Citigroup, Inc. · NYSE:C
Citigroup — Q2 2023 Earnings Presentation
39 slides from Citigroup's earnings presentation, Jul 14, 2023
Slide 1: Earnings Review Second Quarter 2023
citi Earnings Rest Second Quarter 2023 ee eso ta
Slide 2: Second Quarter Results Snapshot
Second Quarter Results Snapshot 2Q23 $19.4 billion 2Q23 $2.9 billion 2Q23 $1.33 / $1.37 ex-div. vs. 2Q22 (1)% vs. 2Q22 (36)% vs. 2Q22 (39)% 2Q23 6.4% / 6.6% ex-div. 2Q23 13.3% 2Q23 $85.34 2Q22 11.2% 2Q22 12.0% vs. 2Q22 TTS revenues up 15% YoY driven by NIl and NIR with client Cards revenues up 15% Y
Slide 3: Progress Against Our Priorities in Second Quarter
Progress Against Our Priorities in Second Quarter Strategic Execution Culture and Talent Y Continuing to execute on Transformation plans v Examples of progress include: Launched SMaRT codified controls platform in Markets, reducing errors by 85% Reduced manual touchpoints by 90% for Equities Middle
Slide 4: Financial Results Overview
Financial Results Overview Fi ial Results 2Q 2023 Financial Overview Highlights ($ in MM, except EPS) 2Q23 % AQoQ % AYoY YTD'23. %AYoY | * Revenues—Decreased (1)% YoY, as growth in Services, USPB and revenue ' from the investment portfolio was more than offset by Markets, Net Interest Income $13,900
Slide 5: 2Q23 QoQ and YoY Expenses and Key Investment Themes
2Q23 QoQ and YoY Expenses and Key Investment Themes ($inB) Continue to invest to modernize our infrastructure, automate our controls and improve the client experience while generating efficiencies to self-fund future investments Up ~9% Total Reported YoY and 2% QoQ Up ~9% Ex-Divestiture Impacts” YoY
Slide 6: Net Interest Income, Average Loans and Deposits
Net Interest Income, Average Loans and Deposits (sin) Net Interest Income 2.24% 2.31% 2.30% Citigroup NIM $13.27 1.49 Markets Ex-Markets f 2Q22 3Q22 1Q23 2Q23 Average Loans Average Deposits $657 $655 $653 $654 $654 $1,323 $1316 © $4,361 $1,363 $4338 QoQ Yay 435 428 431 434 wy PBWM 325 330 333 | PBWM
Slide 7: Consumer and Corporate Credit Overview
Consumer and Corporate Credit Overview (SinB) Cards Loan Corporate Lending Exposur Latin America 7% In our US Cards portfolio, 80% Retail is Prime (2 680) Services 33% In our ICG portfolio, of our total exposure, ~85% is investment grade. Of the international exposure, approximately 90% is investmen
Slide 8: Capital and Balance Sheet Overview
Capital and Balance Sheet Overview (SinB, except per share data) Risk-based Capital Metrics” 2922 1923 CET1 Capital $145 $154 Standardized RWA 1,144 CET1 Capital Ratio - Standardized 13.4% H Advanced RWA 1,252 CET1 Capital Ratio - Advanced 12.3% Leverag 2922 1923 2923 | Supplementary Leverage Ratio”
Slide 9: Standardized CET1 Ratio Overview
Standardized CET1 Ratio Overview 2Q23 QoQ Standardized CET1 Ratio Walk CET1 Standardized Regulatory Requirement and Target Key drivers resulting in CET1 Capital ratio of 13.3% * Strength in earnings * Capital distribution in the form of common dividends and share repurchases + RWA increases as we co
Slide 10: Institutional Clients Group Results
Institutional Clients Group Results Institutional Clients Group Results Institutional Clients Group Highlights ($ in MM) 2923 % QoQ AYO. | Net Interest Income $5,623 12% 24% | Non-Interest Revenue 4,818 (22)% (30% | Total Revenues 10,441 (% — (9)% : Expenses 7,286 4% 13% | NCLs NM NM ! ACL Build (Re
Slide 11: ICG Revenue Items and Selected Business Drivers and Statistics
ICG Revenue Items and Selected Business Drivers and Statistics ($ in MM) 2923 % 1 QoQ % D YoY Net Interest Income $2,425 3% Non-interest Revenue 1,085 3% Treasury and Trade Solutions Revenues 3,510 3% Net Interest Income 489 2% Non-interest Revenue 656 14% Securities Services Revenues 4145 8% Total
Slide 12: Personal Banking and Wealth Management Results
Personal Banking and Wealth Management Results Personal Banking and Wealth Management Results Personal Banking and Wealth Management Highlights ($ in MM) 2923 % &QoQ % BYOY + Revenues-—Up 6% YoY, as growth in net interest income was partially offset Net Interest Income $5,963 - 1% by a decline in no
