Citigroup, Inc. · NYSE:C
Citigroup — Q1 2023 Earnings Presentation
40 slides from Citigroup's earnings presentation, Apr 14, 2023
Slide 1: Earnings Results Presentation First Quarter 2023
Earnings Results Presentation First Quarter 2023 April 14, 2023
Slide 2: First Quarter Results Snapshot
First Quarter Results Snapshot Revenues Net Income EPS 1Q23 $21.4 billion 1Q23 $4.6 billion 1Q23 $2.19 / $1.86 ex-div.(1) vs. 1Q22 12% / 6% ex-div.(1) vs. 1Q22 7% / (19)% ex-div.(1) vs. 1Q22 8% RoTCE(2) CET1 Capital Ratio(3) Tangible Book Value Per Share(4) 1Q23 10.9% / 9.3% ex-div.(1) 1Q23 13.4% 1Q
Slide 3: Progress Against Our Priorities in 1Q23
Progress Against Our Priorities in 1Q23 Transformation Strategic Execution Culture and Talent ✓ Anand Selva named COO and will lead all ✓ Strong TTS performance, up 31%, reflecting ✓ Announced Andy Sieg as new Head of Global enterprise-wide Transformation programs continued execution and investment
Slide 4: Financial Results Overview
Financial Results Overview Financial Results 1Q 2023 Financial Overview Highlights ($ in MM, except EPS) 1Q23 % Δ QoQ % Δ YoY • Revenues Up 12% YoY, up 6% ex-divestiture-related impacts(4) as strength across Services, Fixed Income and USPB was partially offset by Net Interest Income $13,348 1% 23% B
Slide 5: 1Q23 YoY Expense Walk
1Q23 YoY Expense Walk ($ in B) Up ~1% Total Reported Up ~5% Ex-Divestiture Impacts (1) $13.3 $13.2 ~4% 0.1 0.6 ~1% ~(1)% ~0% • Improving Risk & • Client experience, • PBWM advertising & • Other risk & control 1.7 Control environment product and platform marketing initiatives(2) and development in en
Slide 6: Enhancing and modernizing our infrastructure
By enhancing and modernizing our infrastructure, we are creating new products, improving our existing capabilities and risk & controls, while generating efficiencies that will self-fund future investments Platform & Process Simplification Security & Infrastructure Modernization Reducing complexity &
Slide 7: Net Interest Income, Average Loans and Deposits
Net Interest Income, Average Loans and Deposits ($ in B) Net Interest Income 2.31% 2.39% 2.41% 1Q23 1Q23 2.24% QoQ D YoY D 2.05% Citigroup NIM $13.27 $13.35 $0.08 $2.48 $11.96 $12.56 $10.87 1.23 1.49 1.47 $(0.02) $0.38 1.36 Markets(1) 1.09 10.61 11.33 11.78 11.88 $0.10 $2.10 Ex-Markets 9.78 1Q22 2Q2
Slide 8: Consumer & Corporate Loan, Exposure and Credit Metrics
Consumer & Corporate Loan, Exposure and Credit Metrics We maintain nearly $20B of reserves and a reserve-to-funded loans ratio of approximately 2.7% ($ in B) US Cards Loans Corporate Lending Exposure EOP Loans by Segment EOP Loans by FICO Score(1) By Region By Grade Rating Latin America 7% In our IC
Slide 9: Capital and Balance Sheet Overview
Capital and Balance Sheet Overview ($ in B, except per share data) Risk-based Capital Metrics(1) End of Period Assets 1Q22 4Q22 1Q23 $2,455 YoY $2,394 $2,417 3% CET1 Capital $144 $149 $154 329 Cash 272 342 21% Standardized RWAs 1,257 1,143 1,145 CET1 Capital Ratio - Standardized 11.4% 13.0% 13.4% In
Slide 10: Standardized CET1 Ratio Overview
Standardized CET1 Ratio Overview 1Q23 QoQ Standardized CET1 Ratio Walk CET1 Standardized Regulatory Requirement and Target Key drivers resulting in CET1 Capital ratio of 13.4%(1), above the regulatory • Well capitalized today with a CET1 Capital ratio of 13.4%, 140bps requirement as of January 1, 20
Slide 11: Institutional Clients Group Results
