Citibank 2010 Annual Report Download - page 52

50
SPECIAL ASSET POOL
Special Asset Pool (SAP), which constituted approximately 22% of Citi Holdings by assets as of December 31, 2010, is a portfolio of securities, loans and other
assets that Citigroup intends to actively reduce over time through asset sales and portfolio run-off. At December 31, 2010, SAP had $80 billion of assets. SAP
assets have declined by $248 billion, or 76%, from peak levels in 2007 reflecting cumulative write-downs, asset sales and portfolio run-off.
In millions of dollars 2010 2009 2008
% Change
2010 vs. 2009
% Change
2009 vs. 2008
Net interest revenue $ 1,219 $ 2,754 $ 2,676 (56)% 3%
Non-interest revenue 1,633 (6,014) (42,375) NM 86
Revenues, net of interest expense $ 2,852 $(3,260) $(39,699) NM 92%
Total operating expenses $ 548 $ 824 $ 893 (33)% (8)%
Net credit losses $ 2,013 $ 5,399 $ 906 (63)% NM
Provision (releases) for unfunded lending commitments (76) 111 (172) NM NM
Credit reserve builds (releases) (1,711) (530) 2,677 NM NM
Provisions for credit losses and for benefits and claims $ 226 $ 4,980 $ 3,411 (95)% 46%
Income (loss) from continuing operations before taxes $ 2,078 $(9,064) $(44,003) NM 79%
Income taxes (benefits) 905 (3,695) (16,714) NM 78
Net income (loss) from continuing operations $ 1,173 $(5,369) $(27,289) NM 80%
Net income (loss) attributable to noncontrolling interests 188 (16) (205) NM 92
Net income (loss) $ 985 $(5,353) $(27,084) NM 80%
EOP assets (in billions of dollars) $ 80 $ 136 $ 219 (41)% (38)%
NM Not meaningful
2010 vs. 2009
Revenues, net of interest expense increased $6.1 billion, primarily due to
the improvement of revenue marks in 2010. Aggregate marks were negative
$2.6 billion in 2009 as compared to positive marks of $3.4 billion in 2010
(see “Items Impacting SAP Revenues” below). Revenue in the current year
included positive marks of $2.0 billion related to sub-prime related direct
exposure, a positive $0.5 billion CVA related to the monoline insurers, and
$0.4 billion on private equity positions. These positive marks were partially
offset by negative revenues of $0.5 billion on Alt-A mortgages and $0.4 billion
on commercial real estate.
Operating expenses decreased 33% in 2010, mainly driven by the absence
of the U.S. government loss-sharing agreement, lower compensation, and
lower transaction expenses.
Provisions for credit losses and for benefits and claims decreased
$4.8 billion due to a decrease in net credit losses of $3.4 billion and a
higher release of loan loss reserves and unfunded lending commitments
of $1.4 billion.
Assets declined 41% from the prior year, primarily driven by sales and
amortization and prepayments. Asset sales of $39 billion for the year of 2010
generated pretax gains of approximately $1.3 billion.
2009 vs. 2008
Revenues, net of interest expense increased $36.4 billion in 2009, primarily
due to the absence of significant negative revenue marks occurring in the
prior year. Total negative marks were $2.6 billion in 2009 as compared
to $37.4 billion in 2008. Revenue in 2009 included positive marks of
$0.8 billion on subprime-related direct exposures. These positive revenues
were partially offset by negative revenues of $1.5 billion on Alt-A mortgages,
$0.8 billion of write-downs on commercial real estate, and a negative
$1.6 billion CVA on the monoline insurers and fair value option liabilities.
Revenue was also affected by negative marks on private equity positions and
write-downs on highly leveraged finance commitments.
Operating expenses decreased 8% in 2009, mainly driven by lower
compensation and lower volumes and transaction expenses, partially offset
by costs associated with the U.S. government loss-sharing agreement exited
in the fourth quarter of 2009.
Provisions for credit losses and for benefits and claims increased
$1.6 billion, primarily driven by $4.5 billion in increased net credit losses,
partially offset by a lower provision for loan losses and unfunded lending
commitments of $2.9 billion.
Assets declined 38% versus the prior year, primarily driven by amortization
and prepayments, sales, marks and charge-offs.