subsid6 aries (as defineo) and their place of M M i' V ;33 3114,33-11927,33 20692,33-15896,3 l-18754,33-26018;-

- incorporation or organization include; M,:"iJ y w, l33-784,33 32207,33 30791,33-29015! A id 33-33238 on Form S-3;

Otibank, NAE.. m

. United States l ' W,, $ e d$ [and of Oticorp Mortgage Securities, ini, Otibank, NA, and ;

Otibank (South Dakota), NAi _S ' ? ( UnitedStates - % <

• u iCiticorp Banking Corporation? : 1 m Delawarei h$e Lotheraffiliates Nos.33 6979,33 3161d 06350,33-8718,1 y 'j b M;'433 16870,33-25068,33-28615 and 33-! 1448 on Form S-11,.

Oticorp Holdings,Inc,J .M,' . DelawareJ M 1~ o L W M ? 'F, Oticorp North America,incR ,. f Delaware' ~ g l Other subsidiaries of Oticorp and their place ofincorporation or h" 9 s. qj gp w<t, -I V i,4 - h mganizationincluden R _ A ll il k;[gg i

AMBACIndemnity CorporationA (Wisconsini s

;

J t' Xf',,,' OtitanklArizonalf ? , Arizona 4 J' MC + - = a-phy)g [ NewWik,Newtrk Otibank DelawareM ". p pMarch5,1990, Citibank(Maryland), NA ' a l [.UnitedStates> 'M a ec

Delaware 4

QheN"HOPENHES . Otibank (Nevada), NA ! 1UnitedStates, 4 w gm P rs.-,

Oticorpinwstment Bank um!tsd ~ ' t ? - United Kingdomi V 1

T O The principal offices of Citicorp and Otibank, NA l"Citibank' ) are Citicor Mor Inc? Delawa J_ m@ t[ located at 399 Park Avenue, New Wrk, New trk, a 39-story build 'Ird l 1 Otic Real s Delawar I ' United States L n3;: Ing of which two thirds is owned by Citibankiotibank also - OticorpSavings, FSLA owns one third of Oticorp Centet a 59-story building located at OticorpSavings of Flodda[FSIM UnitedStates #: = ' I

3 pp{Aenue. Oticorp occupies all of the space it owns in both build- ~.

gg l53 East 53rd Street acoss Lexington Aenue from 399 Park 4 OticorpSavings ofImnois, FSt.A I UnitedStates i i

'4 ( Oticorp Savings of WasNngton,D.C['" Uns'Nes1 ,j e g ings. Oticorp at Court Square, the 50-story addition to the New FSLA ' " 1g jd trk headquarters complex located in Long Island Oty is essen-g, f tlally complete and

CiticorpSecunties Markets,incJ IDelaware ;

OticorpScrimgeourVders Umited

' United Kingdom 1 oI owns 111 Wall Street in Newtrk, which_ is totally occupled by -, OuotronSystems,inc?. Delaware W mg,Oticorp in additiort Otacorp has major domestic real estate hold" < Oticorp's Restated Certificate of IScorporativa, as amended, ? l mgo m r ings in los Angeles, San Francisco,l Chicago. Phoenix, Tampa - " By4aws, and instruments Def ning the Rights of Securities Hold-c j + 1 j g,; Sioux Falls, South Dakota Hagerstown, and Tyson, Maryland, and, L ers, including indentures and constituent instruments, have been [1 o ggThe takes, Nevada ^ . previously filed with the Commission as exhibits to various - gg s internationally Oticorp ownfmajbr corporate premises in - 0 Oticorp registration statementsa yj 7 : various cities throughout the World, including Paris, London,, Stockholders may obtain copies ONuch documents by writing 7 y y% y J Citicorp, Corporate Administration,399 Park Aenue, New trk,; g V s cNew trk 10043.1 1 l gg' ' ~ 4 >4 4 %@b c aw s ( O hY.b:.

