Citibank 2012 Annual Report Download - page 296

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27. PLEDGED ASSETS, COLLATERAL, COMMITMENTS
AND GUARANTEES
Pledged Assets
In connection with the Company’s financing and trading activities, the
Company has pledged assets to collateralize its obligations under repurchase
agreements, secured financing agreements, secured liabilities of consolidated
VIEs and other borrowings. At December 31, 2012 and 2011, the approximate
carrying values of the significant components of pledged assets recognized on
the Company’s Consolidated Balance Sheet include:
In millions of dollars 2012 2011
Investment securities $187,295 $129,093
Loans 234,797 235,031
Trading account assets 123,178 114,539
Total $545,270 $478,663
In addition, included in cash and due from banks at December 31, 2012
and 2011 are $13.4 billion and $13.6 billion, respectively, of cash segregated
under federal and other brokerage regulations or deposited with clearing
organizations.
At December 31, 2012 and 2011, the Company had $286 million and
$1.4 billion, respectively, of outstanding letters of credit from third-party
banks to satisfy various collateral and margin requirements.
Collateral
At December 31, 2012 and 2011, the approximate fair value of collateral
received by the Company that may be resold or repledged by the Company,
excluding the impact of allowable netting, was $305.9 billion and
$350.0 billion, respectively. This collateral was received in connection with
resale agreements, securities borrowings and loans, derivative transactions
and margined broker loans.
At December 31, 2012 and 2011, a substantial portion of the collateral
received by the Company had been sold or repledged in connection with
repurchase agreements, securities sold, not yet purchased, securities
borrowings and loans, pledges to clearing organizations, segregation
requirements under securities laws and regulations, derivative transactions
and bank loans.
In addition, at December 31, 2012 and 2011, the Company had pledged
$418 billion and $345 billion, respectively, of collateral that may not be sold
or repledged by the secured parties.
Lease Commitments
Rental expense (principally for offices and computer equipment) was
$1.5 billion, $1.6 billion and $1.6 billion for the years ended December 31,
2012, 2011 and 2010, respectively.
Future minimum annual rentals under noncancelable leases, net of
sublease income, are as follows:
In millions of dollars
2013 $ 1,220
2014 1,125
2015 1,001
2016 881
2017 754
Thereafter 2,293
Total $ 7,274
Guarantees
The Company provides a variety of guarantees and indemnifications to
Citigroup customers to enhance their credit standing and enable them
to complete a wide variety of business transactions. For certain contracts
meeting the definition of a guarantee, the guarantor must recognize, at
inception, a liability for the fair value of the obligation undertaken in issuing
the guarantee.
In addition, the guarantor must disclose the maximum potential amount
of future payments that the guarantor could be required to make under
the guarantee, if there were a total default by the guaranteed parties. The
determination of the maximum potential future payments is based on
the notional amount of the guarantees without consideration of possible
recoveries under recourse provisions or from collateral held or pledged.
As such, the Company believes such amounts bear no relationship to the
anticipated losses, if any, on these guarantees. The following tables present
information about the Company’s guarantees at December 31, 2012 and
December 31, 2011:
Maximum potential amount of future payments
In billions of dollars at December 31, 2012 except carrying value in millions
Expire within
1 year
Expire after
1 year
Total amount
outstanding
Carrying value
(in millions of dollars)
Financial standby letters of credit $ 22.3 $ 79.8 $ 102.1 $ 432.8
Performance guarantees 7.3 4.7 12.0 41.6
Derivative instruments considered to be guarantees 11.2 45.5 56.7 2,648.7
Loans sold with recourse — 0.5 0.5 87.0
Securities lending indemnifications (1) 80.4 — 80.4 —
Credit card merchant processing (1) 70.3 — 70.3 —
Custody indemnifications and other — 30.2 30.2 —
Total $191.5 $ 160.7 $352.2 $3,210.1
(1) The carrying values of securities lending indemnifications and credit card merchant processing are not material, as the Company has determined that the amount and probability of potential liabilities arising from these
guarantees are not significant.