--- ticker: C company: Citigroup Inc. filing_type: 10-K year_current: 2024 year_prior: 2023 risks_added: 16 risks_removed: 22 risks_modified: 82 risks_unchanged: 26 source: SEC EDGAR url: https://riskdiff.com/c/2024-vs-2023/ markdown_url: https://riskdiff.com/c/2024-vs-2023/index.md generated: 2026-06-01 --- # Citigroup Inc.: 10-K Risk Factor Changes 2024 vs 2023 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 16 | | Risks removed | 22 | | Risks modified | 82 | | Unchanged | 26 | --- ## New in Current Filing: Citi Is Subject to Extensive Legal and Regulatory Proceedings, Examinations, Investigations, Consent Orders and Related Compliance Efforts and Other Inquiries That Could Result in Large Monetary Penalties, Supervisory or Enforcement Orders, Business Restrictions, Limitations on Dividends, Changes to Directors and/or Officers and Collateral Consequences Arising from Such Outcomes.At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders (see discussion below) and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings and negative regulatory evaluationor examination findings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis (see also the capital return and resolution plan risk factors above). Citi's regulators have broad powers and discretion under their prudential and supervisory authority, and have pursued active inspection and investigatory oversight.As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement extensive targeted action plans and submit quarterly progress reports on a timely and sufficient basis detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls. These improvements will result in continued significant investments by Citi during 2024 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. There can be no assurance that such improvements will be implemented in a manner satisfactory, in both timing and sufficiency, to the FRB and OCC. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above.The global judicial, regulatory and political environment has generally been challenging for large financial institutions, which have been subject to increased regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory --- ## New in Current Filing: Introduction This section summarizes Citi's Operational Footprint goals and Net Zero commitment. Citi's annual ESG Report provides information on a broad set of ESG-related efforts. The upcoming Citi Climate Report, formerly named the Task Force on Climate-Related Financial Disclosures (TCFD) Report, provides information on Citi's continued progress to manage climate risk and its Net Zero plan, including information on financed emissions and 2030 interim emissions reduction targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. --- ## New in Current Filing: Operational Footprint Goals Citi measures progress against operational footprint goals, which include efforts to reduce the environmental impact of its facilities through reductions in emissions, energy, water consumption and waste generation. Citi's efforts to integrate sustainable practices include sustainable building certifications, renewable electricity sourcing, employee engagement and seeking opportunities for efficiency in business travel. In 2023, Citi made progress toward these goals by increasing on-site solar generation, promoting initiatives on waste diversion and recycling, mapping weather- 62 62 62 related risk at its facilities and employing carbon-reduction techniques for building renovations. Additional InformationFor additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2024 Annual Meeting Proxy Statement to be filed with the SEC in March 2024.Citi's climate reporting and any other ESG-related reports and information included elsewhere on Citi's website are not incorporated by reference into, and do not form any part of, this 2023 Annual Report on Form 10-K. related risk at its facilities and employing carbon-reduction techniques for building renovations. Additional InformationFor additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2024 Annual Meeting Proxy Statement to be filed with the SEC in March 2024.Citi's climate reporting and any other ESG-related reports and information included elsewhere on Citi's website are not incorporated by reference into, and do not form any part of, this 2023 Annual Report on Form 10-K. related risk at its facilities and employing carbon-reduction techniques for building renovations. --- ## New in Current Filing: All Other, including Legacy Franchises, Operations and Technology, and Global Staff Functions (1) Colleague distribution is based on assigned region, which may not reflect where the colleague physically resides. (2) Mexico is included in International. (3) Part-time colleagues represented less than 0.9% of Citi's global workforce. (4) Information regarding gender is self-identified by colleagues. --- ## New in Current Filing: All Other(1) (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" below. End-of-period loans increased 5% year-over-year, largely reflecting growth in cards in USPB. End-of-period loans increased 3% sequentially. On an average basis, loans increased 3% year-over-year and 2% sequentially. The year-over-year increase was largely due to growth in USPB, Services and Markets, partially offset by a decline in Banking. As of the fourth quarter of 2023, average loans for: •USPB increased 12% year-over-year, driven by growth in Branded Cards, Retail Banking and Retail Services. •Wealth were largely unchanged. •Services increased 6% year-over-year, primarily driven by strong demand for working capital loans in TTS in North America and internationally. •Markets increased 4% year-over-year, reflecting increased client demand in warehouse lending. •Banking decreased 9% year-over-year, primarily driven by capital optimization efforts. 69 69 69 CORPORATE CREDITConsistent with its overall strategy, Citi's corporate clients are typically corporations that value the depth and breadth of Citi's global network. Citi aims to establish relationships with these clients whose needs encompass multiple products, including cash management and trade services, foreign exchange, lending, capital markets and M&A advisory. CORPORATE CREDITConsistent with its overall strategy, Citi's corporate clients are typically corporations that value the depth and breadth of Citi's global network. Citi aims to establish relationships with these clients whose needs encompass multiple products, including cash management and trade services, foreign exchange, lending, capital markets and M&A advisory. --- ## New in Current Filing: Portfolio Mix - Industry Citi's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2023September 30,2023December 31,2022Transportation and industrials21 %21 %20 %Technology, media and telecom12 12 12 Banks and finance companies(1)12 10 10 Consumer retail11 12 11 Real estate10 10 10 Commercial8 8 8 Residential2 2 2 Power, chemicals, metals and mining8 9 9 Energy and commodities7 7 7 Health5 5 6 Insurance4 4 4 Public sector3 3 3 Asset managers and funds3 3 5 Financial markets infrastructure3 3 2 Other industries1 1 1 Total100 %100 %100 % Banks and finance companies(1) (1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. 71 71 71 The following table details Citi's corporate credit portfolio by industry as of December 31, 2023: Non-investment gradeSelected metricsIn millions of dollarsTotal credit exposureFunded(1)UnfundedInvestment gradeNon-criticizedCriticized performingCriticized non-performing(2)30 days or more past due and accruingNet credit losses (recoveries)Credit derivative hedges(3)Transportation and industrials$149,429 $59,917 $89,512 $118,380 $26,345 $4,469 $235 $125 $39 $(7,060)Autos(4)49,443 22,843 26,600 43,008 5,376 999 60 7 19 (2,304)Transportation28,448 11,996 16,452 21,223 6,208 952 65 3 5 (1,185)Industrials71,538 25,078 46,460 54,149 14,761 2,518 110 115 15 (3,571)Technology, media and telecom84,409 29,832 54,577 67,077 13,637 3,212 483 112 56 (5,546)Banks and finance companies83,512 52,569 30,943 74,364 7,768 1,277 103 7 37 (638)Consumer retail81,799 33,548 48,251 63,017 15,259 3,342 181 130 57 (5,360)Real estate72,827 51,660 21,167 61,226 7,084 3,602 915 69 31 (608)Commercial54,843 35,058 19,785 43,340 7,042 3,602 859 69 31 (608)Residential17,984 16,602 1,382 17,886 42 - 56 - - - Power, chemicals, metals and mining59,572 19,004 40,568 46,551 10,098 2,696 227 36 4 (4,884)Power24,535 5,220 19,315 20,967 3,200 209 159 1 4 (2,280)Chemicals21,963 8,287 13,676 16,418 3,888 1,613 44 34 1 (2,019)Metals and mining13,074 5,497 7,577 9,166 3,010 874 24 1 (1)(585)Energy and commodities(5)46,290 12,606 33,684 40,081 5,528 543 138 5 (15)(3,090)Health36,230 9,135 27,095 30,099 4,871 1,098 162 16 22 (3,023)Insurance27,216 2,390 24,826 25,580 1,607 29 - 7 - (4,516)Public sector24,736 12,621 12,115 21,845 2,399 479 13 36 15 (1,092)Asset managers and funds19,681 4,232 15,449 17,826 1,723 112 20 4 - (65)Financial markets infrastructure18,705 156 18,549 18,705 - - - - - (7)Securities firms1,737 734 1,003 870 822 45 - 2 - (2)Other industries(6)6,992 4,480 2,512 5,079 1,629 257 27 45 4 (6)Total$713,135 $292,884 $420,251 $590,700 $98,770 $21,161 $2,504 $594 $250 $(35,897) Funded(1) --- ## New in Current Filing: Other industries(6) (1) Funded excludes loans carried at fair value of $7.3 billion at December 31, 2023. (2) Includes non-accrual loan exposures and related criticized unfunded exposures. (3) Represents the amount of purchased credit protection in the form of derivatives to economically hedge funded and unfunded exposures. Of the $35.9 billion of purchased credit protection, $33.7 billion represents the total notional amount of purchased credit derivatives on individual reference entities. The remaining $2.2 billion represents the first loss tranche of portfolios of purchased credit derivatives with a total notional of $16.7 billion, where the protection seller absorbs the first loss on the referenced loan portfolios. (4) Autos total credit exposure includes securitization financing facilities secured by auto loans and leases, extended mainly to the finance company subsidiaries of global auto manufacturers, bank subsidiaries and independent auto finance companies, of approximately $16.9 billion ($10.6 billion in funded, with 100% rated investment grade) as of December 31, 2023. (5) In addition to this exposure, Citi has energy-related exposure within the public sector (e.g., energy-related state-owned entities) and the transportation and industrials sector (e.g., off-shore drilling entities) included in the table above. As of December 31, 2023, Citi's total exposure to these energy-related entities was approximately $4.9 billion, of which approximately $2.5 billion consisted of direct outstanding funded loans. (6) Includes $0.6 billion and $0.1 billion of funded and unfunded exposure at December 31, 2023, respectively, primarily related to commercial credit card delinquency-managed loans. Exposure to Commercial Real EstateAs of December 31, 2023, Citi's total credit exposure to commercial real estate (CRE) was $66 billion, including $8 billion of exposure related to office buildings. This total CRE exposure consisted of approximately $55 billion related to corporate clients, included in the real estate category in the table above, and approximately $11 billion related to Wealth clients that is not in the table above as they are not considered corporate exposures. In addition, as of December 31, 2023, approximately 80% of Citi's total CRE exposure was rated investment grade and more than 77% was to borrowers in the U.S.As of December 31, 2023, the ACLL attributed to the total funded CRE exposure (including the Private Bank) was approximately 1.49%, and there were $759 million of non-accrual CRE loans. Exposure to Commercial Real EstateAs of December 31, 2023, Citi's total credit exposure to commercial real estate (CRE) was $66 billion, including $8 billion of exposure related to office buildings. This total CRE exposure consisted of approximately $55 billion related to corporate clients, included in the real estate category in the table above, and approximately $11 billion related to Wealth clients that is not in the table above as they are not considered corporate exposures. --- ## New in Current Filing: CONSUMER CREDIT Citi's consumer credit risk management framework is designed for a variety of environments. Underwriting and portfolio management policies are calibrated based on risk-return trade-offs by product and segment and changes are made based on performance against benchmarks as well as environmental stress. As warranted, Citi adjusts underwriting criteria to address consumer credit risks and macroeconomic challenges and uncertainties. USPB provides credit cards, mortgages, personal loans, small business banking and retail banking, and Wealth offers wealth management lending and other products globally that range from the affluent to ultra-high net worth customer segments through the Private Bank, Wealth at Work and Citigold. USPB's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. All Other - Legacy Franchises also provides such products in its remaining markets through Mexico Consumer and Asia Consumer (Korea, Poland, China and Russia). All Other - Legacy Franchises also provides such products in its remaining markets through Mexico Consumer and Asia Consumer (Korea, Poland, China and Russia). --- ## New in Current Filing: Consumer Credit Portfolio The following table presents Citi's quarterly end-of-period consumer loans(1): In billions of dollars4Q221Q232Q233Q234Q23USPBBranded Cards$100.2 $97.1 $103.0 $105.2 $111.1 Retail Services50.5 48.4 50.0 50.5 53.6 Retail Banking37.1 39.2 41.5 43.1 44.4 Mortgages(2)33.4 35.3 37.4 38.8 39.9 Personal, small business and other3.7 3.9 4.1 4.3 4.5 Total$187.8 $184.7 $194.5 $198.8 $209.1 Wealth(3)(4)Mortgages(2)$84.0 $85.2 $87.0 $88.8 $89.9 Margin lending(5)28.9 29.3 29.6 28.7 29.4 Personal, small business and other(6)31.7 31.0 29.4 28.5 27.2 Cards4.6 4.4 4.5 4.6 5.0 Total$149.2 $149.9 $150.5 $150.6 $151.5 All Other - Legacy FranchisesMexico Consumer (excludes Mexico SBMM)$14.8 $16.3 $17.8 $17.8 $18.7 Asia Consumer(7)13.3 10.0 9.1 8.0 7.4 Legacy Holdings Assets(8)3.0 2.8 2.7 2.5 2.5 Total$31.1 $29.1 $29.6 $28.3 $28.6 Total consumer loans$368.1 $363.7 $374.6 $377.7 $389.2 Mortgages(2) --- ## New in Current Filing: Wealth(3)(4) Mortgages(2) Margin lending(5) Personal, small business and other(6) --- ## New in Current Filing: All Other - Legacy Franchises (managed basis)(3) Asia Consumer (managed basis)(3)(4)(5) Reconciling Items(3) (1)Average loans include interest and fees on credit cards. (2)The ratios of net credit losses are calculated based on average loans, net of unearned income. (3)All Other (managed basis) excludes divestiture-related impacts (Reconciling Items) related to (i) Citi's divestitures of its Asia Consumer businesses and (ii) the planned divestiture of Mexico consumer banking and small business and middle-market banking within Legacy Franchises. The Reconciling Items are fully reflected in the various line items in Citi's Consolidated Statement of Income. See "All Other - Divestiture-Related Impacts (Reconciling Items)" below. (4)Asia Consumer also includes NCLs and average loans in Poland and Russia for all periods presented and in Bahrain for 2021 only. (5)Approximately $25 million, $155 million and $6 million in NCLs relating to certain Asia Consumer businesses classified as held-for-sale in Other assets and Other liabilities on the Consolidated Balance Sheet were recorded as a reduction in revenue (Other revenue) in 2023, 2022 and 2021, respectively. Accordingly, these NCLs are not included in this table. See footnote 3 to this table. 81 81 81 --- ## New in Current Filing: Loan Maturities In millions of dollars at December 31, 2023Due within1 yearGreater than 1 yearbut within5 yearsGreater than 5 years but within 15 yearsGreater than 15 yearsTotalIn North America officesResidential first mortgages$3 $281 $3,017 $105,410 $108,711 Home equity loans5 27 1,519 2,041 3,592 Credit cards(1)163,563 1,157 - - 164,720 Personal, small business and other31,202 4,673 222 38 36,135 Total$194,773 $6,138 $4,758 $107,489 $313,158 In offices outside North AmericaResidential mortgages$1,179 $273 $4,073 $20,901 $26,426 Credit cards(1)14,184 49 - - 14,233 Personal, small business and other27,508 7,159 214 499 35,380 Total$42,871 $7,481 $4,287 $21,400 $76,039 Total Consumer$237,644 $13,619 $9,045 $128,889 $389,197 In millions of dollars at December 31, 2023 Credit cards(1) Credit cards(1) (1)Credit card loans with maturities greater than one year represent loan modifications to borrowers experiencing financial difficulty and are at fixed interest rates. --- ## New in Current Filing: Corporate loans, net of unearned income, excluding portfolio layer cumulative basis adjustments(4) Unallocated portfolio layer cumulative basis adjustments --- ## New in Current Filing: Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. For the quarter ended December 31, 2023, Citigroup's consolidated NSFR was compliant with the rule. Refer to Citi's U.S. NSFR Disclosure report covering December 31, 2023 and September 30, 2023 on its website for additional information. --- ## New in Current Filing: Select Balance Sheet Items This section provides details of select liquidity-related assets and liabilities reported on Citigroup's Consolidated Balance Sheet on an average and end-of-period basis. --- ## New in Current Filing: Cash and Investments The table below details average and end-of-period Cash and due from banks, Deposits with banks (collectively cash) and Investment securities. Citi's investment portfolio consists largely of highly liquid U.S. Treasury, U.S. agency and other sovereign bonds, with an aggregate duration of less than three years. At December 31, 2023, Citi's EOP cash and Investment securities comprised approximately 32% of Citigroup's total assets: In billions of dollars4Q233Q234Q22Cash and due from banks$27 $27 $30 Deposits with banks252 260 306 Investment securities516 509 519 Total Citigroup cash and investment securities (AVG)$795 $796 $855 Total Citigroup cash and investment securities (EOP)$780 $763 $869 Investment securities Deposits The table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated:In billions of dollars4Q233Q234Q22Services$802 $796 $825 TTS 680 676 694 Securities Services122 120 131 Markets and Banking24 25 23 USPB105 110 111 Wealth312 311 320 All Other - Legacy Franchises49 52 50 All Other - Corporate/Other28 21 32 Total Citigroup deposits (AVG)$1,320 $1,315 $1,361 Total Citigroup deposits (EOP)$1,309 $1,274 $1,366 End-of-period deposits decreased 4% year-over-year, largely due to a reduction in Services reflecting quantitative tightening, and a reduction in USPB and Wealth reflecting a shift of deposits to higher-yielding products. End-of-period deposits increased 3% sequentially. On an average basis, deposits declined 3% year-over-year and were largely unchanged sequentially. As of the fourth quarter of 2023, average deposits for: •Services decreased 3% year-over-year, while TTS and Securities Services decreased 2% and 7%, respectively. These declines reflected the impact of quantitative tightening that more than offset deposits from new client acquisitions and deepening of relationships with existing clients. •USPB decreased 5% year-over-year, driven by the transfer of relationships and the associated deposits to Wealth. •Wealth decreased 3% year-over-year, reflecting the continued mix shift of deposits to higher-yielding investments on Citi's platform, partially offset by the benefits of the transfer of certain relationships and the associated deposit balances from USPB. Deposits The table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated: In billions of dollars4Q233Q234Q22Services$802 $796 $825 TTS 680 676 694 Securities Services122 120 131 Markets and Banking24 25 23 USPB105 110 111 Wealth312 311 320 All Other - Legacy Franchises49 52 50 All Other - Corporate/Other28 21 32 Total Citigroup deposits (AVG)$1,320 $1,315 $1,361 Total Citigroup deposits (EOP)$1,309 $1,274 $1,366 Securities Services --- ## No Match in Current: Citi's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs. *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* During 2022, emerging markets revenues accounted for approximately 37% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa in EMEA). Citi's presence in the emerging markets subjects it to various risks, such as limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and continued strength in the U.S. dollar; sustained increases in interest rates; sovereign debt volatility; election outcomes, regulatory changes and political events; foreign exchange controls, including inability to access indirect foreign exchange mechanisms; macroeconomic and geopolitical challenges and uncertainties and volatility, including with respect to Russia and China (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); limitations on foreign investment; sociopolitical instability (including from hyperinflation); fraud; nationalization or loss of licenses; restrictions arising from retaliatory Russian laws and regulations on the conduct of its business; sanctions or asset freezes; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets, and these risks can be exacerbated in the event of a deterioration in relationships between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, due to currency controls in Argentina, Citi faces a risk of devaluation on its unhedged Argentine peso-denominated assets, which continue to increase (for additional information on Argentina-related risks, see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, if the economic situation in a country in which Citi operates were to deteriorate below a certain level, U.S. regulators through the Interagency Country Exposure Review Committee (ICERC) may impose mandatory loan loss or other reserve requirements on Citi, which would increase its credit costs and decrease its earnings. In addition, political turmoil and instability and geopolitical tensions and conflicts (such as the Russia-Ukraine war) have occurred in various regions and emerging market countries across the globe which have required, and may continue to require, management time and attention and other resources, such as monitoring the impact of sanctions on certain emerging market economies as well as impacting Citi's businesses, results of operations and financial conditions in affected countries. The Transition Away from and Discontinuance of LIBOR or Any Other Interest Rate Benchmark Could Have Adverse Consequences for Citi.LIBOR and other rates or indices deemed to be benchmarks have been the subject of ongoing U.S. and non-U.S. regulatory scrutiny and reform. The LIBOR administrator ceased publication of non-USD LIBOR and one-week and two-month USD LIBOR on a permanent or representative basis on December 31, 2021, with plans for all other USD LIBOR tenors to permanently cease or become non-representative after June 30, 2023. As a result, Citi ceased entering into new contracts referencing USD LIBOR as of January 1, 2022, other than for limited circumstances where regulators recognized that it may be appropriate for banks to enter into new USD LIBOR contracts, including with respect to market-making, hedging or novations of USD transactions executed before January 1, 2022.Through a global effort by the financial services industry and regulators, alternative reference rates have been identified foreign exchange controls, including inability to access indirect foreign exchange mechanisms; macroeconomic and geopolitical challenges and uncertainties and volatility, including with respect to Russia and China (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); limitations on foreign investment; sociopolitical instability (including from hyperinflation); fraud; nationalization or loss of licenses; restrictions arising from retaliatory Russian laws and regulations on the conduct of its business; sanctions or asset freezes; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets, and these risks can be exacerbated in the event of a deterioration in relationships between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, due to currency controls in Argentina, Citi faces a risk of devaluation on its unhedged Argentine peso-denominated assets, which continue to increase (for additional information on Argentina-related risks, see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, if the economic situation in a country in which Citi operates were to deteriorate below a certain level, U.S. regulators through the Interagency Country Exposure Review Committee (ICERC) may impose mandatory loan loss or other reserve requirements on Citi, which would increase its credit costs and decrease its earnings. In addition, political turmoil and instability and geopolitical tensions and conflicts (such as the Russia-Ukraine war) have occurred in various regions and emerging market countries across the globe which have required, and may continue to require, management time and attention and other resources, such as monitoring the impact of sanctions on certain emerging market economies as well as impacting Citi's businesses, results of operations and financial conditions in affected countries. --- ## No Match in Current: The Transition Away from and Discontinuance of LIBOR or Any Other Interest Rate Benchmark Could Have Adverse Consequences for Citi. *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* LIBOR and other rates or indices deemed to be benchmarks have been the subject of ongoing U.S. and non-U.S. regulatory scrutiny and reform. The LIBOR administrator ceased publication of non-USD LIBOR and one-week and two-month USD LIBOR on a permanent or representative basis on December 31, 2021, with plans for all other USD LIBOR tenors to permanently cease or become non-representative after June 30, 2023. As a result, Citi ceased entering into new contracts referencing USD LIBOR as of January 1, 2022, other than for limited circumstances where regulators recognized that it may be appropriate for banks to enter into new USD LIBOR contracts, including with respect to market-making, hedging or novations of USD transactions executed before January 1, 2022. Through a global effort by the financial services industry and regulators, alternative reference rates have been identified 53 53 53 and/or developed and are being used to replace LIBOR and other benchmark rates. Alternative reference rates, such as the Secured Overnight Financing Rate (SOFR), are calculated using components different from those used in the calculation of LIBOR and may fluctuate differently than, and not be representative of, LIBOR. In order to compensate for these differences, certain of Citi's financial instruments and commercial agreements allow for a benchmark replacement adjustment. However, there can be no assurance that any benchmark replacement adjustment will be sufficient to produce the economic equivalent of LIBOR, either at the benchmark replacement date or over the life of such instruments and agreements. Moreover, the transition presents challenges related to contractual mechanics of existing contracts that reference USD LIBOR and are governed by non-U.S. law or reference the USD LIBOR Ice Swap Rate. Certain of these legacy instruments and contracts are not covered by any legislative solution and do not provide for fallbacks to alternative reference rates, which makes it unclear what the applicable future replacement benchmark rates and associated payments might be after the current benchmark's cessation. Citi may be unable to amend certain instruments and contracts due to an inability to obtain sufficient levels of consent from counterparties or security holders. Although this will depend on the precise contractual terms of the instrument, such consent requirements are often conditions of securities, such as floating rate notes. The Financial Conduct Authority (FCA), a U.K. regulator, has proposed that one-, three- and six-month USD LIBOR be published on a synthetic basis, which would only be available through September 2024.In addition, the transition away from and discontinuance of LIBOR and other benchmark rates have subjected financial institutions, including Citi, to heightened scrutiny from regulators. Failure to successfully transition away from LIBOR and other benchmark rates could result in adverse regulatory actions, disputes, including potential litigation involving holders of outstanding products and contracts that reference LIBOR and other benchmark rates, and reputational harm to Citi. See "Managing Global Risk - Other Risks - LIBOR Transition Risk" for Citi's ongoing actions to prepare for the transition away from LIBOR.SUSTAINABILITY AND OTHER ESG MATTERSIntroduction Citi has worked on Environmental, Social and Governance (ESG) issues for more than 20 years and has a demonstrated record of ESG progress, including participating in the creation and adoption of ESG-related principles and standards. This section summarizes some of Citi's key ESG initiatives, including its Sustainable Progress Strategy, Net Zero, and Financial Inclusion and Racial Equity commitments. Citi's ESG Report provides information on a broad set of ESG-related efforts. Citi's Task Force on Climate-Related Financial Disclosures (TCFD) Report provides its stakeholders with information on Citi's continued progress to manage climate risk and its Net Zero plan, including information on financed emissions and 2030 emissions targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below. ESG and Climate-Related GovernanceCiti's Board of Directors (Board) provides oversight of Citi's management activities (for additional information, see "Managing Global Risk - Risk Governance" below). For example, the Nomination, Governance and Public Affairs Committee of the Board oversees many of Citi's ESG activities, including reviewing Citi's policies and programs for environmental and social sustainability, climate change, human rights, diversity and other ESG issues, as well as overseeing engagement with external stakeholders. The Risk Management Committee of the Board provides oversight of Citi's Independent Risk Management function and reviews Citi's risk policies and frameworks, including receiving climate risk-related updates.The Audit Committee of the Board has recently been chartered to provide oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and voluntary ESG reporting, as well as management's evaluation of Citi's disclosure controls and procedures for ESG reporting.Citi's Global ESG Council consists of senior members of its management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities. In addition, a number of teams and senior managers contribute to the oversight and management of areas such as environmental sustainability; community investing; talent and diversity; ethics and business practices; and remuneration.Citi's climate governance structure continues to evolve as Citi advances its understanding of its climate risk and its progress under the Net Zero plan. In addition to the expansion of the Board's oversight of climate matters (see Risk Management Committee and Audit Committee descriptions above), Citi has: •Expanded and realigned its climate risk team to be part of the Enterprise Risk Management function within Risk; •Further built out its Clean Energy Transition (CET) team (formed in 2021 and expanded in 2022 to include Corporate Banking), which focuses on providing advisory and capital-raising services to companies involved in energy transition; and•Launched two climate training pilots for its BCMA (Banking, Capital Markets and Advisory), Risk Management and Global Functions teams involving in-person workshops focused on providing foundational knowledge of climate risks and client engagement.Key ESG InitiativesSustainable Progress StrategyCiti's Sustainable Progress Strategy is summarized in its Environmental and Social Policy Framework. The three pillars of the strategy each have climate-related elements and serve as the foundation for Citi's climate commitments: and/or developed and are being used to replace LIBOR and other benchmark rates. Alternative reference rates, such as the Secured Overnight Financing Rate (SOFR), are calculated using components different from those used in the calculation of LIBOR and may fluctuate differently than, and not be representative of, LIBOR. In order to compensate for these differences, certain of Citi's financial instruments and commercial agreements allow for a benchmark replacement adjustment. However, there can be no assurance that any benchmark replacement adjustment will be sufficient to produce the economic equivalent of LIBOR, either at the benchmark replacement date or over the life of such instruments and agreements. Moreover, the transition presents challenges related to contractual mechanics of existing contracts that reference USD LIBOR and are governed by non-U.S. law or reference the USD LIBOR Ice Swap Rate. Certain of these legacy instruments and contracts are not covered by any legislative solution and do not provide for fallbacks to alternative reference rates, which makes it unclear what the applicable future replacement benchmark rates and associated payments might be after the current benchmark's cessation. Citi may be unable to amend certain instruments and contracts due to an inability to obtain sufficient levels of consent from counterparties or security holders. Although this will depend on the precise contractual terms of the instrument, such consent requirements are often conditions of securities, such as floating rate notes. The Financial Conduct Authority (FCA), a U.K. regulator, has proposed that one-, three- and six-month USD LIBOR be published on a synthetic basis, which would only be available through September 2024.In addition, the transition away from and discontinuance of LIBOR and other benchmark rates have subjected financial institutions, including Citi, to heightened scrutiny from regulators. Failure to successfully transition away from LIBOR and other benchmark rates could result in adverse regulatory actions, disputes, including potential litigation involving holders of outstanding products and contracts that reference LIBOR and other benchmark rates, and reputational harm to Citi. See "Managing Global Risk - Other Risks - LIBOR Transition Risk" for Citi's ongoing actions to prepare for the transition away from LIBOR.SUSTAINABILITY AND OTHER ESG MATTERSIntroduction Citi has worked on Environmental, Social and Governance (ESG) issues for more than 20 years and has a demonstrated record of ESG progress, including participating in the creation and adoption of ESG-related principles and standards. This section summarizes some of Citi's key ESG initiatives, including its Sustainable Progress Strategy, Net Zero, and Financial Inclusion and Racial Equity commitments. Citi's ESG Report provides information on a broad set of ESG-related efforts. Citi's Task Force on Climate-Related Financial Disclosures (TCFD) Report provides its stakeholders with information on Citi's continued progress to manage and/or developed and are being used to replace LIBOR and other benchmark rates. Alternative reference rates, such as the Secured Overnight Financing Rate (SOFR), are calculated using components different from those used in the calculation of LIBOR and may fluctuate differently than, and not be representative of, LIBOR. In order to compensate for these differences, certain of Citi's financial instruments and commercial agreements allow for a benchmark replacement adjustment. However, there can be no assurance that any benchmark replacement adjustment will be sufficient to produce the economic equivalent of LIBOR, either at the benchmark replacement date or over the life of such instruments and agreements. Moreover, the transition presents challenges related to contractual mechanics of existing contracts that reference USD LIBOR and are governed by non-U.S. law or reference the USD LIBOR Ice Swap Rate. Certain of these legacy instruments and contracts are not covered by any legislative solution and do not provide for fallbacks to alternative reference rates, which makes it unclear what the applicable future replacement benchmark rates and associated payments might be after the current benchmark's cessation. Citi may be unable to amend certain instruments and contracts due to an inability to obtain sufficient levels of consent from counterparties or security holders. Although this will depend on the precise contractual terms of the instrument, such consent requirements are often conditions of securities, such as floating rate notes. The Financial Conduct Authority (FCA), a U.K. regulator, has proposed that one-, three- and six-month USD LIBOR be published on a synthetic basis, which would only be available through September 2024. In addition, the transition away from and discontinuance of LIBOR and other benchmark rates have subjected financial institutions, including Citi, to heightened scrutiny from regulators. Failure to successfully transition away from LIBOR and other benchmark rates could result in adverse regulatory actions, disputes, including potential litigation involving holders of outstanding products and contracts that reference LIBOR and other benchmark rates, and reputational harm to Citi. See "Managing Global Risk - Other Risks - LIBOR Transition Risk" for Citi's ongoing actions to prepare for the transition away from LIBOR. --- ## No Match in Current: Financial Inclusion and Racial Equity *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Building on Citi's longstanding focus on advancing financial inclusion and economic opportunity for communities of color, in September 2020, Citi and the Citi Foundation announced Action for Racial Equity (ARE), a set of strategic initiatives to help close the racial wealth gap and increase economic mobility in the U.S. As part of ARE, Citi and the Citi Foundation have invested more than $1 billion in strategic initiatives to provide greater access to banking and credit in communities of color, increase investment in Black-owned businesses, expand access to affordable housing and 55 55 55 homeownership among Black Americans and advance anti-racist practices within Citi and across the financial services industry.Consistent with its commitment to transparently report on ARE, in December 2022 Citi released the results of a racial equity audit of ARE, which it had commissioned from the law firm Covington & Burling. The audit assessed ARE as an effort to help address various drivers of the racial wealth gap by evaluating ARE's design, implementation and extent of integration into Citi's business. The audit's overall assessment was that ARE was a well-designed and credible effort to help address the racial wealth gap in the U.S., given the dimensions of Citi's business. More specifically, it concluded that:•ARE's design effectively leveraged Citi's expertise, network of business partners and resources to address some of the key factors contributing to the racial wealth gap.•Citi has made progress toward many of the objectives committed to under ARE, although at the time of the audit (the end of the first two years of its three-year commitment) it had not yet accomplished every objective or commitment.•There are opportunities to further institutionalize ARE efforts into Citi's core business, building upon the creation of dedicated business units in both PBWM and ICG.•There are opportunities for Citi to further support consumers from underrepresented communities to build and maintain healthy credit scores and access credit.In addition to Citi's ongoing work and focus on ARE and in line with its continued commitment to expand access to banking products and services that can help advance economic progress - especially for underbanked and unbanked communities - Citi eliminated overdraft fees, returned item fees and overdraft protection fees beginning in June 2022. In addition to eliminating these fees, Citi will continue to offer a robust suite of free overdraft protection services for its customers. Additional InformationFor additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2023 Annual Meeting Proxy Statement to be filed with the SEC in March 2023, as well as its 2022 TCFD Report to be published and available on Citi's investor relations website in March 2023.The 2022 TCFD Report and any other ESG-related reports and information included elsewhere on Citi's investor relations website are not incorporated by reference into, and do not form any part of, this 2022 Annual Report on Form 10-K. homeownership among Black Americans and advance anti-racist practices within Citi and across the financial services industry.Consistent with its commitment to transparently report on ARE, in December 2022 Citi released the results of a racial equity audit of ARE, which it had commissioned from the law firm Covington & Burling. The audit assessed ARE as an effort to help address various drivers of the racial wealth gap by evaluating ARE's design, implementation and extent of integration into Citi's business. The audit's overall assessment was that ARE was a well-designed and credible effort to help address the racial wealth gap in the U.S., given the dimensions of Citi's business. More specifically, it concluded that:•ARE's design effectively leveraged Citi's expertise, network of business partners and resources to address some of the key factors contributing to the racial wealth gap.•Citi has made progress toward many of the objectives committed to under ARE, although at the time of the audit (the end of the first two years of its three-year commitment) it had not yet accomplished every objective or commitment.•There are opportunities to further institutionalize ARE efforts into Citi's core business, building upon the creation of dedicated business units in both PBWM and ICG.•There are opportunities for Citi to further support consumers from underrepresented communities to build and maintain healthy credit scores and access credit.In addition to Citi's ongoing work and focus on ARE and in line with its continued commitment to expand access to banking products and services that can help advance economic progress - especially for underbanked and unbanked communities - Citi eliminated overdraft fees, returned item fees and overdraft protection fees beginning in June 2022. In addition to eliminating these fees, Citi will continue to offer a robust suite of free overdraft protection services for its customers. Additional InformationFor additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2023 Annual Meeting Proxy Statement to be filed with the SEC in March 2023, as well as its 2022 TCFD Report to be published and available on Citi's investor relations website in March 2023.The 2022 TCFD Report and any other ESG-related reports and information included elsewhere on Citi's investor relations website are not incorporated by reference into, and do not form any part of, this 2022 Annual Report on Form 10-K. homeownership among Black Americans and advance anti-racist practices within Citi and across the financial services industry. Consistent with its commitment to transparently report on ARE, in December 2022 Citi released the results of a racial equity audit of ARE, which it had commissioned from the law firm Covington & Burling. The audit assessed ARE as an effort to help address various drivers of the racial wealth gap by evaluating ARE's design, implementation and extent of integration into Citi's business. The audit's overall assessment was that ARE was a well-designed and credible effort to help address the racial wealth gap in the U.S., given the dimensions of Citi's business. More specifically, it concluded that: •ARE's design effectively leveraged Citi's expertise, network of business partners and resources to address some of the key factors contributing to the racial wealth gap. •Citi has made progress toward many of the objectives committed to under ARE, although at the time of the audit (the end of the first two years of its three-year commitment) it had not yet accomplished every objective or commitment. •There are opportunities to further institutionalize ARE efforts into Citi's core business, building upon the creation of dedicated business units in both PBWM and ICG. •There are opportunities for Citi to further support consumers from underrepresented communities to build and maintain healthy credit scores and access credit. In addition to Citi's ongoing work and focus on ARE and in line with its continued commitment to expand access to banking products and services that can help advance economic progress - especially for underbanked and unbanked communities - Citi eliminated overdraft fees, returned item fees and overdraft protection fees beginning in June 2022. In addition to eliminating these fees, Citi will continue to offer a robust suite of free overdraft protection services for its customers. --- ## No Match in Current: Unspecified(3) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Personal Banking and Wealth Management (1) Colleague distribution is based on assigned business and region, which may not reflect where the colleague physically resides. (2) Part-time colleagues represented less than 1.5% of Citi's global workforce. (3) Information regarding gender is self-identified by colleagues. --- ## No Match in Current: Diversity, Equity and Inclusion *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Citigroup's Board is committed to ensuring that the Board and Citi's Executive Management Team are composed of individuals whose backgrounds reflect the diversity of Citi's employees, customers and other stakeholders. In addition, Citi has increased its efforts to diversify its workforce, including, among other things, taking actions with respect to pay equity, setting representation goals and the use of diverse slates in recruiting. --- ## No Match in Current: Representation Goals *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Citi's management believes that a diverse workforce is key to the Company's success in serving diverse clients and communities. In 2022, Citi announced that it exceeded its Company-wide, aspirational diversity representation goals for 2018-2021 to increase its percentages of women colleagues globally and Black talent in the U.S. Recognizing that this was just a starting point, Citi has set new goals for 2025. The new goals are more global, embrace more dimensions of diversity and include all levels of the Company. Citi's 2025 aspirational representation goals are embedded in its business strategy. Citi has goals for hiring and promoting colleagues into roles at the Assistant Vice President to Managing Director levels across the organization, as well as goals for campus hiring from colleges and universities. Having aspirational goals across all levels - from early career through senior leadership roles - will help ensure Citi not only has diverse talent in leadership roles, but will also help the Company build a diverse talent pipeline for the future. --- ## No Match in Current: Portfolio Mix - Industry *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Citi's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2022September 30,2022December 31,2021Transportation and industrials20 %20 %20 %Technology, media and telecom12 12 12 Consumer retail11 11 11 Real estate10 10 10 Power, chemicals, metals and mining9 9 9 Banks and finance companies(1)10 9 8 Energy and commodities7 7 7 Asset managers and funds5 7 8 Health6 5 5 Insurance4 4 4 Public sector3 3 3 Financial markets infrastructure2 2 2 Other industries1 1 1 Total100 %100 %100 % Banks and finance companies(1) (1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. 64 64 64 The following table details Citi's corporate credit portfolio by industry as of December 31, 2022: Non-investment gradeSelected metricsIn millions of dollarsTotal credit exposureFunded(1)Unfunded(1)Investment gradeNon-criticizedCriticized performingCriticized non-performing(2)30 days or more past due and accruingNet credit losses (recoveries)Credit derivative hedges(3)Transportation and industrials$139,225 $57,271 $81,954 $109,197 $19,697 $9,850 $481 $403 $ - $(8,459)Autos(4)47,482 21,995 25,487 40,795 5,171 1,391 125 52 - (3,084)Transportation24,843 10,374 14,469 18,078 3,156 3,444 165 57 (30)(1,270)Industrials66,900 24,902 41,998 50,324 11,370 5,015 191 294 30 (4,105)Technology, media and telecom81,211 28,931 52,280 65,386 12,308 3,308 209 169 11 (6,050)Consumer retail78,255 32,687 45,568 60,215 14,830 2,910 300 195 28 (5,395)Real estate70,676 48,539 22,137 63,023 4,722 2,881 50 138 2 (739)Power, chemicals, metals and mining59,404 18,326 41,078 47,395 10,466 1,437 106 226 34 (5,063)Power22,718 4,827 17,891 18,822 3,325 512 59 129 (3)(2,306)Chemicals23,147 7,765 15,382 19,033 3,534 564 16 55 30 (2,098)Metals and mining13,539 5,734 7,805 9,540 3,607 361 31 42 7 (659)Banks and finance companies65,623 42,276 23,347 57,368 5,718 2,387 150 266 65 (1,113)Energy and commodities(5)46,309 13,069 33,240 38,918 6,076 1,200 115 180 11 (3,852)Asset managers and funds35,983 13,162 22,821 34,431 1,492 60 - 95 - (759)Health41,836 8,771 33,065 36,954 3,737 978 167 84 7 (2,855)Insurance29,932 4,417 25,515 29,090 801 41 - 44 - (3,884)Public sector23,705 11,736 11,969 20,663 2,084 956 2 77 4 (1,633)Financial markets infrastructure8,742 60 8,682 8,672 70 - - - - (18)Securities firms1,462 569 893 625 678 157 2 2 - (2)Other industries6,697 3,651 3,046 4,842 1,568 238 49 19 16 (8)Total$689,060 $283,465 $405,595 $576,779 $84,247 $26,403 $1,631 $1,898 $178 $(39,830) Funded(1) --- ## No Match in Current: CONSUMER CREDIT *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* PBWM fulfills a broad spectrum of customer financial needs, with U.S. Personal Banking providing retail banking, credit card, personal loan, mortgage and small business banking, and Global Wealth offering wealth management lending and other products globally to affluent to ultra-high-net-worth customer segments through the Private bank, Wealth at Work and Citigold. PBWM's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. Legacy Franchises also provides such activities in its remaining markets through Asia Consumer and Mexico Consumer. The Legacy Franchises consumer credit information discussed below reflects only those exit market portfolios that remained held-for-investment (versus held-for-sale) as of each period. The Philippines was reclassified to held-for-sale as of 4Q21, followed by Malaysia, Thailand, Indonesia, Vietnam, Taiwan, India and Bahrain in 1Q22. As a result, China, Korea, Russia and Poland were the only portfolios that remained held-for-investment and are reflected in the discussion below as of 4Q22. Legacy Franchises also provides such activities in its remaining markets through Asia Consumer and Mexico Consumer. The Legacy Franchises consumer credit information discussed below reflects only those exit market portfolios that remained held-for-investment (versus held-for-sale) as of each period. The Philippines was reclassified to held-for-sale as of 4Q21, followed by Malaysia, Thailand, Indonesia, Vietnam, Taiwan, India and Bahrain in 1Q22. As a result, China, Korea, Russia and Poland were the only portfolios that remained held-for-investment and are reflected in the discussion below as of 4Q22. --- ## No Match in Current: Consumer Credit Portfolio *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* The following table shows Citi's quarterly end-of-period consumer loans:(1) In billions of dollars4Q'21(2)1Q'22(2)2Q'22(2)3Q'22(2)4Q'22(2)Personal Banking and Wealth ManagementU.S. Personal BankingCardsBranded cards$87.9 $85.9 $91.6 $93.7 $100.2 Retail services46.0 44.1 45.8 46.7 50.5 Retail bankingMortgages(5)30.2 30.5 32.3 32.3 33.4 Personal, small business and other2.8 2.8 3.1 3.5 3.7 Global Wealth(3)(4)Cards4.0 3.8 4.0 4.0 4.6 Mortgages(5)74.6 75.4 77.8 82.0 84.0 Personal, small business and other(6)72.7 71.0 67.0 65.1 60.6 Total$318.2 $313.5 $321.6 $327.3 $337.0 Legacy FranchisesAsia Consumer(7)$41.1 $19.5 $17.3 $13.4 $13.3 Mexico Consumer (excludes Mexico SBMM)13.3 13.6 13.5 13.7 14.8 Legacy Holdings Assets(8)3.9 3.7 3.2 3.2 3.0 Total$58.3 $36.8 $34.0 $30.3 $31.1 Total consumer loans$376.5 $350.3 $355.6 $357.6 $368.1 4Q'21(2) 1Q'22(2) 2Q'22(2) 3Q'22(2) 4Q'22(2) Mortgages(5) Global Wealth(3)(4) Mortgages(5) Personal, small business and other(6) --- ## No Match in Current: Personal Banking and Wealth Management *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* As indicated above, PBWM consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking provides card products through Branded cards and Retail services, and also includes mortgages and home equity, small business and personal consumer loans through Citi's Retail banking network. The Retail bank is concentrated in six major U.S. metropolitan areas. Global Wealth provides investment services, cards, mortgages and personal, small business and other consumer loans through the Private bank, Wealth at Work and Citigold. As of December 31, 2022, approximately 45% of PBWM consumer loans consisted of Branded cards and Retail services card loans, which generally drives the overall credit performance of PBWM, as U.S. Cards net credit losses represent approximately 90% of total PBWM losses. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in PBWM increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels in U.S. Cards. PBWM's 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization in U.S. Cards. --- ## No Match in Current: Legacy Franchises *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Asia Consumer(7) Legacy Holdings Assets(8) (1)End-of-period loans include interest and fees on credit cards. (2)Legacy Franchises - 4Q22 Asia Consumer loan balances exclude approximately $12 billion of loans ($9 billion of retail banking loans and $3 billion of credit card loan balances) reclassified to held-for-sale (HFS) (in Other assets on the Consolidated Balance Sheet) as a result of Citi's signed agreements to sell its consumer banking businesses in four countries: Indonesia, Vietnam, Taiwan and India, which were reclassified to HFS starting 1Q22. (See Legacy Franchises above and Note 2 for additional information.) The Malaysia, Thailand and Bahrain sales closed during the fourth quarter of 2022 and were also reclassified to HFS starting 1Q22. The Philippines consumer banking business was reclassified to HFS from 4Q21 until the closing of its sale on August 1, 2022. Accordingly, loans from these sold businesses are excluded from the Asia Consumer loan balances as of the end of such periods. (3)Consists of $98.2 billion, $99.3 billion, $94.6 billion, $94.1 billion and $92.7 billion of loans in North America as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively. For additional information on the credit quality of the Global Wealth portfolio, see Note 14. (4)Consists of $51.0 billion, $51.8 billion, $54.2 billion, $56.1 billion and $58.6 billion of loans outside North America as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively. (5)See Note 14 for details on loan-to-value ratios for the portfolios and FICO scores for the U.S. portfolio. (6)At December 31, 2022, includes approximately $49 billion of classifiably managed loans. Over 90% of these loans are fully collateralized (consisting primarily of marketable investment securities, commercial real estate and limited partner capital commitments in private equity) and have experienced very low historical NCLs. As discussed below, approximately 95% of the classifiably managed portion of these loans are investment grade. See "Consumer Loan Delinquencies Amounts and Ratios" below for details on the delinquency-managed portfolio. (7)Asia Consumer also includes loans and leases in certain EMEA countries for all periods presented. (8)Primarily consists of certain North America consumer mortgages. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. 