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W,,., 1 v b ; MGMURES V ' ., t && > John S. Reed (C6ticorp's Prlnspal fiecutive Omcerj ani$ the d', ' ' ' N 'n, Pursuant to the requerements of Section 13 or 15ldj of the : . Dhectors of Citicorp litsted belos *:uted a pour'of i 3 " f") & y.5ecurities Emchange Act of 19M, the registrant has duty caused attorney appointing Charles E, Lor y ett attorney in-fact,P $ f g; this seport to be signed on fts, behalf by the undersigned, - . empoering him to sign this sepg Son their behalf. M ' K, q 'L $ WW lheseuntodulyauthorized.5 ' . s 4 'EN Mg'g, k@p!g .- , 4* i j 6 f,i n ^'m H pgl j p; a ' S ?- ,J

Richard S. Braddock ?

W 1 CmColtPaf 6W S;

Michael A Callenl >

2 M 1;W ' g f %,(Ilegistrant)@ #yQ C i- , i ' i, N, [3 ", t, % D. Wayne Callowayl W M h 4 + M N. JMg %9 ColbylH, Chandler v jdbo 1 ci?, 4 . '" %, *4 Paul) Collins.M.. gr - gM 4 L i d. ^ 4 - KennethI Dert b, ' @yN 4 "

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f F.. e m,..GMV,' $ h. 4..,- 4 e... y f n7-744 ' b J iJohnM Deutch mE'<* O j@"0d"'Q' s> .1 D, c ,%,) w JJamesD,Farleya f ;@p,7T 2 ' e hs cJ G, ' LAvrence E. Fourakeri- % o-w '" i J

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k Charles E.Long n. .' Clifton C;Garvin, JU ' P". ,2O@ Y # " " 1" E N v EmecutieVicePresi andSecretary, ,A 1 o m. .. -W, e% s 1 = .JohnW Hanleym w~ %, qf w-, <,,a m. m ~.v-4e .w c 1+7 H.J. Haynes :. l A U ' M,s, e p 4,7Q ggy+;&, q ; > '

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3m i s -4 ,w, v'n', 'plt M Q,t. 1 4 ' K1 1;% W LC.PeterMcColougtp. e M 1+ i s,4 i 4 " Donald V Seibert'. Q N ~ "O ^ % Np . t 0 'l' ' n W : S March Sil990 ? f Jr ..b Frank A Shrontz(i WT% ,n q 4fNt3.M _j 1 TA,J. .. T l ;'* $g" T 4,, ;, dJ4 , Mario H. Simonsen MV Pursuant to.the requirements of the Securities Exchange Act off LawrenceM.Smau = j.m /... 1,' 8 M a W %f'y19M, this report has been signed on March 5,1990 by the

floger B. Smith L '

4 i % m y* 4 V dolloMng persons'in the capacities indicated. Franklin A Thomasi % <f y; .' '4 Vi'

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esse t > eessessee esi .*? c man, D.Wawie Calicway ColtyH7 u GaMn,JrJJohnWHanley 6 M r4 yN %a@. g ,t flMecep. 'j ,y ChandietChftonCGaMn,Jr Hr. DonaldV Seitert ard Frankhn i Y, T ,M e ? Memters: John $. Need, Chair. " Haynes.DonaldV Seitert.Mrol, = AThomatx, s > gg gy$ 3sm 1, martColtyH Chandietlamence X ..H $4monsert Frankirn A Thomas.; y 3g Pf^$. Members: DoisidV neltert,"': Cnanmort o.warre Canowen, jg" E. Fouraket Chiton C. Gamn, JG e ,1 Land Edgar $.%olard.JN ,6 - Wd$.BrmPW N N ig l [ JohnW Henley Peenk A shtonth M:.[ John W Hanley and Frar* A - temnsdiiDort,lohn M, Deutcitp c' MMmb E D.Farte@,he M r S b.hf ont2. I W< m , i teVieMng principalsubsidiaries of y~' : $mau,. 4.. - a w wM, y< gg,g,g g g,

a "< LThe Committee on Directors J

~ v Oticorpincluding,tMtnothmited w Citibart.NAIArythreedirectors" s 9'