Institutional Clients Group Results Institutional Clients Group Results Institutional Clients Group Highlights ($ in MM) 1Q23 % Δ QoQ % Δ YoY • Revenues Up 1% YoY, reflecting continued strong business momentum Net Interest Income $5,028 - 33% in Services and strong corporate client activity in Fixed
Slide 12: ICG Revenue Items and Selected Business Drivers and Statistics
ICG Revenue Items and Selected Business Drivers and Statistics Revenues 1Q23 Highlights ($ in MM) 1Q23 % Δ QoQ % Δ YoY Services Net Interest Income $2,358 1% 41% Non-interest Revenue 1,053 11% 13% • Treasury and Trade Solutions revenues were up 31% YoY, driven by 41% Treasury and Trade Solutions Rev
Slide 13: Personal Banking & Wealth Management Results
Personal Banking & Wealth Management Results Personal Banking & Wealth Management Results Personal Banking & Wealth Management Highlights ($ in MM) 1Q23 % Δ QoQ % Δ YoY • Revenues Up 9% YoY, as growth in NII was partially offset by a decline in Net Interest Income $5,934 1% 10% NIR, driven by lower
Slide 14: PBWM Revenues Items and Selected Business Drivers and Statistics
PBWM Revenues Items and Selected Business Drivers and Statistics Revenues 1Q23 Highlights ($ in MM) 1Q23 % Δ QoQ % Δ YoY • Branded Cards revenues up 18% YoY, driven by higher net interest income, Branded Cards $2,466 4% 18% with interest-earning balances up 18% Retail Services 1,613 14% 24% Retail B
Slide 15: Legacy Franchises Results
Legacy Franchises Results Legacy Franchises Results Legacy Franchises Highlights ($ in MM) 1Q23 % Δ QoQ % Δ YoY • Revenues Up 48% YoY (down 7% ex-divestiture-related impacts(3)), primarily driven by a gain on sale of the consumer business in India, Net Interest Income $1,290 (3)% (14)% partially off
Slide 16: Corporate / Other Results
Corporate / Other Results Corporate / Other Results Corporate / Other Highlights ($ in MM, unless otherwise noted) 1Q23 % Δ QoQ % Δ YoY • Revenues Higher revenue YoY, largely driven by higher net revenue from the investment portfolio Net Interest Income $1,096 5% NM Non-Interest Revenue (182) 47% NM
Slide 17: Full Year 2023 Outlook Unchanged
Full Year 2023 Outlook Unchanged • Full year 2023 Revenues: $78 - $79 billion, excluding 2023 divestiture-related impacts(1,2,3) Revenue • Full year 2023 Net Interest Income, excluding Markets: ~$45 billion(2) Expenses • Full year 2023 Expenses: ~$54 billion, excluding 2023 divestiture-related impac
Slide 18: uncertainty and changes in circumstances. These statements are not guarantees of future results or
- uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors. These factors include, among others: c
Slide 19: Citi
CItI
Slide 20: 1Q23 Financial Summary of Businesses
1Q23 Financial Summary of Businesses ($ in B) 1Q23 ICG PBWM Corp. / Other Legacy Franchises Total $ in billions $ YoY Δ (%) $ YoY Δ (%) $ YoY Δ (%) $ YoY Δ (%) $ YoY Δ (%) NII $5.0 33% $5.9 10% $1.1 NM $1.3 (14)% $13.3 23% NIR 6.2 (16)% 0.5 (1)% (0.2) NM 1.6 NM 8.1 (3)% Revenues 11.2 1% 6.4 9% 0.9 N
Slide 21: Estimated Timelines for Signed Exit Markets & Contribution
Estimated Timelines for Signed Exit Markets & Contribution ($ in B) Exit Markets Contribution to P&L (1) (1) 2021(1) 2022(1) 1Q22 1Q23 Status Revenue Expenses Revenue Expenses Revenue Expenses Revenue Expenses Closed $1.2 $1.5 $2.3 $1.4 $0.4 $0.4 $1.2 $0.3 Signed 0.7 0.6 0.6 0.7 0.2 0.2 0.2 0.2 In P
Slide 22: 1Q23 Credit Portfolio by Segment and Geography
