Slide 1: Second Quarter 2020 Earnings Review
Citi | Investor Relations Second Quarter 2020 Earnings Review July 14, 2020
Slide 2: Overview
Overview Performance impacted by macro environment – Despite a challenging environment, delivered solid revenue growth, expense control and strong risk management – Supported clients while maintaining credit discipline and balance sheet strength – Credit reserve build primarily reflects deterioratio
Slide 3: COVID-19 Response To Date – Supporting Our People, Clients & Communities
COVID-19 Response To Date – Supporting Our People, Clients & Communities Employees Consumers Corporates Communities • Slow and measured • In the US, offering • Prudently extending credit • Committed more than reentry to site and rapid comprehensive suite of to corporate clients to $100MM to date thr
Slide 4: Citigroup – Summary Financial Results
Citigroup – Summary Financial Results ($MM, except EPS) 2Q'20 1Q'20 %r 2Q'19 %r 1H'20 %r Revenues $19,766 $20,731 (5)% $18,758 5% $40,497 8% Operating Expenses 10,415 10,594 (2)% 10,500 (1)% 21,009 (0)% Efficiency Ratio 52.7% 51.1% 56.0% 51.9% Operating Margin 9,351 10,137 (8)% 8,258 13% 19,488 20%
Slide 5: Global Consumer Banking
Global Consumer Banking (Constant $MM) QoQ % r YoY % r %r 2Q'20 1H'20 • Revenues Revenues $7,339 (9)% (7)% $15,513 (2)% North America 4,742 (9)% (5)% 9,966 0% – Down 7% YoY, driven by lower International 2,597 (8)% (12)% 5,547 (6)% loan volumes and lower interest rates across all regions, partia
Slide 6: North America Consumer Banking
North America Consumer Banking ($MM) 2Q'20 QoQ % r YoY % r 1H'20 %r • Revenues Revenues $4,742 (9)% (5)% $9,966 0% – Down 5% YoY Branded Cards 2,218 (5)% 1% 4,565 4% – Branded Cards: Up 1% YoY, as a Retail Services 1,402 (20)% (13)% 3,149 (4)% favorable mix shift more than offset Retail Bankin
Slide 7: International Consumer Banking
International Consumer Banking (Constant $MM) QoQ % r YoY % r %r 2Q'20 1H'20 • Revenues Revenues $2,597 (8)% (12)% $5,547 (6)% – Latin America: Down 7% YoY, driven by Latin America 1,050 (3)% (7)% 2,249 (3)% lower cards purchase sales, a decline in Asia(1) 1,547 (11)% (15)% 3,298 (8)% loan volum
Slide 8: Global Consumer Banking – Credit Trends
Global Consumer Banking – Credit Trends (EOP Loans in Constant $B) NCL 90+ DPD Global Consumer Banking North America EOP 2Q'19 1Q'20 2Q'20 EOP 2Q'19 1Q'20 2Q'20 Loans $280.6 $281.6 $272.6 Loans $188.4 $188.1 $181.1 3.08% 3.07% 2.84% 2.90% 3.18% 3.30% 2.70% 2.68% 2.52% 2.51% 2.75% 2.80% 2.68% 2.72% 2
Slide 9: Institutional Clients Group
Institutional Clients Group ($MM) 2Q'20 QoQ % r YoY % r 1H'20 %r • Revenues – Total Banking(2): Up 4% YoY: Product Revenues • TTS down 11% YoY(1), as the impact Total Banking $5,668 10% 4% $10,842 (1)% of lower interest rates and lower - Treasury & Trade Solutions (1) 2,307 (5)% (11)% 4,730 (8)% c
Slide 10: Corporate / Other
Corporate / Other ($MM) 2Q'20 QoQ % r YoY % r 1H'20 %r • Revenues Revenues $290 NM (49)% $363 (65)% – Down 49% YoY, reflecting the wind-down of legacy assets and Expenses 469 13% (2)% 885 (14)% lower rate environment, partially offset by AFS gains and positive Credit Costs 164 (15)% NM 356 NM marks
Slide 11: Citigroup – Net Interest Revenue & Markets Revenue
Citigroup – Net Interest Revenue & Markets Revenue Net Interest Revenue (NIR) (Constant $B) 2.72% 2.67% 2.63% 2.56% 2.48% Citigroup NIM 2.17% 2Q'20 2Q'20 1H'20 QoQ r YoY r YoY r $11.39 $11.66 $11.32 $11.63 $11.33 $(0.25) $(0.58) $(0.64) $11.08 Markets(1) 0.86 1.24 0.77 1.13 1.11 1.47 $0.35 $0.23 $0.
