Citibank 2012 Annual Report Download - page 122

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CORPORATE LOAN DETAILS
For corporate clients and investment banking activities across Citigroup, the
credit process is grounded in a series of fundamental policies, in addition
to those described under “Managing Global Risk—Risk Management—
Overview” above. These include:
•฀ joint business and independent risk management responsibility for
managing credit risks;
•฀ a single center of control for each credit relationship, which coordinates
credit activities with each client;
•฀ portfolio limits to ensure diversification and maintain risk/capital
alignment;
•฀ a minimum of two authorized credit officer signatures required on
extensions of credit, one of which must be from a credit officer in credit
risk management;
•฀ risk rating standards, applicable to every obligor and facility; and
•฀ consistent standards for credit origination documentation and remedial
management.
For additional information on Citi’s Corporate loan portfolio, including
allowance for loan losses, coverage ratios and Corporate non-accrual loans,
see “Credit Risk—Loans Outstanding, Details of Credit Loss Experience,
Allowance for Loan Losses and Non-Accrual Loans and Assets” above.
Corporate Credit Portfolio
The following table represents the Corporate credit portfolio (excluding
Private Bank in Securities and Banking) before consideration of collateral,
by maturity at December 31, 2012 and 2011. The Corporate credit portfolio
is broken out by direct outstandings, which include drawn loans, overdrafts,
interbank placements, bankers’ acceptances and leases, and unfunded
lending commitments, which include unused commitments to lend, letters of
credit and financial guarantees.
At December 31, 2012 At December 31, 2011
In billions of dollars
Due
within
1 year
Greater
than 1 year
but within
5 years
Greater
than
5 years
Total
Exposure
Due
within
1 year
Greater
than 1 year
but within
5 years
Greater
than
5 years
Total
exposure
Direct outstandings $198 $ 70 $18 $286 $177 $ 62 $13 $252
Unfunded lending commitments 123 180 12 315 144 151 21 316
Total $321 $250 $30 $601 $321 $213 $34 $568
Portfolio Mix—Geography, Counterparty and Industry
Citi’s Corporate credit portfolio is diverse across geography and counterparty.
The following table shows the percentage of direct outstandings and
unfunded lending commitments by region:
December 31,
2012
December 31,
2011
North America 45% 47%
EMEA 29 27
Asia 18 18
Latin America 88
Total 100% 100%
The maintenance of accurate and consistent risk ratings across the
Corporate credit portfolio facilitates the comparison of credit exposure across
all lines of business, geographic regions and products. Counterparty risk
ratings reflect an estimated probability of default for a counterparty and are
derived primarily through the use of validated statistical models, scorecard
models and external agency ratings (under defined circumstances), in
combination with consideration of factors specific to the obligor or market,
such as management experience, competitive position and regulatory
environment. Facility risk ratings are assigned that reflect the probability
of default of the obligor and factors that affect the loss-given-default of the
facility, such as support or collateral. Internal obligor ratings that generally
correspond to BBB and above are considered investment grade, while those
below are considered non-investment grade.