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>a 4 gjg" '3 - ;- "Mr i~' N + 7 > ^ OR ' ',' $ma. rt a,nd,Edgari stolardi4 ; M activelysolicits recommendations ; L to.Otibank, NA The comfruttee

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.e. ,d.,end. oui. w(([ lor prospectre duectors from their ;u,eni,ne,nb w,-dm, - a,y,t,uctue and p,ms,es m reVWws the corporathn)sutsidi ' >l ) W,,,,f"IQb, y, managing sutsidiareet the princ@ JThis com I.%. i $lele difBClePL fft9els alitest fouri s and, consistent Mth the reeds of " " $< g) t 1 tuneseachyeerwith the corpora ( 4 the corporation and repeesentaten:: palsutsidiares* Ananew states 4 mentsandacapo,morts L 'y oflnesoardsorD eciesshouid t.anund.pw.auim a 2 of =wousacesacuse N Gegeulhe Vice Plesident with DWer* l'N10mert recommends the approval (' * [capRal structure, positen and % _ j anurgent matter arme that ! ; 1 fd ' Q[ f F lght ' har'accountrag l iof a Candottate,The nottunees are F t planning TheChairmanof thekiG requiresadecheonbelaretneJ JhA. 3 M@Qf andconitel,N oller ered the @ then p'escuted to tre IJll BoardJ i committee feports periodacally to L i Board h next scheduled to :. M h-bs has,early all the powers S meet Tre Executive Committee V Ctwef AudNet $U " cwhich proposes tte state of dnect S trn.Oticorp and Otibar*,NA n; iy"*O4 9, One ofits pnnopellunctionsIsi 4 y tors to be submitted to the stock ' Boards of Directorsy, . Boards or Dwectort encept forc R ', ;to eviewthe auet plans and3 J ' i holdersatthe'annualmeetinga y[y'p' t certain poners eupfessly resened h i@ $ Scope of enafflination Of both khe. W, : tothe soardsof Duecto ,o' s Min add #teori, the committee is,. ,-.e '. U* '4 '.o gndependentaudmoriandacore a ctwgedwithkeepingcurrentand; f g, ax g } q recommending changesin die (*f { oj WU ) 1*, f f$ poralerfshiemalauditdMsiortin bjhg add 41on, it is the responsitWiity of J,( N i, tors'cornpensatiort,4

• N j Chahman i'

' ; [0 MW M g $y% "V ', ^ 7 gE < t m thiscommitteetofecommendto & 3 3 $>4 l d d jr l the boasd the annual appointment i, 4s q ^,e y$@VM l 3^ d - ,,,,, g, g,^ $,s . I' o' ! " Cha# man ~ 5 M4 f . g l M+ "pf the outsade huetort The Board l ~'. ( g e if 4 ~ " n '4 4 accepedthe secommendation g,ggg, '1q(e 4 s

• s Cesesamp

.y' , i q f G qpa m n = agCosasaleteo < w' wm"? ( p e e,e.ati.tPMG mat Merect be7--imis,,'=ay. e' Q th m.

Mernbers D waineCalioway i. ?

A o EM' A6-F 7wulbepeesereedtothestockY!L 2 holders RF approMal at the,annuaygy* "yl ' + k'i h 9 d D Colby H.Chandlet kenneth T. Dert h-l 'L ' N4 J < d# % W W W,,' M. Y W., $v M "' 9 John MLDeutchlawrence E.c ~ ' ' o c Fouraket John.W Hanley C Peter? m MNY" chintemaland;r 4 b n eq y The .,a W ! Mc frank A $hrontU t NM

li MM MS i y C 3.estemal and OMlema{eg'.'