Slide 12: Citigroup – Key Capital Metrics
Citigroup – Key Capital Metrics ($B, except TBV) Common Equity Tier 1 Capital Ratio(1) Supplementary Leverage Ratio(1) Tangible Book Value / Share (2) 10 0.00 12.1% 11.7% 11.9% 11.9% 11.9% 11.6% 11.8% 11.5% 13 .0 % 11.2% 11 .0 % 90 .0 9.0% 6.6% 6.5% 6.4% 6.4% 6.4% 6.3% 6.2% 6.7% 80 .0 6.0% 7.0% 5.0%
Slide 13: Conclusions
Conclusions Operated well in challenging environment during 1H’20 – Results in GCB impacted by lower levels of activity due to COVID-19 – Solid client engagement across ICG and robust performance in Markets and Inv. Banking – Delivered profitable first half despite ~$10.5B increase in credit reserve
Slide 14: Forward-looking statements
Certain statements in this presentation are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances.
Slide 15: Cit
Cit
Slide 16: Appendix Table of Contents
Appendix Table of Contents 17. Citigroup Returns 27. Consumer Drivers (continued) 18. Citigroup – LTM Efficiency Ratio and 28. Institutional Drivers Expenses 29. Preferred Stock Dividend Schedule 19. Estimated FX Impact on Key P&L Metrics 30. Equity & CET1 Capital Drivers (QoQ) 20. CECL Details 31.
Slide 17: Citigroup Returns
Citigroup Returns ($B) 2Q’20 Returns Average Average Net Income GAAP ROA(2) Allocated to Common Assets (bps) TCE(3) RoTCE GCB $(0.4) $418 (38) $34 (4.7)% ICG 1.9 1,756 43 87 8.6% (1) Corp / Other (0.4) 93 (70) 27 (6.2)% (1) Citigroup $1.1 $2,267 23 $149 2.9% LTM’20 Returns Average Average (2) Net In
Slide 18: Citigroup – LTM Efficiency Ratio and Expenses
Citigroup – LTM Efficiency Ratio and Expenses ($B) LTM Efficiency Ratio and Expenses 2Q’20 1H’20 LTM’20 Operating Efficiency 52.7% 51.9% 54.1% 59.8% 59.3% 59.2% YoY r (bps) (328) (460) (254) 58.5% YoY r ex FX (bps) (316) (447) (248) 58.3% 58.2% 57.9% 57.7% 57.4% 57.2% 56.7% 56.7% 56.5% 55.0% 54.1% $
Slide 19: Estimated FX Impact on Key P&L Metrics
Estimated FX(1) Impact on Key P&L Metrics ($B) Year-over-Year Impact 2Q’20 1Q’20 4Q’19 3Q’19 2Q’19 Revenues $(0.4) $(0.3) $0.0 $(0.2) $(0.2) Expenses (0.3) (0.2) 0.0 (0.2) (0.2) Credit Costs (0.1) (0.0) 0.0 (0.0) (0.0) Earnings Before Taxes $(0.1) $(0.1) $(0.0) $(0.1) $(0.1) 19 Note: Totals may not
Slide 20: CECL Details
CECL Details ($B) Allowance for Credit Losses ACLL / Balance CECL 1Q’20 Balance 2Q’20 Balance 1Q’20 2Q’20 Loans as of Transition FX / as of FX / as of Build Build as of 12/31/19 Impact Other (1) 3/31/20 Other(1) 6/30/20 6/30/20 Cards $8.4 $4.5 $2.4 $(0.2) $15.1 $1.6 $0.0 $16.7 11.21% All other GCB $
Slide 21: Consumer Credit
Consumer Credit (Constant $B) 2Q'20 Loans Growth 90+ DPD Ratio NCL Ratio ($B) (% ) YoY % 2Q'20 1Q'20 2Q'19 2Q'20 1Q'20 2Q'19 Korea 16.0 5.9% 4.0% 0.2% 0.2% 0.2% 0.7% 0.6% 0.6% Hong Kong 12.8 4.7% 7.0% 0.1% 0.1% 0.0% 0.3% 0.2% 0.1% Singapore 12.6 4.6% 2.0% 0.1% 0.1% 0.1% 0.3% 0.3% 0.3% Australia 8.8
Slide 22: ICG – Corporate Credit Exposure
ICG – Corporate Credit Exposure ($B) Exposures Industry Composition – % of Portfolio Exposure Type 2Q’20 1Q’20 Industry 2Q’20 1Q’20 Direct outstandings(1) $359 $394 Transportation & industrials 19% 19% 423 394 Autos 7 7 Unfunded lending commitments(2) Transportation 4 4 Total $782 $787 Industrials 9
Slide 23: ICG – Corporate Energy Exposure
ICG – Corporate Energy Exposure (EOP in $B) Energy / Energy-Related Exposure Geographic Distribution as of 2Q’20(2) Funded Total Exposure (2) LATAM 8% UK 2Q’20 1Q’20 2Q’20 1Q’20 14% Energy $18.8 $19.3 $55.4 $55.4 EMEA North 13% Energy-Related (1) 3.4 3.2 5.8 5.4 America 57% Asia Total $22.2 $22.5 $6
Slide 24: ICG – Unfunded Corporate Energy Exposure
