Citibank 2008 Annual Report Download - page 5

• We made difficult but necessary decisions to reduce headcount and ended the year with
headcount of 323,000, down from 375,000.
• We reorganized operations and technology and other functions to create a more streamlined
organization with greater accountability for performance.
• And we added some of the most seasoned and experienced talent in the industry to Citi’s
leadership ranks.
Our ability to accomplish so much in such a short period in the midst of severe market dislocations
is a testament to the hard work and focus of my Citi colleagues around the world. None of this would
have been possible without their extraordinary perseverance and professionalism.
RESTRUCTURING CITI
We accelerated the second stage of our drive for value creation — Restructuring Citi — by realigning
Citi into two operating units — Citicorp and Citi Holdings. This structure highlights the value of our
core franchise and reflects the rapid and dramatic changes in funding markets, operating models,
and client needs.
The new structure simplifies Citi, and sets out a clear path to profitability and value creation.
In the new structure, Citicorp is our global bank for businesses and consumers. Citicorp consists of
the Global Institutional Bank, which includes Global Transaction Services, Corporate and Investment
Bank, Citi Private Bank, and the Retail Bank. The Retail Bank includes regional consumer and
commercial banking and card franchises around the world. Approximately two thirds of Citicorp’s
balance sheet is deposit-funded. It has relatively low-risk, high-return assets and it operates in the
fastest-growing areas of the world. On a stand-alone basis, I believe there is no stronger financial
services firm than Citicorp.
Citi Holdings includes some great businesses that have strong market positions but are not central
to our core operating strategy. Citi Holdings is made up of brokerage and asset management;
consumer finance, mortgage loans, and private label credit cards; and a special asset pool.
Approximately one third of our headcount supports Citi Holdings and it includes the $301 billion of
assets covered by our loss-sharing agreement with the U.S. government. We will continue to manage
these businesses and assets to ensure we maximize their value to our shareholders and will be alert
to sensible dispositions or combinations.
With lower risk and a streamlined set of businesses, we expect Citicorp to be a high-return and high-
growth business. With Citi Holdings, we will be able to tighten our focus on risk management and
credit quality. And, with the right structure and management in place, we’ll be able to turn our
attention to the third stage of our growth strategy: Maximizing Citi.
2009 AND BEYOND
The best way to make good on our commitments to investors, clients, policymakers, employees, and
citizens is to return Citi to profitability as soon as possible. As a Citi shareholder, you have
experienced an extremely disappointing year and I know that any return to profitability is long
overdue. You should know that we are doing everything in our power to accelerate that return.
We recognize that industry profitability may continue to be affected by asset price volatility and
credit deterioration. But we also see that the policies implemented thus far are setting the stage for
recovery.
We enter 2009 with the drivers of profitability in place. Our funding, risk capital, and underlying
revenue levels are strong. Our expenses and risks have been reduced. We are taking control of what
is within our control. Although 2009 will likely remain a challenging year — particularly in terms of
credit costs — we believe that as the economic environment begins to recover, as it inevitably will,
Citi will be well positioned to create the kind of shareholder value of which we all know Citi is
capable and which you should reasonably expect.