I NMh;ulatoryagenetriatevewed.andi "? e [ ' ' H Mario H. smonsen. Roger B. $mittM, hiN %' tj ' \\ i-y, f# t& esponsesto ewiranongs are W N.- 4'

8 ;andedgar$ wootard.Jt?

'g 3 1 M, =c + ,N' [h' ". monitosedtolnsuethatappropri L' 1 4 ,m c 1 , o M Thiscorfunettee,composedof c ' 3y 4*y, i l ate follow.up measues ase taken,) 3 4 s J those Ottcorpdirector$who arej a y . [Uf[. ! M h %',hp outthePfednt*ofmMagerhent; J These are qvlewed with and with{ i 4 g ; not also d rectors of OtibanlQ g ' ' ] \\ i WE, 4 9'

atiends att meetings of the poard -

M; N h g%[$andinseparatemeetingswithy. i of Duectors of OtiDank and 4 y* A: KPMG Nat Marwick wuh no. 4 . memtersof rpanagement pesent , l remaens available to OribankV i,4 s r o Boardasconsultantsonan as. % arecommmeesomeetsannu-: h@fl0 pnncipal seguintory agenciet who i, Y,needed?basesq ._Y' y Tallywith repenentathes of the E N" l4# pmanauypees inefesuttsof t + S-A J C . svA S their piamenmorisJhe fesults of ' eq: 4-M i gthese enemmationielong withjp 4000R1 S.Re0D :- ~ <M O man. y' '. psourownnnenga meteponed e hQip k;f leguterpto the full 8oard.@ wc!:lM N ita miome function of the1 e, i. ";, f@hydommitteetoeverseethei, > R4 &accountingpotciesusedinpre 1 , e y @ atirog the 8nancialstatchYnts of fs gdp,fgj Otscorpand Otibank.W& Q ffn@WMWj

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Lformance Of out tusinessmies ? i i L peNodlC feports from the SeniorM ! lim 6tt of the acquisitsort both... / programs tomaintain an erwiton- ' andinachiedrg a mDre competh 9g_. u ![f maragement of such entiles,and h 4, domesticallyandinternationally y pent At Citicorp /Citibank list J,, ( ') of financialservicesinstitutiont ']1 ttracts and retains people of high 1 1, the tus;ress erwe h $ poportstotheCiticorpBoard? p' capateycomm#iment;andineg< committeefewewsthecorpora t Ac ,j g$F M@y, w a m Approvaityama, atyofite 4 c t.ons poi.cy posto.e. praaices ana x u fGj a y (rnembers constitutes committeen L rity h addition, tte committee ? 4 programs relating to pubhc issues %, ' ; 4

• ^

u actiort Eachacqvwonis t oversees succession planning and t, fof sigrWAcance to Citicorp and the Q4 i Q*> @. reponed to tre fuh Board of Direce ' - emtwope tereht progtams.s , publ#c at large,. ' %gio o ~ 70p 4,. tors of Citicorpat tre meeting .At+fS iWM' 3 9)Qf y s N t l'i h9 h;I ME C ' ky % dMQjM q g Q"Y[ f< M% immediately following approvhl byl r 9-9 < y ja,,, the eommit,ee.and numma.y or ,yv ; w wm y .a wsiennporovedtne w: ChwrmanJ,.,s h a.,s. f waI ,,t, as u s.o. m yp;', Egd g g, y _ committee is presented to the fun t L MI i 4 Chairman L m.' HecMam% sl ( \\ -]'{i - f.., g hh;, d b ~ ! $w r as ' 4yf ) p s W 4 o a t y,h m. a. . s e. t 1 n ' y q,.. .'4 f t .A 3,3 d

