Citibank 2015 Annual Report Download - page 294

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27. PLEDGED ASSETS, COLLATERAL, GUARANTEES
AND COMMITMENTS
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. The approximate carrying values of the
significant components of pledged assets recognized on the Company’s
Consolidated Balance Sheet included:
In millions of dollars 2015 2014
Investment securities $210,604 $173,015
Loans 203,568 214,530
Trading account assets 97,205 111,832
Total $511,377 $499,377
In addition, included in Cash and due from banks at December 31,
2015 and 2014 were $5.0 billion and $6.2 billion, respectively, of cash
segregated under federal and other brokerage regulations or deposited with
clearing organizations.
Collateral
At December 31, 2015 and 2014, the approximate fair value of collateral
received by the Company that may be resold or repledged, excluding
the impact of allowable netting, was $347.5 billion and $346.7 billion,
respectively. This collateral was received in connection with resale
agreements, securities borrowings and loans, derivative transactions and
margined broker loans.
At December 31, 2015 and 2014, 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, 2015 and 2014, the Company had pledged
$405 billion and $378 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
$1.3 billion, $1.4 billion and $1.5 billion for the years ended December 31,
2015, 2014 and 2013, respectively.
Future minimum annual rentals under noncancellable leases, net of
sublease income, are as follows:
In millions of dollars
2016 $1,238
2017 1,002
2018 778
2019 698
2020 567
Thereafter 4,483
Total $8,766
Guarantees
Citi provides a variety of guarantees and indemnifications to its 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, Citi believes such amounts bear no relationship to the anticipated
losses, if any, on these guarantees.
The following tables present information about Citi’s guarantees:
Maximum potential amount of future payments
In billions of dollars at December 31, 2015 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 $ 23.8 $ 73.0 $ 96.8 $ 153
Performance guarantees 7.4 4.1 11.5 24
Derivative instruments considered to be guarantees 3.6 74.9 78.5 1,779
Loans sold with recourse — 0.2 0.2 17
Securities lending indemnifications (1) 79.0 — 79.0 —
Credit card merchant processing (1) 84.2 — 84.2 —
Custody indemnifications and other — 51.7 51.7 56
Total $198.0 $203.9 $401.9 $2,029