1Q23 Credit Portfolio by Segment and Geography (1Q23 EOP $ in B) ICG PBWM Legacy Franchises Emerging Signed Exit Markets Hong Kong Brazil Singapore Hong Kong Singapore EOP Loans(1): ~$8B 3% 5% 3% 6% 6% China EMEA Geographic Loan Distribution Mexico EMEA 3% 4% North 3% 3% America Developed China 8% K
Slide 23: Credit Trends for Branded Cards and Retail Services
Credit Trends for Branded Cards and Retail Services ($ in B) Branded Cards Retail Services Normalized Normalized EOP 1Q22 4Q22 1Q23 EOP 1Q22 4Q22 1Q23 NCL Rate: NCL Rate: Loans $85.9 $100.2 $97.1 5.00 5.5% Loans $44.1 $50.5 $48.4 3.00-3.25% 90+DPD NCL 90+DPD NCL 4.08% 2.84% 3.45% 3.09% 3.30% 2.36% 2
Slide 24: Update on Russia Exposure
Update on Russia Exposure Overview Timeline • Russia exposure decreased by approximately $1.4B from last quarter: Intention to exit Consumer business ꟷ 1 Exposure decrease of $0.5B driven by the depreciation of the ruble Expand the scope of exit process to include other lines of ꟷ 2 Exposure decreas
Slide 25: 1Q23 Deposit Diversification & Stability
1Q23 Deposit Diversification & Stability High-quality deposit base largely consisting of stickier deposits within our TTS Business (1Q23 EOP $ in B) Deposits by Business Treasury & Trade Solutions (TTS) $2,455 Legacy, • Deposits are a byproduct of the operational products & services we provide $53 O
Slide 26: Steady Average Deposit Growth as we Win New Clients
Steady Average Deposit Growth as we Win New Clients & Deepen with Existing Ones TTS encompasses majority of total Citi deposits and grew at a faster 5-year CAGR than total Citi deposits Total CAGR: 6.8% TTS CAGR: 8.2% 1,343 1,370 1,361 1,363 1,321 1,334 1,323 1,316 1,305 1,304 1,268 104 82 79 107 10
Slide 27: 1Q23 Liquidity Coverage Ratio
$327 1Q23 Liquidity Coverage Ratio ($ in B) $265 Average LCR & Historical Trajectory (30-Day Stress) EOP Available Liquidity Resources(1) Global Liquidity Reserve LCR 4Q20 4Q21 4Q22 Cash HQLA Eligibile Unencumbered Secs. Unused Borrowing Capacity $584 $584B Ratio 118% 115% 118% $1,033 $488 $488B $19
Slide 28: Equity & CET1 Capital Drivers (QoQ and YoY)
Equity & CET1 Capital Drivers (QoQ and YoY) ($ in B, except basis points (bps)) QoQ Common Equity Tangible Common Equity (1) CET1 Capital (2) CET1 Capital Ratio (2) (bps) 4Q22 $182.2 $158.2 $148.9 13.0% Impact of: Net Income 4.6 4.6 4.6 40 Preferred Stock Dividends (0.3) (0.3) (0.3) (2) Common Share
Slide 29: Tangible Common Equity Reconciliation and Citigroup Returns
Tangible Common Equity Reconciliation and Citigroup Returns ($ in MM, except per share amounts) Tangible Common Equity and Tangible Book Value Per Share Return on Tangible Common Equity (RoTCE) 1Q22 4Q22 1Q23 1Q23 Citigroup Net Income $4,606 Common Stockholders' Equity $178,714 $182,194 $188,050 Les
Slide 30: FX Impact
FX Impact ($ in MM) Total Citigroup ICG Foreign currency (FX) translation impact(1) 1Q23 4Q22 1Q22 QoQ YoY Foreign currency (FX) translation impact(1) 1Q23 4Q22 1Q22 QoQ YoY Total Revenue- as Reported 21,447 18,006 19,186 19% 12% Total Average Loans - as reported 283 285 289 (1)% (2)% Impact of FX t
Slide 31: Reconciliation of Adjusted Results
Reconciliation of Adjusted Results Total Citigroup ($ in MM) 1Q23 1Q22 % Δ YoY Total Citigroup Revenues - As Reported $21,447 $19,186 12% Less: Total Divestiture Impact on Revenues(1) 1,018 (47) Total Citigroup Revenues, Excluding Divestiture Impacts $20,429 $19,233 6% ($ in MM) 1Q23 1Q22 % Δ YoY To
Slide 32: Reconciliation of Adjusted Results (cont.)