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. Chairman a.. " t Craumanand > ^ '

g iCiticorpandOtitank,NN; _

N,b (NerymonthtoadministettheaffairsON ' ynef Emm y m ,DOf6ALS HOBEDgBT'41 C 'l g j g MIthe Of9hNations Certain specific Cper&"'EN hmon orporabol u ' " JeesN as.gMW, 3 Deector Emerituq and Former Chair. man 4ggb,,;j Mb c < tions an. d areas of the corporation and.': Proest of theBoard s 4 erecto's' committees,whoseactMtles4 m ' ofTechnokgy !.T ' $<LJ C &nneyCompary inU~, d d.' N N.O 4 i y m g[ dhe bank are fe9Ular@ nionitored by the'f,.. J Massactl'isetts instituth" ' +' M anAsuK A.0MOf87ti ' v/ % YNM ' D f ' a. $ Ctavman arc wg, h,Y' [ M Q%are described on the preceding pages, k, ggg g, ppgggy.4,

b CnefE.cuiw omcer m, m 7

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, vee Cnaaman r. ua Oucorp and Outank, NA Q The Boeing ComparyQ _ L $,jJyy ; ' 'ca.a===am sa ' ' ' l $ .%ll DhectorofCiticorp; g j %PQf,; <dO@M Director of Citibankj ' fit 9 e s,as Asm o M.s esossag w y, o s AM h. sW' '4 y;py ' s;, a'N C;ViceChairman qw,, ; Brarihan instir.s 4 WW 'r0 Z. ~;$ Professor Emeritus - 4g =poggggggg.1 4 MN%3q W G K 3g3044 9 9 8.8B A B O OCetia bl e y Q, "?, Graduate School of /. t p , 04- ;The Get6o Vargas Fou T. VgfPresidentW ela M a: $ L .r 2 y memeg,gesagppQ C y wncmcoreandQubantNM C WQ j ? usinessMWnistradon ;' B 1y ~ $pHarvardlJrwersttyiCLIPTDes C.SANWisd,JR id MVice Crwrman, Chairman of tre ' 'i A MTgespeAgtA.cALLamsla i 4*, ~t o o

g! Oticorp and Otibank, NAQ, ' "d QM 7

Executive Committee :, p %p p,,, A. q ; ' J , Jhw : $ector Emcuthe -.-CiticorpandOtitant NL _ P l-['%n S of tre Board ' ' 'r-Roeses.saWTD6P; NM #'$$$g sdh

l V

' furmerChairman % < hWM&gJggnymsgesinarmammarL' N,Q (U f ExxonCorporationi .hiykt8ll W ' ' $mtf:!S Ai - Chairmanand ; i W%@$ LNpsiCo incii 4 (Chairman and t ' ; Chief Executhe Officer e. L 3 C (! Chief Executive Officer 1l. M *' g mW tensmay.u,,. ' y jgj# @ MW d 6 y iDirector and Former i m "yl GeretalMotorsCorporation F i / d@ etBLev pt,CetAffetaR[1N Y J Cnalrrranof theBoard. P i -9 S, pgagggnale A.790000A8 O, fi 4 d x*O T M t Chairmanand > & Monsanto. Company a President i._ J>. dlC Y g L H?\\ hk w D, i i N.J.94Appsgs( '

TheFord,FoundationAp[JRN [3(

W@gq}i Chef Executtve Officer n.hl J e 3DSAR 8.WNDOLAR8 40 / ?M j E,astman Kodak Compary g j,,' 3 ;5enior Counselor J, M etmanJ.cosamess I 4? W ' BechtelGroup.Inc. -lf m Chatman and Chief Emet.uthe OfficerN,%N ( Eldu Pont de Nemours & Compary ; g, g j") f h n piceCrwrman ; w A,*% Wc.,, Ten negggggenW '7" 'f' Wl ' o tA * *N ' 4 M Ceticorpand Otibar*, NA 2 % V 'i Director and Former a ' ' C<* W7 L S (' / 4 M ChairmanOf treBoard" O p' Nil 't,,'9 'M m q'#s kf J ypGS. 4 -s V 5 GjOS/[MM[x qQ,N f h,.',;, 37 '. 3,,, ,.hs 4 i)(eroKCorporaflon d. 4 Mi,i, i,1dt ~~ A >N r-m" s ge W %: L o 1 m + 4 s 3l j t h,N4b! M, Uh 3 (( - fp s ' hf