Slide 13: PBWM Revenues Items and Selected Business Drivers and Statistics
PBWM Revenues Items and Selected Business Drivers and Statistics Revenues ($ in MM) 2923 % 6 Q0Q % AYOY Branded Cards $2,352 (5)% 3% Retail Services 1,646 2% % Retail Banking 594 (3)% US Personal Banking Revenues 4,592 (2)% Private Bank 605 7% Wealth at Work 224 16% Citigold 974 (2)% Global Wealth M
Slide 14: Legacy Franchises Results
Legacy Franchises Results ($ in MM) 2Q23 % A QoQ * Revenues—Down (1)% YoY, driven by higher rates and volumes in Mexico, Net Interest Income $1,345 4% more than offset by reductions from exited markets and wind-downs Non-Interest Revenue 578 (63)% — Mexico revenues® increased 22% YoY (up 10% ex-FX')
Slide 15: Corporate / Other Results
Corporate / Other Results Corporate / O' Results : Corporate / Other High ($ in MM, unless otherwise noted) 2923 % 4 Q0Q % YOY | + Revenues—Higher revenue YoY, largely driven by higher net revenue from the Net Interest Income $969 (12)% NM | investment portfolio Non-Interest Revenue (292) (60)% (100
Slide 16: 3Q 2023 and Full Year 2023 Guidance
3Q 2023 and Full Year 2023 Guidance | * Continued momentum in net interest income driven by \ | * Fullyear 2023 revenues: $78 - $79 billion, excluding \ | USand Non-US interest rates ‘1 2023 divestiture-related impacts(t2) ! ' + Card growth driven by product investment and ! ' + Fullyear 2023 net in
Slide 17: Forward-looking statements
Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not g
Slide 18: Appendix
Slide 19: YTD'23 Financial Summary of Businesses
YTD’23 Financial Summary of Businesses (SinB) YTD'23 ICG PBWM Corp. / Other Sin billions $ YoY A (%) $ YoY A (%) $ YoY A(%) Net Interest Income $10.7 28% $11.9 9% $24 NM Non-Interest Revenue 11.0 (23)% 0.9 (3)% (0.5) NM Revenues 21.7 (4)% 12.8 8% 1.6 NM Expenses 14.3 8% 8.5 1% 0.6 46% Credit Costs (
Slide 20: Legacy Franchise: P&L Contribution And Estimated Timelines
Legacy Franchise: P&L Contribution And Estimated Timelines (SinB) Exit Markets Contribution to P: Status Revenue Expenses Revenue Expenses Revenu: Expenses Revenue Expenses Closed $1.2 $1.5 $2.3 $1.4 $1.2 $0.3 $04 $0.2 Signed 0.7 0.6 0.6 0.7 0.2 0.2 02 0.2 Mexico 47 3.2 48 3.5 13 1.0 1.4 1.0 Wind-Do
Slide 21: 2023 Credit Portfolio by Segment and Geography
2023 Credit Portfolio by Segment and Geography (2Q23 EOP $ in B) ICG Hong Kong Brazil Singapore § 3% 5% 3%, & ‘Mexico = 3% = Developed China a EMEA 2% Fal 19% = G 6 s < North = : c. America J 19% 1) “a Developed 3 Asia o 4% DM: $185 EM: $93, $278 $278 2% Other som Services Energy and B= = Markets Co
Slide 22: Credit Trends for Branded Cards and Retail Services
Credit Trends for Branded Cards and Retail Services ($inB) Branded Cards ! Retail Services coe cop 2022 far 2023 | yl | for 7022 1028 2028 3100-3.25% | Loans $91.6 $97.1 $103.0 : Loans $45.8 $48.4 $50.0 -*90+DPD -*-NCL : ~*-90+DPD -e-NCL aoax “48% 2.47% | 3.09% 2.36% o18% % 1.73% 1.68% 1.46% 150% 15
Slide 23: Allowance for credit losses chart
• ꟷ ꟷ ꟷ • • • $9.8 $7.9 $8.4 $7.9 $7.5 $6.1 $1.7 $6.6 ($0.6) ($0.6)
Slide 24: 2023 Deposit Diversification and Stability
2023 Deposit Diversification and Stability Treasury and Trade Solutions (TTS) * Deposits are a byproduct of the operational products and services we provide for clients * Deposits across ~90 countries * ~80% are from clients that use all three of our integrated services — payments and collections, l
Slide 25: Steady Average Deposit Growth as we Win New Clients and Deepen with Existing
Steady Average Deposit Growth as we Win New Clients and Deepen with Existing TTS encompasses majority of total Citi deposits and grew at a faster 5-year CAGR than total Citi deposits (SinB) TTS CAGR: 7.4% 4,370 4,321 1343 1,334 4,323 4316 1,361 1,363 4338 1,234 107. 100 94 123 122 104 ga a7 «110 rm
Slide 26: LCR Ratio
LCR 1Q21 1Q22 1Q23 Ratio 115% 116% 120% • • •
Slide 27: Equity and CET1 Capital Drivers (QoQ and YoY)
