Citibank 2008 Annual Report Download - page 37

CONSUMER BANKING
In millions of dollars 2008 2007 2006
% Change
2008 vs. 2007
% Change
2007 vs. 2006
Net interest revenue $ 21,932 $20,741 $18,986 6% 9%
Non-interest revenue 6,720 8,717 7,649 (23) 14
Revenues, net of interest expense $ 28,652 $29,458 $26,635 (3)% 11%
Operating expenses 26,653 16,316 14,540 63 12
Provisions for loan losses and for benefits and claims 19,622 10,761 3,825 82 NM
Income (loss) before taxes and minority interest $(17,623) $ 2,381 $ 8,270 NM (71)%
Income taxes (5,354) 181 2,136 NM (92)
Minority interest, net of taxes 11 43 61 (74)% (30)
Net income (loss) $(12,280) $ 2,157 $ 6,073 NM (64)%
Revenues, net of interest expense, by region:
North America $ 16,627 $16,991 $15,526 (2)% 9%
EMEA 2,596 2,485 2,059 421
Latin America 3,959 4,185 3,740 (5) 12
Asia 5,470 5,797 5,310 (6) 9
Total revenues $ 28,652 $29,458 $26,635 (3)% 11%
Net income (loss) by region:
North America $ (9,003) $ 780 $ 4,002 NM (81)%
EMEA (606) (122) 5 NM NM
Latin America (3,822) 660 1,003 NM (34)
Asia 1,151 839 1,063 37% (21)
Total net income (loss) $(12,280) $ 2,157 $ 6,073 NM (64)%
Consumer Finance Japan (CFJ)—NIR $ 726 $ 1,135 $ 1,566 (36)% (28)%
Consumer Banking, excluding CFJ—NIR 21,206 19,606 17,420 813
CFJ—operating expenses $ 371 $ 576 $ 713 (36)% (19)%
Consumer Banking, excluding CFJ—operating expenses 26,282 15,740 13,827 67 14
CFJ—provision for loan losses and for benefits and claims $ 1,336 $ 1,421 $ 1,118 (6)% 27%
Consumer Banking, excluding CFJ—
provision for loan losses and for benefits and claims 18,286 9,340 2,707 96 NM
CFJ—net income (loss) $ 146 $ (520) $ (133) NM NM
Consumer Banking, excluding CFJ—net income (loss) (12,426) 2,677 6,206 NM (57)%
Average assets (in billions of dollars) $ 547 $ 572 $ 467 (4)% 22%
Return on assets (2.24)% 0.38% 1.30%
Key indicators (in billions of dollars)
Average loans $ 395.3 $ 380.0 $ 330.1 415
Average deposits $ 287.7 $ 276.4 $ 236.7 417
Accounts (in millions) 78.5 79.5 69.7 (1) 14
Branches 7,730 8,247 7,826 (6) 5
NM Not meaningful
2008 vs. 2007
Consumer Banking revenue declined 3%. Net interest revenue was 6%
higher than the prior year, as growth of 4% in average loans and 4% in
deposits was partially offset by a Net interest revenue decline in Japan
Consumer Finance (CFJ). Non-interest revenue declined 23%, primarily
due to a 27% decline in investment sales and a loss from the mark-to-market
on the MSR asset and related hedge in North America.
In North America, total revenues decreased 2%. Net interest revenue was
9% higher than the prior year, primarily due to increased average loans and
deposits, up 3% and 2%, respectively, and a shift towards higher yielding
products. Non-interest revenue declined 29%, mainly due to lower
mortgage servicing revenue. Excluding the impact from the mortgage
servicing revenue, total revenues increased 4%. Revenues in EMEA increased
by 4%, driven by growth in average loans and deposits, improved net interest
margin and the impact of the Egg acquisition. Revenues in Latin America
were down 5%, mainly due to spread compression and lower revenues from
the Chile divestiture not being fully offset by average loan and deposit growth
of 14% and 4%, respectively. Asia revenues decreased 6%, as growth in
average loans and deposits of 5% and 4%, respectively, was offset by a 36%
total revenue decline in CFJ and lower investment product sales. Excluding
CFJ, revenues increased 2%.
Operating expenses growth of 63% was primarily driven by a $9.568
billion goodwill impairment charge, higher business volumes, increased
credit management costs, an $877 million repositioning/restructuring
charge and prior-year acquisitions, partially offset by a $221 million benefit
related to a legal vehicle repositioning in Mexico, lower incentive
compensation expenses and the absence of a prior-year write-down of
customer intangibles and fixed assets in CFJ.
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