Citibank 2013 Annual Report Download - page 96

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Allowance for Loan Losses
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)(4) 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 (5) 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%
(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 loan loss reserves for North America mortgages as of December 31, 2012 represented approximately 33 months of coincident net credit loss coverage.
(4) Of the $8.6 billion in loan loss reserves, approximately $4.5 billion and $4.1 billion is determined in accordance with ASC 450-20 and ASC 310-10-35 (troubled debt restructurings), respectively. Of the $125.4 billion
in loans, approximately $102.7 billion and $22.3 billion of the loans are evaluated in accordance with ASC 450-20 and ASC 310-10-35 (troubled debt restructurings), respectively. For additional information, see
Note 16 to the Consolidated Financial Statements.
(5) Includes mortgages and other retail loans.
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 summary provides a general
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 generally based on aging, i.e., the
borrower has fallen behind in payments.
•฀฀Mortgage loans discharged through Chapter 7 bankruptcy, other than
FHA-insured loans, are classified as non-accrual. In addition, home equity
loans in regulated bank entities are classified as non-accrual if the related
residential first mortgage loan is 90 days or more past due.
•฀฀North America Citi-branded cards and Citi retail services are not included
because 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. Non-accrual loans may still be current on interest payments. 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. For all other non-accrual
loans, cash interest receipts are generally recorded as revenue.