Document Sample
PART II Powered By Docstoc
Name of institution:     Citigroup Inc.
Reporting month(s):      June 2009
Submission date:         July 31, 2009

Please provide a brief overview of the intermediation activity during the month. This discussion should
include a general commentary on the lending environment, loan demand, any changes in lending
standards and terms, and any other intermediation activity.

Company description: Citigroup Inc. (“Citi”) does business in the United States through Citibank, Citi
Institutional Clients Group, The Citi Private Bank, Primerica, Diners Club, CitiFinancial, CitiMortgage and
Citi Cards.

All data cited below reflect comparisons to May 2009, unless otherwise noted.

Consumer Lending: Despite sustained economic weakness, Citi originated $20.2 billion in loans to U.S.
consumers and small businesses in June, up 3.8 percent from $19.4 billion in May. This marked the
fourth consecutive monthly increase in consumer originations and was the highest since this reporting
process began. However, weak underlying economic data continued to constrain overall consumer
lending activity across the U.S. in June. Unemployment rose to 9.5 percent – its highest level in 26 years
– although new jobless claims declined to 450,000 per month. Consumer confidence surveys showed
signs of increased optimism by the end of the month.

First mortgage originations also rose for a fourth consecutive month to $11.7 billion, up 21 percent from
May. Refinancing activity increased by 13.6 percent to $2.1 billion, up from $1.9 billion in the previous
month. End of period loan balances decreased by $3.7 billion, or 2.7 percent from May levels, reflecting
a decrease in loans held for sale and loans held in portfolio. “Warehouse” loans (primarily conforming
loans) decreased by $1.7 billion on a month-to-month basis. The runoff of $2 billion in mortgage loans
held for investment (primarily non-conforming loans) contributed to the remaining decline in loan
balances, with the most significant decline coming from sales of medium term adjustable rate mortgage

Average home equity loan balances decreased 1.3 percent to $65 billion, from $65.9 billion in May,
while used and unused commitments declined moderately to $83.4 billion or 1.2 percent from $84.5
billion in May. Home equity loan balances continued to decline as a result of Citi’s decision to scale
down its channel network.

During June, Citi continued to expand participation in its loss mitigation efforts and programs focused on
helping homeowners most affected by the recession modify their loan terms. Through initiatives like
the Citi Homeownership Assistance Program, Citi modified approximately 9,200 first and second
mortgage loans with a total value of more than $1.3 billion during the month.

Average consumer credit card balances were roughly flat for the third consecutive month. Purchase
sales declined 1 percent from May, and were down 16 percent compared with the prior year period.
Both trends are consistent with weaker U.S. consumer spending activity and an increase in savings rates.
New credit lines issued to eligible borrowers fell 13 percent from May to $7.3 billion, while used and
unused commitments declined moderately by 0.8 percent.
Name of institution:    Citigroup Inc.
Reporting month(s):     June 2009
Submission date:        July 31, 2009

Citi’s expanded eligibility forbearance programs continue to provide help to card members who face
financial challenges as a result of the recession. More than 163,000 card members enrolled in these
programs in June, an increase of 7 percent from the previous month and 63 percent from June 2008.

Average total loan balances for other consumer lending, including auto loans, student loans and
personal installment loans, declined 0.9 percent to $60.5 billion.

Commercial Lending: Despite overall weakness in the economy, commercial lending activity showed a
significant increase in activity on a month-to-month basis. Total corporate loan originations rose to
$29.6 billion, up 23 percent from May levels due to a more than three-fold increase in loan amendments
and renewals of existing debt facilities by commercial clients. Although average corporate loan balances
declined 6.8 percent, new Commercial & Industrial (C&I) commitments increased three-fold to $1.4

Average total Commercial Real Estate (CRE) loan and lease balances in June declined moderately on a
month-to-month basis to $25.6 billion. A combination of declining property values, increasing vacancy
rates and declining rents continued to put significant stress on Citi’s commercial real estate portfolio
during the month. Citi is assisting distressed borrowers by modifying and restructuring loans. Although
new loan origination volume increased by 1.4 percent to $103.4 million, low overall levels of activity
reflect underlying weakness in the commercial real estate market.

Other Intermediation Activities: Citi made net purchases of approximately $5.5 billion in mortgage- and
asset-backed securities (MBS/ABS) in June.

MBS purchases reflected a reduction in sales of customers’ Agency pass-through bond volume in the
secondary trading flow business. The average total debit balance decreased by $7 billion due to the
transfer of $10 billion in margin balances to Morgan Stanley Smith Barney, upon the closing of the joint
venture transaction.

Citi’s total debt underwriting increased 13.6 percent from May to $25.8 billion in June, reflecting higher
average principal per deal and higher average deal volumes. High yield underwriting activity included 37
deals totaling $15.1 billion, compared with 42 deals totaling $25.9 billion in May. Citi lead managed 11
of these deals with an aggregate value of $1.6 billion. In June, Citi participated in 132 investment grade
deals, compared with 134 such deals in May. The total value of these deals was $54.8 billion, compared
with $108.9 billion in May. Citi lead managed 32 of these deals with a total value of $9.1 billion. Citi
also participated in 88 equity and linked deals with an aggregate value of $31.0 billion in June, compared
with 107 deals totaling $56.6 billion in May.