Citibank 2010 Annual Report Download - page 38

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EMEA REGIONAL CONSUMER BANKING
EMEA Regional Consumer Banking (EMEA RCB) provides traditional banking and Citi-branded card services to retail customers and small to mid-size
businesses, primarily in Central and Eastern Europe, the Middle East and Africa. Remaining activities in respect of Western Europe retail banking are included
in Citi Holdings. EMEA RCB has generally repositioned its business, shifting from a strategy of widespread distribution to a focused strategy concentrating on
larger urban markets within the region. An exception is Bank Handlowy, which has a mass market presence in Poland. The countries in which EMEA RCB has
the largest presence are Poland, Turkey, Russia and the United Arab Emirates. At December 31, 2010, EMEA RCB had 298 retail bank branches with 3.7 million
customer accounts, $4.4 billion in retail banking loans and $9.2 billion in average deposits. In addition, the business had 2.5 million Citi-branded card
accounts with $2.8 billion in outstanding card loan balances.
In millions of dollars 2010 2009 2008
% Change
2010 vs. 2009
% Change
2009 vs. 2008
Net interest revenue $ 931 $ 979 $1,269 (5)% (23)%
Non-interest revenue 580 576 596 1(3)
Total revenues, net of interest expense $1,511 $1,555 $1,865 (3)% (17)%
Total operating expenses $1,169 $1,094 $1,500 7% (27)%
Net credit losses $ 320 $ 487 $ 237 (34)% NM
Provision for unfunded lending commitments (4) — — —NM
Credit reserve build (release) (119) 307 75 NM NM
Provisions for loan losses $ 197 $ 794 $ 312 (75)% NM
Income (loss) from continuing operations before taxes $ 145 $ (333) $ 53 NM NM
Income taxes (benefits) 42 (124) 3 NM NM
Income (loss) from continuing operations $ 103 $ (209) $ 50 NM NM
Net income (loss) attributable to noncontrolling interests (1) — 12 —(100)%
Net income (loss) $ 104 $ (209) $ 38 NM NM
Average assets (in billions of dollars) $ 10 $ 11 $ 13 (9)% (15)%
Return on assets 1.04% (1.90)% 0.29%
Average deposits (in billions of dollars) $ 9 $ 9 $ 11 — (18)
Net credit losses as a percentage of average loans 4.34% 5.81% 2.48%
Revenue by business
Retail banking $ 830 $ 889 $1,160 (7)% (23)%
Citi-branded cards 681 666 705 2(6)
Total $1,511 $1,555 $1,865 (3)% (17)%
Income (loss) from continuing operations by business
Retail banking $ (40) $ (179) $ (57) 78% NM
Citi-branded cards 143 (30) 107 NM NM
Total $ 103 $ (209) $ 50 NM NM
NM Not meaningful
2010 vs. 2009
Revenues, net of interest expense declined 3% from the prior-year period.
The decrease was due to lower lending revenues, driven by the repositioning
of the lending strategy toward better profile customer segments for new
acquisitions and liquidation of the existing non-strategic customer portfolios,
across EMEA RCB markets. The lower lending revenues were partially
offset by a 45% growth in investment sales with assets under management
increasing by 14%.
Net interest revenue was 5% lower than the prior year due to lower retail
volumes, with average loans for retail banking down 17%.
Non-interest revenue was higher by 1%, reflecting a marginal increase
in the contribution from an equity investment in Turkey.
Operating expenses increased by 7%, reflecting targeted investment
spending, expansion of the sales force and regulatory and legal expenses.
Provisions for loan losses decreased by $597 million to $197 million. Net
credit losses decreased from $487 million to $320 million, while the loan
loss reserve had a release of $119 million in 2010 compared to a build of
$307 million in 2009. These numbers reflected the ongoing improvement in
credit quality during the period.