Citibank 2012 Annual Report Download - page 100

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Non-Accrual Loans and Assets and Renegotiated Loans
The following pages include information on Citi’s “Non-Accrual Loans and
Assets” and “Renegotiated Loans.” There is a certain amount of overlap
among these categories. The following general summary provides a basic
description of each category:
Non-Accrual Loans and Assets:
•฀ Corporate and Consumer (commercial market) non-accrual status
is based on the determination that payment of interest or principal
is doubtful.
•฀ Consumer non-accrual status is based on aging, i.e., the borrower has
fallen behind in payments.
•฀ As a result of OCC guidance received in the third quarter of 2012,
mortgage loans discharged through Chapter 7 bankruptcy are classified
as non-accrual. This guidance added approximately $1.5 billion
of Consumer loans to non-accrual status at September 30, 2012, of
which approximately $1.3 billion was current. See also Note 1 to the
Consolidated Financial Statements.
•฀ North America Citi-branded cards and Citi retail services are not
included as, under industry standards, credit card loans accrue interest
until such loans are charged off, which typically occurs at 180 days
contractual delinquency.
Renegotiated Loans:
•฀ Both Corporate and Consumer loans whose terms have been modified in a
troubled debt restructuring (TDR).
•฀ Includes both accrual and non-accrual TDRs.
Non-Accrual Loans and Assets
The table below summarizes Citigroup’s non-accrual loans as of the periods
indicated. As summarized above, non-accrual loans are loans in which
the borrower has fallen behind in interest payments or, for Corporate and
Consumer (commercial market) loans, where Citi has determined that
the payment of interest or principal is doubtful and therefore considered
impaired. In situations where Citi reasonably expects that only a portion of
the principal owed will ultimately be collected, all payments received are
reflected as a reduction of principal and not as interest income.
Corporate and Consumer (commercial market) non-accrual loans may
still be current on interest payments but are considered non-accrual as
Citi has determined that the future payment of interest and/or principal
is doubtful.