Citibank 2011 Annual Report Download - page 57

35
SPECIAL ASSET POOL
Special Asset Pool (SAP) had approximately $41 billion of assets as of December 31, 2011, which constituted approximately 15% of Citi Holdings assets as
of such date. SAP consists of a portfolio of securities, loans and other assets that Citigroup intends to continue to reduce over time through asset sales and
portfolio run-off. SAP assets have declined by approximately $287 billion, or 88%, from peak levels in 2007, reflecting cumulative write-downs, asset sales and
portfolio run-off.
In millions of dollars 2011  
% Change
2011 vs. 2010
æ#HANGEæ
æVSæ
.ETæINTERESTæREVENUE $ (405)     NM 
.ONINTERESTæREVENUE 952   (42)% .-
Revenues, net of interest expense $ 547    (81)% .-
4OTALæOPERATINGæEXPENSES $ 293     (49)% 
.ETæCREDITæLOSSES $ 1,068     (47)% 
0ROVISIONæRELEASESæFORæUNFUNDEDæLENDINGæCOMMITMENTS (40)   47 .-
#REDITæRESERVEæBUILDSæRELEASES (1,855)   (8) .-
0ROVISIONSæFORæCREDITæLOSSESæANDæFORæBENEFITSæANDæCLAIMS $ (827)     NM 
)NCOMEæLOSSæFROMæCONTINUINGæOPERATIONSæBEFOREæTAXES $ 1,081    (47)% .-
)NCOMEæTAXESæBENEFITS 485   (46) .-
Net income (loss) from continuing operations $ 596    (49)% .-
.ETæINCOMEæLOSSæATTRIBUTABLEæTOæNONCONTROLLINGæINTERESTS 108   (43) .-
Net income (loss) $ 488    (50)% .-
%/0æASSETSæ(in billions of dollars) $41     (49)% 
.-æ.OTæMEANINGFUL
2011 vs. 2010
Net income decreased 50%, driven by the decrease in revenues due to lower
asset balances, partially offset by lower expenses and improved credit.
Revenues decreased 81%, driven by the overall decline in Net interest
revenue during the year, as interest-earning assets declined and thus
represent a smaller portion of SAP. Net interest revenue was a negative $405
million in 2011 and Citi expects to incur continued negative carrying costs
in SAP going forward as the non-interest-earning assets of SAP, which require
funding, now represent the larger portion of the total asset pool. Non-interest
revenue decreased by 42% due to lower gains on asset sales and the absence
of positive marks from the prior year, such as on subprime exposures.
Expenses decreased 49%, driven by lower volume and asset levels, as well
as lower legal and related costs.
Provisions decreased $1.1 billion as credit conditions continued to
improve during the year. The decline of $1.1 billion was driven by a $945
million decrease in net credit losses and an increase in loan loss reserve
releases to $1.9 billion in 2011 from a release of $1.7 billion in 2010.
Assets declined 49%, primarily driven by sales and amortization and
prepayments. Asset sales of $29 billion for 2011 generated pretax gains of
approximately $0.5 billion.
2010 vs. 2009
Net income increased $6.4 billion from a net loss of $5.4 billion in 2009.
The increase was driven by higher gains on asset sales and improved revenue
marks, as well as improved credit.
Revenues 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. 2010 revenues
included positive marks of $2.0 billion related to subprime-related direct
exposure, a positive $0.5 billion CVA/DVA related to 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.
Expenses decreased 37%, mainly driven by the absence of the U.S.
government loss-sharing agreement exited in the fourth quarter of 2009,
lower compensation, and lower transaction expenses.
Provisions decreased 95% as credit conditions improved. The decline in
credit costs was driven by 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%, primarily driven by sales and amortization and
prepayments. Asset sales of $39 billion for 2010 generated pretax gains of
approximately $1.3 billion.