Equity and CET1 Capital Drivers (Q0Q and YoY) (SinB, except basis points (bps)) Q0Q Common Equity Tangible Common Equity” CET{ Capital”) CET1 Capital Ratio”) (bps) 1023 $188.4 $163.9 $153.8 13.4% Impactof: NetIncome 29 29 29 25 Preferred Stock (0.3) (03) (0.3) (3) Common Share Dividends & Repurchase
Slide 28: Tangible Common Equity Reconciliation and Citigroup Returns
Tangible Common Equity Reconciliation and Citigroup Returns (Sin MM, except per share amounts) Tangible Common Equity and Tangible Book Value Per Share Return on Tangible Common Equity (RoTCE) 2023 1023 2022 2923 y1p'23 Citigroup Net Income $7,521 Common Stockholders’ Equity $188,474 $188,050 si0019
Slide 29: FX Impact
FX Impact (Sin MM) Total Citigroup ICG Foreign currency (FX) translation impact” 2923 1023 2022, Q0Q__—YoY ~—_Foreign currency (FX) translation i 2023 1023-2022 QoQ Total Revenues - as Reported 19,436 21,447 19,638 ~—(9)% ~~ (1)% ~—_ TTS Revenues - as reported 3510 3411 3,056 3h ~~«(1S% Impact of FX
Slide 30: Reconciliation of Adjusted Results
Reconciliation of Adjusted Results ($ in MM) 2923 1923 2922 % 4 QoQ $6. YoY Total Citigroup Revenues - As Reported $19,436 $21,447 $19,638 (9)% ()% Less: Total Divestiture Impact on Revenues” (6) 1,018 78 Total Citigroup Revenues, Excluding Divestiture Impacts $19,442 $20,429 $19,560 (5)% ()% ($inmM
Slide 31: Reconciliation of Adjusted Results (cont.)
Reconciliation of Adjusted Results (cont.) ICG ($ in MM) 2023 1023 2922 % A QoQ % & YOY Total Banking Revenues - As Reported $1,167 $1,165 $2,077 - (44)% Less: Gain/(loss) on loan hedges” (66) (199) 494 Total Banking Revenues - Excluding Gain/(loss) on loan hedges $1,233 $1,364 $1,583 (10)% (22)% Ba
Slide 32: Footnotes
Footnotes Slide 2 }) +Second quarter 2023 results included divestiture-related impacts of approximately $(73) million in earnings before taxes (approximately $(92) million after-tax). This amount primarily included separation costs in Mexico as well as severance costs in the Asia exit markets. The a
Slide 33: Footnotes (cont.)
Footnotes (cont.) Slide7 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) Citihad approximately $8 billion of total office exposure as of June 30, 2023 (approximately $4 bil
Slide 34: Footnotes (cont.)
Footnotes (cont.) SlideQ 1) 2023 is preliminary. For the composition of Citigroup's CET1 Capital, please see Appendix C of the 223 earnings press release included as Exhibit 99.1 to Citigroup's Current Report on Form 8-K filed with the SEC on July 14, 2023. 2) Includes changes in goodwill and intang
Slide 35: Footnotes (cont.)
Footnotes (cont.) Slide 12 4) Allowance for Credit Losses (ACL) Build / (Release) and Other provisions includes a net ACL build of approximately $335 million related to loans and unfunded lending commitments as well as other provisions of approximately $3 million relating to policyholder benefits an
Slide 36: Footnotes (cont.)
Footnotes (cont.) Slide 15 1) Tangible common equity (TCE) is a non-GAAP financial measure. For additional information on this measure, please refer to Slide 28. Slide 16 1) Excludes second quarter 2023 divestiture-related impacts: + Divestiture-related revenues of approximately $(6) million. + Dive
Slide 37: Footnotes (cont.)
Footnotes (cont.) Slide 20 4) Legacy Franchises revenues and expenses ex-divestitures are non-GAAP measures and include the following: In the second quarter 2023: + Divestiture-related revenues of approximately $(6) million. + Divestiture-related expenses of approximately $79 million primarily relat
Slide 38: Footnotes (cont.)
Footnotes (cont.) Slide 26 4) Available Liquidity Resources is defined as end-of-period HLA; additional unencumbered securities, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup; and available assets not already accounted for within Citi's
Slide 39: Footnotes (cont.)
Footnotes (cont.) Slide 30 4) Citigroup results excluding divestiture impacts are non-GAAP measures and include the following: In the second quarter 2023: + Divestiture-related revenues of approximately $(6) million. + Divestiture-related expenses of approximately $79 million primarily related to se