Citibank 2009 Annual Report Download - page 3

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THE NEW CITI:
COMMITMENT, STRENGTH AND PROMISE
Dear Fellow Shareholders,
For Citigroup, 2009 was a watershed year, financially, strategically and operationally. Over the
course of those 12 months, your Company made much progress. By year end, the distinctive
outlines of a strong “New Citi” had emerged from an extraordinarily difficult period in the
history of the Company and the world financial system.
Through the hard work, perseverance and sacrifice by people everywhere in Citi, I believe
we have largely succeeded in addressing the fundamental challenges the Company faced
when I became Chief Executive Officer a little more than two years ago. Moreover, despite
all the turbulence in the economy, our people have steadfastly maintained solid revenue
performance. In fact, we generated $91 billion in managed revenue against $48 billion in
expenses in 2009, while also bringing our balance sheet leverage down to 12 to 1 from the
peak of 19 to 1 in the fourth quarter of 2007.
Citi today rests on a solid foundation, poised to achieve our goal of sustained profitability.
To reach that goal, what we now need is a positive turn in the economy, with a new cycle of
job and credit creation. Longer-term, though, Citi’s potential is not limited just to sustained
profitability. I believe the possibilities are much more dynamic for our unique institution with
operations spanning over 140 countries and a 198-year history of client service.
THE BOTTOM LINE
Citigroup reported a net loss for 2009 of $1.6 billion. Diluted earnings per share was a loss of
$0.80. This figure is sharply smaller than the loss in 2008 for various reasons, primarily lower
revenue marks and a gain on the transaction that created our Smith Barney joint venture.
Within this overall picture, our core businesses, together known as Citicorp, were profitable
with $14.8 billion in net income, versus $6.2 billion in 2008. I believe this performance
demonstrates the strength of the businesses we have identified as the future of Citigroup. Citi
Holdings, where we have placed non-core businesses and assets for divestiture, had a 2009
loss of $8.2 billion, versus $36 billion in 2008.
The 2009 results underscored the importance of Citi’s strong global position, as approximately
50% of our revenues came from markets outside North America. Our businesses in these
markets generally performed very well and overall, Citi’s results show the impact of improved
risk management and disciplined focus on clients’ interests.
Of course, we are not at all satisfied with the Company’s bottom-line performance in 2009. We
know that we have much more to accomplish and prove for shareholders.
COMMITMENT TO RESPONSIBLE FINANCE
Perhaps the most obvious evidence of our positive momentum is that we entered 2009 heavily
in debt to the U.S. taxpayer under the Troubled Asset Relief Program (TARP), but we exited
the year by paying back TARP, with a significant dividend for taxpayers. However, we still owe
the nation’s taxpayers a debt of gratitude that goes beyond repayment of TARP dollars. While
we know that many banks as well as companies in other industries received U.S. government
funds, we at Citi took the need for assistance very hard and very personally. We felt a sense
of obligation not only to repay the government as quickly as was prudent, but also to be
engaged in financial reform and recovery.