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k TYnnisO Green ~ i M4. Ibbert D Balief.## ,7 ~ Guenther E.Gelner ? WH'k e W.lliam R. Rhodes W ' 4

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d. Form 10 K W /

= ? Box 4855.NewbrA NY10043? % ? Annual Report pursuant to Section 13 M 3 yn 1190 a.m in the auditorium of Oticorp e/M @# Tor 15fd) of The Securit+s Exchange Act M l '%n Headquartet4 at 399 Park MnueJh(1 ' ' CO49tANWBR ABENTE AfdD E,

e f 1934 for the fiscalyear ended /^ b.'

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Firstinterstme Bankof Californiai 2 + ' f CommissionFileNumberb5738L d$ New

CD41981STRABIS

,S4 b ' EDecember31,1989; 1 km 7 O W,C 4 g Mlarmalnoticeof thismeeting,together) A707WilshireBoulevard6 '.. 3, f ;* V %* W-d O Sf 4, A:, y. ywith a prowyand a proxystatement, has ; Jos Angeles, CA900174 .n W been included with th!s annual report. e h! i. O mm MA. IP A, s uw e M ] Stockholders are urged to s!gn and return v (TheFintNationalBankof Chicag6"[M[iW % ' M N E, wyM( ' [M] j; ;y,. c ~ Mdtheir proNies promptly to assure that the j oN iCorporateTrust Departmenty W'O o $ 45tockof thecorporationWillberepre '

One First NationalPlaza M ' '

4 ,2 9o-WM " #l 4 % sented as fully as possible at the meetilng)'. a

• 0 Chicago,11. 60670 L. - "' M % W W ! Incorpormed in the Sta gl y.,<

m 4 W $4 4:l u v. IRS Emploptidentification Numbergy ?W g( hk@Oiic$rp'haEappiddimately55.000come ' i MohtreAlltUstCompar%" Ii W 4 h 7 lg p3 2614988 %. mf W 14G Address:399ParkMnue,34 g Pmon stockholders of record Atout 82% ' 15 King Street West --' ~ " - $N ' 'N %jelephoneG212)55N00%0g- ~

@Gw j IMhof the Oticorp shares entitled to. vote

' q = ? Toronto, Ontario '

M N D'k # D3 ' ', j m h@d last annual stockholders

• meeting on < 3 jq JCanada M5H184 M2 Q

,j q fwerestedin person or byproxyat the @ ';io g%,, M I S SISTB R B D, g y / -j W- + Mki Aprill8.1989. Additionally there are 1000 I ' AAl%NB888MAf98 HOG.DSR s. 8888VICEORSAN8 ear 80N AND e T? MM)N h NWequity hniders of 5%% Convertrble i pK p ;inatedNotesDue2000n In-'i'"3 FTThe Yasuda Trust and Bariking u +14 M ' Alist f Oticorpsecunt w'h N N5ubord m. IWRPINGBANIC . A MA WNEDE l m9, ' g b IAddrhonal copes of this annualieport E ' ( Company 1.imited, f "* '. p' j. pursuant to Section 12(b) of the Secuntiesy gExcMnge Act oms avaWrom g,,,, g Ware available$ite to Oticorp, Corporate > e j5tock Transfer Department n, Cidcorp. Corporate Administration.1 g J <g L il 21, Yaesu, Chuo-ku,n '"L W5: Wpl Affairs Division l399 ParkMnve,W' ' r3MadMme. Nmtrk M m3g>g Nmbrt NY10043g 4. ^ ; Tokyo, Japan,.;' ,y1 y 4 ,Qg M d Cck~ of theWrittentranscidardiape ~ Cl1900RPBTOCICM8780g"gg 1 D ,a v^ a"V=*- .e,w aw J f s w ~ f Ai of December 31,'1989, O 324,742,783 shares of wmmon stock A g recordings of the proceedings at Oticorp& NewWrk Stock Exchangr M i i y@dOticorpstockholdersatcost fromm e , Pacific Stock Exchange e W ( stockholders'. meetings are available to ; j i( Midwest Stock Exchangefg;f ' Wf outstanding j 4sya2 g j 'W =+J*: 5 W ,y' / 5 Citicorp (1) has filed all reports required to ' %Oticorp Corporate Administration,' 'a ? London Stock Exchangeg ; W

