Citigroup, Inc. · NYSE:C
Citigroup — Investor Day (December 2006)
22 slides from Citigroup's investor day presentation, Dec 14, 2006
Slide 1: Investor / Analyst Day
Investor / Analyst Day Charles Prince Chairman and Chief Executive Officer Citigroup December 14, 2006
Slide 2: Citigroup: Past, Today, Future
Citigroup 1 Acquisition focus Strong, separate franchises U.S. business concentration Strong expense discipline – acquisition synergies Balanced approach to growth One face to the customer Increasingly international Sharpened expense discipline Primarily organic Breaking down silos Greater internati
Slide 3: 2006 YTD Financial Recap
2006 YTD Financial Recap Revenues $62.9 $65.8 5% Non-int. rev. up 9% Operating Expenses 33.8 38.1 13% 9% ex-SFAS 123(R) Credit Costs 6.9 5.6 (19)% Pre-Tax Income 22.2 22.1 -- Taxes & Minority Int. 7.3 6.0 (18)% Income from Cont. Ops. 14.8 16.1 9% EPS from Cont. Ops. $2.85 $3.22 13% Return on Equity
Slide 4: 2006 YTD Financial Recap: Revenue and Net Income Growth
2006 YTD Financial Recap Revenues as a % of C (1) 34% 22% 31% 11% 2% Revenue and Net Income Growth Revenues Net Income as a% of C (1) 37% 20% 32% 6% 5% Net Income (1) Excludes GCG Other, Corporate/Other and Discontinued Operations. Excluding SFAS 123(R) charges. 3 (2)% 10% 14% 16% (41)% U.S. Consume
Slide 5: U.S. Consumer Trends
U.S. Consumer Trends ($B) (1) Managed basis. (2) Reflects $565MM pre-tax accounting charge to conform accounting practice for rewards. 2006 YTD Financial Recap 4 Revenues Expenses $14B $32B Average Deposits Average Loans (1) (2) 390 401 414 422 4Q '05 1Q'06 2Q'06 3Q'06 7.0 7.3 7.6 7.8 4Q'05 1Q'06 2Q
Slide 6: 2006 YTD Financial Recap: Expenses
3% Investments 4% SFAS 123(R) 2% Acquisitions 4% BAU 2006 YTD Financial Recap Expenses ($B) 13% Growth Components 5% CIB 3% Int’l Consumer 3% GWM 2% U.S. Consumer Business Components Expense Composition 5 33.8 38.1 YTD 3Q'05 YTD 3Q'06
Slide 7: Progress on 2006 Strategic Initiatives
Progress on 2006 Strategic Initiatives Expanding Our Distribution Network On track for 1,100+ new retail bank and consumer finance branches; 146 ALMs in Japan CIB offices in Kuwait, Dubai Int’l Financial Centre Partnerships: 7-Eleven, Expedia, Shell, Home Depot Transferring Expertise – Connecting Ou
Slide 8: Strategic Acquisitions
Strategic Acquisitions Full acquisition Preferred approach Full strategic control Partial ownership Strong local partner Strategic cooperation Potential to increase ownership Board representation Management control Restructuring opportunity 12.3% Stake 20% Stake 20% Stake 7 Quilter
Slide 9: Our Priorities for 2007
Generate Growth in U.S. Consumer Re-weight Towards Int’l Consumer, CIB, GWM Sharp Focus on Expense Management Credit Management Our Priorities for 2007 8
Slide 10: Generate Growth in U.S. Consumer
Generate Growth in U.S. Consumer Broadening Core Business Activities Expanding Distribution Integrating Technology Serving Customers as One Company 9
Slide 11: Broadening Core Business Activities
Broadening Core Business Activities Retail Bank Cards Consumer Lending Checking, savings and overdraft products offered through Gateway branches 52 branches in 7 states by year-end 2006 Sales through branches Pilot in 540 branches, full rollout in 2007 Auto loans in branches Rolled out in 46 states
Slide 12: Re-Weight Towards Int'l Consumer, CIB, GWM
Re-Weight Towards Int’l Consumer, CIB, GWM Fill out geographic gaps Transfer expertise Expand distribution Drive efficiency Broaden product capabilities Expand client base Enhance advisory platform Expand balance sheet businesses On-shore build-out Int’l Consumer 23% CIB 31% GWM 11% U.S. Consumer 35
Slide 13: Int'l Consumer: Expanding Distribution
Int’l Consumer: Expanding Distribution Benefits include: On-site convenience Payroll convenience for employer Relationship deepening with employer and employee Continue to grow strong base of 12,000 companies with ~1.5MM customers Plan to launch in 5 countries in 2007 Growing source of new accounts
Slide 14: Corporate & Invest. Banking: Public Sector Group
Corporate & Invest. Banking: Public Sector Group Government Clients Ministries of: Finance Infrastructure Privatization Housing Solutions Cost reduction & efficiency Monetization Risk mitigation Financing strategies Growth Priorities in 2007 Pensions & Invest. Authorities Local & Regional Government
Slide 15: Global Wealth Management
Global Wealth Management Two Key Strategic Priorities Grow Banking and Lending Expand Advisory Business 15% Integrated SB and CPB product capabilities Strong growth in SB lending Consumer partnerships – real estate lending; commercial banking Launched bank deposit tiered pricing Linked Smith Barney/
Slide 16: Sharp Focus on Expense Management
Sharp Focus on Expense Management Structural review of expense base Back and middle office focus Drive meaningful efficiencies over long term Investment spending dynamically managed Influenced by: Environment: yield curve, credit Strategic progress: significant ramp-up in 2005 and 2006 Market testin
Slide 17: Operations & Technology
Operations & Technology Simplification & standardization Target ~$2.0B in technology run-rate savings by 2009 Consolidation of data centers Consolidated core transaction systems Developers in low cost locations Centralized procurement Common customer-facing systems North America: Integrate products
Slide 18: Credit Management – Portfolio Quality
30+ day delinquencies are lower than the industry average Credit Management – Portfolio Quality Credit environment generally stable with selected country-specific issues including: Mexico: Portfolio growth Taiwan: Debt Relief Program Japan: Consumer Finance – increased reserves; potential reposition
Slide 19: Selected 2007 New Deliverables
Selected 2007 New Deliverables 18 1. Structural expense review completed 1Q’07 2. Hardwire U.S. Consumer Connect Smith Barney and Citibank technology platforms 2Q’07 Single sales & service platform across US credit cards 4Q’07 3. Assess Boston and Philadelphia test market success 2H’07 4. Additional
Slide 20: Our Expectations
Our Expectations Organic revenue growth of mid to high single digit Net income growth faster than revenue growth Return on equity of 18% to 20% Long-Term Consolidated Expectations • Yield curve • Credit • Taxes • SFAS 123(R) 2007 Considerations U.S. Consumer Mid-single digit International Consumer D
Slide 21: Looking Ahead
Looking Ahead 20 Future Balanced approach to growth One face to the customer Increasingly international Sharpened expense discipline Future Acquisition focus Strong, separate franchises U.S. business concentration Strong expense discipline – acquisition synergies Primarily organic Breaking down silo
Slide 22: Forward-looking statements
Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially f