Citibank 2008 Annual Report Download - page 39

OUTLOOK FOR 2009
During 2009, Citigroup’s global consumer business is expected to operate in
a continued challenging economic and credit environment. Revenues will
likely continue to be negatively affected by the significant U.S. and global
economic downturn that has impacted customer demand and credit
performance. See “Outlook for 2009” on page 7 and “Risk Factors”
on page 47.
In North America, the continuing deterioration in the U.S. housing
market could continue to adversely impact the cost of credit in the first
mortgage and second mortgage portfolios. With higher levels of
unemployment and bankruptcy filings in 2009, net credit losses,
delinquencies and defaults are expected to continue to increase. In EMEA,
loan volumes are expected to decline as is consistent with tighter origination
standards in view of the weak credit environment and exits in specific
consumer finance businesses. Investment sales and assets under
management are expected to be lower due to weak capital markets and lower
client confidence. In Latin America, revenues, credit costs and business
drivers are expected to be affected by global economic conditions, including
the impact of foreign currency translation, unemployment rates and political
and regulatory developments in the region. In Japan, the Company will
continue to actively monitor developments in customer refund claims and
defaults, political developments and the way courts view grey zone claims,
refunds and defaults, the outcome of which cannot be predicted.
Citigroup’s management and reporting realignment will result in the
restructuring of these businesses, effective for reporting purposes in the
second quarter of 2009, resulting in a focus on the Company’s core assets
within the regional consumer and commercial banking businesses. The
realignment will also allow the Company to seek to realize value from its
other local consumer finance businesses. The Company also anticipates
deploying TARP funds received from the U.S. government by making
mortgage loans directly to homebuyers and supporting the housing market
through the purchase of prime residential mortgages and mortgage-backed
securities in the secondary market, and providing loans to consumers and
businesses facing liquidity problems. See “TARP and Other Regulatory
Programs – Implementation and Management of TARP Programs”
on page 44.
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