yy H@p$399 ParkMnue,Newbr4 NY10043 A ybefiledbySection13or15(d)of thef Q gp

, ' ! Tokyo Stock Exchange d ' AmsterdamStockExchanget c 3 ecurlbes Exchange Act of1934 dunng h 5 yy g e + A .r NM SupplemenOiIinancialdatairhputs iZurich Stock Exchangei s 'N the preceding 12 months (or for such g g p.y (shorterperiodthattheregistrantwas@t i Nitshed quartedy and are available from, z Geneva Stock Exchange; W i ' tequired to file such reports), and (2) has ;, q $ d Oticorp, investor Relations Department, c BaselStock Exchange-: 4 , been subject to such filing requiremen a i 's ~ 5 gj@m ' y pg ;(h. 399ParkMnue,Newtrk,NY10043c LToronto Stock Exchange p fu the past 90 days.7 i, ~D0sseldorf Stock Exchange 7 ' Frankfurt Stock Exchange- >5' - The aggregate ma"rket value of Oticor%py, s<

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,g i c @j[Iygg ; < q common stock held by noryaffiliates on g fg9

ObcorpK idbank jamary3pwasappmagely[ gp

,Q l M, <@%zu,, #. 399 Park Avenue : o $7.7 billion. p q 'f dW NewtrK NY10043 m 1 (4 ;.212)559-1000- ~ Certab Information has beeriincorpo-4

• 1

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b W(N 3 ' [ g~m $y6 ,4 ,s rated by reference as described herein @,., JintoPartlliof tnis AnnualRepor!fromM ' M. M 4% g', g 4 l Oucorp's proxy statement relating to its r ' Mt 1 1 "$g%* ' ' annual meeting of stockholden to be ( %' %g ay/ held on April 17.1990. Mb '4 9 m,+ ,)V !( r y a. A' ] Pim. 7 ~ j1, 'i (, K'

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^ e m-. ~ . g'a gMh, - ;g ; g _m a gy m> gx ne a : gp? g se s k g _ %:%arenue e bund a wondwde organinson dechcated to serwng our customers and take pride in the quakty of seMce we dMM r y >e t <M .d-t ,m m; $f My $ y, l Atmomng addresses and phone numbers are part_ of our serwce commitment 64 ~ A- ? ?,a V WM lV asshtance! /, s +

w n,

For information on Caicorp stocic wree. o: Oticorg inestor Relations Department. 399 Park Mnue. New1brk, NY t

n g- ' g; '; + +,, 3 w W ff V l-M. DMdend Reirwestment Plan Questos) W Q m. W. J. J. -kM i, w.Ii f/. 3.%M212)SSN1263, p y @,f s M. A s. A$1212)657-7055 s y"h : Dudenct Arinestment(AccountQuestions)g 7.Q.n.74;Lf.. 3. LostStockCertificates i T a -. q;.y gm. M./ ha, t.c:f x. m.. i 4g g..q:q q. y q.;. M. A(212)657-5 e' s, T ! DMdendCheckinquines, y.h. ff yg,4. 2 541212)657 7304 ) .Ny.s

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c:M 212)657 5761: h'f?- Estaleinquiries/Ransfer flequnements Wi' #NW. 6.h. #." 14,;. ~. i. 7 si wn((212)657-5761 ' k < 15aockTsarsfer.4:. v.4 .V-.x. Mi.s w ty %^ & i. b, L For all other shareholder concerrg please wrlie: Corporate Admin'stratiort 399 Park Mnue. Newibrk, NY 10043..

