Citibank 2010 Annual Report Download - page 39

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2009 vs. 2008
Revenues, net of interest expense declined 17%. More than half of the
revenue decline was attributable to the impact of foreign currency translation
(FX translation). Other drivers included lower wealth-management and
lending revenues due to lower volumes and spread compression from credit
tightening initiatives. Investment sales declined by 26% due to market
conditions at the start of 2009, with assets under management increasing by
9% by year end.
Net interest revenue was 23% lower than the prior year due to external
competitive pressure on rates and higher funding costs, with average loans
for retail banking down 18% and average deposits down 18%.
Non-interest revenue decreased by 3%, primarily due to the impact of FX
translation. Excluding FX translation, there was marginal growth.
Operating expenses declined 27%, reflecting expense control actions,
lower marketing expenses and the impact of FX translation. Cost savings
were achieved by branch closures, headcount reductions and process
re-engineering efforts.
Provisions for loan losses increased $482 million to $794 million. Net
credit losses increased from $237 million to $487 million, while the loan loss
reserve build increased from $75 million to $307 million. Higher credit costs
reflected the continued credit deterioration across the region during the period.