ICG – Unfunded Corporate Energy Exposure(1) (EOP in $B) Facility Structure Ratings Detail Key Takeaways 2Q’20 A• Fronting exposure represents CCC AAA / BBB BB / B or Total AA / A below advances to borrowers on behalf of A Fronting Exposure $5.1 – – – $5.1 participating banks B Letters of Credit 1.9
Slide 25: Regional Credit Portfolio
Regional Credit Portfolio (2Q’20 EOP in $B) Geographic Loan Distribution Loan Composition Mexico 5% Mortgages South Korea Hong Kong 5% $190 Personal, Small 6% Business & Other Singapore 5% 29% Cards Taiwan 3% 3% GCB Other EM North America 7% $83 66% Developed Asia 69% 38% 3% 40% 22% DM EM Hong Kong
Slide 26: Consumer Drivers
Consumer Drivers (1) 2Q'20 1Q'20 4Q'19 3Q'19 2Q'19 YoY QoQ GCB Digital Metrics (MM) North America: Active Digital Customers 20.1 20.0 19.7 19.3 18.8 6% 0% Active Mobile Customers 12.8 12.7 12.5 12.2 11.5 12% 1% International: Active Digital Customers 13.5 13.5 13.1 12.6 11.9 13% (0)% Active Mobile C
Slide 27: Consumer Drivers (continued)
Consumer Drivers (continued) Digital / Mobile Customers(1) Agent Contact Rate (2) (MM) Digital Customers Mobile Customers 23% 33.6 45% (20)% 30.8 24.0 27.4 20.7 1.32 1.24 16.5 1.05 2Q'18 2Q'19 2Q'20 2Q'18 2Q'19 2Q'20 LTM'18 LTM'19 LTM'20 E-Statement Penetration(3) E-Payment Penetration(4) ~600 bps 7
Slide 28: Institutional Drivers
Institutional Drivers ICG 2Q'20 1Q'20 4Q'19 3Q'19 2Q'19 YoY QoQ (Constant $B) Average Deposits: 919 804 785 765 738 25% 14% NA 481 402 392 374 351 37% 20% EMEA 211 193 190 193 192 10% 9% Latin America 40 34 33 31 30 30% 18% Asia 187 176 170 166 164 14% 7% EOP Deposits: 908 883 758 792 742 22% 3% NA
Slide 29: Preferred Stock Dividend Schedule
Preferred Stock Dividend Schedule ($MM) 2019 2020 2021 1Q $262 $291 $282 2Q 296 253 253 3Q 254 284 282 4Q 296 253 253 Total $1,109 $1,081 $1,071 29 Note: Totals may not sum due to rounding. Based on outstanding preferred stock as of July 14, 2020 and reflects the fixed dividend rate of each security
Slide 30: Equity & CET1 Capital Drivers (QoQ)
Equity & CET1 Capital Drivers (QoQ) ($B, except basis points (bps)) Tangible CET1 Common CET1 Common Capital Equity Capital(2) Equity(1) Ratio(2) (bps) 1Q’20 $174.4 $148.9 $136.7 11.2% Impact of: CECL 25% Provision Deferral(3) N/A N/A 1.3 11 Net Income 1.3 1.3 1.3 11 Preferred Stock Dividends (0.3)
Slide 31: Equity & CET1 Capital Drivers (YoY)
Equity & CET1 Capital Drivers (YoY) ($B, except basis points (bps)) Tangible CET1 Common CET1 Common Capital Equity Capital(2) Equity(1) Ratio(2) (bps) 2Q’19 $179.4 $152.8 $141.1 11.9% Impact of: CECL Transition Impact(3) (3.1) (3.1) - - CECL 25% Provision Deferral(4) N/A N/A 2.5 21 Net Income 13.7
Slide 32: Common Equity Tier 1 Capital Ratio and Components
Common Equity Tier 1 Capital Ratio and Components ($MM) Common Equity Tier 1 Capital Ratio and Components(1) 2Q'20(2) 1Q'20 4Q'19 3Q'19 2Q'19 Citigroup Common Stockholders' Equity(3) $173,793 $174,502 $175,414 $177,052 $179,534 Add: Qualifying noncontrolling interests 145 138 154 145 154 Regulatory
Slide 33: Supplementary Leverage Ratio; TCE Reconciliation
Supplementary Leverage Ratio; TCE Reconciliation ($MM, except per share amounts) Supplementary Leverage Ratio and Components 2Q'20(1) 1Q'20 4Q'19 3Q'19 2Q'19 Common Equity Tier 1 Capital (CET1) (2) $139,649 $136,695 $137,798 $138,581 $141,125 Additional Tier 1 Capital (AT1)(3) 17,990 17,609 18,007 1
Slide 34: Adjusted Results and FX Impact Reconciliation
Adjusted Results and FX Impact Reconciliation ($MM, except balance sheet items in $B) Citigroup 2Q'20 1Q'20 2Q'19 1H'20 1H'19 Latin America Consumer Banking 2Q'20 1Q'20 2Q'19 1H'20 1H'19 Reported Net Income $1,316 $2,522 $4,799 $3,838 $9,509 Reported Revenues $1,050 $1,199 $1,320 $2,249 $2,592 Less: