Citibank 2012 Annual Report Download - page 99

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(1) 2012 includes approximately $635 million of incremental charge-offs related to the Office of the Comptroller of the Currency (OCC) guidance issued in the third quarter of 2012, which required mortgage loans to
borrowers that have gone through Chapter 7 U.S. Bankruptcy Code to be written down to collateral value. There was a corresponding approximate $600 million release in the third quarter of 2012 allowance for loans
losses related to these charge-offs. 2012 also includes a benefit to charge-offs of approximately $40 million related to finalizing the impact of the OCC guidance in the fourth quarter of 2012.
(2) 2012 includes approximately $370 million of incremental charge-offs related to previously deferred principal balances on modified loans in the first quarter of 2012. The charge-offs were related to anticipated
forgiveness of principal in connection with the national mortgage settlement. There was a corresponding approximate $350 million release in the first quarter of 2012 allowance for loan losses related to these
charge-offs.
(3) 2012 includes reductions of approximately $875 million related to the sale or transfer to held-for-sale of various U.S. loan portfolios. 2011 includes reductions of approximately $1.6 billion related to the sale or
transfer to held-for-sale of various U.S. loan portfolios, approximately $240 million related to the sale of the Egg Banking PLC credit card business, approximately $72 million related to the transfer of the Citi Belgium
business to held-for-sale and approximately $290 million related to FX translation. 2010 primarily includes an addition of $13.4 billion related to the impact of consolidating entities in connection with Citi’s adoption
of SFAS 166/167, partially offset by reductions of approximately $2.7 billion related to the sale or transfer to held-for-sale of various U.S. loan portfolios and approximately $290 million related to the transfer of a U.K.
first mortgage portfolio to held-for-sale. 2009 primarily includes reductions to the loan loss reserve of approximately $543 million related to securitizations, approximately $402 million related to the sale or transfer
to held-for-sale of U.S. real estate lending loans, and $562 million related to the transfer of the U.K. cards portfolio to held-for-sale. 2008 primarily includes reductions to the loan loss reserve of approximately $800
million related to FX translation, $102 million related to securitizations, $244 million for the sale of the German retail banking operation, and $156 million for the sale of CitiCapital, partially offset by additions of $106
million related to the Cuscatlán and Bank of Overseas Chinese acquisitions.
(4) December 31, 2012, December 31, 2011 and December 31, 2010 exclude $5.3 billion, $5.3 billion and $4.4 billion, respectively, of loans that are carried at fair value.
(5) Represents additional credit loss reserves for unfunded lending commitments and letters of credit recorded in Other liabilities on the Consolidated Balance Sheet.
(6) Allowance for loan losses represents management’s best estimate of probable losses inherent in the portfolio, as well as probable losses related to large individually evaluated impaired loans and TDRs. See “Significant
Accounting Policies and Significant Estimates” and Note 1 to the Consolidated Financial Statements below. Attribution of the allowance is made for analytical purposes only, and the entire allowance is available to
absorb probable credit losses inherent in the overall portfolio.
Allowance for Loan Losses (continued)
The following table details information on Citi’s allowance for loan losses, loans and coverage ratios as of December 31, 2012 and 2011:
December 31, 2012
In billions of dollars Allowance for loan losses Loans, net of unearned income Allowance as a percentage of loans (1)
North America cards (2) $ 7.3 $ 112.0 6.5%
North America mortgages (3) 8.6 125.4 6.9
North America other 1.5 22.1 6.8
International cards 2.9 40.7 7.0
International other (4) 2.4 108.5 2.2
Total Consumer $22.7 $ 408.7 5.6%
Total Corporate 2.8 246.8 1.1
Total Citigroup $25.5 $ 655.5 3.9%
December 31, 2011
In billions of dollars Allowance for loan losses Loans, net of unearned income Allowance as a percentage of loans (1)
North America cards (2) $ 10.1 $ 118.7 8.5%
North America mortgages 10.0 138.9 7.3
North America other 1.6 23.5 6.8
International cards 2.8 40.1 7.0
International other (4) 2.7 102.5 2.6
Total Consumer $27.2 $ 423.7 6.5%
Total Corporate 2.9 223.5 1.3
Total Citigroup $30.1 $ 647.2 4.7%
(1) Allowance as a percentage of loans excludes loans that are carried at fair value.
(2) Includes both Citi-branded cards and Citi retail services. The $7.3 billion of loan loss reserves for North America cards as of December 31, 2012 represented approximately 18 months of coincident net credit
loss coverage.
(3) Of the $8.6 billion, approximately $8.4 billion was allocated to North America mortgages in Citi Holdings. Excluding the $40 million benefit related to finalizing the impact of the OCC guidance in the fourth quarter of
2012, the $8.6 billion of loans loss reserves for North America mortgages as of December 31, 2012 represented approximately 33 months of coincident net credit loss coverage.
(4) Includes mortgages and other retail loans.