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l J, ; ". % ~ Oticorp Brokeragel,..., f W f,, my. )y'4' Oticorpinsurance5ervicesc. -c ..nqw1 .y...4 ,.[212)736-8170) o NeW Wrk Oty,.~ @ s f.,e e g, .L. .1 . a :.f... , v. (800)237-4365, u b, % -.. .....-. x,. .,'.v. A $mg For information on inestment management trust, and estate matters, write to: Oticorp, Asset Managemeg 641 Lexington Aenue. .e ..N-.. ........w. .. S (212)715-0 41: R E Newbrk,NY10043 ctcalt;. i=: 4. <;. [%. $e : p .c./.- w. J (2121559-10004 f For bank dwectory assistance. calt ;.,.,: 2 ........s. O. p ^ @p 1 ns. 94.: y.p j i r I [. l i i 1ij flypl/ 14[', i VW J' 5 A, f? 'n, ', t e em, : e;. u ,@'W . p;s," R <,; @ (a. + A,y ,s r .. 4 c,P; }y ' c# 9.- d i A,- ,t gi ) n 4 ii i m.- ,3 K n ?- Qc ,s p 'd5 y -4L {}l^ d) t-JJo .s. . ]1: r 4o. m v.., K }. y % 't OTICORP AND CmMNK ARE NEGt51ERED TRADEM'M5.CodR PHOTOS CLOCKME FROM UPPER RGHT:011MNK. fMBLCi MRTHOLoMEW DWON X*JEi GAMMA UAISON: - w$ d ',,sM THE CHILD 8EN.lN50E PHOTOS 91LL MY* PRINTED IN TH6 U$ A.400M.cD2919 4 COPYRGHi l9 .~ n ,ine J yy ? y%$w%,' W d y e am a

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f b 4 L q.wg,m - y [i(N,S$ MSF $$IkSPACTIOR St $ft$60FP l' l 4 Citicoro 4 3 1 ~_ is building a globalfinancial services organisation dedicated to satisfying our customers.Oticorpers in 90 countries work together to consistently deliver quality service to customers 1 and colleagues. The Service Eacellence Award honors Oticorpers i who serve our customers j best. Award winners featured here are among the 2,000 who have earned

3 Service Eacellence

,, 4 /^A 1 dudr ^ recognition in 1989. We applaud these outstanding membersof theworldwide Oticorp team. e f ron ich !.. ngit

1. In Taw.c Ato-;1S C hac 5 I % ary Chairma' Jore 5 Reea Chanes Ma:; C f un i

2. In eglia Dmest Ga' tic't's Prest 1ent Roard 1'

5 Bra 11M Matep Chwklot Sa'Meeta Widha'o Groor E xec utie Ft',va' C h.a s. In (( Greet e Grou; E =et an* ator ; Menetes I s Eien Siount N*os touhoako, Dimitr DespotopoaK's Avs: ass Daha NhiN Sakka

4. In W'ielseia Ma,1ee 3e Orinet VK e Chaw v Lave x e M Smai Consaet de 57 f

Hernweez orrua va' De' Me, 5. l" the t r-Unitea 5:ates Baos - a: 1s Seu e Oaant, s D# rector 5twer R 5ers'c'. Na'K v Stockbridge Groer E secu!ia James t Ba'les 6. I' the ,y United KI'Q)F O'JUE EItt% JDst kts? A' Brutsche Sectar E xe;ot* Mictaa A C a"en Conona M:, oe 7. e ;apa bs've c sa she Matotc F uk aja Cowate Doecty of r N* "tef 0H v (gstume' A' fan Dina Mizae A'a:awabe s. F "ie #t a d Sta:es

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