Reconciliation of Adjusted Results (cont.) Total Citigroup 1Q23 Citigroup Diluted EPS - As Reported $2.19 Less: Total Divestiture Impact on Citigroup Diluted EPS(1) $0.33 Citigroup Diluted EPS, Excluding Divestiture Impact $1.86 1Q23 Citigroup RoTCE - As Reported 10.9% Less: Total Divestiture Impact
Slide 33: Reconciliation of Adjusted Results (cont.)
Reconciliation of Adjusted Results (cont.) ICG ($ in MM) 1Q23 4Q22 1Q22 % Δ QoQ % Δ YoY Total Banking Revenues - As Reported $1,165 $889 $1,886 31% (38)% Less: Gain/(loss) on loan hedges(1) (199) (300) 169 Total Banking Revenues - Excluding Gain/(loss) on loan hedges $1,364 $1,189 $1,717 15% (21)% (
Slide 34: Footnotes
Footnotes Slide 2 1) Excludes 1Q23 pre-tax divestiture-related impacts of approximately $953 million (approximately $648 million after-tax), largely comprising of approximately $1,018 million pre-tax revenue impact primarily from a gain on the sale of the India consumer business, approximately $73 m
Slide 35: Footnotes (cont.)
Footnotes (cont.) Slide 8 1) FICO scores are updated as they become available. The FICO bands are consistent with general industry peer presentations. Results include immaterial balances for Canada. 2) Citi had approximately $8 billion of total office exposure as of March 31st, 2023 (approximately $
Slide 36: Footnotes (cont.)
Footnotes (cont.) Slide 10 1) ei - K filed with the SEC on April 14, 2023. 2) Includes changes in goodwill and intangible assets, and changes in Other Comprehensive Income (including changes in defined plans liability). Citi's regulatory capital ratios and components reflect certain deferrals based
Slide 37: Footnotes (cont.)
Footnotes (cont.) Slide 13 1) Allowance for Credit Losses (ACL) Build / (Release) and Other provisions includes a net ACL build of approximately $501 million related to loans and unfunded lending commitments as well as other provisions of approximately $(4) million relating to policyholder benefits
Slide 38: Footnotes (cont.)
Footnotes (cont.) Slide 16 1) Tangible common equity (TCE) is a non-GAAP financial measure. For additional information on this measure, please refer to Slide 29. Slide 17 1) Excludes 1Q23 pre-tax divestiture-related impacts of approximately $953 million (approximately $648 million after-tax), largel
Slide 39: Footnotes (cont.)
Footnotes (cont.) Slide 25 1) Trading-related liabilities include securities loaned or sold under agreements to repurchase and trading account liabilities and brokerage payables. All other liabilities include short-term borrowings and other liabilities. 2) Net Stable Funding Ratio (NSFR): As previou
Slide 40: Footnotes (cont.)
Footnotes (cont.) Slide 30 1) Reflects the impact of foreign currency (FX) translation into U.S. dollars by applying the first quarter 2023 average exchange rates for all periods presented, with the exception of EOP loans and deposits which was calculated based on exchange rates as of March 31st, -G