69 69 69 Consumer Credit TrendsPersonal Banking and Wealth Management (PBWM)Personal Banking and Wealth ManagementAs indicated above, PBWM consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking provides card products through Branded cards and Retail services, and also includes mortgages and home equity, small business and personal consumer loans through Citi's Retail banking network. The Retail bank is concentrated in six major U.S. metropolitan areas. Global Wealth provides investment services, cards, mortgages and personal, small business and other consumer loans through the Private bank, Wealth at Work and Citigold. As of December 31, 2022, approximately 45% of PBWM consumer loans consisted of Branded cards and Retail services card loans, which generally drives the overall credit performance of PBWM, as U.S. Cards net credit losses represent approximately 90% of total PBWM losses. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in PBWM increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels in U.S. Cards.PBWM's 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization in U.S. Cards.Branded CardsU.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization.Retail ServicesU.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14.Retail Banking Consumer Credit TrendsPersonal Banking and Wealth Management (PBWM)Personal Banking and Wealth ManagementAs indicated above, PBWM consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking provides card products through Branded cards and Retail services, and also includes mortgages and home equity, small business and personal consumer loans through Citi's Retail banking network. The Retail bank is concentrated in six major U.S. metropolitan areas. Global Wealth provides investment services, cards, mortgages and personal, small business and other consumer loans through the Private bank, Wealth at Work and Citigold. As of December 31, 2022, approximately 45% of PBWM consumer loans consisted of Branded cards and Retail services card loans, which generally drives the overall credit performance of PBWM, as U.S. Cards net credit losses represent approximately 90% of total PBWM losses. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in PBWM increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels in U.S. Cards.PBWM's 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization in U.S. Cards.Branded Cards --- ## No Match in Current: Asia(1) Consumer *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* (1) Asia Consumer includes Legacy Franchises activities in certain EMEA countries for all periods presented. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Asia Consumer for the remaining portfolios held-for-investment (China, Korea, Russia and Poland) increased quarter-over-quarter, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $1.5 billion) and the sale of the personal loan portfolio in Russia in the fourth quarter of 2022. The net credit loss rate increased year-over-year, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $7.8 billion) and the sale of the personal loan portfolio in Russia, partially offset by the reclassification of loans to held-for-sale during 2022. The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, mainly driven by the impact of the Asia Consumer held-for-sale reclassifications, partially offset by the effect of declining loans due to the ongoing wind-down of the businesses, including the sale of the personal loan portfolio in Russia. The performance of Asia Consumer's portfolios continues to reflect the strong credit profiles in the region's target customer segments. --- ## No Match in Current: Personal Banking and Wealth Management(2) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Asia Consumer(3)(4) (1)Average loans include interest and fees on credit cards. (2)The ratios of net credit losses are calculated based on average loans, net of unearned income. (3)Asia Consumer includes NCLs and average loans in certain EMEA countries (Russia, Poland and Bahrain) for all periods presented. (4)Citi recently entered into agreements to sell certain Asia consumer banking businesses, which have been reclassified as HFS in Other assets and Other liabilities on the Consolidated Balance Sheet. As a result, approximately $155 million and $6 million in related net credit losses (NCLs) were recorded as a reduction in revenue (Other revenue) in 2022 and 2021, respectively. Accordingly, these NCLs are not included in this table. The reclassifications commenced as follows: Australia (3Q21, and closed on June 1, 2022), the Philippines (4Q21, and closed on August 1, 2022) and Bahrain, India, Indonesia, Malaysia, Taiwan, Thailand and Vietnam (1Q22) (Bahrain, Malaysia and Thailand closed in 4Q22). See Note 2 for additional information. 74 74 74 --- ## No Match in Current: Loan Maturities *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* In millions of dollars at December 31, 2022Due within1 yearGreater than 1 yearbut within5 yearsGreater than 5 years but within 15 yearsGreater than 15 yearsTotalIn North America officesResidential first mortgages$4 $181 $3,513 $92,341 $96,039 Home equity loans551 42 1,669 2,318 4,580 Credit cards(1)149,822 821 - - 150,643 Personal, small business and other33,271 3,945 340 196 37,752 Total$183,648 $4,989 $5,522 $94,855 $289,014 In offices outside North AmericaResidential mortgages$2,994 $372 $4,374 $20,374 $28,114 Credit cards(1)12,885 70 - - 12,955 Personal, small business and other29,637 7,179 588 580 37,984 Total$45,516 $7,621 $4,962 $20,954 $79,053 In millions of dollars at December 31, 2022 Credit cards(1) Credit cards(1) (1)Credit card loans with maturities greater than one year represent TDRs and are at fixed interest rates. --- ## No Match in Current: Gross recoveries on loans(2) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Other - net(3)(4)(5)(6)(7)(8) ACLL as a percentage of EOP loans(9) Allowance for credit losses on unfunded lending commitments (ACLUC)(10)(11) 77 77 77 Total ACLL and ACLUC$19,125 $18,326 $27,611 $14,239 $13,682 Net consumer credit losses on loans$3,611 $4,509 $6,711 $7,414 $6,906 As a percentage of average consumer loans1.02 %1.20 %1.77 %1.94 %1.84 %Net corporate credit losses on loans$178 $386 $900 $354 $207 As a percentage of average corporate loans0.06 %0.13 %0.29 %0.12 %0.07 %ACLL by type at end of year(12)Consumer$14,119 $14,040 $20,180 $10,056 $9,670 Corporate2,855 2,415 4,776 2,727 2,645 Total$16,974 $16,455 $24,956 $12,783 $12,315 --- ## No Match in Current: Non-Accrual Loans and Assets and Renegotiated Loans *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* There is a certain amount of overlap among non-accrual loans and assets and renegotiated loans. The following summary provides a general description of each category. --- ## No Match in Current: Non-Accrual Loans and Assets: *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* •Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful. •A corporate loan may be classified as non-accrual and still be performing under the terms of the loan structure. Non-accrual loans may still be current on interest payments. Citi's corporate non-accrual loans were $1.1 billion, $1.5 billion and $1.6 billion as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Of these, approximately 50%, 68% and 56% were performing at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. •Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments. •Consumer mortgage loans, other than Federal Housing Administration (FHA) insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due. •North America Branded cards and Retail services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency. --- ## No Match in Current: Renegotiated Loans *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* The following table presents Citi's loans modified in TDRs: In millions of dollarsDec. 31, 2022Dec. 31, 2021Corporate renegotiated loans(1) In U.S. offices Commercial and industrial(2)$35 $103 Mortgage and real estate2 2 Financial institutions - - Other11 20 Total$48 $125 In offices outside the U.S.Commercial and industrial(2)$50 $133 Mortgage and real estate11 18 Financial institutions - - Other1 8 Total$62 $159 Total corporate renegotiated loans$110 $284 Consumer renegotiated loans(3)In U.S. officesMortgage and real estate$1,407 $1,485 Cards1,180 1,269 Personal, small business and other19 26 Total$2,606 $2,780 In offices outside the U.S.Mortgage and real estate$152 $227 Cards75 313 Personal, small business and other88 428 Total$315 $968 Total consumer renegotiated loans$2,921 $3,748 --- ## No Match in Current: Corporate renegotiated loans(1) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Commercial and industrial(2) Commercial and industrial(2) --- ## No Match in Current: Consumer renegotiated loans(3) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* (1)Includes $108 million and $284 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest. (2)In addition to modifications reflected as TDRs at December 31, 2022 and 2021, Citi may have modifications that were not considered TDRs because the modifications did not involve a concession or because they qualified for exemptions from TDR accounting provided by the CARES Act or the interagency guidance. (3)Includes $566 million and $664 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest. Forgone Interest Revenue on Loans(1) In millions of dollarsIn U.S.officesIn non-U.S.offices2022totalInterest revenue that would have been accrued at original contractual rates(2)$331 $189 $520 Amount recognized as interest revenue(2)158 121 279 Forgone interest revenue$173 $68 $241 (1) Relates to corporate non-accrual loans, renegotiated loans and consumer loans on which accrual of interest has been suspended. (2) Interest revenue in offices outside the U.S. may reflect prevailing local interest rates, including the effects of inflation and monetary correction in certain countries. --- ## No Match in Current: Long-Term Debt Outstanding *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* The following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated: In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021Non-bank(1)Benchmark debt:Senior debt$117.5 $112.7 $117.8 Subordinated debt22.5 22.4 25.7 Trust preferred1.6 1.6 1.7 Customer-related debt101.1 86.9 78.3 Local country and other(2)7.8 7.0 7.3 Total non-bank$250.5 $230.6 $230.8 BankFHLB borrowings$7.3 $7.3 $5.3 Securitizations(3)7.6 8.4 9.6 Citibank benchmark senior debt2.6 2.5 3.6 Local country and other(2)3.6 4.3 5.1 Total bank$21.1 $22.5 $23.6 Total long-term debt$271.6 $253.1 $254.4 --- ## No Match in Current: Non-bank(1) *This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.* Senior debt Subordinated debt Trust preferred Local country and other(2) Securitizations(3) Local country and other(2) Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums. (1)Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2022, non-bank included $84.2 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line. (2)Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included. (3)Predominantly credit card securitizations, primarily backed by Branded cards receivables. Citi's total long-term debt outstanding increased 7% year-over-year, primarily driven by an increase in customer-related debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 7%, largely driven by an increase in customer-related debt and benchmark senior debt at the non-bank entities. As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2022, Citi redeemed or repurchased an aggregate of approximately $20.8 billion of its outstanding long-term debt. 88 88 88 --- ## Modified: Third Line of Defense: Internal Audit **Key changes:** - Reworded sentence: "The role of Internal Audit is to provide independent, objective, reliable, valued and timely assurance to the Board, its Audit Committee, Citi senior management and regulators over the effectiveness of governance, risk management and controls that mitigate current and evolving risks and enhance the control culture within Citi." - Reworded sentence: "Enterprise support functions are composed of Human Resources and Global Legal Affairs and Compliance (exclusive of ICRM, which is part of the second line of defense)." - Reworded sentence: "The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework and meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors." - Reworded sentence: "Enterprise support functions are composed of Human Resources and Global Legal Affairs and Compliance (exclusive of ICRM, which is part of the second line of defense)." - Reworded sentence: "The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework and meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors." **Prior (2023):** Internal Audit is independent of the first line, second line and enterprise support functions. The role of Internal Audit is to provide independent, objective, reliable, valued and timely assurance to the Board, its Audit Committee, Citi senior management and regulators over the effectiveness of governance, risk management and controls that mitigate 60 60 60 current and evolving risks and enhance the control culture within Citi. The Citi Chief Auditor manages Internal Audit and reports functionally to the Chairman of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. Enterprise Support FunctionsEnterprise support functions engage in activities that support safety and soundness across Citi. These functions provide advisory services and/or design, implement, maintain and oversee Company-wide programs that support Citi in maintaining an effective control environment. Enterprise support functions are composed of Human Resources and Legal (including Citi Security and Investigative Services). Front line units may also include enterprise support units and/or conduct enterprise support activities (e.g., the Controllers Group within Finance). Enterprise support functions, units and activities are subject to the relevant Company-wide independent oversight processes specific to the risks for which they are accountable (e.g., operational risk, compliance risk, reputation risk).Risk GovernanceCiti's ERM Framework encompasses risk management processes to address risks undertaken by Citi through identification, measurement, monitoring, controlling and reporting of all risks. The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework, meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Board delegates authority to an Executive Management Team for directing and overseeing day-to-day management of Citi. The Executive Management Team is led by the Citigroup CEO and provides oversight of group activities, both directly and through authority delegated to committees it has established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy.Board and Executive Management CommitteesThe Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework, including the significant policies and practices used in managing credit, market, liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) performance oversight of the Global Risk Review - credit, capital and collateral review functions.•Audit Committee: provides oversight of Citi's financial reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants.•Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization.•Nomination, Governance and Public Affairs Committee: provides oversight of reputational issues, Environmental, Social and Governance (ESG) and sustainability matters, and legal and regulatory compliance risks as they relate to corporate governance matters.•Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) Citigroup's technology strategy and operating plan and the development of Citi's target operating model and architecture, (ii) technology-based risk management, including Cyber Security, (iii) technology-related resource and talent planning and (iv) third-party management policies, practices and standards.In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the recent regulatory consent orders (for additional information see "Citi's Consent Order Compliance" above).The Executive Management Team has established five standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of:•Group Strategic Risk Committee (GSRC): provides governance oversight of Citi's management actions to adequately identify, monitor, report, manage and escalate all material strategic risks facing Citi. •Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup.•Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all risk categories, including Credit Risk and Market Risk (trading).•Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. current and evolving risks and enhance the control culture within Citi. The Citi Chief Auditor manages Internal Audit and reports functionally to the Chairman of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. Enterprise Support FunctionsEnterprise support functions engage in activities that support safety and soundness across Citi. These functions provide advisory services and/or design, implement, maintain and oversee Company-wide programs that support Citi in maintaining an effective control environment. Enterprise support functions are composed of Human Resources and Legal (including Citi Security and Investigative Services). Front line units may also include enterprise support units and/or conduct enterprise support activities (e.g., the Controllers Group within Finance). Enterprise support functions, units and activities are subject to the relevant Company-wide independent oversight processes specific to the risks for which they are accountable (e.g., operational risk, compliance risk, reputation risk).Risk GovernanceCiti's ERM Framework encompasses risk management processes to address risks undertaken by Citi through identification, measurement, monitoring, controlling and reporting of all risks. The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework, meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Board delegates authority to an Executive Management Team for directing and overseeing day-to-day management of Citi. The Executive Management Team is led by the Citigroup CEO and provides oversight of group activities, both directly and through authority delegated to committees it has established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy.Board and Executive Management CommitteesThe Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework, including the significant policies and practices used in managing credit, market, liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) performance current and evolving risks and enhance the control culture within Citi. The Citi Chief Auditor manages Internal Audit and reports functionally to the Chairman of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. **Current (2024):** Internal Audit is independent of the first line, second line and enterprise support functions. The role of Internal Audit is to provide independent, objective, reliable, valued and timely assurance to the Board, its Audit Committee, Citi senior management and regulators over the effectiveness of governance, risk management and controls that mitigate current and evolving risks and enhance the control culture within Citi. The Citi Chief Auditor manages Internal Audit 66 66 66 and reports functionally to the Chair of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. Enterprise Support FunctionsEnterprise support functions engage in activities that support safety and soundness across Citi. These functions provide advisory services and/or design, implement, maintain and oversee Company-wide programs that support Citi in maintaining an effective control environment. Enterprise support functions are composed of Human Resources and Global Legal Affairs and Compliance (exclusive of ICRM, which is part of the second line of defense). Front line units may also include enterprise support units and/or conduct enterprise support activities (e.g., the Controllers Group within Finance). Enterprise support functions, units and activities are subject to the relevant Company-wide independent oversight processes specific to the risks for which they are accountable (e.g., operational risk, compliance risk, reputation risk).Risk GovernanceCiti's ERM Framework encompasses risk management processes to address risks undertaken by Citi through identification, measurement, monitoring, controlling and reporting of all risks. The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework and meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors. The CEO leads the Company through the Executive Management Team and provides oversight of group activities, both directly and through authority delegated to committees established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy.Board and Executive Management CommitteesThe Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework and risk culture, including the significant policies and practices used in managing credit, market (trading and non-trading), liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) oversight of the Global Risk Review - credit, capital and collateral review functions.•Audit Committee: provides oversight of Citi's financial and regulatory reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants.•Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization.•Nomination, Governance and Public Affairs Committee: responsible for (i) identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of stockholders, (ii) leading the Board in its annual review of the Board's performance, (iii) recommending to the Board directors for each committee for appointment by the Board, (iv) reviewing the Company's policies and programs that relate to public issues of significance to the Company and the public at large, including but not limited to Environmental, Social and Corporate Governance (ESG) matters and (v) reviewing the Company's relationships with external constituencies and issues that impact the Company's reputation, and advising management as to its approach to each.•Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) the planning and execution of Citigroup's technology, strategy and operating plan, (ii) the development of Citi's target state operating model and architecture, including the incorporation of Global Business Services, (iii) technology-based risk management, including risk management framework, risk appetite and risk exposures of the Company, (iv) resource and talent planning of the Technology function and (v) the Company's third-party management policies, practices and standards that relate to Technology.In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the FRB and OCC consent orders (see "Citi's Consent Order Compliance" above).The Citigroup CEO has established four standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of:•Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all and reports functionally to the Chair of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. Enterprise Support FunctionsEnterprise support functions engage in activities that support safety and soundness across Citi. These functions provide advisory services and/or design, implement, maintain and oversee Company-wide programs that support Citi in maintaining an effective control environment. Enterprise support functions are composed of Human Resources and Global Legal Affairs and Compliance (exclusive of ICRM, which is part of the second line of defense). Front line units may also include enterprise support units and/or conduct enterprise support activities (e.g., the Controllers Group within Finance). Enterprise support functions, units and activities are subject to the relevant Company-wide independent oversight processes specific to the risks for which they are accountable (e.g., operational risk, compliance risk, reputation risk).Risk GovernanceCiti's ERM Framework encompasses risk management processes to address risks undertaken by Citi through identification, measurement, monitoring, controlling and reporting of all risks. The ERM Framework integrates these processes with appropriate governance to complement Citi's commitment to maintaining strong and consistent risk management practices.Board OversightThe Board is responsible for oversight of Citi and holds the Executive Management Team accountable for implementing the ERM Framework and meeting strategic objectives within Citi's risk appetite.Executive Management TeamThe Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors. The CEO leads the Company through the Executive Management Team and provides oversight of group activities, both directly and through authority delegated to committees established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy.Board and Executive Management CommitteesThe Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework and risk culture, including the significant policies and practices used in managing credit, market (trading and non-trading), liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to and reports functionally to the Chair of the Citi Audit Committee and administratively to the Citi Chief Executive Officer. The Citi Chief Auditor has unrestricted access to the Board and the Board Audit Committee to address risks and issues identified through Internal Audit's activities. --- ## Modified: Resolution Plan **Key changes:** - Reworded sentence: "Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings." - Reworded sentence: "In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy." - Reworded sentence: "As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions:(i) Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities;(ii) Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event that Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii) pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities;•Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and(iv) the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement.Total Loss-Absorbing Capacity (TLAC)U.S." - Reworded sentence: "As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions: (i) Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities; (ii) Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event that Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii) pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities; •Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and (iv) the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement." **Prior (2023):** Citigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle. On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. global systemically important banks (GSIBs), including Citigroup. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citigroup's 2021 resolution plan regarding data integrity and data quality management issues. For additional information on Citi's resolution plan submissions, see "Risk Factors - Strategic Risks" above. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2021 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's final total loss-absorbing capacity (TLAC) rule, Citigroup believes it has developed the resolution plan so that Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup. The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S. As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions: (i)Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities; (ii)Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii)pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities;•Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and(iv)the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement.The Citi Support Agreement provides two mechanisms, besides Citicorp's issuing of dividends to Citigroup, pursuant to which Citicorp will be required to transfer cash to Citigroup during business as usual so that Citigroup can fund its debt service as well as other operating needs: (i) one or more funding notes issued by Citicorp to Citigroup and (ii) a committed line of credit under which Citicorp may make loans to Citigroup. Total Loss-Absorbing Capacity (TLAC)U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities; •Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and (iv)the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement. The Citi Support Agreement provides two mechanisms, besides Citicorp's issuing of dividends to Citigroup, pursuant to which Citicorp will be required to transfer cash to Citigroup during business as usual so that Citigroup can fund its debt service as well as other operating needs: (i) one or more funding notes issued by Citicorp to Citigroup and (ii) a committed line of credit under which Citicorp may make loans to Citigroup. **Current (2024):** Citigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup. The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S. As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions:(i) Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities;(ii) Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event that Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii) pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities;•Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and(iv) the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement.Total Loss-Absorbing Capacity (TLAC)U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions: (i) Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities; (ii) Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event that Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii) pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities; •Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and (iv) the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement. --- ## Modified: Credit Risk and Concentrations of Risk Can Increase the Potential for Citi to Incur Significant Losses. **Key changes:** - Reworded sentence: "and various countries and jurisdictions globally, including end-of-period consumer loans of $389 billion and end-of-period corporate loans of $300 billion at December 31, 2023." - Reworded sentence: "A default by or a significant downgrade in the credit ratings of a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk." - Reworded sentence: "Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses and disruption." - Reworded sentence: "For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16." - Reworded sentence: "Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (see Note 28)." **Prior (2023):** Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $368 billion and end-of-period corporate loans of $289 billion at December 31, 2022. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below. A default by a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for certain sectors, industries or countries (for additional information, see the co-branding and private label credit card and macroeconomic challenges and uncertainties risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses.While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15. For additional information on Citi's credit and country risk, see each respective business's results of operations above and "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 14 and 15. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (for additional information about these exposures, see Note 27). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in related or dependent industries, and such conditions could cause Citi to incur significant losses.LIQUIDITY RISKSCiti's Businesses, Results of Operations and Financial Condition Could Be Negatively Impacted if It Does Not Effectively Manage Its Liquidity. As a large, global financial institution, adequate liquidity and sources of funding are essential to Citi's businesses. Citi's liquidity and sources of funding can be significantly and negatively impacted by factors it cannot control, such as general disruptions in the financial markets, governmental fiscal and monetary policies, regulatory changes or negative investor perceptions of Citi's creditworthiness, unexpected increases in cash or collateral requirements and the consequent inability to monetize available liquidity resources. Citi competes with other banks and financial institutions for both institutional and consumer deposits, which represent Citi's most stable and lowest cost source of long-term funding. The competition for deposits has continued to increase in recent interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses. While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15. For additional information on Citi's credit and country risk, see each respective business's results of operations above and "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 14 and 15. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (for additional information about these exposures, see Note 27). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in related or dependent industries, and such conditions could cause Citi to incur significant losses. **Current (2024):** Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $389 billion and end-of-period corporate loans of $300 billion at December 31, 2023. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below. A default by or a significant downgrade in the credit ratings of a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical, market and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for vulnerable sectors, industries or countries (see the macroeconomic challenges and uncertainties and co-branding and private label credit card risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses and disruption. For example, the failure of regional banks and other banking stresses in the first half of 2023 resulted in market volatility across the financial sector.While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses (including provisions for loans and unfunded lending commitments, and ACL builds for Other assets) as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For additional information on Citi's credit and country risk, see also each respective business's results of operations above, "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 15 and 16. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, or to a particular product or asset class, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (see Note 28). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in a certain geography and in related or dependent industries, and such conditions could cause Citi to incur significant losses.LIQUIDITY RISKSCiti's Businesses, Results of Operations and Financial Condition Could Be Negatively Impacted if It Does Not Effectively Manage Its Liquidity. As a large, global financial institution, adequate liquidity and sources of funding are essential to Citi's businesses. Citi's liquidity, sources of funding and costs of funding can be significantly and negatively impacted by factors it cannot control, such as general disruptions in the financial markets (e.g., the failure of regional banks and other banking stresses in the first half of 2023); changes in fiscal and monetary policies and regulatory requirements; negative investor perceptions of Citi's creditworthiness; deposit outflows or unfavorable changes in deposit mix; unexpected increases in cash or collateral requirements; credit ratings; and the consequent inability to monetize available liquidity resources. For example, the failure of regional banks and other banking stresses in the first half of 2023 resulted in market volatility across the financial sector. While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses (including provisions for loans and unfunded lending commitments, and ACL builds for Other assets) as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For additional information on Citi's credit and country risk, see also each respective business's results of operations above, "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 15 and 16. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, or to a particular product or asset class, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (see Note 28). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in a certain geography and in related or dependent industries, and such conditions could cause Citi to incur significant losses. --- ## Modified: ACLL by type at end of year(13) **Key changes:** - Reworded sentence: "(1)On January 1, 2023, Citi adopted Accounting Standards Update (ASU) 2022-02, Financial Instruments - Credit Losses (Topic 326): TDRs and Vintage Disclosures." - Reworded sentence: "(3)Citi had a change in accounting related to its variable post-charge-off third-party collection costs that was recorded as an adjustment to its January 1, 2020 opening allowance for credit losses on loans of $443 million." - Reworded sentence: "(7)2021 includes an approximate $280 million reclass related to Citi's agreement to sell its Australia consumer banking business and an approximate $90 million reclass related to Citi's agreement to sell its Philippines consumer banking business." - Reworded sentence: "(8)2020 includes reductions of approximately $4 million related to the transfer to HFS of various real estate loan portfolios." - Reworded sentence: "(9)2019 includes reductions of approximately $42 million related to the sale or transfer to HFS of various loan portfolios." **Prior (2023):** (1)On January 1, 2020, Citi adopted Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses (CECL). The ASC introduces a new credit loss methodology requiring earlier recognition of credit losses while also providing additional disclosure about credit risk. On January 1, 2020, Citi recorded a $4.1 billion, or an approximate 29%, pretax increase in the Allowance for credit losses, along with a $3.1 billion after-tax decrease in Retained earnings and a deferred tax asset increase of $1.0 billion. This transition impact reflects (i) a $4.9 billion build to the consumer ACL due to longer estimated tenors than under the incurred loss methodology under prior U.S. GAAP, net of recoveries, and (ii) a $0.8 billion decrease to the corporate ACL due to shorter remaining tenors, incorporation of recoveries and use of more specific historical loss data based on an increase in portfolio segmentation across industries and geographies. See Note 1 for further discussion on the impact of Citi's adoption of CECL. (2)Citi had a change in accounting related to its variable post-charge-off third-party collection costs that was recorded as an adjustment to its January 1, 2020 opening allowance for credit losses on loans of $443 million. See Note 1. (3)Includes all adjustments to the allowance for credit losses, such as changes in the allowance from acquisitions, dispositions, securitizations, FX translation, purchase accounting adjustments, etc. (4)2022 includes an approximate $350 million reclass related to the announced sales of Citi's consumer banking businesses in Thailand, India, Malaysia, Taiwan, Indonesia, Bahrain and Vietnam. Also includes a decrease of approximately $100 million related to FX translation. (5)2021 includes an approximate $280 million reclass related to Citi's agreement to sell its Australia consumer banking business and an approximate $90 million reclass related to Citi's agreement to sell its Philippines consumer banking business. Those ACLL were reclassified to Other assets during 2021. 2021 also includes a decrease of approximately $134 million related to FX translation. (6)2020 includes reductions of approximately $4 million related to the transfer to HFS of various real estate loan portfolios. In addition, 2020 includes an increase of approximately $97 million related to FX translation. (7)2019 includes reductions of approximately $42 million related to the sale or transfer to HFS of various loan portfolios. In addition, 2019 includes a reduction of approximately $60 million related to FX translation. (8)2018 includes reductions of approximately $201 million related to the sale or transfer to HFS of various loan portfolios, which include approximately $106 million related to the transfer of various real estate loan portfolios to HFS. (9)December 31, 2022, 2021, 2020, 2019 and 2018 exclude $5.4 billion, $6.1 billion, $6.9 billion, $4.1 billion and $3.2 billion, respectively, of loans that are carried at fair value. (10)2020 corporate ACLUC includes a non-provision transfer of $68 million, representing reserves on performance guarantees. The reserves on these contracts were reclassified out of the ACL on unfunded lending commitments and into other liabilities. (11)Represents additional credit reserves recorded as Other liabilities on the Consolidated Balance Sheet. (12)Beginning in 2020, under CECL, the ACLL represents management's estimate of expected credit losses in the portfolio and troubled debt restructurings. See "Significant Accounting Policies and Significant Estimates" and Note 1 below. Attribution of the ACLL is made for analytical purposes only and the entire ACLL is available to absorb credit losses in the overall portfolio. Prior to 2020, the ACLL represented management's estimate of probable losses inherent in the portfolio, as well as probable losses related to large individually evaluated impaired loans and TDRs. 78 78 78 **Current (2024):** (1)On January 1, 2023, Citi adopted Accounting Standards Update (ASU) 2022-02, Financial Instruments - Credit Losses (Topic 326): TDRs and Vintage Disclosures. The ASU eliminated the accounting and disclosure requirements for TDRs, including the requirement to measure the ACLL for TDRs using a discounted cash flow (DCF) approach. On January 1, 2023, Citi recorded a $352 million decrease in the Allowance for loan losses, along with a $290 million after-tax increase to Retained earnings. See Note 1. (2)On January 1, 2020, Citi adopted Accounting Standards Codification (ASC) 326, Financial Instruments - Credit Losses (CECL). The ASC introduces a new credit loss methodology requiring earlier recognition of credit losses while also providing additional disclosure about credit risk. On January 1, 2020, Citi recorded a $4.1 billion, or an approximate 29%, pretax increase in the Allowance for credit losses, along with a $3.1 billion after-tax decrease in Retained earnings and a deferred tax asset increase of $1.0 billion. This transition impact reflects (i) a $4.9 billion build to the consumer ACL due to longer estimated tenors than under the incurred loss methodology under prior U.S. GAAP, net of recoveries, and (ii) a $0.8 billion decrease to the corporate ACL due to shorter remaining tenors, incorporation of recoveries and use of more specific historical loss data based on an increase in portfolio segmentation across industries and geographies. (3)Citi had a change in accounting related to its variable post-charge-off third-party collection costs that was recorded as an adjustment to its January 1, 2020 opening allowance for credit losses on loans of $443 million. (4)Includes all adjustments to the allowance for credit losses, such as changes in the allowance from acquisitions, dispositions, securitizations, FX translation, purchase accounting adjustments, etc. (5)2023 includes an approximate $175 million increase related to FX translation. (6)2022 includes an approximate $350 million reclass related to the announced sales of Citi's consumer banking businesses in Thailand, India, Malaysia, Taiwan, Indonesia, Bahrain and Vietnam. Also includes a decrease of approximately $100 million related to FX translation. (7)2021 includes an approximate $280 million reclass related to Citi's agreement to sell its Australia consumer banking business and an approximate $90 million reclass related to Citi's agreement to sell its Philippines consumer banking business. Those ACLL were reclassified to Other assets during 2021. 2021 also includes a decrease of approximately $134 million related to FX translation. (8)2020 includes reductions of approximately $4 million related to the transfer to HFS of various real estate loan portfolios. In addition, 2020 includes an increase of approximately $97 million related to FX translation. (9)2019 includes reductions of approximately $42 million related to the sale or transfer to HFS of various loan portfolios. In addition, 2019 includes a reduction of approximately $60 million related to FX translation. (10)December 31, 2023, 2022, 2021, 2020 and 2019 exclude $7.6 billion, $5.4 billion, $6.1 billion, $6.9 billion and $4.1 billion, respectively, of loans that are carried at fair value. (11)Represents additional credit reserves recorded as Other liabilities on the Consolidated Balance Sheet. (12)2020 corporate ACLUC includes a non-provision transfer of $68 million, representing reserves on performance guarantees. The reserves on these contracts were reclassified out of the ACL on unfunded lending commitments and into Other liabilities. (13)Beginning in 2020, under CECL, the ACLL represents management's estimate of expected credit losses in the portfolio and troubled debt restructurings. See "Significant Accounting Policies and Significant Estimates." Attribution of the ACLL is made for analytical purposes only and the entire ACLL is available to absorb credit losses in the overall portfolio. Prior to 2020, the ACLL represented management's estimate of probable losses inherent in the portfolio, as well as probable losses related to large individually evaluated impaired loans and TDRs. 85 85 85 --- ## Modified: If Citi's Risk Management and Other Processes, Strategies or Models Are Deficient or Ineffective, Citi May Incur Significant Losses and Its Regulatory Capital and Capital Ratios Could Be Negatively Impacted. **Key changes:** - Reworded sentence: "Citi utilizes a broad and diversified set of risk management and other processes and strategies, including the use of models in analyzing and monitoring the various risks Citi assumes in conducting its activities." - Reworded sentence: "Management of these risks and the reliability of the data are made more challenging within a large, global financial institution, such as Citi, particularly due to complex, diverse and rapidly changing financial markets and conditions in which Citi operates." - Reworded sentence: "banking regulators regarding the U.S." - Reworded sentence: "Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses and disruption." - Reworded sentence: "For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16." **Prior (2023):** Citi utilizes a broad and diversified set of risk management and mitigation processes and strategies, including the use of models in enacting processes and strategies as well as in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks is made more challenging within a global financial institution such as Citi, particularly given the complex, diverse and rapidly changing financial markets and conditions in which Citi operates as well as that losses can occur unintentionally from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below). Citi's risk management processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of 49 49 49 such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances. Citi could incur significant losses, and its regulatory capital and capital ratios could be negatively impacted, if Citi's risk management processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting.Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking agencies regarding the regulatory capital framework applicable to Citi, have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to achieve its regulatory capital requirements. CREDIT RISKSCredit Risk and Concentrations of Risk Can Increase the Potential for Citi to Incur Significant Losses. Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $368 billion and end-of-period corporate loans of $289 billion at December 31, 2022. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below.A default by a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for certain sectors, industries or countries (for additional information, see the co-branding and private label credit card and macroeconomic challenges and uncertainties risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses.While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15. For additional information on Citi's credit and country risk, see each respective business's results of operations above and "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 14 and 15. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (for additional information about these exposures, see Note 27). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in related or dependent industries, and such conditions could cause Citi to incur significant losses.LIQUIDITY RISKSCiti's Businesses, Results of Operations and Financial Condition Could Be Negatively Impacted if It Does Not Effectively Manage Its Liquidity. As a large, global financial institution, adequate liquidity and sources of funding are essential to Citi's businesses. Citi's liquidity and sources of funding can be significantly and negatively impacted by factors it cannot control, such as general disruptions in the financial markets, governmental fiscal and monetary policies, regulatory changes or negative investor perceptions of Citi's creditworthiness, unexpected increases in cash or collateral requirements and the consequent inability to monetize available liquidity resources. Citi competes with other banks and financial institutions for both institutional and consumer deposits, which represent Citi's most stable and lowest cost source of long-term funding. The competition for deposits has continued to increase in recent such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances. Citi could incur significant losses, and its regulatory capital and capital ratios could be negatively impacted, if Citi's risk management processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting.Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking agencies regarding the regulatory capital framework applicable to Citi, have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to achieve its regulatory capital requirements. CREDIT RISKSCredit Risk and Concentrations of Risk Can Increase the Potential for Citi to Incur Significant Losses. Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $368 billion and end-of-period corporate loans of $289 billion at December 31, 2022. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below.A default by a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for certain sectors, industries or countries (for additional information, see the co-branding and private label credit card and macroeconomic challenges and uncertainties risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances. Citi could incur significant losses, and its regulatory capital and capital ratios could be negatively impacted, if Citi's risk management processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting. Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking agencies regarding the regulatory capital framework applicable to Citi, have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to achieve its regulatory capital requirements. **Current (2024):** Citi utilizes a broad and diversified set of risk management and other processes and strategies, including the use of models in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks and the reliability of the data are made more challenging within a large, global financial institution, such as Citi, particularly due to complex, diverse and rapidly changing financial markets and conditions in which Citi operates. Unexpected losses can result from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below). Citi's risk management and other processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, particularly given various macroeconomic, geopolitical and other challenges and uncertainties (see the macroeconomic challenges and uncertainties risk factor above), nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances, or identify changes in markets or client behaviors not yet inherent in historical data. Citi could incur significant losses, receive negative regulatory evaluation or examination findings or be subject to additional enforcement actions, and its regulatory capital, capital ratios and ability to return capital could be negatively impacted, if Citi's risk management and other processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. For additional information, see the capital return risk factor above and the heightened regulatory 57 57 57 scrutiny and ongoing interpretation of regulatory changes risk factor below. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting.Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking regulators regarding the U.S. regulatory capital framework applicable to Citi, including, but not limited to, potential revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above), have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to meet its regulatory capital requirements. CREDIT RISKSCredit Risk and Concentrations of Risk Can Increase the Potential for Citi to Incur Significant Losses.Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $389 billion and end-of-period corporate loans of $300 billion at December 31, 2023. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below.A default by or a significant downgrade in the credit ratings of a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical, market and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for vulnerable sectors, industries or countries (see the macroeconomic challenges and uncertainties and co-branding and private label credit card risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses and disruption. For example, the failure of regional banks and other banking stresses in the first half of 2023 resulted in market volatility across the financial sector.While Citi provides reserves for expected losses for its credit exposures, as applicable, such reserves are subject to judgments and estimates that could be incorrect or differ from actual future events. Under the CECL accounting standard, the ACL reflects expected losses, which has resulted in and could lead to additional volatility in the allowance and the provision for credit losses (including provisions for loans and unfunded lending commitments, and ACL builds for Other assets) as forecasts of economic conditions change. For additional information, see the incorrect assumptions or estimates and changes to financial accounting and reporting standards risk factors above. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For additional information on Citi's credit and country risk, see also each respective business's results of operations above, "Managing Global Risk - Credit Risk" and "Managing Global Risk - Other Risks - Country Risk" below and Notes 15 and 16. Concentrations of risk to clients or counterparties engaged in the same or related industries or doing business in a particular geography, or to a particular product or asset class, especially credit and market risks, can also increase Citi's risk of significant losses. For example, Citi routinely executes a high volume of securities, trading, derivative and foreign exchange transactions with non-U.S. sovereigns and with counterparties in the financial services industry, including banks, insurance companies, investment banks, governments, central banks and other financial institutions. Moreover, Citi has indemnification obligations in connection with various transactions that expose it to concentrations of risk, including credit risk from hedging or reinsurance arrangements related to those obligations (see Note 28). A rapid deterioration of a large borrower or other counterparty or within a sector or country in which Citi has large exposures or indemnifications or unexpected market dislocations could lead to concerns about the creditworthiness of other borrowers or counterparties in a certain geography and in related or dependent industries, and such conditions could cause Citi to incur significant losses.LIQUIDITY RISKSCiti's Businesses, Results of Operations and Financial Condition Could Be Negatively Impacted if It Does Not Effectively Manage Its Liquidity. As a large, global financial institution, adequate liquidity and sources of funding are essential to Citi's businesses. Citi's liquidity, sources of funding and costs of funding can be significantly and negatively impacted by factors it cannot control, such as general disruptions in the financial markets (e.g., the failure of regional banks and other banking stresses in the first half of 2023); changes in fiscal and monetary policies and regulatory requirements; negative investor perceptions of Citi's creditworthiness; deposit outflows or unfavorable changes in deposit mix; unexpected increases in cash or collateral requirements; credit ratings; and the consequent inability to monetize available liquidity resources. scrutiny and ongoing interpretation of regulatory changes risk factor below. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting.Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking regulators regarding the U.S. regulatory capital framework applicable to Citi, including, but not limited to, potential revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above), have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to meet its regulatory capital requirements. CREDIT RISKSCredit Risk and Concentrations of Risk Can Increase the Potential for Citi to Incur Significant Losses.Citi has credit exposures to consumer, corporate and public sector borrowers and other counterparties in the U.S. and various countries and jurisdictions globally, including end-of-period consumer loans of $389 billion and end-of-period corporate loans of $300 billion at December 31, 2023. For additional information on Citi's corporate and consumer loan portfolios, see "Managing Global Risk - Corporate Credit" and " - Consumer Credit" below.A default by or a significant downgrade in the credit ratings of a borrower or other counterparty, or a decline in the credit quality or value of any underlying collateral, exposes Citi to credit risk. Despite Citi's target client strategy, various macroeconomic, geopolitical, market and other factors, among other things, can increase Citi's credit risk and credit costs, particularly for vulnerable sectors, industries or countries (see the macroeconomic challenges and uncertainties and co-branding and private label credit card risk factors above and the emerging markets risk factor below). For example, a weakening of economic conditions can adversely affect borrowers' ability to repay their obligations, as well as result in Citi being unable to liquidate the collateral it holds or forced to liquidate the collateral at prices that do not cover the full amount owed to Citi. Citi is also a member of various central clearing counterparties and could incur financial losses as a result of defaults by other clearing members due to the requirements of clearing members to share losses. Additionally, due to the interconnectedness among financial institutions, concerns about the creditworthiness of or defaults by a financial institution could spread to other financial market participants and result in market-wide losses and disruption. scrutiny and ongoing interpretation of regulatory changes risk factor below. Such deficiencies or ineffectiveness could also result in inaccurate financial, regulatory or risk reporting. Moreover, Citi's Basel III regulatory capital models, including its credit, market and operational risk models, currently remain subject to ongoing regulatory review and approval, which may result in refinements, modifications or enhancements (required or otherwise) to these models. Citi is required to notify and obtain preapproval from both the OCC and FRB prior to implementing certain risk-weighted asset treatments, as well as certain model changes, resulting in a more challenging environment within which Citi must operate in managing its risk-weighted assets. Modifications or requirements resulting from these ongoing reviews, as well as any future changes or guidance provided by the U.S. banking regulators regarding the U.S. regulatory capital framework applicable to Citi, including, but not limited to, potential revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above), have resulted in, and could continue to result in, significant changes to Citi's risk-weighted assets. These changes can negatively impact Citi's capital ratios and its ability to meet its regulatory capital requirements. --- ## Modified: Short-Term Borrowings **Key changes:** - Reworded sentence: "Citi's short-term borrowings of $37 billion as of the fourth quarter of 2023 decreased 20% year-over-year, reflecting lower commercial paper issuances at the broker-dealer subsidiaries, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings)." - Reworded sentence: "(CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2023." - Reworded sentence: "The table below presents the ratings for Citigroup and Citibank as of December 31, 2023." - Reworded sentence: "(CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2023." **Prior (2023):** Citi's short-term borrowings of $47 billion as of the fourth quarter of 2022 increased 68% year-over-year, reflecting an increase in FHLB advances and commercial paper issuance, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). 91 91 91 CREDIT RATINGSCitigroup's funding and liquidity, funding capacity, ability to access capital markets and other sources of funds, the cost of these funds and its ability to maintain certain deposits are partially dependent on its credit ratings. The table below shows the ratings for Citigroup and Citibank as of December 31, 2022. While not included in the table below, the long-term and short-term ratings of Citigroup Global Markets Holding Inc. (CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2022. CREDIT RATINGSCitigroup's funding and liquidity, funding capacity, ability to access capital markets and other sources of funds, the cost of these funds and its ability to maintain certain deposits are partially dependent on its credit ratings. The table below shows the ratings for Citigroup and Citibank as of December 31, 2022. While not included in the table below, the long-term and short-term ratings of Citigroup Global Markets Holding Inc. (CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2022. **Current (2024):** Citi's short-term borrowings of $37 billion as of the fourth quarter of 2023 decreased 20% year-over-year, reflecting lower commercial paper issuances at the broker-dealer subsidiaries, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). 97 97 97 CREDIT RATINGSCitigroup's funding and liquidity, funding capacity, ability to access capital markets and other sources of funds, the cost of these funds and its ability to maintain certain deposits are partially dependent on its credit ratings. The table below presents the ratings for Citigroup and Citibank as of December 31, 2023. While not included in the table below, the long-term and short-term ratings of Citigroup Global Markets Holding Inc. (CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2023. CREDIT RATINGSCitigroup's funding and liquidity, funding capacity, ability to access capital markets and other sources of funds, the cost of these funds and its ability to maintain certain deposits are partially dependent on its credit ratings. The table below presents the ratings for Citigroup and Citibank as of December 31, 2023. While not included in the table below, the long-term and short-term ratings of Citigroup Global Markets Holding Inc. (CGMHI) were A+/F1 at Fitch Ratings, A2/P-1 at Moody's Investors Service and A/A-1 at S&P Global Ratings as of December 31, 2023. --- ## Modified: Credit Risk Mitigation **Key changes:** - Reworded sentence: "As part of its overall risk management activities, Citigroup uses credit derivatives, both partial and full term, and other risk mitigants to economically hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales." - Reworded sentence: "At December 31, 2023, September 30, 2023 and December 31, 2022, Banking had economic hedges on the corporate credit portfolio of $35.9 billion, $36.0 billion and $39.8 billion, respectively." - Reworded sentence: "The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution:" **Prior (2023):** As part of its overall risk management activities, Citigroup uses credit derivatives and other risk mitigants to hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. Citi may enter into partial-term hedges as well as full-term hedges. In advance of the expiration of partial-term hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income. At December 31, 2022, September 30, 2022 and December 31, 2021, ICG had economic hedges on the corporate credit portfolio of $39.8 billion, $36.5 billion and $39.3 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying ICG corporate credit portfolio exposures with the following risk rating distribution: **Current (2024):** As part of its overall risk management activities, Citigroup uses credit derivatives, both partial and full term, and other risk mitigants to economically hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. In advance of the expiration of partial-term economic hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income. At December 31, 2023, September 30, 2023 and December 31, 2022, Banking had economic hedges on the corporate credit portfolio of $35.9 billion, $36.0 billion and $39.8 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution: --- ## Modified: Wealth classifiably managed loans(6) **Key changes:** - Reworded sentence: "(3)The 90+ days past due and 30-89 days past due and related ratios for Retail Banking exclude loans guaranteed by U.S." - Reworded sentence: "The amounts excluded for loans 90+ days past due and (EOP loans) were $63 million ($0.5 billion), $89 million ($0.6 billion) and $185 million ($1.1 billion) at December 31, 2023, 2022 and 2021, respectively." - Reworded sentence: "(4)The 90+ days past due balances for Branded Cards and Retail Services are generally still accruing interest." - Reworded sentence: "(5)Excludes EOP classifiably managed Private Bank loans." - Reworded sentence: "As of December 31, 2023, 2022 and 2021, 85%, 96% and 94% of Wealth classifiably managed loans were rated investment grade." **Prior (2023):** Asia Consumer(7)(8) Legacy Holdings Assets (consumer)(9) (1)End-of-period (EOP) loans include interest and fees on credit cards. (2)The ratios of 90+ days past due and 30-89 days past due are calculated based on EOP loans, net of unearned income. (3)The 90+ days past due and 30-89 days past due and related ratios for Retail banking exclude loans guaranteed by U.S. government-sponsored agencies since the potential risk of loss predominantly resides with the U.S. government-sponsored agencies. The amounts excluded for loans 90+ days past due and (EOP loans) were $89 million ($0.6 billion), $185 million ($1.1 billion) and $171 million ($0.7 billion) at December 31, 2022, 2021 and 2020, respectively. The amounts excluded for loans 30-89 days past due (the 30-89 days past due EOP loans have the same adjustments as the 90+ days past due EOP loans) were $70 million, $74 million and $98 million at December 31, 2022, 2021 and 2020, respectively. The EOP loans in the table include the guaranteed loans. (4)The 90+ days past due balances for Branded cards and Retail services are generally still accruing interest. Citi's policy is generally to accrue interest on credit card loans until 180 days past due, unless notification of bankruptcy filing has been received earlier. (5)Excludes EOP classifiably managed Private bank loans. These loans are not included in the delinquency numerator, denominator and ratios. (6)These loans are evaluated for non-accrual status and write-off primarily based on their internal risk classification and not solely on their delinquency status, and therefore delinquency metrics are excluded from this table. As of December 31, 2022, 2021 and 2020, 96%, 94% and 92% of Global Wealth classifiably managed loans were rated investment grade. For additional information on the credit quality of the Global Wealth portfolio, including classifiably managed portfolios, see "Consumer Credit Trends" above. (7)Asia Consumer includes delinquencies and loans in certain EMEA countries for all periods presented. 73 73 73 (8)Citi recently entered into agreements to sell certain Asia consumer banking businesses. Accordingly, the loans of these businesses have been reclassified as HFS in Other assets on the Consolidated Balance Sheet, and hence the loans and related delinquencies and ratios are not included in this table. The reclassifications commenced as follows: Australia (3Q21, and closed on June 1, 2022), the Philippines (4Q21, and closed on August 1, 2022) and Bahrain, India, Indonesia, Malaysia, Taiwan, Thailand and Vietnam (1Q22) (Bahrain, Malaysia and Thailand closed in 4Q22). See Note 2 for additional information. (9)The 90+ days past due and 30-89 days past due and related ratios exclude U.S. mortgage loans that are primarily related to U.S. mortgages guaranteed by U.S. government-sponsored agencies since the potential risk of loss predominantly resides with the U.S. agencies. The amounts excluded for 90+ days past due and (EOP loans) were $90 million ($0.3 billion), $138 million ($0.4 billion) and $183 million ($0.5 billion) at December 31, 2022, 2021 and 2020, respectively. The amounts excluded for loans 30-89 days past due (the 30-89 days past due EOP loans have the same adjustments as the 90+ days past due EOP loans) were $37 million, $35 million and $73 million at December 31, 2022, 2021 and 2020, respectively. The EOP loans in the table include the guaranteed loans. N/A Not applicable **Current (2024):** Asia Consumer(7)(8) Legacy Holdings Assets (consumer)(9) (1)End-of-period (EOP) loans include interest and fees on credit cards. (2)The ratios of 90+ days past due and 30-89 days past due are calculated based on EOP loans, net of unearned income. (3)The 90+ days past due and 30-89 days past due and related ratios for Retail Banking exclude loans guaranteed by U.S. government-sponsored agencies since the potential risk of loss predominantly resides with the U.S. government-sponsored agencies. The amounts excluded for loans 90+ days past due and (EOP loans) were $63 million ($0.5 billion), $89 million ($0.6 billion) and $185 million ($1.1 billion) at December 31, 2023, 2022 and 2021, respectively. The amounts excluded for loans 30-89 days past due (the 30-89 days past due EOP loans have the same adjustments as the 90+ days past due EOP loans) were $73 million, $70 million and $74 million at December 31, 2023, 2022 and 2021, respectively. The EOP loans in the table include the guaranteed loans. (4)The 90+ days past due balances for Branded Cards and Retail Services are generally still accruing interest. Citi's policy is generally to accrue interest on credit card loans until 180 days past due, unless notification of bankruptcy filing has been received earlier. (5)Excludes EOP classifiably managed Private Bank loans. These loans are not included in the delinquency numerator, denominator and ratios. (6)These loans are evaluated for non-accrual status and write-off primarily based on their internal risk classification and not solely on their delinquency status, and therefore delinquency metrics are excluded from this table. As of December 31, 2023, 2022 and 2021, 85%, 96% and 94% of Wealth classifiably managed loans were rated investment grade. For additional information on the credit quality of the Wealth portfolio, including classifiably managed portfolios, see "Consumer Credit Trends" above. (7)Asia Consumer includes delinquencies and loans in Poland and Russia for all periods presented and in Bahrain for 2021 only. (8)Citi has entered into agreements to sell certain Asia Consumer banking businesses. Accordingly, the loans of these businesses have been reclassified as HFS in Other assets on the Consolidated Balance Sheet, and hence the loans and related delinquencies and ratios are not included in this table. The reclassifications commenced as follows: Bahrain, India, Indonesia, Malaysia, Taiwan, Thailand and Vietnam in 1Q22 (Bahrain, Malaysia and Thailand closed in 4Q22; India and Vietnam closed in 1Q23; Taiwan closed in 3Q23; and Indonesia closed in 4Q23); Australia in 3Q21 (closed in 2Q22); and the Philippines in 4Q21 (closed in 3Q22). In addition, a portfolio was reclassified to HFS in the first quarter of 2023 and subsequently sold in the second quarter of 2023. See Note 2. 80 80 80 (9)The 90+ days past due and 30-89 days past due and related ratios exclude U.S. mortgage loans that are primarily related to U.S. mortgages guaranteed by U.S. government-sponsored agencies since the potential risk of loss predominantly resides with the U.S. agencies. The amounts excluded for 90+ days past due and (EOP loans) were $67 million ($0.2 billion), $90 million ($0.3 billion) and $138 million ($0.4 billion) at December 31, 2023, 2022 and 2021, respectively. The amounts excluded for loans 30-89 days past due (the 30-89 days past due EOP loans have the same adjustments as the 90+ days past due EOP loans) were $36 million, $37 million and $35 million at December 31, 2023, 2022 and 2021, respectively. The EOP loans in the table include the guaranteed loans. N/A Not applicable --- ## Modified: A Ratings Downgrade Could Adversely Impact Citi's Funding and Liquidity. **Key changes:** - Reworded sentence: "The credit rating agencies, such as Fitch Ratings, Moody's Investors Service and S&P Global Ratings, continuously evaluate Citi and certain of its subsidiaries." - Reworded sentence: "Rating downgrades could negatively impact Citi and its rated subsidiaries' ability to access the capital markets and other sources of funds as well as increase credit spreads and the costs of those funds." - Reworded sentence: "Certain of Citi's corporate customers and trading counterparties, among other clients, could re-evaluate their business relationships with Citi and limit the trading of certain market instruments, and limit or withdraw deposits placed with Citi in response to ratings downgrades." **Prior (2023):** The credit rating agencies, such as Fitch Ratings, Moody's Investors Services and S&P Global Ratings, continuously evaluate Citi and certain of its subsidiaries. Their ratings of Citi and its rated subsidiaries' long-term debt and short-term obligations are based on several factors, including the financial strength of Citi and such subsidiaries, as well as factors that are not entirely within the control of Citi and its subsidiaries, such as the agencies' proprietary rating methodologies and assumptions, and conditions affecting the financial services industry and markets generally. Citi and its subsidiaries may not be able to maintain their current respective ratings and outlooks. Rating downgrades could negatively impact Citi and its rated subsidiaries' ability to access the capital markets and other sources of funds as well as the costs of those funds. A ratings downgrade could also have a negative impact on Citi and its rated subsidiaries' ability to obtain funding and liquidity due to reduced funding capacity and the impact from derivative triggers, which could require Citi and its rated subsidiaries to meet cash obligations and collateral requirements. In addition, a ratings downgrade could have a negative impact on other funding sources such as secured financing and other margined transactions for which there may be no explicit triggers, and on contractual provisions and other credit requirements of Citi's counterparties and clients that may contain minimum ratings thresholds in order for Citi to hold third-party funds. Furthermore, a credit ratings downgrade could have impacts that may not be currently known to Citi or are not possible to quantify. Some of Citi's counterparties and clients could have ratings limitations on their permissible counterparties, of which Citi may or may not be aware. Certain of Citi's corporate customers and trading counterparties, among other clients, could re-evaluate their business relationships with Citi and limit the trading of certain contracts or market instruments with Citi in response to ratings downgrades. Changes in customer and counterparty behavior could impact not only Citi's funding and liquidity but also the results of operations of certain Citi businesses. For additional information on the potential impact of a reduction in Citi's or Citibank's credit ratings, see "Managing Global Risk - Liquidity Risk" below. **Current (2024):** The credit rating agencies, such as Fitch Ratings, Moody's Investors Service and S&P Global Ratings, continuously evaluate Citi and certain of its subsidiaries. Their ratings of Citi and its rated subsidiaries' long-term debt and short-term obligations are based on firm-specific factors, including the financial strength of Citi and such subsidiaries, as well as factors that are not entirely within the control of Citi and its subsidiaries, such as the agencies' proprietary rating methodologies and assumptions, potential impact from negative actions on U.S. sovereign ratings and conditions affecting the financial services industry and markets generally. Citi and its subsidiaries may not be able to maintain their current respective ratings and outlooks. Rating downgrades could negatively impact Citi and its rated subsidiaries' ability to access the capital markets and other sources of funds as well as increase credit spreads and the costs of those funds. A ratings downgrade could also have a negative impact on Citi and its rated subsidiaries' ability to obtain funding and liquidity due to reduced funding capacity and the impact from derivative triggers, which could require Citi and its rated subsidiaries to meet cash obligations and collateral requirements or permit counterparties to terminate certain contracts. In addition, a ratings downgrade could have a negative impact on other funding sources such as secured financing and other margined transactions for which there may be no explicit triggers. Furthermore, a credit ratings downgrade could have impacts that may not be currently known to Citi or are not possible to quantify. Some of Citi's counterparties and clients could have ratings limitations on their permissible counterparties, of which Citi may or may not be aware. Certain of Citi's corporate customers and trading counterparties, among other clients, could re-evaluate their business relationships with Citi and limit the trading of certain market instruments, and limit or withdraw deposits placed with Citi in response to ratings downgrades. Changes in customer and counterparty behavior could impact not only Citi's funding and liquidity but also the results of operations of certain Citi businesses. For additional information on the potential impact of a reduction in Citi's or Citibank's credit ratings, see "Managing Global Risk - Liquidity Risk" below. --- ## Modified: Portfolio Mix - Geography and Counterparty **Key changes:** - Reworded sentence: "The following table presents the percentage of this portfolio by region based on Citi's internal management geography: December 31,2023September 30,2023December 31,2022North America56 %56 %56 %International44 44 44 Total100 %100 %100 % The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products." - Reworded sentence: "The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments." - Reworded sentence: "The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 % Note: Total exposure includes direct outstandings and unfunded lending commitments." - Reworded sentence: "70 70 70 Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2023." - Reworded sentence: "In addition, appetite per obligor is reduced consistent with the ratings, and downgrades may result in the purchase of additional credit derivatives or other risk/structural mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector." **Prior (2023):** Citi's corporate credit portfolio is diverse across geography and counterparty. The following table shows the percentage of this portfolio by region based on Citi's internal management geography: December 31,2022September 30,2022December 31,2021North America56 %56 %56 %EMEA25 25 25 Asia12 12 13 Latin America7 7 6 Total100 %100 %100 % The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade. The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2022September 30,2022December 31,2021AAA/AA/A50 %50 %48 %BBB34 33 34 BB/B14 15 16 CCC or below2 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss.Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. This includes but is not limited to exposures in those sectors significantly impacted by the COVID-19 The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2022September 30,2022December 31,2021AAA/AA/A50 %50 %48 %BBB34 33 34 BB/B14 15 16 CCC or below2 2 2 Total100 %100 %100 % Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss. Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. This includes but is not limited to exposures in those sectors significantly impacted by the COVID-19 63 63 63 pandemic (including consumer retail, commercial real estate and transportation). Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2022. Citigroup has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, downgrades may result in the purchase of additional credit derivatives or other risk mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments.See Note 14 for additional information on Citi's corporate credit portfolio.Portfolio Mix - IndustryCiti's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2022September 30,2022December 31,2021Transportation and industrials20 %20 %20 %Technology, media and telecom12 12 12 Consumer retail11 11 11 Real estate10 10 10 Power, chemicals, metals and mining9 9 9 Banks and finance companies(1)10 9 8 Energy and commodities7 7 7 Asset managers and funds5 7 8 Health6 5 5 Insurance4 4 4 Public sector3 3 3 Financial markets infrastructure2 2 2 Other industries1 1 1 Total100 %100 %100 %(1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. pandemic (including consumer retail, commercial real estate and transportation). Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2022. Citigroup has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, downgrades may result in the purchase of additional credit derivatives or other risk mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments.See Note 14 for additional information on Citi's corporate credit portfolio. pandemic (including consumer retail, commercial real estate and transportation). Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2022. Citigroup has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, downgrades may result in the purchase of additional credit derivatives or other risk mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments. See Note 14 for additional information on Citi's corporate credit portfolio. Portfolio Mix - IndustryCiti's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2022September 30,2022December 31,2021Transportation and industrials20 %20 %20 %Technology, media and telecom12 12 12 Consumer retail11 11 11 Real estate10 10 10 Power, chemicals, metals and mining9 9 9 Banks and finance companies(1)10 9 8 Energy and commodities7 7 7 Asset managers and funds5 7 8 Health6 5 5 Insurance4 4 4 Public sector3 3 3 Financial markets infrastructure2 2 2 Other industries1 1 1 Total100 %100 %100 %(1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. **Current (2024):** Citi's corporate credit portfolio is diverse across geography and counterparty. The following table presents the percentage of this portfolio by region based on Citi's internal management geography: December 31,2023September 30,2023December 31,2022North America56 %56 %56 %International44 44 44 Total100 %100 %100 % The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade. The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss.Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 % Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss. Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. 70 70 70 Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2023. Citi has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, appetite per obligor is reduced consistent with the ratings, and downgrades may result in the purchase of additional credit derivatives or other risk/structural mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments.See Note 15 for additional information on Citi's corporate credit portfolio.Portfolio Mix - IndustryCiti's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2023September 30,2023December 31,2022Transportation and industrials21 %21 %20 %Technology, media and telecom12 12 12 Banks and finance companies(1)12 10 10 Consumer retail11 12 11 Real estate10 10 10 Commercial8 8 8 Residential2 2 2 Power, chemicals, metals and mining8 9 9 Energy and commodities7 7 7 Health5 5 6 Insurance4 4 4 Public sector3 3 3 Asset managers and funds3 3 5 Financial markets infrastructure3 3 2 Other industries1 1 1 Total100 %100 %100 %(1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2023. Citi has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, appetite per obligor is reduced consistent with the ratings, and downgrades may result in the purchase of additional credit derivatives or other risk/structural mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments.See Note 15 for additional information on Citi's corporate credit portfolio. Citi believes the corporate credit portfolio to be appropriately rated and classified as of December 31, 2023. Citi has taken action to adjust internal ratings and classifications of exposures as both the macroeconomic environment and obligor-specific factors have changed, particularly where additional stress has been seen. As obligor risk ratings are downgraded, the probability of default increases. Downgrades of obligor risk ratings tend to result in a higher provision for credit losses. In addition, appetite per obligor is reduced consistent with the ratings, and downgrades may result in the purchase of additional credit derivatives or other risk/structural mitigants to hedge the incremental credit risk, or may result in Citi's seeking to reduce exposure to an obligor or an industry sector. Citi will continue to review exposures to ensure that the appropriate probability of default is incorporated into all risk assessments. See Note 15 for additional information on Citi's corporate credit portfolio. Portfolio Mix - IndustryCiti's corporate credit portfolio is diversified by industry. The following table details the allocation of Citi's total corporate credit portfolio by industry: Total exposure December 31,2023September 30,2023December 31,2022Transportation and industrials21 %21 %20 %Technology, media and telecom12 12 12 Banks and finance companies(1)12 10 10 Consumer retail11 12 11 Real estate10 10 10 Commercial8 8 8 Residential2 2 2 Power, chemicals, metals and mining8 9 9 Energy and commodities7 7 7 Health5 5 6 Insurance4 4 4 Public sector3 3 3 Asset managers and funds3 3 5 Financial markets infrastructure3 3 2 Other industries1 1 1 Total100 %100 %100 %(1) As of the periods in the table, Citi had less than 1% exposure to securities firms. See corporate credit portfolio by industry, below. --- ## Modified: Citi's Interpretation or Application of the Complex Tax Laws to Which It Is Subject Could Differ from Those of Governmental Authorities, Which Could Result in Litigation or Examinations and the Payment of Additional Taxes, Penalties or Interest. **Key changes:** - Reworded sentence: "For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each country." - Reworded sentence: "Beginning in 2024, countries that adopted the OECD Pillar 2 rules in 2023 can collect the top-up tax only with respect to earnings of entities in their jurisdiction or subsidiaries of such entities." - Reworded sentence: "While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed reasonably possible losses, the outcome of the matters may be different than Citi's expectations." - Reworded sentence: "Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of continued elevated interest rates and inflation, and lower economic growth rates, as well as a continuing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to a challenging macroeconomic environment or otherwise.These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded Cards, Retail Services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 17 for information on Citi's credit card related intangibles generally)." - Reworded sentence: "While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed reasonably possible losses, the outcome of the matters may be different than Citi's expectations." **Prior (2023):** Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each separate country. EU member states are required to adopt the OECD Pillar 2 rules in 2023, and other non-U.S. countries are expected to follow suit. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. The U.S. is not expected to pass Pillar 2 legislation in the near term, but the top-up tax can be collected by other countries. While many aspects of the application of the rules remain uncertain, Citi does not expect a material effect to its earnings.In addition, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed, as reasonably possible, matters that are more-likely-than-not, the outcome from the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, which could be material. See Note 29 for additional information on litigation and examinations involving non-U.S. tax authorities.A Deterioration in or Failure to Maintain Citi's Co-Branding or Private Label Credit Card Relationships Could Have a Negative Impact on Citi.Citi has co-branding and private label relationships through its Branded cards and Retail services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to customers of the retailers or merchants. The five largest relationships across both businesses in U.S. Personal Banking constituted an aggregate of approximately 10% of Citi's revenues in 2022 (for additional information, see "Personal Banking and Wealth Management" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term.Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of significantly elevated levels of inflation, higher interest rates, global supply shocks and lower economic growth rates, as well as an increasing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to the challenging macroeconomic environment or otherwise.These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded cards, Retail services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 16 for information on Citi's credit card related intangibles generally). application of the rules remain uncertain, Citi does not expect a material effect to its earnings. In addition, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed, as reasonably possible, matters that are more-likely-than-not, the outcome from the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, which could be material. See Note 29 for additional information on litigation and examinations involving non-U.S. tax authorities. **Current (2024):** Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each country. EU member states were required to adopt the OECD Pillar 2 rules in 2023, with an effective date of January 1, 2024 (unless an exception applied), and other non-U.S. countries have similarly adopted or are expected to adopt the rules. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. Beginning in 2024, countries that adopted the OECD Pillar 2 rules in 2023 can collect the top-up tax only with respect to earnings of entities in their jurisdiction or subsidiaries of such entities. Beginning in 2025, all countries that have adopted the OECD Pillar 2 rules can collect a share of the top-up tax owed with respect to any member of the Pillar 2 multinational group. While Citi does not currently expect the rules to have a material impact on its earnings, many aspects of the application of the rules remain uncertain.Additionally, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed reasonably possible losses, the outcome of the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, the reduction of certain tax benefits or the requirement to make adjustments to amounts recorded, which could be material. See Note 30 for additional information on litigation and examinations involving non-U.S. tax authorities.A Deterioration in or Failure to Maintain Citi's Co-Branding or Private Label Credit Card Relationships Could Have a Negative Impact on Citi.Citi has co-branding and private label relationships through its Branded Cards and Retail Services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to consumers, including customers of the retailers or merchants. The five largest relationships across both businesses in USPB constituted an aggregate of approximately 11% of Citi's revenues in 2023 (see "U.S. Personal Banking" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term.Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of continued elevated interest rates and inflation, and lower economic growth rates, as well as a continuing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to a challenging macroeconomic environment or otherwise.These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded Cards, Retail Services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 17 for information on Citi's credit card related intangibles generally). that have adopted the OECD Pillar 2 rules can collect a share of the top-up tax owed with respect to any member of the Pillar 2 multinational group. While Citi does not currently expect the rules to have a material impact on its earnings, many aspects of the application of the rules remain uncertain. Additionally, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed reasonably possible losses, the outcome of the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, the reduction of certain tax benefits or the requirement to make adjustments to amounts recorded, which could be material. See Note 30 for additional information on litigation and examinations involving non-U.S. tax authorities. --- ## Modified: Board and Executive Management Committees **Key changes:** - Reworded sentence: "The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework and risk culture, including the significant policies and practices used in managing credit, market (trading and non-trading), liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) oversight of the Global Risk Review - credit, capital and collateral review functions.•Audit Committee: provides oversight of Citi's financial and regulatory reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants.•Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization.•Nomination, Governance and Public Affairs Committee: responsible for (i) identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of stockholders, (ii) leading the Board in its annual review of the Board's performance, (iii) recommending to the Board directors for each committee for appointment by the Board, (iv) reviewing the Company's policies and programs that relate to public issues of significance to the Company and the public at large, including but not limited to Environmental, Social and Corporate Governance (ESG) matters and (v) reviewing the Company's relationships with external constituencies and issues that impact the Company's reputation, and advising management as to its approach to each.•Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) the planning and execution of Citigroup's technology, strategy and operating plan, (ii) the development of Citi's target state operating model and architecture, including the incorporation of Global Business Services, (iii) technology-based risk management, including risk management framework, risk appetite and risk exposures of the Company, (iv) resource and talent planning of the Technology function and (v) the Company's third-party management policies, practices and standards that relate to Technology.In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the FRB and OCC consent orders (see "Citi's Consent Order Compliance" above).The Citigroup CEO has established four standing committees that cover the primary risks to which Citi (i.e., Group) is exposed." - Reworded sentence: "•Nomination, Governance and Public Affairs Committee: responsible for (i) identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of stockholders, (ii) leading the Board in its annual review of the Board's performance, (iii) recommending to the Board directors for each committee for appointment by the Board, (iv) reviewing the Company's policies and programs that relate to public issues of significance to the Company and the public at large, including but not limited to Environmental, Social and Corporate Governance (ESG) matters and (v) reviewing the Company's relationships with external constituencies and issues that impact the Company's reputation, and advising management as to its approach to each." - Removed sentence: "•Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company." - Removed sentence: "The Committee also provides comprehensive Group-wide coverage of all risk categories, including Credit Risk and Market Risk (trading)." - Removed sentence: "61 61 61 •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi.In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary." **Prior (2023):** The Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework, including the significant policies and practices used in managing credit, market, liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) performance oversight of the Global Risk Review - credit, capital and collateral review functions.•Audit Committee: provides oversight of Citi's financial reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants.•Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization.•Nomination, Governance and Public Affairs Committee: provides oversight of reputational issues, Environmental, Social and Governance (ESG) and sustainability matters, and legal and regulatory compliance risks as they relate to corporate governance matters.•Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) Citigroup's technology strategy and operating plan and the development of Citi's target operating model and architecture, (ii) technology-based risk management, including Cyber Security, (iii) technology-related resource and talent planning and (iv) third-party management policies, practices and standards.In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the recent regulatory consent orders (for additional information see "Citi's Consent Order Compliance" above).The Executive Management Team has established five standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of:•Group Strategic Risk Committee (GSRC): provides governance oversight of Citi's management actions to adequately identify, monitor, report, manage and escalate all material strategic risks facing Citi. •Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup.•Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all risk categories, including Credit Risk and Market Risk (trading).•Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. oversight of the Global Risk Review - credit, capital and collateral review functions. •Audit Committee: provides oversight of Citi's financial reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants. •Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization. •Nomination, Governance and Public Affairs Committee: provides oversight of reputational issues, Environmental, Social and Governance (ESG) and sustainability matters, and legal and regulatory compliance risks as they relate to corporate governance matters. •Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) Citigroup's technology strategy and operating plan and the development of Citi's target operating model and architecture, (ii) technology-based risk management, including Cyber Security, (iii) technology-related resource and talent planning and (iv) third-party management policies, practices and standards. In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the recent regulatory consent orders (for additional information see "Citi's Consent Order Compliance" above). The Executive Management Team has established five standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of: •Group Strategic Risk Committee (GSRC): provides governance oversight of Citi's management actions to adequately identify, monitor, report, manage and escalate all material strategic risks facing Citi. •Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup. •Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all risk categories, including Credit Risk and Market Risk (trading). •Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. 61 61 61 •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi.In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi. •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi. In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. The figure below illustrates the reporting lines between the Board and Executive Management committees: CREDIT RISKOverviewCredit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution. For additional information, see "Risk Factors - Credit Risk" above. Credit risk arises in many of Citigroup's business activities, including:•consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed).Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category.Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures.To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework.Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 15), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 14 for additional information on Citi's credit risk management. CREDIT RISKOverviewCredit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution. For additional information, see "Risk Factors - Credit Risk" above. Credit risk arises in many of Citigroup's business activities, including:•consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed).Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category.Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures.To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework. **Current (2024):** The Board executes its responsibilities either directly or through its committees. The Board has delegated authority to the following Board standing committees to help fulfill its oversight and risk management responsibilities: •Risk Management Committee (RMC): assists the Board in fulfilling its responsibility with respect to (i) oversight of Citi's risk management framework and risk culture, including the significant policies and practices used in managing credit, market (trading and non-trading), liquidity, strategic, operational, compliance, reputation and certain other risks, including those pertaining to capital management, and (ii) oversight of the Global Risk Review - credit, capital and collateral review functions.•Audit Committee: provides oversight of Citi's financial and regulatory reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants.•Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization.•Nomination, Governance and Public Affairs Committee: responsible for (i) identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of stockholders, (ii) leading the Board in its annual review of the Board's performance, (iii) recommending to the Board directors for each committee for appointment by the Board, (iv) reviewing the Company's policies and programs that relate to public issues of significance to the Company and the public at large, including but not limited to Environmental, Social and Corporate Governance (ESG) matters and (v) reviewing the Company's relationships with external constituencies and issues that impact the Company's reputation, and advising management as to its approach to each.•Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) the planning and execution of Citigroup's technology, strategy and operating plan, (ii) the development of Citi's target state operating model and architecture, including the incorporation of Global Business Services, (iii) technology-based risk management, including risk management framework, risk appetite and risk exposures of the Company, (iv) resource and talent planning of the Technology function and (v) the Company's third-party management policies, practices and standards that relate to Technology.In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the FRB and OCC consent orders (see "Citi's Consent Order Compliance" above).The Citigroup CEO has established four standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of:•Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all capital management, and (ii) oversight of the Global Risk Review - credit, capital and collateral review functions. •Audit Committee: provides oversight of Citi's financial and regulatory reporting and internal control risk, as well as Internal Audit and Citi's external independent accountants. •Compensation, Performance Management and Culture Committee: provides oversight of compensation of Citi's employees and Citi management's sustained focus on fostering a principled culture of sound ethics, responsible conduct and accountability within the organization. •Nomination, Governance and Public Affairs Committee: responsible for (i) identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of stockholders, (ii) leading the Board in its annual review of the Board's performance, (iii) recommending to the Board directors for each committee for appointment by the Board, (iv) reviewing the Company's policies and programs that relate to public issues of significance to the Company and the public at large, including but not limited to Environmental, Social and Corporate Governance (ESG) matters and (v) reviewing the Company's relationships with external constituencies and issues that impact the Company's reputation, and advising management as to its approach to each. •Technology Committee: assists the Board in fulfilling its responsibility with respect to oversight of (i) the planning and execution of Citigroup's technology, strategy and operating plan, (ii) the development of Citi's target state operating model and architecture, including the incorporation of Global Business Services, (iii) technology-based risk management, including risk management framework, risk appetite and risk exposures of the Company, (iv) resource and talent planning of the Technology function and (v) the Company's third-party management policies, practices and standards that relate to Technology. In addition to the above, the Board has established the following ad hoc committee: •Transformation Oversight Committee: provides oversight of the actions of Citi's management to develop and execute a transformation of Citi's risk and control environment pursuant to the FRB and OCC consent orders (see "Citi's Consent Order Compliance" above). The Citigroup CEO has established four standing committees that cover the primary risks to which Citi (i.e., Group) is exposed. These consist of: •Group Risk Management Committee (GRMC): the primary senior executive level committee responsible for (i) overseeing the execution of Citigroup's ERM Framework, (ii) monitoring Citi's risk profile at an aggregate level inclusive of individual risk categories, (iii) ensuring that Citi's risk profile remains consistent with its approved risk appetite and (iv) discussing material and emerging risk issues facing the Company. The Committee also provides comprehensive Group-wide coverage of all 67 67 67 risk categories, including Credit Risk, Market Risk (trading) and Strategic Risk.•Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup.•Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi.In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. risk categories, including Credit Risk, Market Risk (trading) and Strategic Risk.•Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup.•Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi.In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. risk categories, including Credit Risk, Market Risk (trading) and Strategic Risk. •Citigroup Asset and Liability Committee (ALCO): responsible for governance over management's Liquidity Risk and Market Risk (non-trading) management and for monitoring and influencing the balance sheet, investment securities and capital management activities of Citigroup. •Group Business Risk and Control Committee (GBRCC): provides governance oversight of Citi's Compliance and Operational Risks. •Group Reputation Risk Committee (GRRC): provides governance oversight for Reputation Risk management across Citi. In addition to the Executive Management committees listed above, management may establish ad-hoc committees in response to regulatory feedback or to manage additional activities when deemed necessary. The figure below illustrates the reporting lines between the Board and Executive Management committees: 68 68 68 CREDIT RISK OverviewCredit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution (see "Risk Factors - Credit Risks" above). Credit risk arises in many of Citigroup's business activities, including:•consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed).Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category.Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures.To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework.Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 16), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 15 for additional information on Citi's credit risk management. LoansThe table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated:In billions of dollars4Q233Q234Q22Services$83 $83 $78 Markets115 108 111 Banking87 87 96 USPB Branded Cards$107 $103 $95 Retail Services52 50 48 Retail Banking43 43 37 Total USPB$202 $196 $180 Wealth$150 $151 $150 All Other(1)$38 $37 $38 Total Citigroup loans (AVG)$675 $662 $653 Total Citigroup loans (EOP)$689 $666 $657 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" below.End-of-period loans increased 5% year-over-year, largely reflecting growth in cards in USPB. End-of-period loans increased 3% sequentially.On an average basis, loans increased 3% year-over-year and 2% sequentially. The year-over-year increase was largely due to growth in USPB, Services and Markets, partially offset by a decline in Banking. As of the fourth quarter of 2023, average loans for: •USPB increased 12% year-over-year, driven by growth in Branded Cards, Retail Banking and Retail Services. •Wealth were largely unchanged. •Services increased 6% year-over-year, primarily driven by strong demand for working capital loans in TTS in North America and internationally. •Markets increased 4% year-over-year, reflecting increased client demand in warehouse lending. •Banking decreased 9% year-over-year, primarily driven by capital optimization efforts. CREDIT RISK OverviewCredit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution (see "Risk Factors - Credit Risks" above). Credit risk arises in many of Citigroup's business activities, including:•consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed).Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category.Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures.To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework.Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 16), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 15 for additional information on Citi's credit risk management. --- ## Modified: Changes or Errors in Accounting Assumptions, Judgments or Estimates, or the Application of Certain Accounting Principles, Could Result in Significant Losses or Other Adverse Impacts. **Key changes:** - Reworded sentence: "These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the 56 56 56 specifics and timing of such outcomes." - Reworded sentence: "For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16." - Reworded sentence: "These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (see the capital return risk factor above)." - Reworded sentence: "For example, Citi could incur a significant loss on sale due to CTA losses related to any signing of a sale agreement for its remaining consumer banking divestitures (see the capital return and continued investments risk factors above)." - Reworded sentence: "Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, U.S." **Prior (2023):** U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15. For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL, and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (for additional information on the CECL phase-in, see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, in the second quarter of 2022, Citi incurred a CTA loss (net of hedges) in AOCI released to earnings of approximately $400 million ($345 million after-tax) related to the substantial liquidation of a legacy U.K. consumer operation (for additional information, see "Legacy Franchises" and "Corporate/Other" above and Note 2). For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 20. Changes to Financial Accounting and Reporting Standards or Interpretations Could Have a Material Impact on How Citi Records and Reports Its Financial Condition and Results of Operations.Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition.If Citi's Risk Management Processes, Strategies or Models Are Deficient or Ineffective, Citi May Incur Significant Losses and Its Regulatory Capital and Capital Ratios Could Be Negatively Impacted.Citi utilizes a broad and diversified set of risk management and mitigation processes and strategies, including the use of models in enacting processes and strategies as well as in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks is made more challenging within a global financial institution such as Citi, particularly given the complex, diverse and rapidly changing financial markets and conditions in which Citi operates as well as that losses can occur unintentionally from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below).Citi's risk management processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of the substantial liquidation of a legacy U.K. consumer operation (for additional information, see "Legacy Franchises" and "Corporate/Other" above and Note 2). For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 20. **Current (2024):** U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the 56 56 56 specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, Citi could incur a significant loss on sale due to CTA losses related to any signing of a sale agreement for its remaining consumer banking divestitures (see the capital return and continued investments risk factors above). The majority of these losses would be regulatory capital neutral at closing. For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 21. Changes to Financial Accounting and Reporting Standards or Interpretations Could Have a Material Impact on How Citi Records and Reports Its Financial Condition and Results of Operations.Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, U.S. banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition.If Citi's Risk Management and Other Processes, Strategies or Models Are Deficient or Ineffective, Citi May Incur Significant Losses and Its Regulatory Capital and Capital Ratios Could Be Negatively Impacted.Citi utilizes a broad and diversified set of risk management and other processes and strategies, including the use of models in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks and the reliability of the data are made more challenging within a large, global financial institution, such as Citi, particularly due to complex, diverse and rapidly changing financial markets and conditions in which Citi operates. Unexpected losses can result from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below).Citi's risk management and other processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, particularly given various macroeconomic, geopolitical and other challenges and uncertainties (see the macroeconomic challenges and uncertainties risk factor above), nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances, or identify changes in markets or client behaviors not yet inherent in historical data. Citi could incur significant losses, receivenegative regulatory evaluation or examination findings or besubject to additional enforcement actions, and its regulatory capital, capital ratios and ability to return capital could be negatively impacted, if Citi's risk management and other processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. For additional information, see the capital return risk factor above and the heightened regulatory specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, Citi could incur a significant loss on sale due to CTA losses related to any signing of a sale agreement for its remaining consumer banking divestitures (see the capital return and continued investments risk factors above). The majority of these losses would be regulatory capital neutral at closing. For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 21. Changes to Financial Accounting and Reporting Standards or Interpretations Could Have a Material Impact on How Citi Records and Reports Its Financial Condition and Results of Operations.Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 16. For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, Citi could incur a significant loss on sale due to CTA losses related to any signing of a sale agreement for its remaining consumer banking divestitures (see the capital return and continued investments risk factors above). The majority of these losses would be regulatory capital neutral at closing. For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 21. --- ## Modified: Modified Loans to Borrowers Experiencing Financial Difficulty **Key changes:** - Reworded sentence: "On January 1, 2023, Citi adopted ASU 2022-02, which eliminated the accounting and disclosure requirements for TDRs (see Note 1)." - Reworded sentence: "The liquidity risk management framework provides that, in addition to the aggregate requirements, certain entities be self-sufficient or net providers of liquidity, including in conditions established under their designated stress tests.Citi's primary funding sources include (i) corporate and consumer deposits via Citi's bank subsidiaries, including Citibank, N.A." - Reworded sentence: "These sources may be supplemented by short-term borrowings, primarily in the form of secured funding transactions.Citi's funding and liquidity framework, working in concert with overall asset/liability management, helps ensure that there is sufficient liquidity and tenor in the overall liability structure (including funding products) of the Company relative to the liquidity requirements of Citi's assets." - Reworded sentence: "The ALCO sets the strategy of the liquidity portfolio and monitors portfolio performance (see "Risk Governance - Board and Executive Management Committees" above)." - Reworded sentence: "LIQUIDITY RISKOverviewAdequate and diverse sources of funding and liquidity are essential to Citi's businesses." **Prior (2023):** In millions of dollarsIn U.S.officesIn non-U.S.offices2022totalInterest revenue that would have been accrued at original contractual rates(2)$331 $189 $520 Amount recognized as interest revenue(2)158 121 279 Forgone interest revenue$173 $68 $241 2022 total Interest revenue that would have been accrued at original contractual rates(2) Amount recognized as interest revenue(2) (1) Relates to corporate non-accrual loans, renegotiated loans and consumer loans on which accrual of interest has been suspended. (2) Interest revenue in offices outside the U.S. may reflect prevailing local interest rates, including the effects of inflation and monetary correction in certain countries. 84 84 84 LIQUIDITY RISK OverviewAdequate and diverse sources of funding and liquidity are essential to Citi's businesses. Funding and liquidity risks arise from several factors, many of which are mostly or entirely outside Citi's control, such as disruptions in the financial markets, changes in key funding sources, credit spreads, changes in Citi's credit ratings and macroeconomic, geopolitical and other conditions. For additional information, see "Risk Factors - Liquidity Risks" above.Citi's funding and liquidity management objectives are aimed at (i) funding its existing asset base, (ii) growing its core businesses, (iii) maintaining sufficient liquidity, structured appropriately, so that Citi can operate under a variety of adverse circumstances, including potential Company-specific and/or market liquidity events in varying durations and severity, and (iv) satisfying regulatory requirements, including, but not limited to, those related to resolution planning (for additional information, see "Resolution Plan" and "Total Loss-Absorbing Capacity (TLAC)" below). Citigroup's primary liquidity objectives are established by entity, and in aggregate, across two major categories: •Citibank (including Citibank Europe plc, Citibank Singapore Ltd. and Citibank (Hong Kong) Ltd.); and•Citi's non-bank and other entities, including the parent holding company (Citigroup Inc.), Citi's primary intermediate holding company (Citicorp LLC), Citi's broker-dealer subsidiaries (including Citigroup Global Markets Inc., Citigroup Global Markets Limited and Citigroup Global Markets Japan Inc.) and other bank and non-bank subsidiaries that are consolidated into Citigroup (including Citibanamex).At an aggregate Citigroup level, Citi's goal is to maintain sufficient funding in amount and tenor to fully fund customer assets and to provide an appropriate amount of cash and high-quality liquid assets (as discussed below), even in times of stress, in order to meet its payment obligations as they come due. The liquidity risk management framework provides that in addition to the aggregate requirements, certain entities be self-sufficient or net providers of liquidity, including in conditions established under their designated stress tests.Citi's primary funding sources include (i) corporate and consumer deposits via Citi's bank subsidiaries, including Citibank, N.A. (Citibank), (ii) long-term debt (primarily senior and subordinated debt) mainly issued by Citigroup Inc., as the parent, and Citibank, and (iii) stockholders' equity. These sources may be supplemented by short-term borrowings, primarily in the form of secured funding transactions.Citi's funding and liquidity framework, working in concert with overall asset/liability management, ensures that there is sufficient liquidity and tenor in the overall liability structure (including funding products) of the Company relative to the liquidity requirements of Citi's assets. This reduces the risk that liabilities will become due before assets mature or are monetized. The Company holds excess liquidity, primarily in the form of high-quality liquid assets (HQLA), as presented in the table below. Citi's liquidity is managed centrally by Corporate Treasury, in conjunction with regional and in-country treasurers with oversight provided by Independent Risk Management and various Asset & Liability Committees (ALCOs) at the individual entity, region, country and business levels. Pursuant to this approach, Citi's HQLA are managed with emphasis on asset/liability management and entity-level liquidity adequacy throughout Citi.Citi's CRO and CFO co-chair Citigroup's ALCO, which includes Citi's Treasurer and other senior executives. The ALCO sets the strategy of the liquidity portfolio and monitors portfolio performance (for additional information about the ALCO, see "Risk Governance - Board and Executive Management Committees" above). Significant changes to portfolio asset allocations are approved by the ALCO. Citi also has other ALCOs, which are established at various organizational levels to ensure appropriate oversight for individual entities, countries, franchise businesses and regions, serving as the primary governance committees for managing Citi's balance sheet and liquidity.As a supplement to ALCO, Citi's Funding and Liquidity Risk Committee (FLRC) is focused on funding and liquidity risk matters. The FLRC reviews and discusses the funding and liquidity risk profile of, as well as risk management practices for, Citigroup and Citibank and reports its findings and recommendations to each relevant ALCO as appropriate.Liquidity Monitoring and MeasurementStress Testing Liquidity stress testing is performed for each of Citi's major entities, operating subsidiaries and countries. Stress testing and scenario analyses are intended to quantify the potential impact of an adverse liquidity event on the balance sheet and liquidity position, in order to have sufficient liquidity on hand to manage through such an event. These scenarios include assumptions about significant changes in key funding sources, market triggers (such as credit ratings), potential uses of funding and macroeconomic, geopolitical and other conditions. These conditions include expected and stressed market conditions as well as Company-specific events.Liquidity stress tests are performed to ascertain potential mismatches between liquidity sources and uses over a variety of time horizons and over different stressed conditions. To monitor the liquidity of an entity, these stress tests and potential mismatches are calculated on a daily basis. Given the range of potential stresses, Citi maintains contingency funding plans on a consolidated basis and for individual entities. These plans specify a wide range of readily available actions for a variety of adverse market conditions or idiosyncratic stresses. LIQUIDITY RISK OverviewAdequate and diverse sources of funding and liquidity are essential to Citi's businesses. Funding and liquidity risks arise from several factors, many of which are mostly or entirely outside Citi's control, such as disruptions in the financial markets, changes in key funding sources, credit spreads, changes in Citi's credit ratings and macroeconomic, geopolitical and other conditions. For additional information, see "Risk Factors - Liquidity Risks" above.Citi's funding and liquidity management objectives are aimed at (i) funding its existing asset base, (ii) growing its core businesses, (iii) maintaining sufficient liquidity, structured appropriately, so that Citi can operate under a variety of adverse circumstances, including potential Company-specific and/or market liquidity events in varying durations and severity, and (iv) satisfying regulatory requirements, including, but not limited to, those related to resolution planning (for additional information, see "Resolution Plan" and "Total Loss-Absorbing Capacity (TLAC)" below). Citigroup's primary liquidity objectives are established by entity, and in aggregate, across two major categories: •Citibank (including Citibank Europe plc, Citibank Singapore Ltd. and Citibank (Hong Kong) Ltd.); and•Citi's non-bank and other entities, including the parent holding company (Citigroup Inc.), Citi's primary intermediate holding company (Citicorp LLC), Citi's broker-dealer subsidiaries (including Citigroup Global Markets Inc., Citigroup Global Markets Limited and Citigroup Global Markets Japan Inc.) and other bank and non-bank subsidiaries that are consolidated into Citigroup (including Citibanamex).At an aggregate Citigroup level, Citi's goal is to maintain sufficient funding in amount and tenor to fully fund customer assets and to provide an appropriate amount of cash and high-quality liquid assets (as discussed below), even in times of stress, in order to meet its payment obligations as they come due. The liquidity risk management framework provides that in addition to the aggregate requirements, certain entities be self-sufficient or net providers of liquidity, including in conditions established under their designated stress tests.Citi's primary funding sources include (i) corporate and consumer deposits via Citi's bank subsidiaries, including Citibank, N.A. (Citibank), (ii) long-term debt (primarily senior and subordinated debt) mainly issued by Citigroup Inc., as the parent, and Citibank, and (iii) stockholders' equity. These sources may be supplemented by short-term borrowings, primarily in the form of secured funding transactions.Citi's funding and liquidity framework, working in concert with overall asset/liability management, ensures that there is sufficient liquidity and tenor in the overall liability structure (including funding products) of the Company relative to the liquidity requirements of Citi's assets. This reduces the **Current (2024):** On January 1, 2023, Citi adopted ASU 2022-02, which eliminated the accounting and disclosure requirements for TDRs (see Note 1). See Note 15 for information on loan modifications during the year ended December 31, 2023. 89 89 89 The changes in Citigroup's non-accrual loans were as follows: Year endedYear endedDecember 31, 2023December 31, 2022In millions of dollarsCorporateConsumerTotalCorporateConsumerTotalNon-accrual loans at beginning of year$1,122 $1,317 $2,439 $1,553 $1,826 $3,379 Additions2,103 1,702 3,805 2,123 1,374 3,497 Sales and transfers to HFS(110)(22)(132)(21)(240)(261)Returned to performing(141)(315)(456)(378)(408)(786)Paydowns/settlements(819)(476)(1,295)(1,814)(585)(2,399)Charge-offs(264)(851)(1,115)(260)(598)(858)Other(9)(40)(49)(81)(52)(133)Ending balance$1,882 $1,315 $3,197 $1,122 $1,317 $2,439 The table below summarizes Citigroup's other real estate owned (OREO) assets. OREO is recorded on the Consolidated Balance Sheet within Other assets. This represents the carrying value of all real estate property acquired by foreclosure or other legal proceedings when Citi has taken possession of the collateral: December 31,In millions of dollars20232022202120202019OREONorth America$17 $10 $15 $19 $39 International19 5 12 24 22 Total OREO$36 $15 $27 $43 $61 Non-accrual assetsCorporate non-accrual loans$1,882 $1,122 $1,553 $3,046 $2,024 Consumer non-accrual loans1,315 1,317 1,826 2,622 1,980 Non-accrual loans (NAL)$3,197 $2,439 $3,379 $5,668 $4,004 OREO$36 $15 $27 $43 $61 Non-accrual assets (NAA)$3,233 $2,454 $3,406 $5,711 $4,065 NAL as a percentage of total loans0.46 %0.37 %0.51 %0.84 %0.52 %NAA as a percentage of total assets0.13 0.10 0.15 0.25 0.21 ACLL as a percentage of NAL(1)568 696 487 440 319 ACLL as a percentage of NAL(1) (1)The ACLL includes the allowance for Citi's credit card portfolios and purchased credit-deteriorated loans, while the non-accrual loans exclude credit card balances (with the exception of certain international portfolios) and, prior to 2020, include purchased credit-deteriorated loans as these continue to accrue interest until charge-off. 90 90 90 LIQUIDITY RISKOverviewAdequate and diverse sources of funding and liquidity are essential to Citi's businesses. Funding and liquidity risks arise from several factors, many of which are mostly or entirely outside of Citi's control, such as disruptions in the financial markets, changes in key funding sources, credit spreads, changes in Citi's credit ratings and macroeconomic, geopolitical and other conditions. For additional information, see "Risk Factors - Liquidity Risks" above.Citi's funding and liquidity management objectives are aimed at (i) funding its existing asset base, (ii) growing its core businesses, (iii) maintaining sufficient liquidity, structured appropriately, so that Citi can operate under a variety of adverse circumstances, including potential Company-specific and/or market liquidity events in varying durations and severity, and (iv) satisfying regulatory requirements, including, but not limited to, those related to resolution planning (see "Resolution Plan" and "Total Loss-Absorbing Capacity (TLAC)" below). Citigroup's primary liquidity objectives are established by entity, and in aggregate, across two major categories:•Citibank (including Citibank Europe plc, Citibank Singapore Ltd. and Citibank (Hong Kong) Ltd.); and•Citi's non-bank and other entities, including the parent holding company (Citigroup Inc.), Citi's primary intermediate holding company (Citicorp LLC), Citi's broker-dealer subsidiaries (including Citigroup Global Markets Inc., Citigroup Global Markets Limited and Citigroup Global Markets Japan Inc.) and other bank and non-bank subsidiaries that are consolidated into Citigroup (including Citibanamex).At an aggregate Citigroup level, Citi's goal is to maintain sufficient funding in amount and tenor to fully fund customer assets and to provide an appropriate amount of cash and high-quality liquid assets (as discussed below), even in times of stress, in order to meet its payment obligations as they come due. The liquidity risk management framework provides that, in addition to the aggregate requirements, certain entities be self-sufficient or net providers of liquidity, including in conditions established under their designated stress tests.Citi's primary funding sources include (i) corporate and consumer deposits via Citi's bank subsidiaries, including Citibank, N.A. (Citibank), (ii) long-term debt (primarily senior and subordinated debt) mainly issued by Citigroup Inc., as the parent, and Citibank, and (iii) stockholders' equity. These sources may be supplemented by short-term borrowings, primarily in the form of secured funding transactions.Citi's funding and liquidity framework, working in concert with overall asset/liability management, helps ensure that there is sufficient liquidity and tenor in the overall liability structure (including funding products) of the Company relative to the liquidity requirements of Citi's assets. This reduces the risk that liabilities will become due before assets mature or are monetized. The Company holds excess liquidity, primarily in the form of high-quality liquid assets (HQLA), as presented in the table below. Citi's liquidity is managed centrally by Corporate Treasury, in conjunction with regional and in-country treasurers with oversight provided by Independent Risk Management and various Asset & Liability Committees (ALCOs) at the individual entity, region, country and business levels. Pursuant to this approach, Citi's HQLA are managed with emphasis on asset/liability management and entity-level liquidity adequacy throughout Citi.Citi's CRO and CFO co-chair Citigroup's ALCO, which includes Citi's Treasurer and other senior executives. The ALCO sets the strategy of the liquidity portfolio and monitors portfolio performance (see "Risk Governance - Board and Executive Management Committees" above). Significant changes to portfolio asset allocations are approved by the ALCO. Citi also has other ALCOs, which are established at various organizational levels to ensure appropriate oversight for individual entities, countries, franchise businesses and regions, serving as the primary governance committees for managing Citi's balance sheet and liquidity.As a supplement to ALCO, Citi's Funding and Liquidity Risk Committee (FLRC) is focused on funding and liquidity risk matters. The FLRC reviews and discusses the funding and liquidity risk profile of, as well as risk management practices for, Citigroup and Citibank and reports its findings and recommendations to each relevant ALCO as appropriate.Liquidity Monitoring and MeasurementStress Testing Liquidity stress testing is performed for each of Citi's major entities, operating subsidiaries and countries. Stress testing and scenario analyses are intended to quantify the potential impact of an adverse liquidity event on the balance sheet and liquidity position, in order to have sufficient liquidity on hand to manage through such an event. These scenarios include assumptions about significant changes in key funding sources, market triggers (such as credit ratings), potential uses of funding and macroeconomic, geopolitical and other conditions. These conditions include expected and stressed market conditions as well as Company-specific events.Liquidity stress tests are performed to ascertain potential mismatches between liquidity sources and uses over a variety of time horizons and over different stressed conditions. To monitor the liquidity of an entity, these stress tests and potential mismatches are calculated on a daily basis. Given the range of potential stresses, Citi maintains contingency funding plans on a consolidated basis and for individual entities. These plans specify a wide range of readily available actions for a variety of adverse market conditions or idiosyncratic stresses. LIQUIDITY RISKOverviewAdequate and diverse sources of funding and liquidity are essential to Citi's businesses. Funding and liquidity risks arise from several factors, many of which are mostly or entirely outside of Citi's control, such as disruptions in the financial markets, changes in key funding sources, credit spreads, changes in Citi's credit ratings and macroeconomic, geopolitical and other conditions. For additional information, see "Risk Factors - Liquidity Risks" above.Citi's funding and liquidity management objectives are aimed at (i) funding its existing asset base, (ii) growing its core businesses, (iii) maintaining sufficient liquidity, structured appropriately, so that Citi can operate under a variety of adverse circumstances, including potential Company-specific and/or market liquidity events in varying durations and severity, and (iv) satisfying regulatory requirements, including, but not limited to, those related to resolution planning (see "Resolution Plan" and "Total Loss-Absorbing Capacity (TLAC)" below). Citigroup's primary liquidity objectives are established by entity, and in aggregate, across two major categories:•Citibank (including Citibank Europe plc, Citibank Singapore Ltd. and Citibank (Hong Kong) Ltd.); and•Citi's non-bank and other entities, including the parent holding company (Citigroup Inc.), Citi's primary intermediate holding company (Citicorp LLC), Citi's broker-dealer subsidiaries (including Citigroup Global Markets Inc., Citigroup Global Markets Limited and Citigroup Global Markets Japan Inc.) and other bank and non-bank subsidiaries that are consolidated into Citigroup (including Citibanamex).At an aggregate Citigroup level, Citi's goal is to maintain sufficient funding in amount and tenor to fully fund customer assets and to provide an appropriate amount of cash and high-quality liquid assets (as discussed below), even in times of stress, in order to meet its payment obligations as they come due. The liquidity risk management framework provides that, in addition to the aggregate requirements, certain entities be self-sufficient or net providers of liquidity, including in conditions established under their designated stress tests.Citi's primary funding sources include (i) corporate and consumer deposits via Citi's bank subsidiaries, including Citibank, N.A. (Citibank), (ii) long-term debt (primarily senior and subordinated debt) mainly issued by Citigroup Inc., as the parent, and Citibank, and (iii) stockholders' equity. These sources may be supplemented by short-term borrowings, primarily in the form of secured funding transactions.Citi's funding and liquidity framework, working in concert with overall asset/liability management, helps ensure that there is sufficient liquidity and tenor in the overall liability structure (including funding products) of the Company relative to the liquidity requirements of Citi's assets. This reduces the --- ## Modified: Dividends, Changes to Directors and/or Officers and Collateral Consequences Arising from Such Outcomes. **Key changes:** - Reworded sentence: "Additionally, Citi remains subject to governmental and regulatory investigations, consent orders (see discussion below) and related compliance efforts, and other inquiries." - Reworded sentence: "The global judicial, regulatory and political environment has generally been challenging for large financial institutions, which have been subject to increased regulatory scrutiny." - Reworded sentence: "Responding to regulatory 60 60 60 inquiries and proceedings can be time consuming and costly, and divert management attention from Citi's businesses." - Reworded sentence: "In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, regulatory restrictions, structural changes, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs." - Reworded sentence: "governmental entities have increasingly brought criminal actions against, or have sought and obtained criminal guilty pleas or deferred prosecution agreements from, financial institutions and individual employees." **Prior (2023):** At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis. As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement targeted action plans and submit quarterly progress reports detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls. These improvements will result in continued significant investments by Citi during 2023 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above.The global judicial, regulatory and political environment has generally been challenging for large financial institutions, and financial institutions have been subject to continued regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory inquiries and proceedings can be time consuming and costly. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement targeted action plans and submit quarterly progress reports detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls. These improvements will result in continued significant investments by Citi during 2023 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above. The global judicial, regulatory and political environment has generally been challenging for large financial institutions, and financial institutions have been subject to continued regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory inquiries and proceedings can be time consuming and costly. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, 52 52 52 employees or the integrity of the markets, such behavior may not always be deterred or prevented. In addition to regulatory restrictions or structural changes that could result from perceived deficiencies in Citi's culture, such focus could also lead to additional regulatory proceedings. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought criminal convictions from, financial institutions and individual employees, and criminal prosecutors in the U.S. have increasingly sought and obtained criminal guilty pleas or deferred prosecution agreements against financial entities and individuals and other criminal sanctions for those institutions and individuals. These types of actions by U.S. and international governmental entities may, in the future, have significant collateral consequences for a financial institution, including loss of customers and business, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 29.OTHER RISKSCiti's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs.During 2022, emerging markets revenues accounted for approximately 37% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa in EMEA). Citi's presence in the emerging markets subjects it to various risks, such as limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and continued strength in the U.S. dollar; sustained increases in interest rates; sovereign debt volatility; election outcomes, regulatory changes and political events; foreign exchange controls, including inability to access indirect foreign exchange mechanisms; macroeconomic and geopolitical challenges and uncertainties and volatility, including with respect to Russia and China (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); limitations on foreign investment; sociopolitical instability (including from hyperinflation); fraud; nationalization or loss of licenses; restrictions arising from retaliatory Russian laws and regulations on the conduct of its business; sanctions or asset freezes; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets, and these risks can be exacerbated in the event of a deterioration in relationships between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, due to currency controls in Argentina, Citi faces a risk of devaluation on its unhedged Argentine peso-denominated assets, which continue to increase (for additional information on Argentina-related risks, see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, if the economic situation in a country in which Citi operates were to deteriorate below a certain level, U.S. regulators through the Interagency Country Exposure Review Committee (ICERC) may impose mandatory loan loss or other reserve requirements on Citi, which would increase its credit costs and decrease its earnings. In addition, political turmoil and instability and geopolitical tensions and conflicts (such as the Russia-Ukraine war) have occurred in various regions and emerging market countries across the globe which have required, and may continue to require, management time and attention and other resources, such as monitoring the impact of sanctions on certain emerging market economies as well as impacting Citi's businesses, results of operations and financial conditions in affected countries. The Transition Away from and Discontinuance of LIBOR or Any Other Interest Rate Benchmark Could Have Adverse Consequences for Citi.LIBOR and other rates or indices deemed to be benchmarks have been the subject of ongoing U.S. and non-U.S. regulatory scrutiny and reform. The LIBOR administrator ceased publication of non-USD LIBOR and one-week and two-month USD LIBOR on a permanent or representative basis on December 31, 2021, with plans for all other USD LIBOR tenors to permanently cease or become non-representative after June 30, 2023. As a result, Citi ceased entering into new contracts referencing USD LIBOR as of January 1, 2022, other than for limited circumstances where regulators recognized that it may be appropriate for banks to enter into new USD LIBOR contracts, including with respect to market-making, hedging or novations of USD transactions executed before January 1, 2022.Through a global effort by the financial services industry and regulators, alternative reference rates have been identified employees or the integrity of the markets, such behavior may not always be deterred or prevented. In addition to regulatory restrictions or structural changes that could result from perceived deficiencies in Citi's culture, such focus could also lead to additional regulatory proceedings. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought criminal convictions from, financial institutions and individual employees, and criminal prosecutors in the U.S. have increasingly sought and obtained criminal guilty pleas or deferred prosecution agreements against financial entities and individuals and other criminal sanctions for those institutions and individuals. These types of actions by U.S. and international governmental entities may, in the future, have significant collateral consequences for a financial institution, including loss of customers and business, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 29.OTHER RISKSCiti's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs.During 2022, emerging markets revenues accounted for approximately 37% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa in EMEA). Citi's presence in the emerging markets subjects it to various risks, such as limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and continued strength in the U.S. dollar; sustained increases in interest rates; sovereign debt volatility; election outcomes, regulatory changes and political events; employees or the integrity of the markets, such behavior may not always be deterred or prevented. In addition to regulatory restrictions or structural changes that could result from perceived deficiencies in Citi's culture, such focus could also lead to additional regulatory proceedings. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought criminal convictions from, financial institutions and individual employees, and criminal prosecutors in the U.S. have increasingly sought and obtained criminal guilty pleas or deferred prosecution agreements against financial entities and individuals and other criminal sanctions for those institutions and individuals. These types of actions by U.S. and international governmental entities may, in the future, have significant collateral consequences for a financial institution, including loss of customers and business, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 29. **Current (2024):** At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders (see discussion below) and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings and negative regulatory evaluation or examination findings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis (see also the capital return and resolution plan risk factors above). Citi's regulators have broad powers and discretion under their prudential and supervisory authority, and have pursued active inspection and investigatory oversight. As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement extensive targeted action plans and submit quarterly progress reports on a timely and sufficient basis detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls. These improvements will result in continued significant investments by Citi during 2024 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. There can be no assurance that such improvements will be implemented in a manner satisfactory, in both timing and sufficiency, to the FRB and OCC. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above. The global judicial, regulatory and political environment has generally been challenging for large financial institutions, which have been subject to increased regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory 60 60 60 inquiries and proceedings can be time consuming and costly, and divert management attention from Citi's businesses. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, regulatory restrictions, structural changes, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. For additional information, see the capital return andheightened regulatory scrutiny and ongoing interpretation ofregulatory changes risk factors above. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, employees or the integrity of the markets, such behavior may not always be deterred or prevented. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. For example, U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought and obtained criminal guilty pleas or deferred prosecution agreements from, financial institutions and individual employees. These types of actions by U.S. and other governments may, in the future, have significant collateral consequences for Citi, including loss of customers and business, operational loss, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi substantial reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 30.OTHER RISKSCiti's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs.During 2023, emerging markets revenues accounted for approximately 40% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa). Citi's presence in the emerging markets subjects it to various risks. Emerging market risks include, among others, limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and strength in the U.S. dollar; sustained elevated interest rates and quantitative tightening; elevated inflation and hyperinflation; foreign exchange controls, including an inability to access indirect foreign exchange mechanisms; macroeconomic, geopolitical and domestic political challenges, uncertainties and volatility, including with respect to Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); cyberattacks; restrictions arising from retaliatory laws and regulations; sanctions or asset freezes; sovereign debt volatility; fluctuations in commodity prices; election outcomes; regulatory changes, including potential conflicts among regulations with other jurisdictions where Citi does business; limitations on foreign investment; sociopolitical instability; civil unrest; crime, corruption and fraud; nationalization or loss of licenses; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets; and these risks can be exacerbated in the event of a deterioration in the relationship between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, Citi may need to record additional translation losses due to currency controls in Argentina (see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, Citi may need to record additional reserves for expected losses for its credit exposures based on the transfer risk associated with exposures outside the U.S., driven by safety and soundness considerations under U.S. banking law (see "Managing Global Risk - Other Risks - Country Risk - Argentina" and " - Russia" and "Significant AccountingPolicies and Significant Estimates" below). In addition, political turmoil and instability; geopolitical challenges, tensions and conflicts (including those related to Russia's war in Ukraine as well as a persistent and/or escalating conflict in the Middle East); terrorism; and other instabilities have occurred in various regions and emerging market countries across the globe, which impact Citi's businesses, results of operations and financial conditions in affected countries and have required, and may continue to require, management time and attention and other resources, such as managing the impact of sanctions and their effect on Citi's operations in certain emerging market countries. For inquiries and proceedings can be time consuming and costly, and divert management attention from Citi's businesses. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, regulatory restrictions, structural changes, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. For additional information, see the capital return andheightened regulatory scrutiny and ongoing interpretation ofregulatory changes risk factors above. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, employees or the integrity of the markets, such behavior may not always be deterred or prevented. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. For example, U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought and obtained criminal guilty pleas or deferred prosecution agreements from, financial institutions and individual employees. These types of actions by U.S. and other governments may, in the future, have significant collateral consequences for Citi, including loss of customers and business, operational loss, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi substantial reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 30. inquiries and proceedings can be time consuming and costly, and divert management attention from Citi's businesses. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, regulatory restrictions, structural changes, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. For additional information, see the capital return and heightened regulatory scrutiny and ongoing interpretation of regulatory changes risk factors above. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, employees or the integrity of the markets, such behavior may not always be deterred or prevented. Moreover, the severity of the remedies sought in legal and regulatory proceedings to which Citi is subject has remained elevated. For example, U.S. and certain non-U.S. governmental entities have increasingly brought criminal actions against, or have sought and obtained criminal guilty pleas or deferred prosecution agreements from, financial institutions and individual employees. These types of actions by U.S. and other governments may, in the future, have significant collateral consequences for Citi, including loss of customers and business, operational loss, and the inability to offer certain products or services and/or operate certain businesses. Citi may be required to accept or be subject to similar types of criminal remedies, consent orders, sanctions, substantial fines and penalties, remediation and other financial costs or other requirements in the future, including for matters or practices not yet known to Citi, any of which could materially and negatively affect Citi's businesses, business practices, financial condition or results of operations, require material changes in Citi's operations or cause Citi substantial reputational harm. Additionally, many large claims - both private civil and regulatory - asserted against Citi are highly complex, slow to develop and may involve novel or untested legal theories. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings. Although Citi establishes accruals for its legal and regulatory matters according to accounting requirements, Citi's estimates of, and changes to, these accruals involve significant judgment and may be subject to significant uncertainty, and the amount of loss ultimately incurred in relation to those matters may be substantially higher than the amounts accrued (see the incorrect assumptions or estimates risk factor above). In addition, certain settlements are subject to court approval and may not be approved. For further information on Citi's legal and regulatory proceedings, see Note 30. OTHER RISKSCiti's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs.During 2023, emerging markets revenues accounted for approximately 40% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa). Citi's presence in the emerging markets subjects it to various risks. Emerging market risks include, among others, limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and strength in the U.S. dollar; sustained elevated interest rates and quantitative tightening; elevated inflation and hyperinflation; foreign exchange controls, including an inability to access indirect foreign exchange mechanisms; macroeconomic, geopolitical and domestic political challenges, uncertainties and volatility, including with respect to Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); cyberattacks; restrictions arising from retaliatory laws and regulations; sanctions or asset freezes; sovereign debt volatility; fluctuations in commodity prices; election outcomes; regulatory changes, including potential conflicts among regulations with other jurisdictions where Citi does business; limitations on foreign investment; sociopolitical instability; civil unrest; crime, corruption and fraud; nationalization or loss of licenses; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets; and these risks can be exacerbated in the event of a deterioration in the relationship between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, Citi may need to record additional translation losses due to currency controls in Argentina (see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, Citi may need to record additional reserves for expected losses for its credit exposures based on the transfer risk associated with exposures outside the U.S., driven by safety and soundness considerations under U.S. banking law (see "Managing Global Risk - Other Risks - Country Risk - Argentina" and " - Russia" and "Significant AccountingPolicies and Significant Estimates" below). In addition, political turmoil and instability; geopolitical challenges, tensions and conflicts (including those related to Russia's war in Ukraine as well as a persistent and/or escalating conflict in the Middle East); terrorism; and other instabilities have occurred in various regions and emerging market countries across the globe, which impact Citi's businesses, results of operations and financial conditions in affected countries and have required, and may continue to require, management time and attention and other resources, such as managing the impact of sanctions and their effect on Citi's operations in certain emerging market countries. For --- ## Modified: Citi's Ability to Return Capital to Common Shareholders Substantially Depends on Regulatory Capital Requirements, Including the Results of the CCAR Process and Dodd-Frank Act Regulatory Stress Tests, and Other Factors. **Key changes:** - Reworded sentence: "Citi's ability to return capital to its common shareholders consistent with its capital planning efforts and targets, whether through its common stock dividend or through a share repurchase program, substantially depends, among other things, on its regulatory capital requirements, including the annual recalibration of the Stress Capital Buffer (SCB), which is based upon the results of the CCAR process required by the FRB, and recalibration of the GSIB surcharge,as well as the supervisory expectations and assessments regarding individual institutions." - Reworded sentence: "Under the capital proposal, a single capital buffer, including the SCB, would apply to a firm's risk-based capital ratios, regardless of whether the applicable ratios result from the Expanded Risk-based Approach or the Modified Standardized Approach." - Reworded sentence: "Further, ongoing regulatory and legislative uncertainties and changes make Citi's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations." - Reworded sentence: "Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change." **Prior (2023):** Citi's ability to return capital to its common shareholders consistent with its capital planning efforts and targets, whether through its common stock dividend or through a share repurchase program, substantially depends, among other things, on regulatory capital requirements, including the annual recalibration of the Stress Capital Buffer (SCB), which is based upon the results of the CCAR process required by the FRB, and recalibration of the GSIB surcharge. Citi's ability to return capital also depends on its results of operations and financial condition, including the capital impact related to its remaining divestitures, such as, among other things, any temporary capital impact from CTA losses (net of hedges) between transaction signings and closings and achievement of the expected capital benefits from the divestitures (for additional information, see "Executive Summary" above and the continued investments risk factor below); Citi's effectiveness in planning, managing and calculating its level of risk-weighted assets under both the Advanced Approaches and the Standardized Approach, Supplementary Leverage ratio (SLR) and GSIB surcharge; its implementation and maintenance of an effective capital planning process and management framework; forecasts of macroeconomic conditions; and deferred tax asset (DTA) utilization (see the ability to utilize DTA risk factor below). Changes in regulatory capital rules, requirements or interpretations could continue to have a material impact on Citi's regulatory capital. For example, on October 1, 2022, Citi's required regulatory CET1 Capital ratio increased to 11.5% from 10.5% due to an increase in the SCB requirement (see below for information on calculation of the SCB). In addition, on January 1, 2023, Citi's required regulatory CET1 Capital ratio further increased to 12% from 11.5% under the Standardized Approach, as the current GSIB surcharge increased to 3.5% from 3.0%. Due to these increases as well as macroeconomic uncertainty, Citi paused common share repurchases beginning as of the third quarter of 2022. In addition, the U.S. banking agencies are considering a number of changes to the U.S. regulatory capital framework in the future, including, but not limited to, revisions to the U.S. Basel III rules, and potential changes to the GSIB surcharge, SLR and discretionary Countercyclical Capital Buffer. All of these potential changes could negatively impact Citi's regulatory capital position or increase Citi's regulatory capital requirements.All firms subject to CCAR requirements, including Citi, will continue to be subject to a rigorous regulatory evaluation of capital planning practices, including, but not limited to, governance, risk management, data quality and internal controls. Citi's ability to return capital may be adversely impacted if such an evaluation of Citi results in negative findings. The FRB has stated that it expects capital adequacy practices to continue to evolve and to likely be determined by its yearly cross-firm review of capital plan submissions. Similarly, the FRB has indicated that, as part of its stated goal to continually evolve its annual stress testing requirements, several parameters of the annual stress testing process may continue to be altered, including the severity of the stress test scenario, the FRB modeling of Citi's balance sheet, pre-provision net revenue and stress losses, and the addition of components deemed important by the FRB. For information on limitations on Citi's ability to return capital to common shareholders, as well as the CCAR process, supervisory stress test requirements and GSIB surcharge, see "Capital Resources - Overview" and "Capital Resources - Stress Testing Component of Capital Planning" above and the risk management risk factor below.Beginning January 1, 2022, Citi was required to phase into regulatory capital, at 25% per year, the changes in retained earnings, DTAs and ACL determined upon the January 1, 2020 CECL adoption date, as well as subsequent changes in the ACL through December 31, 2021. The FRB has stated that it plans to maintain its current framework for calculating allowances on loans in the supervisory stress test through the 2023 supervisory stress test cycle, while continuing to evaluate appropriate future enhancements to this framework. The impacts on Citi's capital adequacy of the FRB's incorporation of CECL into its supervisory stress tests on an ongoing basis, and of other potential regulatory changes in the FRB's stress testing methodologies, remain unclear. For additional information regarding the CECL methodology, including the transition provisions related to the adverse regulatory capital effects resulting from adoption of the CECL methodology, see "Capital Resources - Current Regulatory Capital Standards - Regulatory Capital Treatment - Modified Changes in regulatory capital rules, requirements or interpretations could continue to have a material impact on Citi's regulatory capital. For example, on October 1, 2022, Citi's required regulatory CET1 Capital ratio increased to 11.5% from 10.5% due to an increase in the SCB requirement (see below for information on calculation of the SCB). In addition, on January 1, 2023, Citi's required regulatory CET1 Capital ratio further increased to 12% from 11.5% under the Standardized Approach, as the current GSIB surcharge increased to 3.5% from 3.0%. Due to these increases as well as macroeconomic uncertainty, Citi paused common share repurchases beginning as of the third quarter of 2022. In addition, the U.S. banking agencies are considering a number of changes to the U.S. regulatory capital framework in the future, including, but not limited to, revisions to the U.S. Basel III rules, and potential changes to the GSIB surcharge, SLR and discretionary Countercyclical Capital Buffer. All of these potential changes could negatively impact Citi's regulatory capital position or increase Citi's regulatory capital requirements. All firms subject to CCAR requirements, including Citi, will continue to be subject to a rigorous regulatory evaluation of capital planning practices, including, but not limited to, governance, risk management, data quality and internal controls. Citi's ability to return capital may be adversely impacted if such an evaluation of Citi results in negative findings. The FRB has stated that it expects capital adequacy practices to continue to evolve and to likely be determined by its yearly cross-firm review of capital plan submissions. Similarly, the FRB has indicated that, as part of its stated goal to continually evolve its annual stress testing requirements, several parameters of the annual stress testing process may continue to be altered, including the severity of the stress test scenario, the FRB modeling of Citi's balance sheet, pre-provision net revenue and stress losses, and the addition of components deemed important by the FRB. For information on limitations on Citi's ability to return capital to common shareholders, as well as the CCAR process, supervisory stress test requirements and GSIB surcharge, see "Capital Resources - Overview" and "Capital Resources - Stress Testing Component of Capital Planning" above and the risk management risk factor below. Beginning January 1, 2022, Citi was required to phase into regulatory capital, at 25% per year, the changes in retained earnings, DTAs and ACL determined upon the January 1, 2020 CECL adoption date, as well as subsequent changes in the ACL through December 31, 2021. The FRB has stated that it plans to maintain its current framework for calculating allowances on loans in the supervisory stress test through the 2023 supervisory stress test cycle, while continuing to evaluate appropriate future enhancements to this framework. The impacts on Citi's capital adequacy of the FRB's incorporation of CECL into its supervisory stress tests on an ongoing basis, and of other potential regulatory changes in the FRB's stress testing methodologies, remain unclear. For additional information regarding the CECL methodology, including the transition provisions related to the adverse regulatory capital effects resulting from adoption of the CECL methodology, see "Capital Resources - Current Regulatory Capital Standards - Regulatory Capital Treatment - Modified 42 42 42 Transition of the Current Expected Credit Losses Methodology" above and Note 1.In addition, the annual stress testing requirements are integrated into ongoing regulatory capital requirements. Citi's SCB equals the maximum decline in its CET1 Capital ratio under the supervisory severely adverse scenario over a nine-quarter CCAR measurement period, plus four quarters of planned common stock dividends, subject to a minimum requirement of 2.5%. The SCB is calculated by the FRB using its proprietary data and modeling of each firm's results. Accordingly, Citi's SCB may change annually, based on the supervisory stress test results, thus potentially resulting in additional volatility in the calculation of Citi's required regulatory CET1 Capital ratio under the Standardized Approach. Similar to the other regulatory capital buffers, a breach of the SCB may result in graduated limitations on capital distributions. For additional information on the SCB, see "Capital Resources - Regulatory Capital Buffers" above.Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, these changes to the FRB's regulatory capital, stress testing and CCAR regimes, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially impacting the extent to which Citi is able to return capital to shareholders.Citi Must Continually Review, Analyze and Successfully Adapt to Ongoing Regulatory and Legislative Uncertainties and Changes in the U.S. and Globally.Citi, its management and its businesses continue to face ongoing regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the areas of ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including as a result of priority shifts depending on individuals, political parties and other groups in governmental positions; (ii) potential changes to various aspects of the regulatory capital framework and requirements applicable to Citi, including the Basel III rules (see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change risk factor below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles.For example, in February 2023, the Consumer Financial Protection Bureau proposed significant changes to the maximum amounts on credit card late fees, which, if adopted as proposed, would reduce credit card fee revenues in Branded cards and Retail services in PBWM. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even conflicting requirements, including within a single jurisdiction. For example, in 2019, the European Commission adopted, as part of Capital Requirements Directive V (CRD V), a new requirement for major banking groups headquartered outside the EU (which would include Citi) to establish an intermediate EU holding company where the foreign bank has two or more institutions (broadly meaning banks, broker-dealers and similar financial firms) established in the EU. While in some respects the requirement mirrors an existing U.S. requirement for non-U.S. banking organizations to form U.S. intermediate holding companies, the implementation of the EU holding company requirement could lead to additional complexity with respect to Citi's resolution planning, capital and liquidity allocation and efficiency in various jurisdictions.Further, ongoing regulatory and legislative uncertainties and changes make Citi's and its management's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. For example, while the Basel III regulatory reforms and revised market risk framework have been finalized at the international level, there remain significant uncertainties with respect to the integration of these revisions into the U.S. regulatory capital framework. Business planning is required to be based on possible or proposed rules or outcomes, which can change dramatically upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's businesses, results of operations and financial condition.Citi's Continued Investment and Other Initiatives as Part of Its Transformation and Strategic Refresh May Not Be as Successful as It Projects or Expects.As part of its transformation and other strategic initiatives, Citi continues to make significant investments to improve its risk and control environment, modernize its data and technology infrastructure and further enhance safety and soundness (for additional information on these investments, see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic refresh. For example, Citi has been making investments across the Company, including, for example, hiring front office colleagues and enhancing product capabilities and platforms to improve client digital experiences and add scalability and implementing new capabilities and partnerships. Citi has also been pursuing productivity improvements through various technology and digital initiatives, organizational simplification and location strategies. Citi's multiyear transformation initiatives involve significant execution complexity, and there is inherent risk that these will not be as productive or effective as Citi expects, Transition of the Current Expected Credit Losses Methodology" above and Note 1.In addition, the annual stress testing requirements are integrated into ongoing regulatory capital requirements. Citi's SCB equals the maximum decline in its CET1 Capital ratio under the supervisory severely adverse scenario over a nine-quarter CCAR measurement period, plus four quarters of planned common stock dividends, subject to a minimum requirement of 2.5%. The SCB is calculated by the FRB using its proprietary data and modeling of each firm's results. Accordingly, Citi's SCB may change annually, based on the supervisory stress test results, thus potentially resulting in additional volatility in the calculation of Citi's required regulatory CET1 Capital ratio under the Standardized Approach. Similar to the other regulatory capital buffers, a breach of the SCB may result in graduated limitations on capital distributions. For additional information on the SCB, see "Capital Resources - Regulatory Capital Buffers" above.Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, these changes to the FRB's regulatory capital, stress testing and CCAR regimes, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially impacting the extent to which Citi is able to return capital to shareholders.Citi Must Continually Review, Analyze and Successfully Adapt to Ongoing Regulatory and Legislative Uncertainties and Changes in the U.S. and Globally.Citi, its management and its businesses continue to face ongoing regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the areas of ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including as a result of priority shifts depending on individuals, political parties and other groups in governmental positions; (ii) potential changes to various aspects of the regulatory capital framework and requirements applicable to Citi, including the Basel III rules (see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change risk factor below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles.For example, in February 2023, the Consumer Financial Protection Bureau proposed significant changes to the maximum amounts on credit card late fees, which, if adopted as proposed, would reduce credit card fee revenues in Branded cards and Retail services in PBWM. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even Transition of the Current Expected Credit Losses Methodology" above and Note 1. In addition, the annual stress testing requirements are integrated into ongoing regulatory capital requirements. Citi's SCB equals the maximum decline in its CET1 Capital ratio under the supervisory severely adverse scenario over a nine-quarter CCAR measurement period, plus four quarters of planned common stock dividends, subject to a minimum requirement of 2.5%. The SCB is calculated by the FRB using its proprietary data and modeling of each firm's results. Accordingly, Citi's SCB may change annually, based on the supervisory stress test results, thus potentially resulting in additional volatility in the calculation of Citi's required regulatory CET1 Capital ratio under the Standardized Approach. Similar to the other regulatory capital buffers, a breach of the SCB may result in graduated limitations on capital distributions. For additional information on the SCB, see "Capital Resources - Regulatory Capital Buffers" above. Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, these changes to the FRB's regulatory capital, stress testing and CCAR regimes, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially impacting the extent to which Citi is able to return capital to shareholders. **Current (2024):** Citi's ability to return capital to its common shareholders consistent with its capital planning efforts and targets, whether through its common stock dividend or through a share repurchase program, substantially depends, among other things, on its regulatory capital requirements, including the annual recalibration of the Stress Capital Buffer (SCB), which is based upon the results of the CCAR process required by the FRB, and recalibration of the GSIB surcharge,as well as the supervisory expectations and assessments regarding individual institutions. The FRB's annual stress testing requirements are integrated into ongoing regulatory capital requirements. Citi's SCB equals the maximum projected decline in its CET1 Capital ratio under the supervisory severely adverse scenario over a nine-quarter CCAR measurement period, plus four quarters of planned common stock dividends as a percentage of Citi's risk-weighted assets, subject to a minimum requirement of 2.5%. The SCB is calculated by the FRB using its proprietary data and modeling of each firm's results. Accordingly, Citi's SCB may change annually, based on the supervisory stress test results, thus potentially resulting in variability in the calculation of Citi's required regulatory CET1 Capital ratio under the Standardized Approach. On October 1, 2023, Citi's required regulatory CET1 Capital ratio increased to 12.3% from 12% under the Standardized Approach, reflecting the increase in the SCB requirement to 4.3% from 4.0%. In addition, a breach of the SCB and other regulatory capital buffers may result in gradual limitations on capital distributions and discretionary bonus payments to executive officers. For additional information on the SCB, see "Capital Resources - Regulatory Capital Buffers" above. Moreover, changes in regulatory capital rules, requirements or interpretations could materially increase Citi's required regulatory capital. For example, the U.S. banking regulators have proposed a number of changes to the U.S. regulatory capital framework, including, but not limited to, significant revisions to the U.S. Basel III rules, known as the Basel III Endgame (capital proposal); changes to the method for calculating the GSIB surcharge; and changes to aspects of the total loss-absorbing capacity (TLAC) requirements. The capital proposal would replace the Advanced Approaches with a new Expanded Risk-based Approach for calculating risk- weighted assets. Under the capital proposal, a single capital buffer, including the SCB, would apply to a firm's risk-based capital ratios, regardless of whether the applicable ratios result from the Expanded Risk-based Approach or the Modified Standardized Approach. Additionally, the capital proposal would make various changes to the calculations of credit risk, market risk and operational risk components of risk-weighted assets (see "Capital Resources - Regulatory Capital Standards and Developments" above). All of these potential changes, if adopted as proposed, would likely materially impact Citi's regulatory capital position and substantially increase Citi's regulatory capital requirements, and thus adversely impact the extent to which Citi is able to return capital to shareholders.Citi's ability to return capital also depends on its results of operations and financial condition, including the capital impact related to its remaining divestitures, such as, among other things, any temporary capital impact from CTA losses (net of hedges) between transaction signings and closings (see the continued investments and the incorrect assumptions or estimates risk factors below); Citi's effectiveness in planning, managing and calculating its level of regulatory capital and risk-weighted assets under both the Advanced Approaches and the Standardized Approach, as well as the Supplementary Leverage ratio (SLR); its implementation and maintenance of an effective capital planning process and management framework; forecasts of macroeconomic conditions; and deferred tax asset (DTA) utilization (see the ability to utilize DTA risk factor below). The FRB could also limit or prohibit capital actions, such as paying or increasing dividends or repurchasing common stock due to macroeconomic disruptions or events, some of which occurred for a period of time during the COVID-19 pandemic.All firms subject to CCAR requirements, including Citi, will continue to be subject to a rigorous regulatory evaluation of capital planning practices and other reviews and examinations, including, but not limited to data quality, whichis a key regulatory focus, governance, risk management and internal controls. For example, the FRB has stated that it expects capital adequacy practices to continue to evolve and to likely be determined by its yearly cross-firm review of capital plan submissions. Similarly, the FRB has indicated that, as part of its stated goal to continually evolve its annual stress testing requirements, several parameters of the annual stress testing process may continue to be altered, including the number and severity of the stress test scenarios, the FRB modeling of Citi's balance sheet, pre-provision net revenue and stress losses, and the addition of components deemed important by the FRB. Additionally, Citi's ability to return capital may be adversely impacted if a regulatory evaluation or examination results in negative findings regarding absolutecapital levels or other aspects of Citi's operations, including as a result of the imposition of additional capital buffers, limitations on capital distributions or otherwise. For information on limitations on Citi's ability to return capital to common shareholders, as well as the CCAR process, supervisory stress test requirements and GSIB surcharge, see "Capital Resources - Overview" and "Capital Resources - Stress Testing Component of Capital Planning" above and the risk management risk factor below. weighted assets. Under the capital proposal, a single capital buffer, including the SCB, would apply to a firm's risk-based capital ratios, regardless of whether the applicable ratios result from the Expanded Risk-based Approach or the Modified Standardized Approach. Additionally, the capital proposal would make various changes to the calculations of credit risk, market risk and operational risk components of risk-weighted assets (see "Capital Resources - Regulatory Capital Standards and Developments" above). All of these potential changes, if adopted as proposed, would likely materially impact Citi's regulatory capital position and substantially increase Citi's regulatory capital requirements, and thus adversely impact the extent to which Citi is able to return capital to shareholders. Citi's ability to return capital also depends on its results of operations and financial condition, including the capital impact related to its remaining divestitures, such as, among other things, any temporary capital impact from CTA losses (net of hedges) between transaction signings and closings (see the continued investments and the incorrect assumptions or estimates risk factors below); Citi's effectiveness in planning, managing and calculating its level of regulatory capital and risk-weighted assets under both the Advanced Approaches and the Standardized Approach, as well as the Supplementary Leverage ratio (SLR); its implementation and maintenance of an effective capital planning process and management framework; forecasts of macroeconomic conditions; and deferred tax asset (DTA) utilization (see the ability to utilize DTA risk factor below). The FRB could also limit or prohibit capital actions, such as paying or increasing dividends or repurchasing common stock due to macroeconomic disruptions or events, some of which occurred for a period of time during the COVID-19 pandemic. All firms subject to CCAR requirements, including Citi, will continue to be subject to a rigorous regulatory evaluation of capital planning practices and other reviews and examinations, including, but not limited to data quality, which is a key regulatory focus, governance, risk management and internal controls. For example, the FRB has stated that it expects capital adequacy practices to continue to evolve and to likely be determined by its yearly cross-firm review of capital plan submissions. Similarly, the FRB has indicated that, as part of its stated goal to continually evolve its annual stress testing requirements, several parameters of the annual stress testing process may continue to be altered, including the number and severity of the stress test scenarios, the FRB modeling of Citi's balance sheet, pre-provision net revenue and stress losses, and the addition of components deemed important by the FRB. Additionally, Citi's ability to return capital may be adversely impacted if a regulatory evaluation or examination results in negative findings regarding absolute capital levels or other aspects of Citi's operations, including as a result of the imposition of additional capital buffers, limitations on capital distributions or otherwise. For information on limitations on Citi's ability to return capital to common shareholders, as well as the CCAR process, supervisory stress test requirements and GSIB surcharge, see "Capital Resources - Overview" and "Capital Resources - Stress Testing Component of Capital Planning" above and the risk management risk factor below. 49 49 49 In December 2023, the FRB announced that it will maintain its current framework for calculating allowances on loans in the supervisory stress test through the 2024 stress test cycle, while continuing to evaluate appropriate future enhancements to this framework. The impacts on Citi's capital adequacy of any potential incorporation by the FRB of CECL into its supervisory stress tests in future stress test cycles, and of other potential regulatory changes in the FRB's stress testing methodologies, remain unclear. For additional information regarding the CECL methodology, including the transition provisions related to the adverse regulatory capital effects resulting from adoption of the CECL methodology, see "Capital Resources - Current Regulatory Capital Standards - Regulatory Capital Treatment - Modified Transition of the Current Expected Credit Losses Methodology" above and Note 1.Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, changes to regulatory capital, results from the FRB's stress testing and CCAR regimes, and regulatory evaluation or examination findings, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially adversely impacting the extent to which Citi is able to return capital to shareholders.Citi Must Continually Review, Analyze and Successfully Adapt to Ongoing Regulatory and Legislative Uncertainties and Changes in the U.S. and Globally.Citi, its management and its businesses continue to face regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential changes to various aspects of the U.S. regulatory capital framework and requirements applicable to Citi, including, among others, significant revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); (ii) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including potential changes in regulatory requirements relating to interest rate risk management; and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the EU, the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change and heightened regulatory scrutiny and ongoing interpretation of regulatory changes risk factors below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles, which, as theychange over time, can have a major impact. In particular, theU.S. regulators have indicated that the level of theirexpectations is increasing and prompt negative examinationfindings/ratings and enforcements actions are more likely.For example, in February 2023, the Consumer Financial Protection Bureau (CFPB) proposed significant changes to the maximum amounts on credit card late fees, which, if adopted as proposed, would reduce credit card fee revenues in Branded Cards and Retail Services in USPB. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even conflicting requirements, including within a single jurisdiction. Further, ongoing regulatory and legislative uncertainties and changes make Citi's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's competitive position, as well as its businesses, results of operations and financial condition.Citi's Ability to Achieve Its Objectives from Its Transformation, Organizational, Simplification and Other Strategic and Other Initiatives May Not Be as Successful as It Projects or Expects.As part of its transformation initiatives, Citi continues to make significant investments to improve its risk and controls environment, modernize its data and technology infrastructure and further enhance safety and soundness (see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic initiatives. For example, Citi has been making investments across the Company, including hiring front office colleagues in key strategic markets and businesses; enhancing product capabilities and platforms to grow key businesses, improve client digital experiences and add scalability; and implementing new capabilities and partnerships. These business-led investments are designed to grow revenues as well as result in retention and efficiency improvements. Additionally, Citi has been pursuing overall simplification initiatives that include management and operating model changes and actions to enhance focus on clients and reduce expenses. Citi's simplification actions also include divestiture of the Mexico Consumer/SBMM operations and completing other exits and wind-downs in order to streamline Citi and assist in optimizing its allocation of resources. These overall simplification initiatives involve various execution challenges and may result in higher than expected expenses, litigation and regulatory scrutiny, CTA and other losses or other negative financial or strategic impacts, which could be material (for information about potential CTA impacts, see the capital In December 2023, the FRB announced that it will maintain its current framework for calculating allowances on loans in the supervisory stress test through the 2024 stress test cycle, while continuing to evaluate appropriate future enhancements to this framework. The impacts on Citi's capital adequacy of any potential incorporation by the FRB of CECL into its supervisory stress tests in future stress test cycles, and of other potential regulatory changes in the FRB's stress testing methodologies, remain unclear. For additional information regarding the CECL methodology, including the transition provisions related to the adverse regulatory capital effects resulting from adoption of the CECL methodology, see "Capital Resources - Current Regulatory Capital Standards - Regulatory Capital Treatment - Modified Transition of the Current Expected Credit Losses Methodology" above and Note 1.Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, changes to regulatory capital, results from the FRB's stress testing and CCAR regimes, and regulatory evaluation or examination findings, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially adversely impacting the extent to which Citi is able to return capital to shareholders.Citi Must Continually Review, Analyze and Successfully Adapt to Ongoing Regulatory and Legislative Uncertainties and Changes in the U.S. and Globally.Citi, its management and its businesses continue to face regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential changes to various aspects of the U.S. regulatory capital framework and requirements applicable to Citi, including, among others, significant revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); (ii) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including potential changes in regulatory requirements relating to interest rate risk management; and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the EU, the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change and heightened regulatory scrutiny and ongoing interpretation of regulatory changes risk factors below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles, which, as theychange over time, can have a major impact. In particular, theU.S. regulators have indicated that the level of theirexpectations is increasing and prompt negative examinationfindings/ratings and enforcements actions are more likely.For example, in February 2023, the Consumer Financial Protection Bureau (CFPB) proposed significant changes to the maximum amounts on credit card late fees, which, if adopted In December 2023, the FRB announced that it will maintain its current framework for calculating allowances on loans in the supervisory stress test through the 2024 stress test cycle, while continuing to evaluate appropriate future enhancements to this framework. The impacts on Citi's capital adequacy of any potential incorporation by the FRB of CECL into its supervisory stress tests in future stress test cycles, and of other potential regulatory changes in the FRB's stress testing methodologies, remain unclear. For additional information regarding the CECL methodology, including the transition provisions related to the adverse regulatory capital effects resulting from adoption of the CECL methodology, see "Capital Resources - Current Regulatory Capital Standards - Regulatory Capital Treatment - Modified Transition of the Current Expected Credit Losses Methodology" above and Note 1. Although various uncertainties exist regarding the extent of, and the ultimate impact to Citi from, changes to regulatory capital, results from the FRB's stress testing and CCAR regimes, and regulatory evaluation or examination findings, these changes could increase the level of capital Citi is required or elects to hold, including as part of Citi's management buffer, thus potentially adversely impacting the extent to which Citi is able to return capital to shareholders. --- ## Modified: Corporate Credit Portfolio **Key changes:** - Reworded sentence: "The following table details Citi's corporate credit portfolio within Services, Markets, Banking and the Mexico SBMM component of All Other - Legacy Franchises (excluding loans carried at fair value and loans held-for-sale), and before consideration of collateral or hedges, by remaining tenor for the periods indicated: December 31, 2023September 30, 2023December 31, 2022In billions of dollarsDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDirect outstandings (on-balance sheet)(1)$132 $122 $39 $293 $125 $118 $38 $281 $135 $122 $27 $284 Unfunded lending commitments (off-balance sheet)(2)134 268 18 420 144 259 19 422 140 256 10 406 Total exposure$266 $390 $57 $713 $269 $377 $57 $703 $275 $378 $37 $690 Direct outstandings (on-balance sheet)(1) Unfunded lending commitments (off-balance sheet)(2) (1) Includes drawn loans, overdrafts, bankers' acceptances and leases." - Reworded sentence: "The following table presents the percentage of this portfolio by region based on Citi's internal management geography:December 31,2023September 30,2023December 31,2022North America56 %56 %56 %International44 44 44 Total100 %100 %100 %The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products." - Reworded sentence: "Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade.The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments." - Reworded sentence: "Portfolio Mix - Geography and CounterpartyCiti's corporate credit portfolio is diverse across geography and counterparty." **Prior (2023):** The following table details Citi's corporate credit portfolio within ICG and the Mexico SBMM component of Legacy Franchises (excluding certain loans managed on a delinquency basis, loans carried at fair value and loans held-for-sale), and before consideration of collateral or hedges, by remaining tenor for the periods indicated: December 31, 2022September 30, 2022December 31, 2021In billions of dollarsDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDirect outstandings (on-balance sheet)(1)$134 $122 $27 $283 $143 $114 $27 $284 $145 $119 $20 $284 Unfunded lending commitments (off-balance sheet)(2)140 256 10 406 133 248 10 391 147 269 13 429 Total exposure$274 $378 $37 $689 $276 $362 $37 $675 $292 $388 $33 $713 Direct outstandings (on-balance sheet)(1) Unfunded lending commitments (off-balance sheet)(2) (1) Includes drawn loans, overdrafts, bankers' acceptances and leases. (2) Includes unused commitments to lend, letters of credit and financial guarantees. Portfolio Mix - Geography and CounterpartyCiti's corporate credit portfolio is diverse across geography and counterparty. The following table shows the percentage of this portfolio by region based on Citi's internal management geography:December 31,2022September 30,2022December 31,2021North America56 %56 %56 %EMEA25 25 25 Asia12 12 13 Latin America7 7 6 Total100 %100 %100 %The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade.The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2022September 30,2022December 31,2021AAA/AA/A50 %50 %48 %BBB34 33 34 BB/B14 15 16 CCC or below2 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss.Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. This includes but is not limited to exposures in those sectors significantly impacted by the COVID-19 Portfolio Mix - Geography and CounterpartyCiti's corporate credit portfolio is diverse across geography and counterparty. The following table shows the percentage of this portfolio by region based on Citi's internal management geography:December 31,2022September 30,2022December 31,2021North America56 %56 %56 %EMEA25 25 25 Asia12 12 13 Latin America7 7 6 Total100 %100 %100 %The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade. **Current (2024):** The following table details Citi's corporate credit portfolio within Services, Markets, Banking and the Mexico SBMM component of All Other - Legacy Franchises (excluding loans carried at fair value and loans held-for-sale), and before consideration of collateral or hedges, by remaining tenor for the periods indicated: December 31, 2023September 30, 2023December 31, 2022In billions of dollarsDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDuewithin1 yearGreaterthan 1 yearbut within5 yearsGreaterthan5 yearsTotalexposureDirect outstandings (on-balance sheet)(1)$132 $122 $39 $293 $125 $118 $38 $281 $135 $122 $27 $284 Unfunded lending commitments (off-balance sheet)(2)134 268 18 420 144 259 19 422 140 256 10 406 Total exposure$266 $390 $57 $713 $269 $377 $57 $703 $275 $378 $37 $690 Direct outstandings (on-balance sheet)(1) Unfunded lending commitments (off-balance sheet)(2) (1) Includes drawn loans, overdrafts, bankers' acceptances and leases. (2) Includes unused commitments to lend, letters of credit and financial guarantees. Portfolio Mix - Geography and CounterpartyCiti's corporate credit portfolio is diverse across geography and counterparty. The following table presents the percentage of this portfolio by region based on Citi's internal management geography:December 31,2023September 30,2023December 31,2022North America56 %56 %56 %International44 44 44 Total100 %100 %100 %The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade.The following table presents the corporate credit portfolio by facility risk rating as a percentage of the total corporate credit portfolio: Total exposure December 31,2023September 30,2023December 31,2022AAA/AA/A50 %49 %50 %BBB33 34 34 BB/B16 15 14 CCC or below1 2 2 Total100 %100 %100 %Note: Total exposure includes direct outstandings and unfunded lending commitments. In addition to the obligor and facility risk ratings assigned to all exposures, Citi may classify exposures in the corporate credit portfolio. These classifications are consistent with Citi's interpretation of the U.S. banking regulators' definition of criticized exposures, which may categorize exposures as special mention, substandard, doubtful or loss.Risk ratings and classifications are reviewed regularly and adjusted as appropriate. The credit review process incorporates quantitative and qualitative factors, including financial and non-financial disclosures or metrics, idiosyncratic events or changes to the competitive, regulatory or macroeconomic environment. Portfolio Mix - Geography and CounterpartyCiti's corporate credit portfolio is diverse across geography and counterparty. The following table presents the percentage of this portfolio by region based on Citi's internal management geography:December 31,2023September 30,2023December 31,2022North America56 %56 %56 %International44 44 44 Total100 %100 %100 %The maintenance of accurate and consistent risk ratings across the corporate credit portfolio facilitates the comparison of credit exposure across all lines of business, geographic regions and products. Counterparty risk ratings reflect an estimated probability of default for a counterparty, and internal risk ratings are derived by leveraging validated statistical models and scorecards in combination with consideration of factors specific to the obligor or market, such as management experience, competitive position, regulatory environment and commodity prices. Facility risk ratings are assigned that reflect the probability of default of the obligor and factors that affect the loss given default of the facility, such as support or collateral. Internal obligor ratings that generally correspond to BBB and above are considered investment grade, while those below are considered non-investment grade. --- ## Modified: Total Loss-Absorbing Capacity (TLAC) **Key changes:** - Reworded sentence: "96 96 96 SECURED FUNDING TRANSACTIONS AND SHORT-TERM BORROWINGS Citi supplements its primary sources of funding with short-term financings that generally include (i) secured funding transactions consisting of securities loaned or sold under agreements to repurchase, i.e., repos, and (ii) to a lesser extent, short-term borrowings consisting of commercial paper and borrowings from the FHLB and other market participants." - Reworded sentence: "Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets." - Reworded sentence: "Secured Funding TransactionsSecured funding is primarily accessed through Citi's broker-dealer subsidiaries, with a smaller portion executed through Citi's bank entities to efficiently fund both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities." - Reworded sentence: "Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets." **Prior (2023):** U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. 90 90 90 SECURED FUNDING TRANSACTIONS AND SHORT-TERM BORROWINGS Citi supplements its primary sources of funding with short-term financings that generally include (i) secured funding transactions consisting of securities loaned or sold under agreements to repurchase, i.e., repos, and (ii) to a lesser extent, short-term borrowings consisting of commercial paper and borrowings from the FHLB and other market participants. Secured Funding TransactionsSecured funding is primarily accessed through Citi's broker-dealer subsidiaries to fund efficiently both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Citi also executes a smaller portion of its secured funding transactions through its bank entities, which are typically collateralized by government debt securities. Generally, daily changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and securities inventory. Secured funding of $202 billion as of December 31, 2022 increased 6% from the prior year and was unchanged sequentially, driven by normal business activity. The average balance for secured funding was approximately $205 billion for the quarter ended December 31, 2022.The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity. The majority of this activity is secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other secured funding is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding matched book assets.The remainder of the secured funding activity in the broker-dealer subsidiaries serves to fund securities inventory held in the context of market making and customer activities. To maintain reliable funding under a wide range of market conditions, including under periods of stress, Citi manages these activities by taking into consideration the quality of the underlying collateral and establishing minimum required funding tenors. The weighted average maturity of Citi's secured funding of less liquid securities inventory was greater than 110 days as of December 31, 2022.Citi manages the risks in its secured funding by conducting daily stress tests to account for changes in capacity, tenor, haircut, collateral profile and client actions. In addition, Citi maintains counterparty diversification by establishing concentration triggers and assessing counterparty reliability and stability under stress. Citi generally sources secured funding from more than 150 counterparties.Short-Term BorrowingsCiti's short-term borrowings of $47 billion as of the fourth quarter of 2022 increased 68% year-over-year, reflecting an increase in FHLB advances and commercial paper issuance, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). SECURED FUNDING TRANSACTIONS AND SHORT-TERM BORROWINGS Citi supplements its primary sources of funding with short-term financings that generally include (i) secured funding transactions consisting of securities loaned or sold under agreements to repurchase, i.e., repos, and (ii) to a lesser extent, short-term borrowings consisting of commercial paper and borrowings from the FHLB and other market participants. Secured Funding TransactionsSecured funding is primarily accessed through Citi's broker-dealer subsidiaries to fund efficiently both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Citi also executes a smaller portion of its secured funding transactions through its bank entities, which are typically collateralized by government debt securities. Generally, daily changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and securities inventory. Secured funding of $202 billion as of December 31, 2022 increased 6% from the prior year and was unchanged sequentially, driven by normal business activity. The average balance for secured funding was approximately $205 billion for the quarter ended December 31, 2022.The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity. The majority of this activity is secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other secured funding is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding matched book assets. **Current (2024):** U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. 96 96 96 SECURED FUNDING TRANSACTIONS AND SHORT-TERM BORROWINGS Citi supplements its primary sources of funding with short-term financings that generally include (i) secured funding transactions consisting of securities loaned or sold under agreements to repurchase, i.e., repos, and (ii) to a lesser extent, short-term borrowings consisting of commercial paper and borrowings from the FHLB and other market participants. Secured Funding TransactionsSecured funding is primarily accessed through Citi's broker-dealer subsidiaries, with a smaller portion executed through Citi's bank entities to efficiently fund both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Secured funding transactions are predominantly collateralized by government debt securities. Generally, changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and changes in securities inventory. In order to maintain reliable funding under a wide range of market conditions, Citi manages risks related to its secured funding by establishing secured funding limits and conducting daily stress tests that account for risks related to capacity, tenor, haircut, collateral type, counterparty and client actions. Secured funding of $269 billion as of December 31, 2023 increased 33% year-over-year and 5% sequentially, largely driven by additional financing to support increases in trading-related assets within Citi's broker-dealer subsidiaries. As of the quarter ended December 31, 2023, on an average basis, secured funding was $288 billion. The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity and is primarily secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets. As indicated above, the remaining portion of secured funding is used to fund securities inventory held in the context of market making and customer activities.Short-Term BorrowingsCiti's short-term borrowings of $37 billion as of the fourth quarter of 2023 decreased 20% year-over-year, reflecting lower commercial paper issuances at the broker-dealer subsidiaries, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). SECURED FUNDING TRANSACTIONS AND SHORT-TERM BORROWINGS Citi supplements its primary sources of funding with short-term financings that generally include (i) secured funding transactions consisting of securities loaned or sold under agreements to repurchase, i.e., repos, and (ii) to a lesser extent, short-term borrowings consisting of commercial paper and borrowings from the FHLB and other market participants. Secured Funding TransactionsSecured funding is primarily accessed through Citi's broker-dealer subsidiaries, with a smaller portion executed through Citi's bank entities to efficiently fund both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Secured funding transactions are predominantly collateralized by government debt securities. Generally, changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and changes in securities inventory. In order to maintain reliable funding under a wide range of market conditions, Citi manages risks related to its secured funding by establishing secured funding limits and conducting daily stress tests that account for risks related to capacity, tenor, haircut, collateral type, counterparty and client actions. Secured funding of $269 billion as of December 31, 2023 increased 33% year-over-year and 5% sequentially, largely driven by additional financing to support increases in trading-related assets within Citi's broker-dealer subsidiaries. As of the quarter ended December 31, 2023, on an average basis, secured funding was $288 billion. The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity and is primarily secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets. As indicated above, the remaining portion of secured funding is used to fund securities inventory held in the context of market making and customer activities.Short-Term BorrowingsCiti's short-term borrowings of $37 billion as of the fourth quarter of 2023 decreased 20% year-over-year, reflecting lower commercial paper issuances at the broker-dealer subsidiaries, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). --- ## Modified: Driving a Culture of Excellence and Accountability **Key changes:** - Reworded sentence: "Citi's Leadership Principles of "taking ownership, delivering with pride and succeeding together" have been reinforced through a behavioral science-led campaign, referred to as Citi's New Way, that reinforces the key working habits that support Citi's leadership culture." **Prior (2023):** Citi continues to embark on a talent and culture transformation to drive a culture of excellence and accountability that is supported by strong risk and controls management. Citi's new Leadership Principles of "taking ownership, delivering with pride and succeeding together" have been reinforced through a behavioral science-led campaign, Citi's New Way, that reinforces the key working habits that support Citi's leadership culture. Citi's performance management approach also emphasizes the Leadership Principles through a new four-pillar system, evaluating what colleagues deliver against financial performance, risk and controls, and client and franchise goals as well as how colleagues deliver from a leadership perspective. The performance management and incentive compensation processes and associated policies and frameworks have been redesigned to enhance accountability through increased rigor and consistency, in particular for risk and controls. The culture shift is also being supported by changes in the way Citi identifies, assesses, develops and promotes talent, particularly at the most senior levels of the organization. In 2022, the first Company-wide approach for promotions to the critical leadership role of Managing Director was launched, with common eligibility criteria across Citi, including risk and control performance. Further, all potential successors to Executive Management Team roles are evaluated by the Board and are now subject to a risk and controls assessment. **Current (2024):** Citi continues to embark on a talent and culture transformation to drive a culture of excellence and accountability that is supported by strong risk and controls management. Citi's Leadership Principles of "taking ownership, delivering with pride and succeeding together" have been reinforced through a behavioral science-led campaign, referred to as Citi's New Way, that reinforces the key working habits that support Citi's leadership culture. Citi's performance management approach also emphasizes the Leadership Principles through a four-pillar system, evaluating colleagues against financial performance, risk and controls, and client and franchise goals as well as how colleagues deliver from a leadership perspective. The performance management and incentive compensation processes and associated policies and frameworks have enhanced accountability through increased rigor and consistency, in particular for risk and controls. The culture shift is supported by changes in the way Citi identifies, assesses, develops and promotes talent, particularly at senior levels of the Company. Citi promotes a new class of managing directors each year. This is a testament to these individuals' performance and commitment to living the Leadership Principles and instilling them throughout their teams and the entire company. Further, all potential successors to Executive Management Team roles are evaluated by the Board and are now subject to a risk and controls assessment. --- ## Modified: Citi Faces Increased Competitive Challenges, Including from Financial Services and Other Companies and Emerging Technologies. **Key changes:** - Reworded sentence: "Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, private credit and financial technology companies and others." - Reworded sentence: "and globally that have grown rapidly over the last several years or have developed and introduced new products and services." - Reworded sentence: "Citi may not be able to provide the same or similar services for legal or regulatory reasons, which may be exacerbated by rapidly evolving and conflicting regulatory requirements, and due to increased compliance and other risks." - Reworded sentence: "For example, failure to strategically embrace the potential of artificial intelligence (AI) may result in a competitive disadvantage to Citi." - Reworded sentence: "For example, failure to strategically embrace the potential of artificial intelligence (AI) may result in a competitive disadvantage to Citi." **Prior (2023):** Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage. For example, Citi competes with other financial services companies in the U.S. and globally that continue to develop and introduce new products and services. In recent years, non-traditional financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions, such as Citi, and have sought bank charters to provide these services. These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to borrow, save and invest money. Emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite recent turmoil in the digital asset market, there is sustained interest from clients and investors in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. However, Citi may not be able to provide the same or similar services for legal or regulatory reasons and due to increased compliance and other risks. In 46 46 46 addition, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive.Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services to attract and retain customers or clients or to compete more effectively with competitors, including new market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks.Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (for additional information, see the operational processes and systems, cybersecurity and emerging markets risk factors below).To the extent that Citi is not able to compete effectively with financial technology companies and other firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below.OPERATIONAL RISKSA Failure or Disruption of Citi's Operational Processes or Systems Could Negatively Impact Its Reputation, Customers, Clients, Businesses or Results of Operations and Financial Condition.Citi's global operations rely heavily on its technology, including the accurate, timely and secure processing, management, storage and transmission of confidential transactions, data and other information as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their extensive account transactions. Citi's operations must also comply with complex and evolving laws and regulations in the countries in which it operates. With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud technologies to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption, including as a result of cyber or information security incidents (for additional information, see the cybersecurity risk factor below).Although Citi has continued to upgrade its technology, including systems to automate processes and enhance efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, human error, such as manual transaction processing errors, which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; operational or execution failures or deficiencies by third parties; insufficient (or limited) straight-through processing between legacy systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy systems leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human error. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Operational incidents can also arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks.Incidents that impact information security and/or technology operations may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below). addition, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive.Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services to attract and retain customers or clients or to compete more effectively with competitors, including new market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks.Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (for additional information, see the operational processes and systems, cybersecurity and emerging markets risk factors below).To the extent that Citi is not able to compete effectively with financial technology companies and other firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below.OPERATIONAL RISKSA Failure or Disruption of Citi's Operational Processes or Systems Could Negatively Impact Its Reputation, Customers, Clients, Businesses or Results of Operations and Financial Condition.Citi's global operations rely heavily on its technology, including the accurate, timely and secure processing, management, storage and transmission of confidential transactions, data and other information as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their extensive account transactions. Citi's operations must also comply with complex and evolving laws and regulations in the countries in which it operates. With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud technologies to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption, including as a result of cyber or information addition, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive. Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services to attract and retain customers or clients or to compete more effectively with competitors, including new market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks. Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (for additional information, see the operational processes and systems, cybersecurity and emerging markets risk factors below). To the extent that Citi is not able to compete effectively with financial technology companies and other firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below. **Current (2024):** Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, private credit and financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage. For example, Citi competes with other financial services companies in the U.S. and globally that have grown rapidly over the last several years or have developed and introduced new products and services. Potential mergers and acquisitions involving traditional financial services companies such as regional banks or credit card issuers, as well as networks and merchant acquirers, may also increase competition and impact Citi's ability to offer competitive pricing and rewards. Non-traditional financial services firms, such as private credit and financial technology companies, are less regulated and continue to expand their offerings of services traditionally provided by financial institutions. The growth of certain of these competitors has increased market and counterparty credit risks, particularly in a more challenging macroeconomic environment (see the risk factor on credit and concentrations of risk below). In addition, emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite difficulties and turmoil faced by the digital asset market in recent years, clients and investors have exhibited a sustained interest in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. Citi may not be able to provide the same or similar services for legal or regulatory reasons, which may be exacerbated by rapidly evolving and conflicting regulatory requirements, and due to increased compliance and other risks. Further, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive. Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services, as well as invest in and develop related infrastructure, to attract and retain customers or clients or to compete more effectively with competitors, including new market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, failure to strategically embrace the potential of artificial intelligence (AI) may result in a competitive disadvantage to Citi. At the same time, as a new technology, use of AI without sufficient controls, governance and risk management may result in increased risks across all of Citi's risk categories. As another example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks. Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (see the operational processes and systems, cybersecurity and emerging markets risk factors below).To the extent that Citi is not able to compete effectively with financial services companies, including private credit and financial technology companies, and non-financial services firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below.OPERATIONAL RISKSA Failure or Disruption of Citi's Operational Processes or Systems Could Negatively Impact Its Reputation, Customers, Clients, Businesses or Results of Operations and Financial Condition.Citi's global operations rely heavily on its technology systems and infrastructure, including the accurate, timely and secure processing, management, storage and transmission of data, including confidential transactions, and other information, as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their account transactions. Citi's operations must also comply with complex and evolving laws, regulations and heightened regulatory expectations in the countries in which it operates (see the implementation and interpretation of regulatory changes and legal proceedings risk factors below). With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud services to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption. market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, failure to strategically embrace the potential of artificial intelligence (AI) may result in a competitive disadvantage to Citi. At the same time, as a new technology, use of AI without sufficient controls, governance and risk management may result in increased risks across all of Citi's risk categories. As another example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks. Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (see the operational processes and systems, cybersecurity and emerging markets risk factors below). To the extent that Citi is not able to compete effectively with financial services companies, including private credit and financial technology companies, and non-financial services firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below. --- ## Modified: Interest rate exposure(1)(2) **Key changes:** - Reworded sentence: "Estimated initial negative impact to AOCI (after-tax)(2) Estimated initial impact on CET1 Capital ratio (bps) from AOCI scenario (1)Excludes trading book and fair value option banking book portfolios and replaces them with the associated transfer pricing." - Reworded sentence: "Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months." - Reworded sentence: "Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months." - Reworded sentence: "The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2023 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S." - Reworded sentence: "In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months." **Prior (2023):** Estimated initial negative impact to AOCI (after-tax)(3) (1)Excludes trading book and fair value option banking book portfolios and replaces them with the associated transfer pricing. (2)IRE as of December 31, 2021 excludes certain IRE methodology enhancements implemented in September 2022, most notably the banking book revisions to the treatment of certain business. (3)Includes the effect of changes in interest rates on AOCI related to investment securities, cash flow hedges and pension liability adjustments. Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2022 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $1.1 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2022 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $1.1 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2022 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE. In a 100 bps upward rate shock scenario, Citi expects that the approximate $1.1 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. 95 95 95 **Current (2024):** Estimated initial negative impact to AOCI (after-tax)(2) Estimated initial impact on CET1 Capital ratio (bps) from AOCI scenario (1)Excludes trading book and fair value option banking book portfolios and replaces them with the associated transfer pricing. (2)Includes the effect of changes in interest rates on AOCI related to investment securities, cash flow hedges and pension liability adjustments. The All other currencies of $1,219 billion as of December 31, 2023 in the table above includes the impact from the following top six non-U.S. dollar currencies, which represents approximately 50% of the total non-U.S. dollar currency impact: approximately $0.2 billion from the Japanese yen, and approximately $0.1 billion each from the Indian rupee, Singapore dollar, Korean won, Swiss franc and Chinese yuan. These impacts per currency are generally in the same direction (estimated positive impact in the +100 bps shock scenario) and not offsetting.Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2023 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. The All other currencies of $1,219 billion as of December 31, 2023 in the table above includes the impact from the following top six non-U.S. dollar currencies, which represents approximately 50% of the total non-U.S. dollar currency impact: approximately $0.2 billion from the Japanese yen, and approximately $0.1 billion each from the Indian rupee, Singapore dollar, Korean won, Swiss franc and Chinese yuan. These impacts per currency are generally in the same direction (estimated positive impact in the +100 bps shock scenario) and not offsetting.Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2023 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE.In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. The All other currencies of $1,219 billion as of December 31, 2023 in the table above includes the impact from the following top six non-U.S. dollar currencies, which represents approximately 50% of the total non-U.S. dollar currency impact: approximately $0.2 billion from the Japanese yen, and approximately $0.1 billion each from the Indian rupee, Singapore dollar, Korean won, Swiss franc and Chinese yuan. These impacts per currency are generally in the same direction (estimated positive impact in the +100 bps shock scenario) and not offsetting. Citi's balance sheet is asset sensitive (assets reprice faster than liabilities), resulting in higher net interest income in increasing interest rate scenarios. The estimated impact to Citi's net interest income in a 100 bps upward rate shock scenario as of December 31, 2023 decreased quarter-over-quarter and year-over-year, primarily reflecting the net impact of lower expected gains due to U.S. dollar interest rate moves that have already been realized and changes in Citi's balance sheet. At progressively higher interest rate levels, the marginal net interest income benefit is lower, as Citi assumes it will pass on a larger share of rate changes to depositors (i.e., higher betas), further reducing Citi's IRE sensitivity. Currency-specific interest rate changes and balance sheet factors may drive quarter-to-quarter volatility in Citi's estimated IRE. In a 100 bps upward rate shock scenario, Citi expects that the approximate $0.8 billion initial negative impact to AOCI could potentially be offset in shareholders' equity through the expected recovery of the impact on AOCI through accretion of Citi's investment portfolio and expected net interest income benefit over a period of approximately four months. 101 101 101 --- ## Modified: High-Quality Liquid Assets (HQLA) **Key changes:** - Reworded sentence: "31, 2022Available cash$200.6 $203.1 $241.2 $5.6 $5.4 $4.3 $206.2 $208.5 $245.5 U.S." - Reworded sentence: "Foreign government debt securities are held largely to support local liquidity requirements and Citi's local franchises and principally include government bonds from Japan, Korea, Mexico, India and Hong Kong." - Reworded sentence: "Citigroup's average HQLA decreased quarter-over-quarter as of the fourth quarter of 2023, primarily driven by a reduction in average unsecured debt." - Reworded sentence: "31, 2022HQLA$560.5 $569.3 $575.2 Net outflows482.7 485.3 489.0 LCR116 %117 %118 %HQLA in excess of net outflows$77.8 $84.0 $86.2 Note: The amounts are presented on an average basis.As of December 31, 2023, Citigroup's average LCR decreased from the quarter ended September 30, 2023." - Reworded sentence: "Citigroup's average HQLA decreased quarter-over-quarter as of the fourth quarter of 2023, primarily driven by a reduction in average unsecured debt." **Prior (2023):** CitibankCiti non-bank and other entitiesTotalIn billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021Available cash$241.2 $202.2 $253.6 $4.3 $2.1 $2.6 $245.5 $204.3 $256.2 U.S. sovereign130.0 144.6 119.6 68.7 69.4 63.1 198.7 214.0 182.7 U.S. agency/agency MBS46.3 52.5 45.0 4.0 4.7 5.7 50.3 57.2 50.7 Foreign government debt(1)59.1 63.3 48.9 19.4 15.7 13.6 78.5 79.0 62.5 Other investment grade1.7 2.0 1.6 0.5 0.6 0.8 2.2 2.6 2.4 Total HQLA (AVG)$478.3 $464.6 $468.7 $96.9 $92.5 $85.8 $575.2 $557.1 $554.5 U.S. sovereign U.S. agency/agency MBS Foreign government debt(1) Other investment grade Note: The amounts shown in the table above are presented on an average basis. For securities, the amounts represent the liquidity value that potentially could be realized and, therefore, exclude any securities that are encumbered and incorporate any haircuts applicable under the U.S. LCR rule. The table above incorporates various restrictions that could limit the transferability of liquidity between legal entities, including Section 23A of the Federal Reserve Act. (1) Foreign government debt includes securities issued or guaranteed by foreign sovereigns, agencies and multilateral development banks. Foreign government debt securities are held largely to support local liquidity requirements and Citi's local franchises and principally include government bonds from Japan, Korea, Mexico, Singapore and Hong Kong. The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA increased quarter-over-quarter as of the fourth quarter of 2022, primarily driven by wholesale unsecured debt issuances. As of December 31, 2022, Citigroup had approximately $1,045 billion of available liquidity resources to support client and business needs, including end-of-period HQLA assets; additional unencumbered securities, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup; available assets not already accounted for within Citi's HQLA to support the Federal Home Loan Bank (FHLB); and Federal Reserve Bank discount window borrowing capacity.Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR)In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR.The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%.The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated:In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021HQLA$575.2 $557.1 $554.5 Net outflows489.0 477.0 482.9 LCR118 %117 %115 %HQLA in excess of net outflows$86.2 $80.1 $71.6 Note: The amounts are presented on an average basis.As of December 31, 2022, Citigroup's average LCR increased, primarily driven by wholesale unsecured debt issuances. The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA increased quarter-over-quarter as of the fourth quarter of 2022, primarily driven by wholesale unsecured debt issuances. As of December 31, 2022, Citigroup had approximately $1,045 billion of available liquidity resources to support client and business needs, including end-of-period HQLA assets; additional unencumbered securities, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup; available assets not already accounted for within Citi's HQLA to support the Federal Home Loan Bank (FHLB); and Federal Reserve Bank discount window borrowing capacity. The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA increased quarter-over-quarter as of the fourth quarter of 2022, primarily driven by wholesale unsecured debt issuances. As of December 31, 2022, Citigroup had approximately $1,045 billion of available liquidity resources to support client and business needs, including end-of-period HQLA assets; additional unencumbered securities, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup; available assets not already accounted for within Citi's HQLA to support the Federal Home Loan Bank (FHLB); and Federal Reserve Bank discount window borrowing capacity. Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR)In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR.The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%.The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated:In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021HQLA$575.2 $557.1 $554.5 Net outflows489.0 477.0 482.9 LCR118 %117 %115 %HQLA in excess of net outflows$86.2 $80.1 $71.6 Note: The amounts are presented on an average basis.As of December 31, 2022, Citigroup's average LCR increased, primarily driven by wholesale unsecured debt issuances. **Current (2024):** CitibankCiti non-bank and other entitiesTotalIn billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022Available cash$200.6 $203.1 $241.2 $5.6 $5.4 $4.3 $206.2 $208.5 $245.5 U.S. sovereign131.6 134.2 130.0 74.3 79.3 68.7 205.9 213.5 198.7 U.S. agency/agency MBS51.0 48.5 46.3 3.1 3.6 4.0 54.1 52.1 50.3 Foreign government debt(1)76.0 74.3 59.1 18.0 19.9 19.4 94.0 94.2 78.5 Other investment grade0.2 0.3 1.7 0.1 0.7 0.5 0.3 1.0 2.2 Total HQLA (AVG)$459.4 $460.4 $478.3 $101.1 $108.9 $96.9 $560.5 $569.3 $575.2 U.S. sovereign U.S. agency/agency MBS Foreign government debt(1) Other investment grade Note: The amounts in the table above are presented on an average basis. For securities, the amounts represent the liquidity value that potentially could be realized and, therefore, exclude any securities that are encumbered and incorporate any haircuts applicable under the U.S. LCR rule. The table above incorporates various restrictions that could limit the transferability of liquidity between legal entities, including Section 23A of the Federal Reserve Act. (1) Foreign government debt includes securities issued or guaranteed by foreign sovereigns, agencies and multilateral development banks. Foreign government debt securities are held largely to support local liquidity requirements and Citi's local franchises and principally include government bonds from Japan, Korea, Mexico, India and Hong Kong. The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA decreased quarter-over-quarter as of the fourth quarter of 2023, primarily driven by a reduction in average unsecured debt. As of December 31, 2023, Citigroup had approximately $965 billion of available liquidity resources to support client and business needs, including end-of-period HQLA ($562 billion); additional unencumbered HQLA, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup ($232 billion); and unused borrowing capacity from available assets not already accounted for within Citi's HQLA to support additional advances from the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank discount window ($171 billion).Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR)In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR.The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%.The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated:In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022HQLA$560.5 $569.3 $575.2 Net outflows482.7 485.3 489.0 LCR116 %117 %118 %HQLA in excess of net outflows$77.8 $84.0 $86.2 Note: The amounts are presented on an average basis.As of December 31, 2023, Citigroup's average LCR decreased from the quarter ended September 30, 2023. The decrease was primarily driven by the reduction in average HQLA.In addition, considering Citi's total available liquidity resources at quarter end of $965 billion, Citi maintained approximately $482 billion of excess liquidity above the stressed average net outflow of approximately $483 billion, shown in the LCR table above. The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA decreased quarter-over-quarter as of the fourth quarter of 2023, primarily driven by a reduction in average unsecured debt. As of December 31, 2023, Citigroup had approximately $965 billion of available liquidity resources to support client and business needs, including end-of-period HQLA ($562 billion); additional unencumbered HQLA, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup ($232 billion); and unused borrowing capacity from available assets not already accounted for within Citi's HQLA to support additional advances from the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank discount window ($171 billion). The table above includes average amounts of HQLA held at Citigroup's operating entities that are eligible for inclusion in the calculation of Citigroup's consolidated Liquidity Coverage ratio (LCR), pursuant to the U.S. LCR rules. These amounts include the HQLA needed to meet the minimum requirements at these entities as well as any amounts in excess of these minimums that are available to be transferred to other entities within Citigroup. Citigroup's average HQLA decreased quarter-over-quarter as of the fourth quarter of 2023, primarily driven by a reduction in average unsecured debt. As of December 31, 2023, Citigroup had approximately $965 billion of available liquidity resources to support client and business needs, including end-of-period HQLA ($562 billion); additional unencumbered HQLA, including excess liquidity held at bank entities that is non-transferable to other entities within Citigroup ($232 billion); and unused borrowing capacity from available assets not already accounted for within Citi's HQLA to support additional advances from the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank discount window ($171 billion). Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR)In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR.The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%.The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated:In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022HQLA$560.5 $569.3 $575.2 Net outflows482.7 485.3 489.0 LCR116 %117 %118 %HQLA in excess of net outflows$77.8 $84.0 $86.2 Note: The amounts are presented on an average basis.As of December 31, 2023, Citigroup's average LCR decreased from the quarter ended September 30, 2023. The decrease was primarily driven by the reduction in average HQLA.In addition, considering Citi's total available liquidity resources at quarter end of $965 billion, Citi maintained approximately $482 billion of excess liquidity above the stressed average net outflow of approximately $483 billion, shown in the LCR table above. --- ## Modified: Non-bank(1) **Key changes:** - Reworded sentence: "Senior debt Subordinated debt Trust preferred Local country and other(2) Securitizations(3) Local country and other(2) Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums." - Reworded sentence: "Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings." - Reworded sentence: "In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy." - Reworded sentence: "Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings." - Reworded sentence: "In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy." **Prior (2023):** The table below details Citi's long-term debt issuances and maturities (including repurchases and redemptions) during the periods presented: 202220212020In billions of dollarsMaturitiesIssuancesMaturitiesIssuancesMaturitiesIssuancesNon-bankBenchmark debt:Senior debt$15.4 $27.3 $17.6 $15.4 $6.5 $20.4 Subordinated debt0.9 - - - - - Trust preferred0.1 - - - - - Customer-related debt27.0 65.1 31.2 48.7 27.7 36.8 Local country and other2.8 3.5 3.3 3.6 2.4 1.4 Total non-bank$46.2 $95.9 $52.1 $67.7 $36.6 $58.6 BankFHLB borrowings$5.3 $7.3 $5.7 $ - $7.5 $12.9 Securitizations2.1 0.2 6.1 - 4.6 0.3 Citibank benchmark senior debt0.9 - 9.8 - 9.8 - Local country and other2.6 1.3 1.2 2.9 4.9 4.6 Total bank$10.9 $8.8 $22.8 $2.9 $26.8 $17.8 Total$57.1 $104.7 $74.9 $70.6 $63.4 $76.4 Senior debt Subordinated debt The table below shows Citi's aggregate long-term debt maturities (including repurchases and redemptions) in 2022, as well as its aggregate expected remaining long-term debt maturities by year as of December 31, 2022: MaturitiesIn billions of dollars202220232024202520262027ThereafterTotalNon-bankBenchmark debt:Senior debt$15.4 $4.9 $10.5 $11.8 $23.4 $6.9 $60.0 $117.5 Subordinated debt0.9 1.2 0.9 4.8 2.3 3.6 9.7 22.5 Trust preferred 0.1 - - - - - 1.6 1.6 Customer-related debt27.0 16.4 20.6 14.0 6.2 9.3 34.6 101.1 Local country and other2.8 2.9 0.4 0.3 0.7 0.2 3.1 7.8 Total non-bank$46.2 $25.4 $32.4 $30.9 $32.6 $20.0 $109.0 $250.5 BankFHLB borrowings$5.3 $4.3 $3.0 $ - $ - $ - $ - $7.3 Securitizations2.1 2.2 1.3 1.6 - 0.8 1.7 7.6 Citibank benchmark senior debt0.9 - 2.6 - - - - 2.6 Local country and other2.6 0.6 1.2 0.2 0.2 - 1.4 3.6 Total bank$10.9 $7.1 $8.1 $1.8 $0.2 $0.8 $3.1 $21.1 Total long-term debt$57.1 $32.5 $40.5 $32.7 $32.8 $20.8 $112.1 $271.6 Senior debt Subordinated debt Trust preferred 89 89 89 Resolution PlanCitigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. global systemically important banks (GSIBs), including Citigroup. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citigroup's 2021 resolution plan regarding data integrity and data quality management issues. For additional information on Citi's resolution plan submissions, see "Risk Factors - Strategic Risks" above. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2021 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's final total loss-absorbing capacity (TLAC) rule, Citigroup believes it has developed the resolution plan so that Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup.The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S.As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions:(i)Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities;(ii)Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii)pursuant to the Citi Support Agreement:•Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities;•Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and(iv)the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement.The Citi Support Agreement provides two mechanisms, besides Citicorp's issuing of dividends to Citigroup, pursuant to which Citicorp will be required to transfer cash to Citigroup during business as usual so that Citigroup can fund its debt service as well as other operating needs: (i) one or more funding notes issued by Citicorp to Citigroup and (ii) a committed line of credit under which Citicorp may make loans to Citigroup. Total Loss-Absorbing Capacity (TLAC)U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. Resolution PlanCitigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. global systemically important banks (GSIBs), including Citigroup. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citigroup's 2021 resolution plan regarding data integrity and data quality management issues. For additional information on Citi's resolution plan submissions, see "Risk Factors - Strategic Risks" above. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2021 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's final total loss-absorbing capacity (TLAC) rule, Citigroup believes it has developed the resolution plan so that Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup.The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S.As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions:(i)Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities;(ii)Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii)pursuant to the Citi Support Agreement: **Current (2024):** Senior debt Subordinated debt Trust preferred Local country and other(2) Securitizations(3) Local country and other(2) Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums. (1) Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2023, non-bank included $92.6 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line. (2) Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included. (3) Predominantly credit card securitizations, primarily backed by Branded Cards receivables. Citi's total long-term debt outstanding increased 6% year-over-year, largely driven by issuance of customer-related debt at the non-bank entities, as well as increased senior benchmark debt and FHLB borrowings at the bank. The increase was partially offset by a decline in senior benchmark debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 4%, largely driven by an increase in customer-related debt at the non-bank entities and increased FHLB borrowings and benchmark senior debt at the bank. As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2023, Citi redeemed or repurchased an aggregate of approximately $32.0 billion of its outstanding long-term debt. 94 94 94 Long-Term Debt Issuances and Maturities The table below details Citi's long-term debt issuances and maturities (including repurchases and redemptions) during the periods presented: 202320222021In billions of dollarsMaturitiesIssuancesMaturitiesIssuancesMaturitiesIssuancesNon-bankBenchmark debt:Senior debt$10.2 $ - $15.4 $27.3 $17.6 $15.4 Subordinated debt1.3 3.2 0.9 - - - Trust preferred - - 0.1 - - - Customer-related debt42.1 40.1 27.0 65.1 31.2 48.7 Local country and other3.1 3.9 2.8 3.5 3.3 3.6 Total non-bank$56.7 $47.2 $46.2 $95.9 $52.1 $67.7 BankFHLB borrowings$4.3 $8.5 $5.3 $7.3 $5.7 $ - Securitizations2.4 1.5 2.1 0.2 6.1 - Citibank benchmark senior debt - 7.5 0.9 - 9.8 - Local country and other1.6 1.1 2.6 1.3 1.2 2.9 Total bank$8.3 $18.6 $10.9 $8.8 $22.8 $2.9 Total$65.0 $65.8 $57.1 $104.7 $74.9 $70.6 Senior debt Subordinated debt The table below details Citi's aggregate long-term debt maturities (including repurchases and redemptions) in 2023, as well as its aggregate expected remaining long-term debt maturities by year as of December 31, 2023: MaturitiesIn billions of dollars202320242025202620272028ThereafterTotalNon-bankBenchmark debt:Senior debt$10.2 $5.5 $12.0 $24.2 $7.1 $15.2 $46.3 $110.3 Subordinated debt1.3 1.0 5.0 2.4 3.7 2.0 10.8 24.9 Trust preferred - - - - - - 1.6 1.6 Customer-related debt42.1 26.2 17.2 10.0 9.6 8.2 38.9 110.1 Local country and other3.1 1.3 1.8 0.6 0.1 1.0 3.2 8.0 Total non-bank$56.7 $34.0 $36.0 $37.2 $20.5 $26.4 $100.8 $254.9 BankFHLB borrowings$4.3 $7.0 $4.5 $ - $ - $ - $ - $11.5 Securitizations2.4 1.1 3.1 - 0.8 1.0 0.7 6.7 Citibank benchmark senior debt - 2.6 2.5 2.5 - 2.5 - 10.1 Local country and other1.6 1.1 0.3 0.7 - 0.2 1.1 3.4 Total bank$8.3 $11.8 $10.4 $3.2 $0.8 $3.7 $1.8 $31.7 Total long-term debt$65.0 $45.8 $46.4 $40.4 $21.3 $30.1 $102.6 $286.6 Senior debt Subordinated debt Trust preferred 95 95 95 Resolution PlanCitigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup.The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S.As previously disclosed, in response to feedback received from the FRB and FDIC, Citigroup took the following actions:(i) Citicorp LLC (Citicorp), an existing wholly owned subsidiary of Citigroup, was established as an intermediate holding company (an IHC) for certain of Citigroup's operating material legal entities;(ii) Citigroup executed an inter-affiliate agreement with Citicorp, Citigroup's operating material legal entities and certain other affiliated entities pursuant to which Citicorp is required to provide liquidity and capital support to Citigroup's operating material legal entities in the event that Citigroup were to enter bankruptcy proceedings (Citi Support Agreement); (iii) pursuant to the Citi Support Agreement: •Citigroup made an initial contribution of assets, including certain high-quality liquid assets and inter-affiliate loans (Contributable Assets), to Citicorp, and Citicorp became the business-as-usual funding vehicle for Citigroup's operating material legal entities;•Citigroup will be obligated to continue to transfer Contributable Assets to Citicorp over time, subject to certain amounts retained by Citigroup to, among other things, meet Citigroup's near-term cash needs; •in the event of a Citigroup bankruptcy, Citigroup will be required to contribute most of its remaining assets to Citicorp; and(iv) the obligations of both Citigroup and Citicorp under the Citi Support Agreement, as well as the Contributable Assets, are secured pursuant to a security agreement.Total Loss-Absorbing Capacity (TLAC)U.S. GSIBs are required to maintain minimum levels of TLAC and eligible LTD, each set by reference to the GSIB's consolidated risk-weighted assets (RWA) and total leverage exposure. The intended purpose of the requirements is to facilitate the orderly resolution of U.S. GSIBs under the U.S. Bankruptcy Code and Title II of the Dodd-Frank Act. For additional information, including Citi's TLAC and LTD amounts and ratios, see "Capital Resources - Current Regulatory Capital Standards" above. Resolution PlanCitigroup is required under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and the rules promulgated by the FDIC and Federal Reserve Board (FRB) to periodically submit a plan for Citi's rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure. Citigroup will alternate between submitting a full resolution plan and a targeted resolution plan on a biennial cycle.Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. Citigroup's resolution plan has been designed to minimize the risk of systemic impact to the U.S. and global financial systems, while maximizing the value of the bankruptcy estate for the benefit of Citigroup's creditors, including its unsecured long-term debt holders. In addition, in line with the FRB's total loss-absorbing capacity (TLAC) rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup.The FDIC has also indicated that it was developing a single point of entry strategy to implement the Orderly Liquidation Authority under Title II of the Dodd-Frank Act, which provides the FDIC with the ability to resolve a firm when it is determined that bankruptcy would have serious adverse effects on financial stability in the U.S. --- ## Modified: Citi's Ability to Achieve Its Objectives from Its Transformation, Organizational, Simplification and Other Strategic and Other Initiatives May Not Be as Successful as It Projects or Expects. **Key changes:** - Reworded sentence: "As part of its transformation initiatives, Citi continues to make significant investments to improve its risk and controls environment, modernize its data and technology infrastructure and further enhance safety and soundness (see "Executive Summary" above and the legal and regulatory proceedings risk factor below)." - Reworded sentence: "Physical risks from climate change include acute risks, such as hurricanes, floods and droughts, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration." - Reworded sentence: "Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization." - Reworded sentence: "Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a time-lag, and variable in quality." - Reworded sentence: "For example, in October 2023, the FRB, FDIC and OCC jointly released principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, including physical and transition risks, for financial institutions with more than $100 billion in assets." **Prior (2023):** As part of its transformation and other strategic initiatives, Citi continues to make significant investments to improve its risk and control environment, modernize its data and technology infrastructure and further enhance safety and soundness (for additional information on these investments, see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic refresh. For example, Citi has been making investments across the Company, including, for example, hiring front office colleagues and enhancing product capabilities and platforms to improve client digital experiences and add scalability and implementing new capabilities and partnerships. Citi has also been pursuing productivity improvements through various technology and digital initiatives, organizational simplification and location strategies. Citi's multiyear transformation initiatives involve significant execution complexity, and there is inherent risk that these will not be as productive or effective as Citi expects, 43 43 43 or at all. Conversely, failure to properly invest in and upgrade Citi's technology and processes could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid operational errors (for additional information, see the operational processes and systems and legal and regulatory proceedings risk factors below). Moreover, Citi's ability to achieve expected returns on its investments and productivity improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes.Citi's strategic refresh also includes the divestiture of its remaining consumer banking businesses in Legacy Franchises, including Mexico Consumer/SBMM, in order to simplify the Company and enhance its allocation of resources. These divestitures involve significant uncertainty and execution complexity, and may result in additional CTA or other losses, charges or other negative financial or strategic impacts, which could be material (for information about risks related to Citi's operations in Russia, see the macroeconomic challenges and uncertainties risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). For additional information about CTA losses, see "Executive Summary" and the capital return risk factor above and the incorrect assumptions or estimates risk factor below.Citi's investment and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. Climate Change Presents Various Financial and Non-Financial Risks to Citi and its Customers and Clients.Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes and floods, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. Such physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of properties and other assets, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses.Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, the need to decarbonize in a gradual and orderly way, while promoting energy security, may lead to continued exposure to carbon-intensive activity that in turn may raise such reputational risks. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. Moreover, U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in December 2022, the FRB requested comment on draft principles that would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for FRB-supervised financial institutions with more than $100 billion in assets.Legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs for Citi (for additional information, see the ongoing regulatory and legislative uncertainties and changes risk factor above). In addition, Citi could face increased regulatory, reputational and legal scrutiny as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Citi also faces potentially conflicting anti-ESG initiatives from certain U.S. state governments that may impact its ability to conduct certain business within those jurisdictions, as well as from Congress. For information on Citi's climate and other sustainability initiatives, see "Sustainability and Other ESG Matters" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below.Citi's Ability to Utilize Its DTAs, and Thus Reduce the Negative Impact of the DTAs on Citi's Regulatory Capital, Will Be Driven by Its Ability to Generate U.S. Taxable Income.At December 31, 2022, Citi's net DTAs were $27.7 billion, net of a valuation allowance of $2.4 billion, of which $10.9 billion was deducted from Citi's CET1 Capital under the U.S. or at all. Conversely, failure to properly invest in and upgrade Citi's technology and processes could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid operational errors (for additional information, see the operational processes and systems and legal and regulatory proceedings risk factors below). Moreover, Citi's ability to achieve expected returns on its investments and productivity improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes.Citi's strategic refresh also includes the divestiture of its remaining consumer banking businesses in Legacy Franchises, including Mexico Consumer/SBMM, in order to simplify the Company and enhance its allocation of resources. These divestitures involve significant uncertainty and execution complexity, and may result in additional CTA or other losses, charges or other negative financial or strategic impacts, which could be material (for information about risks related to Citi's operations in Russia, see the macroeconomic challenges and uncertainties risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). For additional information about CTA losses, see "Executive Summary" and the capital return risk factor above and the incorrect assumptions or estimates risk factor below.Citi's investment and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. Climate Change Presents Various Financial and Non-Financial Risks to Citi and its Customers and Clients.Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes and floods, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. Such physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of properties and other assets, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses.Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, or at all. Conversely, failure to properly invest in and upgrade Citi's technology and processes could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid operational errors (for additional information, see the operational processes and systems and legal and regulatory proceedings risk factors below). Moreover, Citi's ability to achieve expected returns on its investments and productivity improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes. Citi's strategic refresh also includes the divestiture of its remaining consumer banking businesses in Legacy Franchises, including Mexico Consumer/SBMM, in order to simplify the Company and enhance its allocation of resources. These divestitures involve significant uncertainty and execution complexity, and may result in additional CTA or other losses, charges or other negative financial or strategic impacts, which could be material (for information about risks related to Citi's operations in Russia, see the macroeconomic challenges and uncertainties risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). For additional information about CTA losses, see "Executive Summary" and the capital return risk factor above and the incorrect assumptions or estimates risk factor below. Citi's investment and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. **Current (2024):** As part of its transformation initiatives, Citi continues to make significant investments to improve its risk and controls environment, modernize its data and technology infrastructure and further enhance safety and soundness (see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic initiatives. For example, Citi has been making investments across the Company, including hiring front office colleagues in key strategic markets and businesses; enhancing product capabilities and platforms to grow key businesses, improve client digital experiences and add scalability; and implementing new capabilities and partnerships. These business-led investments are designed to grow revenues as well as result in retention and efficiency improvements. Additionally, Citi has been pursuing overall simplification initiatives that include management and operating model changes and actions to enhance focus on clients and reduce expenses. Citi's simplification actions also include divestiture of the Mexico Consumer/SBMM operations and completing other exits and wind-downs in order to streamline Citi and assist in optimizing its allocation of resources. These overall simplification initiatives involve various execution challenges and may result in higher than expected expenses, litigation and regulatory scrutiny, CTA and other losses or other negative financial or strategic impacts, which could be material (for information about potential CTA impacts, see the capital 50 50 50 return risk factor above and the incorrect assumptions or estimates risk factor below).Citi's multiyear transformation, as well as its simplification initiatives, involve significant complexities and uncertainties. In addition, there is inherent risk that Citi's transformation and simplification initiatives will not be as productive or effective as Citi expects, or at all. Conversely, failure to adequately invest in and upgrade Citi's technology and processes or properly implement its enterprise-wide simplification could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid disruptions to its businesses and operational errors (see the operational processes and systems and legal and regulatory proceedings risk factors below). Citi's ability to achieve expected returns and operational improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes.Citi's transformation, strategic and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. Climate Change Presents Various Financial and Non-Financial Risks to Citi and Its Customers and Clients.Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes, floods and droughts, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. For example, physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of owned or leased properties and other assets, destruction or deterioration of the value of collateral, such as real estate, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses.Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization. Moreover, increasing legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in increased regulatory, compliance, credit, reputational and other risks and costs for Citi. New regulations have been enacted and/or are expected in several jurisdictions, including the EU's Corporate Sustainability Reporting Directive (CSRD), the SEC climate-related disclosures that could require disclosure of climate-related information and the State of California's legislation enacted in October 2023 requiring broad disclosure of greenhouse gas emissions and other climate-related information largely beginning in 2026. In addition, Citi could face increased regulatory scrutiny and reputation and litigation risks as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a time-lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in October 2023, the FRB, FDIC and OCC jointly released principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, including physical and transition risks, for financial institutions with more than $100 billion in assets. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, Citi's approach to supporting client decarbonization in a gradual and orderly way, while promoting energy security, may lead to both continued exposure to carbon-intensive activity and increased reputation risks from stakeholders with divergent points of view. Citi also faces anti-ESG challenges from certain U.S. state and other governments that may impact its ability to conduct certain business within those jurisdictions.For information on Citi's climate and other sustainability initiatives, see "Climate Change and Net Zero" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. return risk factor above and the incorrect assumptions or estimates risk factor below).Citi's multiyear transformation, as well as its simplification initiatives, involve significant complexities and uncertainties. In addition, there is inherent risk that Citi's transformation and simplification initiatives will not be as productive or effective as Citi expects, or at all. Conversely, failure to adequately invest in and upgrade Citi's technology and processes or properly implement its enterprise-wide simplification could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid disruptions to its businesses and operational errors (see the operational processes and systems and legal and regulatory proceedings risk factors below). Citi's ability to achieve expected returns and operational improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes.Citi's transformation, strategic and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. Climate Change Presents Various Financial and Non-Financial Risks to Citi and Its Customers and Clients.Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes, floods and droughts, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. For example, physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of owned or leased properties and other assets, destruction or deterioration of the value of collateral, such as real estate, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses.Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products return risk factor above and the incorrect assumptions or estimates risk factor below). Citi's multiyear transformation, as well as its simplification initiatives, involve significant complexities and uncertainties. In addition, there is inherent risk that Citi's transformation and simplification initiatives will not be as productive or effective as Citi expects, or at all. Conversely, failure to adequately invest in and upgrade Citi's technology and processes or properly implement its enterprise-wide simplification could result in Citi's inability to meet regulatory expectations, be sufficiently competitive, serve clients effectively and avoid disruptions to its businesses and operational errors (see the operational processes and systems and legal and regulatory proceedings risk factors below). Citi's ability to achieve expected returns and operational improvements depends, in part, on factors that it cannot control, including, among others, macroeconomic challenges and uncertainties; customer, client and competitor actions; and ongoing regulatory requirements or changes. Citi's transformation, strategic and other initiatives may continue to evolve as its business strategies, the market environment and regulatory expectations change, which could make the initiatives more costly and more challenging to implement, and limit their effectiveness. --- ## Modified: Interest Rate Risk of Investment Portfolios - Impact **Key changes:** - Reworded sentence: "AOCI at risk considers potential changes in AOCI (and the corresponding impact on the CET1 Capital ratio) relative to Citi's capital generation capacity.Citi uses 100 basis point (bps) shocks in each scenario to reflect its net interest income sensitivity to unanticipated changes in market interest rates, as potential monetary policy decisions and changes in economic conditions may be reflected in current market-implied forward rates." - Reworded sentence: "Citi uses 100 basis point (bps) shocks in each scenario to reflect its net interest income sensitivity to unanticipated changes in market interest rates, as potential monetary policy decisions and changes in economic conditions may be reflected in current market-implied forward rates." **Prior (2023):** on AOCI Citi also measures the potential impacts of changes in interest rates on the value of its AOCI, which can in turn impact Citi's common equity and tangible common equity. This will impact Citi's CET1 and other regulatory capital ratios. Citi seeks to manage its exposure to changes in the market level of interest rates, while limiting the potential impact on its AOCI and regulatory capital position. AOCI at risk is managed as part of the Company-wide interest rate risk position. AOCI at risk considers potential changes in AOCI (and the corresponding impact on the CET1 Capital ratio) relative to Citi's capital generation capacity.The following table presents the 12-month estimated impact to Citi's net interest income, AOCI and the CET1 Capital ratio, each assuming an unanticipated parallel instantaneous 100 basis point (bps) increase in interest rates: AOCI at risk is managed as part of the Company-wide interest rate risk position. AOCI at risk considers potential changes in AOCI (and the corresponding impact on the CET1 Capital ratio) relative to Citi's capital generation capacity. The following table presents the 12-month estimated impact to Citi's net interest income, AOCI and the CET1 Capital ratio, each assuming an unanticipated parallel instantaneous 100 basis point (bps) increase in interest rates: In millions of dollars, except as otherwise notedDec. 31, 2022Sept. 30, 2022Dec. 31, 2021Parallel interest rate shock +100 bpsInterest rate exposure(1)(2)U.S. dollar$186 $677 $781 All other currencies1,650 1,483 2,025 Total$1,836 $2,160 $2,806 As a percentage of average interest-earning assets0.08 %0.10 %0.12 %Estimated initial negative impact to AOCI (after-tax)(3)$(1,102)$(969)$(4,609)Estimated initial impact on CET1 Capital ratio (bps)(10)(9)(30) **Current (2024):** on AOCI Citi also measures the potential impacts of changes in interest rates on the value of its AOCI, which can in turn impact Citi's common equity and tangible common equity. This will impact Citi's CET1 and other regulatory capital ratios. Citi seeks to manage its exposure to changes in the market level of interest rates, while limiting the potential impact on its AOCI and regulatory capital position. AOCI at risk is managed as part of the Company-wide interest rate risk position. AOCI at risk considers potential changes in AOCI (and the corresponding impact on the CET1 Capital ratio) relative to Citi's capital generation capacity.Citi uses 100 basis point (bps) shocks in each scenario to reflect its net interest income sensitivity to unanticipated changes in market interest rates, as potential monetary policy decisions and changes in economic conditions may be reflected in current market-implied forward rates. The following table presents the 12-month estimated impact to Citi's net interest income, AOCI and the CET1 Capital ratio, each assuming an unanticipated parallel instantaneous 100 bps increase in interest rates: AOCI at risk is managed as part of the Company-wide interest rate risk position. AOCI at risk considers potential changes in AOCI (and the corresponding impact on the CET1 Capital ratio) relative to Citi's capital generation capacity. Citi uses 100 basis point (bps) shocks in each scenario to reflect its net interest income sensitivity to unanticipated changes in market interest rates, as potential monetary policy decisions and changes in economic conditions may be reflected in current market-implied forward rates. The following table presents the 12-month estimated impact to Citi's net interest income, AOCI and the CET1 Capital ratio, each assuming an unanticipated parallel instantaneous 100 bps increase in interest rates: In millions of dollars, except as otherwise notedDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Parallel interest rate shock +100 bpsInterest rate exposure(1)(2)U.S. dollar$(33)$82 $186 All other currencies1,219 1,214 1,650 Total$1,186 $1,296 $1,836 As a percentage of average interest-earning assets0.05 %0.06 %0.08 %Estimated initial negative impact to AOCI (after-tax)(2)$(829)$(807)$(1,102)Estimated initial impact on CET1 Capital ratio (bps) from AOCI scenario(12)(12)(10) --- ## Modified: A Failure or Disruption of Citi's Operational Processes or Systems Could Negatively Impact Its Reputation, Customers, Clients, Businesses or Results of Operations and Financial Condition. **Key changes:** - Reworded sentence: "Citi's global operations rely heavily on its technology systems and infrastructure, including the accurate, timely and secure processing, management, storage and transmission of data, including confidential transactions, and other information, as well as the monitoring of a substantial amount of data and complex transactions in real time." - Reworded sentence: "Furthermore, when Citi introduces new products, systems or processes, new operational risks that may arise from those changes may not be identified, or adequate controls to mitigate the identified risks may not be appropriately implemented or operate as designed." - Reworded sentence: "Operational incidents could result in financial losses and other costs as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition." - Reworded sentence: "Furthermore, when Citi introduces new products, systems or processes, new operational risks that may arise from those changes may not be identified, or adequate controls to mitigate the identified risks may not be appropriately implemented or operate as designed." - Reworded sentence: "Operational incidents could result in financial losses and other costs as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition." **Prior (2023):** Citi's global operations rely heavily on its technology, including the accurate, timely and secure processing, management, storage and transmission of confidential transactions, data and other information as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their extensive account transactions. Citi's operations must also comply with complex and evolving laws and regulations in the countries in which it operates. With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud technologies to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption, including as a result of cyber or information security incidents (for additional information, see the cybersecurity risk factor below).Although Citi has continued to upgrade its technology, including systems to automate processes and enhance efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, human error, such as manual transaction processing errors, which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; operational or execution failures or deficiencies by third parties; insufficient (or limited) straight-through processing between legacy systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy systems leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human error. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Operational incidents can also arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks.Incidents that impact information security and/or technology operations may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below). security incidents (for additional information, see the cybersecurity risk factor below). Although Citi has continued to upgrade its technology, including systems to automate processes and enhance efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, human error, such as manual transaction processing errors, which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; operational or execution failures or deficiencies by third parties; insufficient (or limited) straight-through processing between legacy systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy systems leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human error. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Operational incidents can also arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks. Incidents that impact information security and/or technology operations may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below). 47 47 47 For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below.Citi's and Third Parties' Computer Systems and Networks Will Continue to Be Susceptible to an Increasing Risk of Continually Evolving, Sophisticated Cybersecurity Incidents That Could Result in the Theft, Loss, Misuse or Disclosure of Confidential Client or Customer Information, Damage to Citi's Reputation, Additional Costs to Citi, Regulatory Penalties, Legal Exposure and Financial Losses.Citi's computer systems, software and networks are subject to ongoing cyber incidents, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code, cyberattacks and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities.The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi's wind-down of its businesses in Russia could also increase its susceptibility to cyberattacks (for additional information about Citi's exposures related to its Russia operations, see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below).Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, may also be sources of cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites, which could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches impacting Citi customers. Furthermore, because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses, including as a result of derivatives reforms over the last few years, Citi has increased exposure to cyberattacks through third parties. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses Citi may incur from third-party cyber incidents.Citi and some of its third-party partners have been subject to attempted and sometimes successful cyberattacks from external sources over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems; (iii) data breaches due to unauthorized access to customer account data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services were able to detect and respond to the incidents targeting its systems before they became significant, they still resulted in limited losses in some instances as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics and on a more significant scale.Further, although Citi devotes significant resources to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide absolute security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, given the evolving nature of cyber threat actors and the frequency and sophistication of the cyber activities they carry out, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following discovery of the incident. Also, while Citi engages in certain actions to reduce the exposure resulting from outsourcing, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these actions cannot prevent all third-party-related cyberattacks or data breaches.Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information, damage to Citi's reputation with its clients and the market, customer dissatisfaction and additional costs to Citi, including expenses such as repairing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, exposure to litigation and other financial losses, including loss of funds, to both Citi and its clients and customers and disruption to Citi's operational systems (for additional information on the potential impact of operational disruptions, see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory scrutiny of firms' cybersecurity protection services and calls for additional laws and regulations to further enhance protection of consumers' personal data.While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify.For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below.Citi's and Third Parties' Computer Systems and Networks Will Continue to Be Susceptible to an Increasing Risk of Continually Evolving, Sophisticated Cybersecurity Incidents That Could Result in the Theft, Loss, Misuse or Disclosure of Confidential Client or Customer Information, Damage to Citi's Reputation, Additional Costs to Citi, Regulatory Penalties, Legal Exposure and Financial Losses.Citi's computer systems, software and networks are subject to ongoing cyber incidents, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code, cyberattacks and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities.The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi's wind-down of its businesses in Russia could also increase its susceptibility to cyberattacks (for additional information about Citi's exposures related to its Russia operations, see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below).Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, may also be sources of cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites, which could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches impacting Citi customers. Furthermore, because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses, including as a result of derivatives reforms over the last few years, Citi has increased exposure to cyberattacks through third parties. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses Citi may incur from third-party cyber incidents.Citi and some of its third-party partners have been subject to attempted and sometimes successful cyberattacks from external sources over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems; (iii) data For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below. **Current (2024):** Citi's global operations rely heavily on its technology systems and infrastructure, including the accurate, timely and secure processing, management, storage and transmission of data, including confidential transactions, and other information, as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their account transactions. Citi's operations must also comply with complex and evolving laws, regulations and heightened regulatory expectations in the countries in which it operates (see the implementation and interpretation of regulatory changes and legal proceedings risk factors below). With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud services to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption. 54 54 54 Although Citi has continued to upgrade its technology, including systems to automate processes and gain efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, operational or execution failures, or deficiencies by third parties, including third parties that provide products or services to Citi (e.g., cloud service providers), other market participants or those that otherwise have an ongoing partnership or business relationship with Citi; deficiencies in processes or controls; inadequate management of data governance practices, data controls and monitoring mechanisms that may adversely impact internal or external reporting and decision-making; cyber or information security incidents (see the cybersecurity risk factor below); human error, such as manual transaction processing errors (e.g., erroneous payments to lenders or manual errors by traders that cause system and market disruptions or losses), which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; insufficient (or limited) straight-through processing between legacy or bespoke systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy or bespoke systems, leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure, including cloud services; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, operational incidents can arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks. Failure by Citi to develop, implement and operate a third-party risk management program commensurate with the level of risk, complexity and nature of its third-party relationships can also result in operational incidents. In addition, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human and other errors. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Furthermore, when Citi introduces new products, systems or processes, new operational risks that may arise from those changes may not be identified, or adequate controls to mitigate the identified risks may not be appropriately implemented or operate as designed. Incidents that impact information security, technology operations or other operational processes may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses and other costs as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below).For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below.Citi's and Third Parties' Computer Systems and Networks Will Continue to Be Susceptible to an Increasing Risk of Continually Evolving, Sophisticated Cybersecurity Incidents That Could Result in the Theft, Loss, Non-Availability, Misuse or Disclosure of Confidential Client or Customer Information, Damage to Citi's Reputation, Additional Costs to Citi, Regulatory Penalties, Legal Exposure and Financial Losses. Citi's computer systems, software and networks are subject to ongoing attempted cyberattacks, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities. Citi develops its own software and relies on third-party applications and software, which are susceptible to vulnerability exploitations. Software leveraged in financial services and other industries continues to be impacted by an increasing number of zero-day vulnerabilities, thus increasing inherent cyber risk to Citi. The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi is also susceptible to cyberattacks given, among other things, its size and scale, high-profile brand, global footprint and prominent role in the financial system, as well as the ongoing wind-down of its businesses in Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). Additionally, Citi continues to operate in multiple jurisdictions in the midst of geopolitical unrest, including active conflicts in Ukraine and the Middle East, which could expose Citi to heightened risk of insider threat, politically motivated hacktivism or other cyber threats. Although Citi has continued to upgrade its technology, including systems to automate processes and gain efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, operational or execution failures, or deficiencies by third parties, including third parties that provide products or services to Citi (e.g., cloud service providers), other market participants or those that otherwise have an ongoing partnership or business relationship with Citi; deficiencies in processes or controls; inadequate management of data governance practices, data controls and monitoring mechanisms that may adversely impact internal or external reporting and decision-making; cyber or information security incidents (see the cybersecurity risk factor below); human error, such as manual transaction processing errors (e.g., erroneous payments to lenders or manual errors by traders that cause system and market disruptions or losses), which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; insufficient (or limited) straight-through processing between legacy or bespoke systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy or bespoke systems, leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure, including cloud services; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, operational incidents can arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks. Failure by Citi to develop, implement and operate a third-party risk management program commensurate with the level of risk, complexity and nature of its third-party relationships can also result in operational incidents. In addition, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human and other errors. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Furthermore, when Citi introduces new products, systems or processes, new operational risks that may arise from those changes may not be identified, or adequate controls to mitigate the identified risks may not be appropriately implemented or operate as designed. Incidents that impact information security, technology operations or other operational processes may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking Although Citi has continued to upgrade its technology, including systems to automate processes and gain efficiencies, operational incidents are unpredictable and can arise from numerous sources, not all of which are fully within Citi's control. These include, among others, operational or execution failures, or deficiencies by third parties, including third parties that provide products or services to Citi (e.g., cloud service providers), other market participants or those that otherwise have an ongoing partnership or business relationship with Citi; deficiencies in processes or controls; inadequate management of data governance practices, data controls and monitoring mechanisms that may adversely impact internal or external reporting and decision-making; cyber or information security incidents (see the cybersecurity risk factor below); human error, such as manual transaction processing errors (e.g., erroneous payments to lenders or manual errors by traders that cause system and market disruptions or losses), which can be exacerbated by staffing challenges and processing backlogs; fraud or malice on the part of employees or third parties; insufficient (or limited) straight-through processing between legacy or bespoke systems and any failure to design and effectively operate controls that mitigate operational risks associated with those legacy or bespoke systems, leading to potential risk of errors and operating losses; accidental system or technological failure; electrical or telecommunication outages; failures of or cyber incidents involving computer servers or infrastructure, including cloud services; or other similar losses or damage to Citi's property or assets (see also the climate change risk factor above). For example, operational incidents can arise as a result of failures by third parties with which Citi does business, such as failures by internet, mobile technology and cloud service providers or other vendors to adequately follow procedures or processes, safeguard their systems or prevent system disruptions or cyberattacks. Failure by Citi to develop, implement and operate a third-party risk management program commensurate with the level of risk, complexity and nature of its third-party relationships can also result in operational incidents. In addition, Citi has experienced and could experience further losses associated with manual transaction processing errors, including erroneous payments to lenders or manual errors by Citi traders that cause system and market disruptions and losses for Citi and its clients. Irrespective of the sophistication of the technology utilized by Citi, there will always be some room for human and other errors. In view of the large transactions in which Citi engages, such errors could result in significant losses. While Citi has change management processes in place to appropriately upgrade its operational processes and systems to ensure that any changes introduced do not adversely impact security and operational continuity, such change management can fail or be ineffective. Furthermore, when Citi introduces new products, systems or processes, new operational risks that may arise from those changes may not be identified, or adequate controls to mitigate the identified risks may not be appropriately implemented or operate as designed. Incidents that impact information security, technology operations or other operational processes may cause disruptions and/or malfunctions within Citi's businesses (e.g., the temporary loss of availability of Citi's online banking system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses and other costs as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below).For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below.Citi's and Third Parties' Computer Systems and Networks Will Continue to Be Susceptible to an Increasing Risk of Continually Evolving, Sophisticated Cybersecurity Incidents That Could Result in the Theft, Loss, Non-Availability, Misuse or Disclosure of Confidential Client or Customer Information, Damage to Citi's Reputation, Additional Costs to Citi, Regulatory Penalties, Legal Exposure and Financial Losses. Citi's computer systems, software and networks are subject to ongoing attempted cyberattacks, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities. Citi develops its own software and relies on third-party applications and software, which are susceptible to vulnerability exploitations. Software leveraged in financial services and other industries continues to be impacted by an increasing number of zero-day vulnerabilities, thus increasing inherent cyber risk to Citi. The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi is also susceptible to cyberattacks given, among other things, its size and scale, high-profile brand, global footprint and prominent role in the financial system, as well as the ongoing wind-down of its businesses in Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). Additionally, Citi continues to operate in multiple jurisdictions in the midst of geopolitical unrest, including active conflicts in Ukraine and the Middle East, which could expose Citi to heightened risk of insider threat, politically motivated hacktivism or other cyber threats. system or mobile banking platform), as well as the operations of its clients, customers or other third parties. In addition, operational incidents could involve the failure or ineffectiveness of internal processes or controls. Given Citi's global footprint and the high volume of transactions processed by Citi, certain failures, errors or actions may be repeated or compounded before they are discovered and rectified, which would further increase the consequences and costs. Operational incidents could result in financial losses and other costs as well as misappropriation, corruption or loss of confidential and other information or assets, which could significantly negatively impact Citi's reputation, customers, clients, businesses or results of operations and financial condition. Cyber-related and other operational incidents can also result in legal and regulatory actions or proceedings, fines and other costs (see the legal and regulatory proceedings risk factor below). For information on Citi's management of operational risk, see "Managing Global Risk - Operational Risk" below. --- ## Modified: Significantly Heightened Regulatory Expectations and Scrutiny in the U.S. and Globally and Ongoing Interpretation and Implementation of Regulatory and Legislative Requirements and Changes Have Increased Citi's Compliance, Regulatory and Other Risks and Costs. **Key changes:** - Reworded sentence: "Large financial institutions, such as Citi, face significantly heightened regulatory expectations and scrutiny in the U.S." - Reworded sentence: "regulatory agencies and states and non-U.S." - Reworded sentence: "For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above.The global judicial, regulatory and political environment has generally been challenging for large financial institutions, which have been subject to increased regulatory scrutiny." - Reworded sentence: "Responding to regulatory reporting requirements." - Reworded sentence: "regulatory agencies and states and non-U.S." **Prior (2023):** Citi is continually required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which it does business, which may overlap or conflict across jurisdictions, resulting in substantial compliance, regulatory and other risks and costs. In addition, there are heightened regulatory scrutiny and expectations in the U.S. and globally 51 51 51 for large financial institutions, as well as their employees and agents, with respect to governance, infrastructure, data, climate and risk management practices and controls. These requirements and expectations also include, among other things, those related to customer and client protection, market practices, anti-money laundering and increasingly complex sanctions and disclosure regimes. A failure to comply with these requirements and expectations, even if inadvertent, or resolve any identified deficiencies, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines (for additional information on such regulatory consequences, see the legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a significant number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and will require continued investments in Citi's global operations and technology solutions. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (ii) the U.S. banking agencies' regulatory capital rules and requirements, which have continued to evolve (for additional information, see the capital return risk factor and "Capital Resources" above). In addition, certain U.S. regulatory agencies and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while Congress is signaling, and certain U.S. state governments are pursuing potentially conflicting anti-ESG priorities. Citi Is Subject to Extensive Legal and Regulatory Proceedings, Examinations, Investigations, Consent Orders and Related Compliance Efforts and Other Inquiries That Could Result in Significant Monetary Penalties, Supervisory or Enforcement Orders, Business Restrictions, Limitations on Dividends, Changes to Directors and/or Officers and Collateral Consequences Arising from Such Outcomes.At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis. As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement targeted action plans and submit quarterly progress reports detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls. These improvements will result in continued significant investments by Citi during 2023 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above.The global judicial, regulatory and political environment has generally been challenging for large financial institutions, and financial institutions have been subject to continued regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory inquiries and proceedings can be time consuming and costly. U.S. and non-U.S. regulators have been increasingly focused on the culture of financial services firms, including Citi, as well as "conduct risk," a term used to describe the risks associated with behavior by employees and agents, including third parties, that could harm clients, customers, employees or the integrity of the markets, such as improperly creating, selling, marketing or managing products and services or improper incentive compensation programs with respect thereto, failures to safeguard a party's personal information, or failures to identify and manage conflicts of interest. In addition to the greater focus on conduct risk, the general heightened scrutiny and expectations from regulators could lead to investigations and other inquiries, as well as remediation requirements, more regulatory or other enforcement proceedings, civil litigation and higher compliance and other risks and costs. Further, while Citi takes numerous steps to prevent and detect conduct by employees and agents that could potentially harm clients, customers, for large financial institutions, as well as their employees and agents, with respect to governance, infrastructure, data, climate and risk management practices and controls. These requirements and expectations also include, among other things, those related to customer and client protection, market practices, anti-money laundering and increasingly complex sanctions and disclosure regimes. A failure to comply with these requirements and expectations, even if inadvertent, or resolve any identified deficiencies, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines (for additional information on such regulatory consequences, see the legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a significant number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and will require continued investments in Citi's global operations and technology solutions. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (ii) the U.S. banking agencies' regulatory capital rules and requirements, which have continued to evolve (for additional information, see the capital return risk factor and "Capital Resources" above). In addition, certain U.S. regulatory agencies and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while Congress is signaling, and certain U.S. state governments are pursuing potentially conflicting anti-ESG priorities. Citi Is Subject to Extensive Legal and Regulatory Proceedings, Examinations, Investigations, Consent Orders and Related Compliance Efforts and Other Inquiries That Could Result in Significant Monetary Penalties, Supervisory or Enforcement Orders, Business Restrictions, Limitations on Dividends, Changes to Directors and/or Officers and Collateral Consequences Arising from Such Outcomes.At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis. for large financial institutions, as well as their employees and agents, with respect to governance, infrastructure, data, climate and risk management practices and controls. These requirements and expectations also include, among other things, those related to customer and client protection, market practices, anti-money laundering and increasingly complex sanctions and disclosure regimes. A failure to comply with these requirements and expectations, even if inadvertent, or resolve any identified deficiencies, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines (for additional information on such regulatory consequences, see the legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a significant number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and will require continued investments in Citi's global operations and technology solutions. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (ii) the U.S. banking agencies' regulatory capital rules and requirements, which have continued to evolve (for additional information, see the capital return risk factor and "Capital Resources" above). In addition, certain U.S. regulatory agencies and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while Congress is signaling, and certain U.S. state governments are pursuing potentially conflicting anti-ESG priorities. **Current (2024):** Large financial institutions, such as Citi, face significantly heightened regulatory expectations and scrutiny in the U.S. and globally, including with respect to, among other things, governance, infrastructure, data and risk management practices and controls. These regulatory expectations extend to their employees and agents and also include, among other things, those related to customer and client protection, market practices, anti-money laundering, increasingly complex sanctions and disclosure regimes and various regulatory 59 59 59 reporting requirements. U.S. financial institutions also face increased expectations and scrutiny in the wake of the failures of several regional banks and other banking stresses in the first half of 2023. In addition, Citi is continually required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which it does business, which may overlap or conflict across jurisdictions, resulting in substantial compliance, regulatory and other risks and costs.A failure to comply with these expectations and requirements, even if inadvertent, or resolve any identified deficiencies in a timely and sufficiently satisfactory manner to regulators, could result in increased regulatory oversight; material restrictions, including, among others, imposition ofadditional capital buffers and limitations on capitaldistributions; enforcement proceedings; penalties; and fines (see the capital return risk factor above and legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a large number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and result in changes to Citi's businesses. In addition, the changes require continued substantial technology and other investments. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance from multiple jurisdictions(including various U.S. states) and regulators, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) the U.S. regulatory capital framework and requirements, which have continued to evolve (see the capital return risk factor and "Capital Resources" above); (ii) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (iii) the EU's Corporate Sustainability Reporting Directive, which may overlap but also diverge from climate-related disclosure requirements expected to come into effect in other jurisdictions, including in the U.S. In addition, certain U.S. regulatory agencies and states and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while certain U.S. state and other governments are pursuing and signaling challenges that may conflict with corporate ESG initiatives. Citi Is Subject to Extensive Legal and Regulatory Proceedings, Examinations, Investigations, Consent Orders and Related Compliance Efforts and Other Inquiries That Could Result in Large Monetary Penalties, Supervisory or Enforcement Orders, Business Restrictions, Limitations on Dividends, Changes to Directors and/or Officers and Collateral Consequences Arising from Such Outcomes.At any given time, Citi is a party to a significant number of legal and regulatory proceedings and is subject to numerous governmental and regulatory examinations. Additionally, Citi remains subject to governmental and regulatory investigations, consent orders (see discussion below) and related compliance efforts, and other inquiries. Citi could also be subject to enforcement proceedings and negative regulatory evaluationor examination findings not only because of violations of laws and regulations, but also due to failures, as determined by its regulators, to have adequate policies and procedures, or to remedy deficiencies on a timely basis (see also the capital return and resolution plan risk factors above). Citi's regulators have broad powers and discretion under their prudential and supervisory authority, and have pursued active inspection and investigatory oversight.As previously disclosed, the October 2020 FRB and OCC consent orders require Citigroup and Citibank to implement extensive targeted action plans and submit quarterly progress reports on a timely and sufficient basis detailing the results and status of improvements relating principally to various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls. These improvements will result in continued significant investments by Citi during 2024 and beyond, as an essential part of Citi's broader transformation efforts to enhance its risk, controls, data and finance infrastructure and compliance. There can be no assurance that such improvements will be implemented in a manner satisfactory, in both timing and sufficiency, to the FRB and OCC. Although there are no restrictions on Citi's ability to serve its clients, the OCC consent order requires Citibank to obtain prior approval of any significant new acquisition, including any portfolio or business acquisition, excluding ordinary course transactions. Moreover, the OCC consent order provides that the OCC has the right to assess future civil money penalties or take other supervisory and/or enforcement actions. Such actions by the OCC could include imposing business restrictions, including possible limitations on the declaration or payment of dividends and changes in directors and/or senior executive officers. More generally, the OCC and/or the FRB could take additional enforcement or other actions if the regulatory agency believes that Citi has not met regulatory expectations regarding compliance with the consent orders. For additional information regarding the consent orders, see "Citi's Consent Order Compliance" above.The global judicial, regulatory and political environment has generally been challenging for large financial institutions, which have been subject to increased regulatory scrutiny. The complexity of the federal and state regulatory and enforcement regimes in the U.S., coupled with the global scope of Citi's operations, also means that a single event or issue may give rise to a large number of overlapping investigations and regulatory proceedings, either by multiple federal and state agencies and authorities in the U.S. or by multiple regulators and other governmental entities in foreign jurisdictions, as well as multiple civil litigation claims in multiple jurisdictions. Violations of law by other financial institutions may also result in regulatory scrutiny of Citi. Responding to regulatory reporting requirements. U.S. financial institutions also face increased expectations and scrutiny in the wake of the failures of several regional banks and other banking stresses in the first half of 2023. In addition, Citi is continually required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which it does business, which may overlap or conflict across jurisdictions, resulting in substantial compliance, regulatory and other risks and costs.A failure to comply with these expectations and requirements, even if inadvertent, or resolve any identified deficiencies in a timely and sufficiently satisfactory manner to regulators, could result in increased regulatory oversight; material restrictions, including, among others, imposition ofadditional capital buffers and limitations on capitaldistributions; enforcement proceedings; penalties; and fines (see the capital return risk factor above and legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a large number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and result in changes to Citi's businesses. In addition, the changes require continued substantial technology and other investments. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance from multiple jurisdictions(including various U.S. states) and regulators, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) the U.S. regulatory capital framework and requirements, which have continued to evolve (see the capital return risk factor and "Capital Resources" above); (ii) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (iii) the EU's Corporate Sustainability Reporting Directive, which may overlap but also diverge from climate-related disclosure requirements expected to come into effect in other jurisdictions, including in the U.S. In addition, certain U.S. regulatory agencies and states and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while certain U.S. state and other governments are pursuing and signaling challenges that may conflict with corporate ESG initiatives. Citi Is Subject to Extensive Legal and Regulatory Proceedings, Examinations, Investigations, Consent Orders and Related Compliance Efforts and Other Inquiries That Could Result in Large Monetary Penalties, Supervisory or Enforcement Orders, Business Restrictions, Limitations on reporting requirements. U.S. financial institutions also face increased expectations and scrutiny in the wake of the failures of several regional banks and other banking stresses in the first half of 2023. In addition, Citi is continually required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which it does business, which may overlap or conflict across jurisdictions, resulting in substantial compliance, regulatory and other risks and costs. A failure to comply with these expectations and requirements, even if inadvertent, or resolve any identified deficiencies in a timely and sufficiently satisfactory manner to regulators, could result in increased regulatory oversight; material restrictions, including, among others, imposition of additional capital buffers and limitations on capital distributions; enforcement proceedings; penalties; and fines (see the capital return risk factor above and legal and regulatory proceedings risk factor below). Over the past several years, Citi has been required to implement a large number of regulatory and legislative changes, including new regulatory or legislative requirements or regimes, across its businesses and functions, and these changes continue. The changes themselves may be complex and subject to interpretation, and result in changes to Citi's businesses. In addition, the changes require continued substantial technology and other investments. In some cases, Citi's implementation of a regulatory or legislative requirement is occurring simultaneously with changing or conflicting regulatory guidance from multiple jurisdictions (including various U.S. states) and regulators, legal challenges or legislative action to modify or repeal existing rules or enact new rules. Examples of regulatory or legislative changes that have resulted in increased compliance risks and costs include (i) the U.S. regulatory capital framework and requirements, which have continued to evolve (see the capital return risk factor and "Capital Resources" above); (ii) various laws relating to the limitation of cross-border data movement and/or collection and use of customer information, including data localization and protection and privacy laws, which also can conflict with or increase compliance complexity with respect to other laws, including anti-money laundering laws; and (iii) the EU's Corporate Sustainability Reporting Directive, which may overlap but also diverge from climate-related disclosure requirements expected to come into effect in other jurisdictions, including in the U.S. In addition, certain U.S. regulatory agencies and states and non-U.S. authorities have prioritized issues of social, economic and racial justice, and are in the process of considering ways in which these issues can be mitigated, including through rulemaking, supervision and other means, even while certain U.S. state and other governments are pursuing and signaling challenges that may conflict with corporate ESG initiatives. --- ## Modified: % of EOP loans(1) **Prior (2023):** North America cards(2) North America mortgages(3) North America other(3) International other(3) Total(1) Total(1) **Current (2024):** North America cards(2) North America mortgages(3) North America other(3) International other(3) Total(1) Total(1) --- ## Modified: ACLL for corporate loan losses as a percentage of total corporate loans - net of unearned income(5) **Key changes:** - Reworded sentence: "83 83 83 (3) Consumer loans are net of unearned income of $802 million, $712 million, $629 million, $692 million and $732 million at December 31, 2023, 2022, 2021, 2020 and 2019, respectively." **Prior (2023):** (1) North America includes the U.S., Canada and Puerto Rico. Mexico is included in offices outside North America. The classification of corporate loans between offices in North America and outside North America is based on the domicile of the booking unit. The difference between the domicile of the booking unit and the domicile of the managing unit is not material. (2) Loans secured primarily by real estate. (3) Consumer loans are net of unearned income of $712 million, $629 million, $692 million, $732 million and $703 million at December 31, 2022, 2021, 2020, 2019 and 2018, respectively. Unearned income on consumer loans primarily represents unamortized origination fees and costs, premiums and discounts. (4) Corporate loans include Mexico SBMM loans and are net of unearned income of $(797) million, $(770) million, $(787) million, $(763) million and $(817) million at December 31, 2022, 2021, 2020, 2019 and 2018, respectively. Unearned income on corporate loans primarily represents interest received in advance, but not yet earned, on loans originated on a discounted basis. (5) Because loans carried at fair value do not have an ACLL, they are excluded from the ACLL ratio calculation. 76 76 76 **Current (2024):** (1) North America includes the U.S., Canada and Puerto Rico. Mexico is included in offices outside North America. The classification of corporate loans between offices in North America and outside North America is based on the domicile of the booking unit. The difference between the domicile of the booking unit and the domicile of the managing unit is not material. (2) Loans secured primarily by real estate. 83 83 83 (3) Consumer loans are net of unearned income of $802 million, $712 million, $629 million, $692 million and $732 million at December 31, 2023, 2022, 2021, 2020 and 2019, respectively. Unearned income on consumer loans primarily represents loan origination fees, net of certain direct origination costs, that are deferred and recognized as Interest income over the lives of the related loans. (4) Corporate loans include Mexico SBMM loans and are net of unearned income of $(917) million, $(797) million, $(770) million, $(787) million and $(763) million at December 31, 2023, 2022, 2021, 2020 and 2019, respectively. Unearned income on corporate loans primarily represents loan origination fees, net of certain direct origination costs, that are deferred and recognized as Interest income over the lives of the related loans. (5) Because loans carried at fair value do not have an ACLL, they are excluded from the ACLL ratio calculation. --- ## Modified: Long-Term Debt **Key changes:** - Reworded sentence: "Weighted-Average Maturity (WAM) The following table presents Citigroup and its affiliates' (including Citibank) WAM of unsecured long-term debt issued with a remaining life greater than one year: WAM in yearsDec." - Reworded sentence: "31, 2022Non-bank(1)Benchmark debt:Senior debt$110.3 $110.3 $117.5 Subordinated debt24.9 24.5 22.5 Trust preferred1.6 1.6 1.6 Customer-related debt110.1 106.4 101.1 Local country and other(2)8.0 8.5 7.8 Total non-bank$254.9 $251.3 $250.5 BankFHLB borrowings$11.5 $8.5 $7.3 Securitizations(3)6.7 5.2 7.6 Citibank benchmark senior debt10.1 7.6 2.6 Local country and other(2)3.4 3.2 3.6 Total bank$31.7 $24.5 $21.1 Total long-term debt$286.6 $275.8 $271.6 Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums.(1) Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup." - Reworded sentence: "During 2023, Citi redeemed or repurchased an aggregate of approximately $32.0 billion of its outstanding long-term debt." **Prior (2023):** Long-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Long-term debt is an important funding source due in part to its multiyear contractual maturity structure. The weighted-average maturity of unsecured long-term debt issued by Citigroup and its affiliates (including Citibank) with a remaining life greater than one year was approximately 7.6 years as of December 31, 2022, compared to 8.6 years as of the prior year and 7.8 years as of the prior quarter. The weighted-average maturity is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity at the option of the holder, the weighted-average maturity is calculated based on the earliest date an option becomes exercisable. Citi's long-term debt outstanding at the Citigroup parent company includes benchmark senior and subordinated debt and what Citi refers to as customer-related debt, consisting of structured notes, such as equity- and credit-linked notes, as well as non-structured notes. Citi's issuance of customer-related debt is generally driven by customer demand and complements benchmark debt issuance as a source of funding for Citi's non-bank entities. Citi's long-term debt at the bank includes bank notes, FHLB advances and securitizations. Long-Term Debt OutstandingThe following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated:In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021Non-bank(1)Benchmark debt:Senior debt$117.5 $112.7 $117.8 Subordinated debt22.5 22.4 25.7 Trust preferred1.6 1.6 1.7 Customer-related debt101.1 86.9 78.3 Local country and other(2)7.8 7.0 7.3 Total non-bank$250.5 $230.6 $230.8 BankFHLB borrowings$7.3 $7.3 $5.3 Securitizations(3)7.6 8.4 9.6 Citibank benchmark senior debt2.6 2.5 3.6 Local country and other(2)3.6 4.3 5.1 Total bank$21.1 $22.5 $23.6 Total long-term debt$271.6 $253.1 $254.4 Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums.(1)Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2022, non-bank included $84.2 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line.(2)Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included.(3)Predominantly credit card securitizations, primarily backed by Branded cards receivables.Citi's total long-term debt outstanding increased 7% year-over-year, primarily driven by an increase in customer-related debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 7%, largely driven by an increase in customer-related debt and benchmark senior debt at the non-bank entities.As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2022, Citi redeemed or repurchased an aggregate of approximately $20.8 billion of its outstanding long-term debt. **Current (2024):** Long-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Weighted-Average Maturity (WAM) The following table presents Citigroup and its affiliates' (including Citibank) WAM of unsecured long-term debt issued with a remaining life greater than one year: WAM in yearsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Unsecured debt7.5 7.4 7.6 Non-bank benchmark debt7.0 7.1 7.4 Customer-related debt8.6 8.2 8.1 TLAC-eligible debt8.6 8.7 9.0 The WAM is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity where the option is not held by the issuer, the WAM is calculated based on the earliest date an option becomes exercisable. Long-Term Debt OutstandingThe following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated:In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Non-bank(1)Benchmark debt:Senior debt$110.3 $110.3 $117.5 Subordinated debt24.9 24.5 22.5 Trust preferred1.6 1.6 1.6 Customer-related debt110.1 106.4 101.1 Local country and other(2)8.0 8.5 7.8 Total non-bank$254.9 $251.3 $250.5 BankFHLB borrowings$11.5 $8.5 $7.3 Securitizations(3)6.7 5.2 7.6 Citibank benchmark senior debt10.1 7.6 2.6 Local country and other(2)3.4 3.2 3.6 Total bank$31.7 $24.5 $21.1 Total long-term debt$286.6 $275.8 $271.6 Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums.(1) Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2023, non-bank included $92.6 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line.(2) Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included.(3) Predominantly credit card securitizations, primarily backed by Branded Cards receivables.Citi's total long-term debt outstanding increased 6% year-over-year, largely driven by issuance of customer-related debt at the non-bank entities, as well as increased senior benchmark debt and FHLB borrowings at the bank. The increase was partially offset by a decline in senior benchmark debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 4%, largely driven by an increase in customer-related debt at the non-bank entities and increased FHLB borrowings and benchmark senior debt at the bank.As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2023, Citi redeemed or repurchased an aggregate of approximately $32.0 billion of its outstanding long-term debt. Long-Term Debt Outstanding The following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated: In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Non-bank(1)Benchmark debt:Senior debt$110.3 $110.3 $117.5 Subordinated debt24.9 24.5 22.5 Trust preferred1.6 1.6 1.6 Customer-related debt110.1 106.4 101.1 Local country and other(2)8.0 8.5 7.8 Total non-bank$254.9 $251.3 $250.5 BankFHLB borrowings$11.5 $8.5 $7.3 Securitizations(3)6.7 5.2 7.6 Citibank benchmark senior debt10.1 7.6 2.6 Local country and other(2)3.4 3.2 3.6 Total bank$31.7 $24.5 $21.1 Total long-term debt$286.6 $275.8 $271.6 --- ## Modified: Workforce Development **Key changes:** - Reworded sentence: "•Citi continues to focus on internal talent development and aims to provide colleagues with career growth opportunities." **Prior (2023):** Citi's numerous programmatic offerings aim to reinforce its culture and values, foster understanding of compliance requirements and develop competencies required to deliver excellence to its clients. Citi encourages career growth and development by offering broad and diverse opportunities to colleagues, including the following: •Citi provides a range of internal development and rotational programs to colleagues at all levels, including an extensive leadership curriculum, allowing the opportunity to build the skills needed to transition to supervisory and managerial roles. Citi's tuition assistance program further enables colleagues in North America to pursue their educational goals. •Citi has a focus on internal talent development and aims to provide colleagues with career growth opportunities, with more than 33,000 open positions filled internally in 2022. These opportunities are particularly important as Citi focuses on providing career paths for its internal talent base as part of its efforts to increase organic growth and promotions within the organization. **Current (2024):** Citi's numerous programmatic offerings aim to reinforce its culture and values, foster understanding of compliance requirements and develop competencies required to deliver excellence to its clients. Citi encourages career growth and development by offering broad and diverse opportunities to colleagues, including the following: •Citi provides a range of internal development and rotational programs to colleagues at all levels, including an extensive leadership curriculum, allowing the opportunity to build the skills needed to transition to supervisory and managerial roles. Citi's tuition assistance program further enables colleagues in North America to pursue their educational goals. •Citi continues to focus on internal talent development and aims to provide colleagues with career growth opportunities. Of the 44,600 mobility opportunities filled in 2023, 14% were open roles applied for and filled by internal candidates, and 38% were filled by colleagues who applied for, and were promoted into, new opportunities. These opportunities are particularly important as Citi focuses on providing career paths for its internal talent base as part of its efforts to increase organic growth within the organization. •Citi enabled Development Plans for colleagues of all levels. Last year, more than 100,000 employees completed a plan, setting a roadmap for how they can achieve their career aspirations. --- ## Modified: Details of Credit Loss Experience **Key changes:** - Reworded sentence: "In millions of dollars20232022202120202019Allowance for credit losses on loans (ACLL) at beginning of year$16,974 $16,455 $24,956 $12,783 $12,315 Adjustments to opening balance:Financial instruments - TDRs and vintage disclosures(1)(352) - - - - Financial instruments - credit losses (CECL)(2) - - - 4,201 - Variable post-charge-off third-party collection costs(3) - - - (443) - Adjusted ACLL at beginning of year$16,622 $16,455 $24,956 $16,541 $12,315 Provision for credit losses on loans (PCLL)Consumer$7,665 $4,128 $(1,159)$12,222 $7,788 Corporate121 617 (1,944)3,700 430 Total$7,786 $4,745 $(3,103)$15,922 $8,218 Gross credit losses on loansConsumerIn U.S." **Prior (2023):** In millions of dollars20222021202020192018Allowance for credit losses on loans (ACLL) at beginning of year$16,455 $24,956 $12,783 $12,315 $12,355 Adjustments to opening balance:Financial instruments - credit losses (CECL)(1) - - 4,201 - - Variable post-charge-off third-party collection costs(2) - - (443) - - Adjusted ACLL at beginning of year$16,455 $24,956 $16,541 $12,315 $12,355 Provision for credit losses on loans (PCLL)Consumer(2)4,128 (1,159)12,222 7,788 7,261 Corporate617 (1,944)3,700 430 93 Total$4,745 $(3,103)$15,922 $8,218 $7,354 Gross credit losses on loansConsumerIn U.S. offices$3,944 $4,076 $6,141 $6,590 $5,974 In offices outside the U.S. 934 2,144 2,146 2,316 2,352 CorporateCommercial and industrial, and otherIn U.S. offices110 228 466 213 119 In offices outside the U.S. 81 259 409 196 206 Loans to financial institutionsIn U.S. offices - 1 14 - 3 In offices outside the U.S. 80 1 12 3 7 Mortgage and real estateIn U.S. offices - 10 71 23 2 In offices outside the U.S.7 1 4 - 2 Total$5,156 $6,720 $9,263 $9,341 $8,665 Gross recoveries on loans(2)ConsumerIn U.S. offices$1,045 $1,215 $1,094 $988 $918 In offices outside the U.S. 222 496 482 504 502 CorporateCommercial and industrial, and otherIn U.S. offices44 57 34 15 39 In offices outside the U.S. 46 54 27 58 79 Loans to financial institutionsIn U.S. offices6 2 - - - In offices outside the U.S. 3 1 14 - 6 Mortgage and real estateIn U.S. offices - - - 8 7 In offices outside the U.S. 1 - 1 - 1 Total$1,367 $1,825 $1,652 $1,573 $1,552 Net credit losses on loans (NCLs)In U.S. offices$2,959 $3,041 $5,564 $5,815 $5,134 In offices outside the U.S. 830 1,854 2,047 1,953 1,979 Total$3,789 $4,895 $7,611 $7,768 $7,113 Other - net(3)(4)(5)(6)(7)(8)$(437)$(503)$104 $18 $(281)Allowance for credit losses on loans (ACLL) at end of year$16,974 $16,455 $24,956 $12,783 $12,315 ACLL as a percentage of EOP loans(9)2.60 %2.49 %3.73 %1.84 %1.81 %Allowance for credit losses on unfunded lending commitments (ACLUC)(10)(11)$2,151 $1,871 $2,655 $1,456 $1,367 Financial instruments - credit losses (CECL)(1) Variable post-charge-off third-party collection costs(2) Consumer(2) **Current (2024):** In millions of dollars20232022202120202019Allowance for credit losses on loans (ACLL) at beginning of year$16,974 $16,455 $24,956 $12,783 $12,315 Adjustments to opening balance:Financial instruments - TDRs and vintage disclosures(1)(352) - - - - Financial instruments - credit losses (CECL)(2) - - - 4,201 - Variable post-charge-off third-party collection costs(3) - - - (443) - Adjusted ACLL at beginning of year$16,622 $16,455 $24,956 $16,541 $12,315 Provision for credit losses on loans (PCLL)Consumer$7,665 $4,128 $(1,159)$12,222 $7,788 Corporate121 617 (1,944)3,700 430 Total$7,786 $4,745 $(3,103)$15,922 $8,218 Gross credit losses on loansConsumerIn U.S. offices$6,339 $3,944 $4,076 $6,141 $6,590 In offices outside the U.S. 1,214 934 2,144 2,146 2,316 CorporateCommercial and industrial, and otherIn U.S. offices129 110 228 466 213 In offices outside the U.S. 119 81 259 409 196 Loans to financial institutionsIn U.S. offices4 - 1 14 - In offices outside the U.S. 36 80 1 12 3 Mortgage and real estateIn U.S. offices31 - 10 71 23 In offices outside the U.S.9 7 1 4 - Total$7,881 $5,156 $6,720 $9,263 $9,341 Gross recoveries on loansConsumerIn U.S. offices$1,124 $1,045 $1,215 $1,094 $988 In offices outside the U.S. 242 222 496 482 504 CorporateCommercial and industrial, and otherIn U.S. offices38 44 57 34 15 In offices outside the U.S. 37 46 54 27 58 Loans to financial institutionsIn U.S. offices - 6 2 - - In offices outside the U.S. - 3 1 14 - Mortgage and real estateIn U.S. offices - - - - 8 In offices outside the U.S. 3 1 - 1 - Total$1,444 $1,367 $1,825 $1,652 $1,573 Net credit losses on loans (NCLs)In U.S. offices$5,341 $2,959 $3,041 $5,564 $5,815 Financial instruments - TDRs and vintage disclosures(1) Financial instruments - credit losses (CECL)(2) Variable post-charge-off third-party collection costs(3) 84 84 84 In offices outside the U.S. 1,096 830 1,854 2,047 1,953 Total$6,437 $3,789 $4,895 $7,611 $7,768 Other - net(4)(5)(6)(7)(8)(9)$174 $(437)$(503)$104 $18 Allowance for credit losses on loans (ACLL) at end of year$18,145 $16,974 $16,455 $24,956 $12,783 ACLL as a percentage of EOP loans(10)2.66 %2.60 %2.49 %3.73 %1.84 %Allowance for credit losses on unfunded lending commitments (ACLUC)(11)(12)$1,728 $2,151 $1,871 $2,655 $1,456 Total ACLL and ACLUC$19,873 $19,125 $18,326 $27,611 $14,239 Net consumer credit losses on loans$6,187 $3,611 $4,509 $6,711 $7,414 As a percentage of average consumer loans1.66 %1.02 %1.20 %1.77 %1.94 %Net corporate credit losses on loans$250 $178 $386 $900 $354 As a percentage of average corporate loans0.09 %0.06 %0.13 %0.29 %0.12 %ACLL by type at end of year(13)Consumer$15,431 $14,119 $14,040 $20,180 $10,056 Corporate2,714 2,855 2,415 4,776 2,727 Total$18,145 $16,974 $16,455 $24,956 $12,783 Other - net(4)(5)(6)(7)(8)(9) ACLL as a percentage of EOP loans(10) Allowance for credit losses on unfunded lending commitments (ACLUC)(11)(12) --- ## Modified: Citi Must Continually Review, Analyze and Successfully Adapt to Ongoing Regulatory and Legislative Uncertainties and Changes in the U.S. and Globally. **Key changes:** - Reworded sentence: "Citi, its management and its businesses continue to face regulatory and legislative uncertainties and changes, both in the U.S." - Reworded sentence: "Further, ongoing regulatory and legislative uncertainties and changes make Citi's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations." - Reworded sentence: "Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change." - Reworded sentence: "Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change." **Prior (2023):** Citi, its management and its businesses continue to face ongoing regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the areas of ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including as a result of priority shifts depending on individuals, political parties and other groups in governmental positions; (ii) potential changes to various aspects of the regulatory capital framework and requirements applicable to Citi, including the Basel III rules (see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change risk factor below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles. For example, in February 2023, the Consumer Financial Protection Bureau proposed significant changes to the maximum amounts on credit card late fees, which, if adopted as proposed, would reduce credit card fee revenues in Branded cards and Retail services in PBWM. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even conflicting requirements, including within a single jurisdiction. For example, in 2019, the European Commission adopted, as part of Capital Requirements Directive V (CRD V), a new requirement for major banking groups headquartered outside the EU (which would include Citi) to establish an intermediate EU holding company where the foreign bank has two or more institutions (broadly meaning banks, broker-dealers and similar financial firms) established in the EU. While in some respects the requirement mirrors an existing U.S. requirement for non-U.S. banking organizations to form U.S. intermediate holding companies, the implementation of the EU holding company requirement could lead to additional complexity with respect to Citi's resolution planning, capital and liquidity allocation and efficiency in various jurisdictions.Further, ongoing regulatory and legislative uncertainties and changes make Citi's and its management's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. For example, while the Basel III regulatory reforms and revised market risk framework have been finalized at the international level, there remain significant uncertainties with respect to the integration of these revisions into the U.S. regulatory capital framework. Business planning is required to be based on possible or proposed rules or outcomes, which can change dramatically upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's businesses, results of operations and financial condition.Citi's Continued Investment and Other Initiatives as Part of Its Transformation and Strategic Refresh May Not Be as Successful as It Projects or Expects.As part of its transformation and other strategic initiatives, Citi continues to make significant investments to improve its risk and control environment, modernize its data and technology infrastructure and further enhance safety and soundness (for additional information on these investments, see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic refresh. For example, Citi has been making investments across the Company, including, for example, hiring front office colleagues and enhancing product capabilities and platforms to improve client digital experiences and add scalability and implementing new capabilities and partnerships. Citi has also been pursuing productivity improvements through various technology and digital initiatives, organizational simplification and location strategies. Citi's multiyear transformation initiatives involve significant execution complexity, and there is inherent risk that these will not be as productive or effective as Citi expects, conflicting requirements, including within a single jurisdiction. For example, in 2019, the European Commission adopted, as part of Capital Requirements Directive V (CRD V), a new requirement for major banking groups headquartered outside the EU (which would include Citi) to establish an intermediate EU holding company where the foreign bank has two or more institutions (broadly meaning banks, broker-dealers and similar financial firms) established in the EU. While in some respects the requirement mirrors an existing U.S. requirement for non-U.S. banking organizations to form U.S. intermediate holding companies, the implementation of the EU holding company requirement could lead to additional complexity with respect to Citi's resolution planning, capital and liquidity allocation and efficiency in various jurisdictions. Further, ongoing regulatory and legislative uncertainties and changes make Citi's and its management's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. For example, while the Basel III regulatory reforms and revised market risk framework have been finalized at the international level, there remain significant uncertainties with respect to the integration of these revisions into the U.S. regulatory capital framework. Business planning is required to be based on possible or proposed rules or outcomes, which can change dramatically upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's businesses, results of operations and financial condition. **Current (2024):** Citi, its management and its businesses continue to face regulatory and legislative uncertainties and changes, both in the U.S. and globally. While the ongoing regulatory and legislative uncertainties and changes facing Citi are too numerous to list completely, examples include, but are not limited to (i) potential changes to various aspects of the U.S. regulatory capital framework and requirements applicable to Citi, including, among others, significant revisions to the U.S. Basel III rules, known as the Basel III Endgame (for information about the Basel III Endgame, see the capital return risk factor and "Capital Resources - Regulatory Capital Standards Developments" above); (ii) potential fiscal, monetary, tax, sanctions and other changes promulgated by the U.S. federal government and other governments, including potential changes in regulatory requirements relating to interest rate risk management; and (iii) rapidly evolving legislative and regulatory requirements and other government initiatives in the EU, the U.S. and globally related to climate change and other ESG areas that vary, and may conflict, across jurisdictions, including any new disclosure requirements (see the climate change and heightened regulatory scrutiny and ongoing interpretation of regulatory changes risk factors below). References to "regulatory" refer to both formal regulation and the views and expectations of Citi's regulators in their supervisory roles, which, as they change over time, can have a major impact. In particular, the U.S. regulators have indicated that the level of their expectations is increasing and prompt negative examination findings/ratings and enforcements actions are more likely. For example, in February 2023, the Consumer Financial Protection Bureau (CFPB) proposed significant changes to the maximum amounts on credit card late fees, which, if adopted as proposed, would reduce credit card fee revenues in Branded Cards and Retail Services in USPB. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even conflicting requirements, including within a single jurisdiction. Further, ongoing regulatory and legislative uncertainties and changes make Citi's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's competitive position, as well as its businesses, results of operations and financial condition.Citi's Ability to Achieve Its Objectives from Its Transformation, Organizational, Simplification and Other Strategic and Other Initiatives May Not Be as Successful as It Projects or Expects.As part of its transformation initiatives, Citi continues to make significant investments to improve its risk and controls environment, modernize its data and technology infrastructure and further enhance safety and soundness (see "Executive Summary" above and the legal and regulatory proceedings risk factor below). Citi also continues to make business-led investments, as part of the execution of its strategic initiatives. For example, Citi has been making investments across the Company, including hiring front office colleagues in key strategic markets and businesses; enhancing product capabilities and platforms to grow key businesses, improve client digital experiences and add scalability; and implementing new capabilities and partnerships. These business-led investments are designed to grow revenues as well as result in retention and efficiency improvements. Additionally, Citi has been pursuing overall simplification initiatives that include management and operating model changes and actions to enhance focus on clients and reduce expenses. Citi's simplification actions also include divestiture of the Mexico Consumer/SBMM operations and completing other exits and wind-downs in order to streamline Citi and assist in optimizing its allocation of resources. These overall simplification initiatives involve various execution challenges and may result in higher than expected expenses, litigation and regulatory scrutiny, CTA and other losses or other negative financial or strategic impacts, which could be material (for information about potential CTA impacts, see the capital as proposed, would reduce credit card fee revenues in Branded Cards and Retail Services in USPB. In addition, U.S. and international regulatory and legislative initiatives have not always been undertaken or implemented on a coordinated basis, and areas of divergence have developed and continue to develop with respect to their scope, interpretation, timing, structure or approach, leading to inconsistent or even conflicting requirements, including within a single jurisdiction. Further, ongoing regulatory and legislative uncertainties and changes make Citi's long-term business, balance sheet and strategic budget planning difficult, subject to change and potentially more costly and may impact its results of operations. U.S. and other regulators globally have implemented and continue to discuss various changes to certain regulatory requirements, which would require ongoing assessment by management as to the impact to Citi, its businesses and business planning. Business planning must necessarily be based on possible or proposed rules or outcomes, which can change significantly upon finalization, or upon implementation or interpretive guidance from numerous regulatory bodies worldwide, and such guidance can change. Regulatory and legislative changes have also significantly increased Citi's compliance risks and costs (see the implementation and interpretation of regulatory changes risk factor below) and can adversely affect Citi's competitive position, as well as its businesses, results of operations and financial condition. --- ## Modified: The Application of U.S. Resolution Plan Requirements May Pose a Greater Risk of Loss to Citi's Debt and Equity Securities Holders, and Citi's Inability in Its Resolution Plan Submissions to Address Any Shortcomings or Deficiencies or Guidance Could Subject Citi to More Stringent Capital, Leverage or Liquidity Requirements, or Restrictions on Its Growth, Activities or Operations, and Could Eventually Require Citi to Divest Assets or Operations. **Key changes:** - Added sentence: "Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings." - Added sentence: "As a result, Citigroup's losses and any losses incurred by its material legal entity subsidiaries would be imposed first on holders of Citigroup's equity securities and thereafter on its unsecured creditors, including holders of eligible long-term debt and other debt securities." - Added sentence: "In addition, a wholly owned, direct subsidiary of Citigroup serves as a resolution funding vehicle (the IHC) to which Citigroup has transferred, and has agreed to transfer on an ongoing basis, certain assets." - Added sentence: "The obligations of Citigroup and of the IHC, respectively, under the amended and restated secured support agreement, are secured on a senior basis by the assets of Citigroup (other than shares in subsidiaries of the parent company and certain other assets), and the assets of the IHC, as applicable." - Added sentence: "As a result, claims of the operating material legal entities against the assets of Citigroup with respect to such secured assets are effectively senior to unsecured obligations of Citigroup." **Prior (2023):** Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan. For additional information on Citi's resolution plan submissions, see "Managing Global Risk - Liquidity Risk" below. Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally believed to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy. **Current (2024):** Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. As a result, Citigroup's losses and any losses incurred by its material legal entity subsidiaries would be imposed first on holders of Citigroup's equity securities and thereafter on its unsecured creditors, including holders of eligible long-term debt and other debt securities. In addition, a wholly owned, direct subsidiary of Citigroup serves as a resolution funding vehicle (the IHC) to which Citigroup has transferred, and has agreed to transfer on an ongoing basis, certain assets. The obligations of Citigroup and of the IHC, respectively, under the amended and restated secured support agreement, are secured on a senior basis by the assets of Citigroup (other than shares in subsidiaries of the parent company and certain other assets), and the assets of the IHC, as applicable. As a result, claims of the operating material legal entities against the assets of Citigroup with respect to such secured assets are effectively senior to unsecured obligations of Citigroup. Citi's single point of entry resolution plan strategy and the obligations under the amended and restated secured support agreement may result in the recapitalization of and/or provision of liquidity to Citi's operating material legal entities, and the commencement of bankruptcy proceedings by Citigroup at an earlier stage of financial stress than might otherwise occur without such mechanisms in place. In line with the FRB's TLAC rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - would bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup. For additional information on Citi's single point of entry resolution plan strategy and the IHC and secured support agreement, see "Managing Global Risk - Liquidity Risk" below. On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan (see discussion below). Citi submitted its 2023 resolution plan in June 2023. More generally, data continuesto be a subject of regulatory focus, and Citi continues to workon enhancing its data availability and quality.Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally understood to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy.Citi's Performance and Its Ability to Effectively Execute Its Transformation and Strategic and Other Initiatives Could Be Negatively Impacted if It Is Not Able to Hire and Retain Qualified Employees.Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and strategic and other initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support Citi's transformation and strategic and other initiatives, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues. If Citi is unable to continue to attract, retain and motivate highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and strategic and other initiatives and its results of operations could be negatively impacted.Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of Citi's control. For example, the competition for talent continues to be particularly intense due to factors such as low unemployment and changes in worker expectations, concerns and preferences, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including, for example, technology companies, that are not subject to Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan (see discussion below). Citi submitted its 2023 resolution plan in June 2023. More generally, data continues to be a subject of regulatory focus, and Citi continues to work on enhancing its data availability and quality. Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally understood to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy. --- ## Modified: Retail Banking **Key changes:** - Reworded sentence: "USPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans." - Reworded sentence: "For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15." **Prior (2023):** 70 70 70 U.S. Personal Banking's Retail banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 14.As shown in the chart above, the net credit loss rate in Retail banking for the fourth quarter of 2022 increased slightly quarter-over-quarter and year-over-year, primarily driven by the continued impact of industry-wide episodic overdraft losses.The 90+ days past due delinquency rate decreased quarter-over-quarter and year-over-year, primarily driven by U.S. mortgages, which reflected the lasting effects of government stimulus, unemployment benefits and consumer relief programs.Global WealthAs discussed above, the Global Wealth credit portfolio primarily consists of consumer mortgages, cards and other lending products extended to customer segments that range from the affluent to ultra-high-net-worth through the Private bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies. As of December 31, 2022, approximately $49 billion, or 33%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 95% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios.As shown in the chart above, the net credit loss rate and 90+ days past due delinquency rate were broadly stable quarter-over-quarter and year-over-year, reflecting the strong credit profiles of the portfolios. The net credit loss rate increased slightly quarter-over-quarter, due to a classifiably managed loan charge-off. The low levels of net credit losses and the 90+ days past due delinquency rate continued to reflect the strong credit profiles of the portfolios. Legacy FranchisesLegacy Franchises provides traditional retail banking and branded card products to retail and small business customers in Asia Consumer and Mexico Consumer.Asia(1) Consumer (1) Asia Consumer includes Legacy Franchises activities in certain EMEA countries for all periods presented.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Asia Consumer for the remaining portfolios held-for-investment (China, Korea, Russia and Poland) increased quarter-over-quarter, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $1.5 billion) and the sale of the personal loan portfolio in Russia in the fourth quarter of 2022. The net credit loss rate increased year-over-year, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $7.8 billion) and the sale of the personal loan portfolio in Russia, partially offset by the reclassification of loans to held-for-sale during 2022.The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, mainly driven by the impact of the Asia Consumer held-for-sale reclassifications, partially offset by the effect of declining loans due to the ongoing wind-down of the businesses, including the sale of the personal loan portfolio in Russia.The performance of Asia Consumer's portfolios continues to reflect the strong credit profiles in the region's target customer segments.Mexico Consumer U.S. Personal Banking's Retail banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 14.As shown in the chart above, the net credit loss rate in Retail banking for the fourth quarter of 2022 increased slightly quarter-over-quarter and year-over-year, primarily driven by the continued impact of industry-wide episodic overdraft losses.The 90+ days past due delinquency rate decreased quarter-over-quarter and year-over-year, primarily driven by U.S. mortgages, which reflected the lasting effects of government stimulus, unemployment benefits and consumer relief programs.Global WealthAs discussed above, the Global Wealth credit portfolio primarily consists of consumer mortgages, cards and other lending products extended to customer segments that range from the affluent to ultra-high-net-worth through the Private bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies. As of December 31, 2022, approximately $49 billion, or 33%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 95% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios.As shown in the chart above, the net credit loss rate and 90+ days past due delinquency rate were broadly stable quarter-over-quarter and year-over-year, reflecting the strong credit profiles of the portfolios. The net credit loss rate increased slightly quarter-over-quarter, due to a classifiably managed loan charge-off. The low levels of net credit losses U.S. Personal Banking's Retail banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 14. As shown in the chart above, the net credit loss rate in Retail banking for the fourth quarter of 2022 increased slightly quarter-over-quarter and year-over-year, primarily driven by the continued impact of industry-wide episodic overdraft losses. The 90+ days past due delinquency rate decreased quarter-over-quarter and year-over-year, primarily driven by U.S. mortgages, which reflected the lasting effects of government stimulus, unemployment benefits and consumer relief programs. **Current (2024):** USPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15. As presented in the chart above, the net credit loss rate in Retail Banking for the fourth quarter of 2023 was broadly stable quarter-over-quarter and increased year-over-year, primarily driven by the growth and seasoning of personal loans. The 90+ days past due delinquency rate was broadly stable quarter-over-quarter and decreased year-over-year, primarily driven by lower delinquencies in U.S. mortgages. Wealth As indicated above, Wealth provides consumer mortgages, margin lending, cards and other lending products to customer segments that range from affluent to ultra-high net worth through the Private Bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies and includes loans that are delinquency managed or classifiably managed. The delinquency-managed portfolio consists primarily of mortgages, margin lending and cards. As of December 31, 2023, approximately $46 billion, or 30%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 85% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios.As presented in the chart above, the net credit loss rate and 90+ days past due delinquency rate in Wealth for the fourth quarter of 2023 were broadly stable quarter-over-quarter and year-over-year. The low net credit loss and the 90+ days past due delinquency rates continued to reflect the strong credit profiles of the portfolios. Mexico ConsumerMexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As presented in the chart above, the fourth quarter of 2023 net credit loss rate in Mexico Consumer increased quarter-over-quarter and year-over-year, primarily driven by the ongoing normalization of loss rates from post-pandemic lows. The 90+ days past due delinquency rate was relatively stable quarter-over-quarter and year-over-year. For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 15. risk based on their internal risk rating, of which 85% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios. As presented in the chart above, the net credit loss rate and 90+ days past due delinquency rate in Wealth for the fourth quarter of 2023 were broadly stable quarter-over-quarter and year-over-year. The low net credit loss and the 90+ days past due delinquency rates continued to reflect the strong credit profiles of the portfolios. --- ## Modified: Citi's and Third Parties' Computer Systems and Networks Will Continue to Be Susceptible to an Increasing Risk of Continually Evolving, Sophisticated Cybersecurity Incidents That Could Result in the Theft, Loss, Non-Availability, Misuse or Disclosure of Confidential Client or Customer Information, Damage to Citi's Reputation, Additional Costs to Citi, Regulatory Penalties, Legal Exposure and Financial Losses. **Key changes:** - Reworded sentence: "Citi's computer systems, software and networks are subject to ongoing attempted cyberattacks, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code and other similar events." - Added sentence: "Citi develops its own software and relies on third-party applications and software, which are susceptible to vulnerability exploitations." - Added sentence: "Software leveraged in financial services and other industries continues to be impacted by an increasing number of zero-day vulnerabilities, thus increasing inherent cyber risk to Citi." - Reworded sentence: "Citi is also susceptible to cyberattacks given, among other things, its size and scale, high-profile brand, global footprint and prominent role in the financial system, as well as the ongoing wind-down of its businesses in Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below)." - Reworded sentence: "These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites." **Prior (2023):** Citi's computer systems, software and networks are subject to ongoing cyber incidents, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code, cyberattacks and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities. The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi's wind-down of its businesses in Russia could also increase its susceptibility to cyberattacks (for additional information about Citi's exposures related to its Russia operations, see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, may also be sources of cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites, which could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches impacting Citi customers. Furthermore, because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses, including as a result of derivatives reforms over the last few years, Citi has increased exposure to cyberattacks through third parties. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses Citi may incur from third-party cyber incidents. Citi and some of its third-party partners have been subject to attempted and sometimes successful cyberattacks from external sources over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems; (iii) data breaches due to unauthorized access to customer account data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services were able to detect and respond to the incidents targeting its systems before they became significant, they still resulted in limited losses in some instances as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics and on a more significant scale.Further, although Citi devotes significant resources to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide absolute security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, given the evolving nature of cyber threat actors and the frequency and sophistication of the cyber activities they carry out, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following discovery of the incident. Also, while Citi engages in certain actions to reduce the exposure resulting from outsourcing, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these actions cannot prevent all third-party-related cyberattacks or data breaches.Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information, damage to Citi's reputation with its clients and the market, customer dissatisfaction and additional costs to Citi, including expenses such as repairing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, exposure to litigation and other financial losses, including loss of funds, to both Citi and its clients and customers and disruption to Citi's operational systems (for additional information on the potential impact of operational disruptions, see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory scrutiny of firms' cybersecurity protection services and calls for additional laws and regulations to further enhance protection of consumers' personal data.While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify.For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. breaches due to unauthorized access to customer account data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services were able to detect and respond to the incidents targeting its systems before they became significant, they still resulted in limited losses in some instances as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics and on a more significant scale. Further, although Citi devotes significant resources to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide absolute security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, given the evolving nature of cyber threat actors and the frequency and sophistication of the cyber activities they carry out, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following discovery of the incident. Also, while Citi engages in certain actions to reduce the exposure resulting from outsourcing, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these actions cannot prevent all third-party-related cyberattacks or data breaches. Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information, damage to Citi's reputation with its clients and the market, customer dissatisfaction and additional costs to Citi, including expenses such as repairing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, exposure to litigation and other financial losses, including loss of funds, to both Citi and its clients and customers and disruption to Citi's operational systems (for additional information on the potential impact of operational disruptions, see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory scrutiny of firms' cybersecurity protection services and calls for additional laws and regulations to further enhance protection of consumers' personal data. While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify. For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. 48 48 48 Changes or Errors in Accounting Assumptions, Judgments or Estimates, or the Application of Certain Accounting Principles, Could Result in Significant Losses or Other Adverse Impacts.U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15.For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL, and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (for additional information on the CECL phase-in, see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, in the second quarter of 2022, Citi incurred a CTA loss (net of hedges) in AOCI released to earnings of approximately $400 million ($345 million after-tax) related to the substantial liquidation of a legacy U.K. consumer operation (for additional information, see "Legacy Franchises" and "Corporate/Other" above and Note 2). For additional information on Citi's accounting policy for foreign currency translation and its foreign CTA components of AOCI, see Notes 1 and 20. Changes to Financial Accounting and Reporting Standards or Interpretations Could Have a Material Impact on How Citi Records and Reports Its Financial Condition and Results of Operations.Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition.If Citi's Risk Management Processes, Strategies or Models Are Deficient or Ineffective, Citi May Incur Significant Losses and Its Regulatory Capital and Capital Ratios Could Be Negatively Impacted.Citi utilizes a broad and diversified set of risk management and mitigation processes and strategies, including the use of models in enacting processes and strategies as well as in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks is made more challenging within a global financial institution such as Citi, particularly given the complex, diverse and rapidly changing financial markets and conditions in which Citi operates as well as that losses can occur unintentionally from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below).Citi's risk management processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of Changes or Errors in Accounting Assumptions, Judgments or Estimates, or the Application of Certain Accounting Principles, Could Result in Significant Losses or Other Adverse Impacts.U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not hold in times of market stress, limited liquidity or other unforeseen circumstances. If Citi's assumptions, judgments or estimates underlying its financial statements are incorrect or differ from actual or subsequent events, Citi could experience unexpected losses or other adverse impacts, some of which could be significant. Citi could also experience declines in its stock price, be subject to legal and regulatory proceedings and incur fines and other losses. For additional information on the key areas for which assumptions and estimates are used in preparing Citi's financial statements, see "Significant Accounting Policies and Significant Estimates" below and Notes 1 and 15.For example, the CECL methodology requires that Citi provide reserves for a current estimate of lifetime expected credit losses for its loan portfolios and other financial assets, as applicable, at the time those assets are originated or acquired. This estimate is adjusted each period for changes in expected lifetime credit losses. Citi's ACL estimate depends upon its CECL models and assumptions; forecasted macroeconomic conditions, including, among other things, the U.S. unemployment rate and U.S. inflation-adjusted gross domestic product (real GDP); and the credit indicators, composition and other characteristics of Citi's loan portfolios and other applicable financial assets. These model assumptions and forecasted macroeconomic conditions will change over time, resulting in variability in Citi's ACL, and, thus, impact its results of operations and financial condition, as well as regulatory capital due to the CECL phase-in (for additional information on the CECL phase-in, see the capital return risk factor above). Moreover, Citi has incurred losses related to its foreign operations that are reported in the CTA components of Accumulated other comprehensive income (loss) (AOCI). In accordance with U.S. GAAP, a sale, substantial liquidation or other deconsolidation event of any foreign operations, such as those related to Citi's remaining divestitures or legacy businesses, would result in reclassification of any foreign CTA component of AOCI related to that foreign operation, including related hedges and taxes, into Citi's earnings. For example, in the second quarter of 2022, Citi incurred a CTA loss (net of hedges) in AOCI released to earnings of approximately $400 million ($345 million after-tax) related to **Current (2024):** Citi's computer systems, software and networks are subject to ongoing attempted cyberattacks, such as unauthorized access, loss or destruction of data (including confidential client information), account takeovers, disruptions of service, phishing, malware, ransomware, computer viruses or other malicious code and other similar events. These threats can arise from external parties, including cyber criminals, cyber terrorists, hacktivists (individuals or groups using cyberattacks to promote a political or social agenda) and nation-state actors, as well as insiders who knowingly or unknowingly engage in or enable malicious cyber activities. Citi develops its own software and relies on third-party applications and software, which are susceptible to vulnerability exploitations. Software leveraged in financial services and other industries continues to be impacted by an increasing number of zero-day vulnerabilities, thus increasing inherent cyber risk to Citi. The increasing use of mobile and other digital banking platforms and services, cloud technologies and connectivity solutions to facilitate remote working for Citi's employees all increase Citi's exposure to cybersecurity risks. Citi is also susceptible to cyberattacks given, among other things, its size and scale, high-profile brand, global footprint and prominent role in the financial system, as well as the ongoing wind-down of its businesses in Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" below). Additionally, Citi continues to operate in multiple jurisdictions in the midst of geopolitical unrest, including active conflicts in Ukraine and the Middle East, which could expose Citi to heightened risk of insider threat, politically motivated hacktivism or other cyber threats. 55 55 55 Citi continues to experience increased exposure to cyberattacks through third parties, in part because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses. Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, and any such third parties' downstream service providers, also pose cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites. This could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches or business disruptions impacting Citi customers, employees or operations. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses and other adverse impacts Citi may incur from third-party cyber incidents. Citi and some of its third-party partners have been subjected to attempted and sometimes successful cyberattacks over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems and/or impact availability or privacy of confidential data, with objectives including, but not limited to, extortion payments or causing reputational damage; (iii) data breaches due to unauthorized access to customer account or other data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services have historically generally succeeded in detecting, thwarting and/or responding to attacks targeting its systems before they become significant, certain past incidents resulted in limited losses, as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics, including leveraging of tools made possible by emerging technologies, and on a more significant scale. Despite the significant resources Citi allocates to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention systems and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide sufficient security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, cyber threats and cyberattack techniques change, develop and evolve rapidly, including from emerging technologies such as artificial intelligence, cloud computing and quantum computing. Given the frequency and sophistication of cyberattacks, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following detection of the incident. Also, while Citi strives to implement measures to reduce the exposure resulting from outsourcing risks, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these measures cannot prevent all third-party related cyberattacks or data breaches. In addition, the risk of insider threat may be elevated in the near term due to Citi's overall simplification initiatives, including streamlining its global staff functions. Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information; damage to Citi's reputation with its clients, other counterparties and the market; customer dissatisfaction; and additional costs to Citi, including expenses such as repairing or replacing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, deposit flight, exposure to litigation and other financial losses, including loss of funds to both Citi and its clients and customers, and disruption to Citi's operational systems (see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory action on cybersecurity, including, among other things, scrutiny of firms' cybersecurity protection services, laws and regulations to enhance protection of consumers' personal data and mandated disclosure on cybersecurity matters. For example, in July 2023, the SEC finalized new rules requiring timely disclosure of material cybersecurity incidents as well as other annual cyber-related disclosures (see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below). While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify. For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. Changes or Errors in Accounting Assumptions, Judgments or Estimates, or the Application of Certain Accounting Principles, Could Result in Significant Losses or Other Adverse Impacts.U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the Citi continues to experience increased exposure to cyberattacks through third parties, in part because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses. Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, and any such third parties' downstream service providers, also pose cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites. This could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches or business disruptions impacting Citi customers, employees or operations. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses and other adverse impacts Citi may incur from third-party cyber incidents. Citi and some of its third-party partners have been subjected to attempted and sometimes successful cyberattacks over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems and/or impact availability or privacy of confidential data, with objectives including, but not limited to, extortion payments or causing reputational damage; (iii) data breaches due to unauthorized access to customer account or other data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services have historically generally succeeded in detecting, thwarting and/or responding to attacks targeting its systems before they become significant, certain past incidents resulted in limited losses, as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics, including leveraging of tools made possible by emerging technologies, and on a more significant scale. Despite the significant resources Citi allocates to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention systems and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide sufficient security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, cyber threats and cyberattack techniques change, develop and evolve rapidly, including from emerging technologies such as artificial intelligence, cloud computing and quantum Citi continues to experience increased exposure to cyberattacks through third parties, in part because financial institutions are becoming increasingly interconnected with central agents, exchanges and clearing houses. Third parties with which Citi does business, as well as retailers and other third parties with which Citi's customers do business, and any such third parties' downstream service providers, also pose cybersecurity risks, particularly where activities of customers are beyond Citi's security and control systems. For example, Citi outsources certain functions, such as processing customer credit card transactions, uploading content on customer-facing websites and developing software for new products and services. These relationships allow for the storage and processing of customer information by third-party hosting of, or access to, Citi websites. This could lead to compromise or the potential to introduce vulnerable or malicious code, resulting in security breaches or business disruptions impacting Citi customers, employees or operations. While many of Citi's agreements with third parties include indemnification provisions, Citi may not be able to recover sufficiently, or at all, under these provisions to adequately offset any losses and other adverse impacts Citi may incur from third-party cyber incidents. Citi and some of its third-party partners have been subjected to attempted and sometimes successful cyberattacks over the last several years, including (i) denial of service attacks, which attempt to interrupt service to clients and customers; (ii) hacking and malicious software installations intended to gain unauthorized access to information systems or to disrupt those systems and/or impact availability or privacy of confidential data, with objectives including, but not limited to, extortion payments or causing reputational damage; (iii) data breaches due to unauthorized access to customer account or other data; and (iv) malicious software attacks on client systems, in attempts to gain unauthorized access to Citi systems or client data under the guise of normal client transactions. While Citi's monitoring and protection services have historically generally succeeded in detecting, thwarting and/or responding to attacks targeting its systems before they become significant, certain past incidents resulted in limited losses, as well as increases in expenditures to monitor against the threat of similar future cyber incidents. There can be no assurance that such cyber incidents will not occur again, and they could occur more frequently, via novel tactics, including leveraging of tools made possible by emerging technologies, and on a more significant scale. Despite the significant resources Citi allocates to implement, maintain, monitor and regularly upgrade its systems and networks with measures such as intrusion detection and prevention systems and firewalls to safeguard critical business applications, there is no guarantee that these measures or any other measures can provide sufficient security. Because the techniques used to initiate cyberattacks change frequently or, in some cases, are not recognized until launched or even later, Citi may be unable to implement effective preventive measures or otherwise proactively address these methods. In addition, cyber threats and cyberattack techniques change, develop and evolve rapidly, including from emerging technologies such as artificial intelligence, cloud computing and quantum computing. Given the frequency and sophistication of cyberattacks, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following detection of the incident. Also, while Citi strives to implement measures to reduce the exposure resulting from outsourcing risks, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these measures cannot prevent all third-party related cyberattacks or data breaches. In addition, the risk of insider threat may be elevated in the near term due to Citi's overall simplification initiatives, including streamlining its global staff functions. Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information; damage to Citi's reputation with its clients, other counterparties and the market; customer dissatisfaction; and additional costs to Citi, including expenses such as repairing or replacing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, deposit flight, exposure to litigation and other financial losses, including loss of funds to both Citi and its clients and customers, and disruption to Citi's operational systems (see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory action on cybersecurity, including, among other things, scrutiny of firms' cybersecurity protection services, laws and regulations to enhance protection of consumers' personal data and mandated disclosure on cybersecurity matters. For example, in July 2023, the SEC finalized new rules requiring timely disclosure of material cybersecurity incidents as well as other annual cyber-related disclosures (see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below). While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify. For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. Changes or Errors in Accounting Assumptions, Judgments or Estimates, or the Application of Certain Accounting Principles, Could Result in Significant Losses or Other Adverse Impacts.U.S. GAAP requires Citi to use certain assumptions, judgments and estimates in preparing its financial statements, including, among other items, the estimate of the ACL; reserves related to litigation, regulatory and tax matters; valuation of DTAs; the fair values of certain assets and liabilities; and the assessment of goodwill and other assets for impairment. These assumptions, judgments and estimates are inherently limited because they involve techniques, including the use of historical data in many circumstances, that cannot anticipate every economic and financial outcome in the markets in which Citi operates, nor can they anticipate the computing. Given the frequency and sophistication of cyberattacks, the determination of the severity and potential impact of a cyber incident may not become apparent for a substantial period of time following detection of the incident. Also, while Citi strives to implement measures to reduce the exposure resulting from outsourcing risks, such as performing security control assessments of third-party vendors and limiting third-party access to the least privileged level necessary to perform job functions, these measures cannot prevent all third-party related cyberattacks or data breaches. In addition, the risk of insider threat may be elevated in the near term due to Citi's overall simplification initiatives, including streamlining its global staff functions. Cyber incidents can result in the disclosure of personal, confidential or proprietary customer, client or employee information; damage to Citi's reputation with its clients, other counterparties and the market; customer dissatisfaction; and additional costs to Citi, including expenses such as repairing or replacing systems, replacing customer payment cards, credit monitoring or adding new personnel or protection technologies. Cyber incidents can also result in regulatory penalties, loss of revenues, deposit flight, exposure to litigation and other financial losses, including loss of funds to both Citi and its clients and customers, and disruption to Citi's operational systems (see the operational processes and systems risk factor above). Moreover, the increasing risk of cyber incidents has resulted in increased legislative and regulatory action on cybersecurity, including, among other things, scrutiny of firms' cybersecurity protection services, laws and regulations to enhance protection of consumers' personal data and mandated disclosure on cybersecurity matters. For example, in July 2023, the SEC finalized new rules requiring timely disclosure of material cybersecurity incidents as well as other annual cyber-related disclosures (see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below). While Citi maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses and may not take into account reputational harm, the costs of which are impossible to quantify. For additional information about Citi's management of cybersecurity risk, see "Managing Global Risk - Operational Risk - Cybersecurity Risk" below. --- ## Modified: Executive Management Team **Key changes:** - Reworded sentence: "The Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors." **Prior (2023):** The Board delegates authority to an Executive Management Team for directing and overseeing day-to-day management of Citi. The Executive Management Team is led by the Citigroup CEO and provides oversight of group activities, both directly and through authority delegated to committees it has established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy. **Current (2024):** The Citigroup CEO directs and oversees the day-to-day management of Citi as delegated by the Board of Directors. The CEO leads the Company through the Executive Management Team and provides oversight of group activities, both directly and through authority delegated to committees established to oversee the management of risk, to ensure continued alignment with Citi's risk strategy. --- ## Modified: Non-Accrual Loans and Assets **Key changes:** - Reworded sentence: "There is a certain amount of overlap among non-accrual loans and assets." **Prior (2023):** •Includes both corporate and consumer loans whose terms have been modified in a troubled debt restructuring (TDR). •Includes both accrual and non-accrual TDRs. 81 81 81 Non-Accrual LoansThe table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. Non-Accrual LoansThe table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. **Current (2024):** There is a certain amount of overlap among non-accrual loans and assets. The following summary provides a general description of each category: •Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful. •A corporate loan may be classified as non-accrual and still be current on principal and interest payments under the terms of the loan structure. Citi's corporate non-accrual loans were $1.9 billion, $2.0 billion and $1.1 billion as of December 31, 2023, September 30, 2023 and December 31, 2022, respectively. •Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments. •Consumer mortgage loans, other than Federal Housing Administration (FHA)-insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due. •U.S. Branded Cards and Retail Services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency. 88 88 88 Non-Accrual LoansThe table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. Non-Accrual LoansThe table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. --- ## Modified: Loans Outstanding **Key changes:** - Reworded sentence: "December 31,In millions of dollars20232022202120202019Consumer loansIn North America offices(1)Residential first mortgages(2)$108,711 $96,039 $83,361 $83,956 $78,664 Home equity loans(2)3,592 4,580 5,745 7,890 10,174 Credit cards164,720 150,643 133,868 130,385 149,163 Personal, small business and other36,135 37,752 40,713 39,259 36,548 Total$313,158 $289,014 $263,687 $261,490 $274,549 In offices outside North America(1)Residential mortgages(2)$26,426 $28,114 $37,889 $42,817 $40,467 Credit cards14,233 12,955 17,808 22,692 25,909 Personal, small business and other35,380 37,984 57,150 59,475 60,013 Total$76,039 $79,053 $112,847 $124,984 $126,389 Consumer loans, net of unearned income(3)$389,197 $368,067 $376,534 $386,474 $400,938 Corporate loansIn North America offices(1)Commercial and industrial$61,008 $56,176 $48,364 $53,930 $52,229 Financial institutions39,393 43,399 49,804 39,390 38,782 Mortgage and real estate(2)17,813 17,829 15,965 16,522 13,696 Installment and other23,335 23,767 20,143 17,362 22,219 Lease financing227 308 415 673 1,290 Total$141,776 $141,479 $134,691 $127,877 $128,216 In offices outside North America(1)Commercial and industrial$93,402 $93,967 $102,735 $103,234 $112,332 Financial institutions26,143 21,931 22,158 25,111 28,176 Mortgage and real estate(2)7,197 4,179 4,374 5,277 4,325 Installment and other27,907 23,347 22,812 24,034 21,273 Lease financing48 46 40 65 95 Governments and official institutions3,599 4,205 4,423 3,811 4,128 Total$158,296 $147,675 $156,542 $161,532 $170,329 Corporate loans, net of unearned income, excluding portfolio layer cumulative basis adjustments(4)$300,072 $289,154 $291,233 $289,409 $298,545 Unallocated portfolio layer cumulative basis adjustments$93 $ - $ - $ - $ - Corporate loans, net of unearned income(4)$300,165 $289,154 $291,233 $289,409 $298,545 Total loans - net of unearned income$689,362 $657,221 $667,767 $675,883 $699,483 Allowance for credit losses on loans (ACLL)(18,145)(16,974)(16,455)(24,956)(12,783)Total loans - net of unearned income and ACLL$671,217 $640,247 $651,312 $650,927 $686,700 ACLL as a percentage of total loans - net of unearned income(5)2.66 %2.60 %2.49 %3.73 %1.84 %ACLL for consumer loan losses as a percentage of total consumer loans - net of unearned income(5)3.97 %3.84 %3.73 %5.22 %2.51 %ACLL for corporate loan losses as a percentage of total corporate loans - net of unearned income(5)0.93 %1.01 %0.85 %1.69 %0.93 % In North America offices(1) Residential first mortgages(2) Home equity loans(2) In offices outside North America(1) Residential mortgages(2)" **Prior (2023):** December 31,In millions of dollars20222021202020192018Consumer loansIn North America offices(1)Residential first mortgages(2)$96,039 $83,361 $83,956 $78,664 $75,074 Home equity loans(2)4,580 5,745 7,890 10,174 12,675 Credit cards150,643 133,868 130,385 149,163 144,542 Personal, small business and other37,752 40,713 39,259 36,548 35,733 Total$289,014 $263,687 $261,490 $274,549 $268,024 In offices outside North America(1)Residential mortgages(2)$28,114 $37,889 $42,817 $40,467 $39,314 Credit cards12,955 17,808 22,692 25,909 24,951 Personal, small business and other37,984 57,150 59,475 60,013 52,052 Total$79,053 $112,847 $124,984 $126,389 $116,317 Consumer loans, net of unearned income(3)$368,067 $376,534 $386,474 $400,938 $384,341 Corporate loansIn North America offices(1)Commercial and industrial$56,176 $48,364 $53,930 $52,229 $56,957 Financial institutions43,399 49,804 39,390 38,782 34,906 Mortgage and real estate(2)17,829 15,965 16,522 13,696 14,490 Installment and other23,767 20,143 17,362 22,219 23,759 Lease financing308 415 673 1,290 1,429 Total$141,479 $134,691 $127,877 $128,216 $131,541 In offices outside North America(1)Commercial and industrial$93,967 $102,735 $103,234 $112,332 $113,662 Financial institutions21,931 22,158 25,111 28,176 26,602 Mortgage and real estate(2)4,179 4,374 5,277 4,325 2,920 Installment and other23,347 22,812 24,034 21,273 20,458 Lease financing46 40 65 95 152 Governments and official institutions4,205 4,423 3,811 4,128 4,520 Total$147,675 $156,542 $161,532 $170,329 $168,314 Corporate loans, net of unearned income(4)$289,154 $291,233 $289,409 $298,545 $299,855 Total loans - net of unearned income$657,221 $667,767 $675,883 $699,483 $684,196 Allowance for credit losses on loans (ACLL)(16,974)(16,455)(24,956)(12,783)(12,315)Total loans - net of unearned income and ACLL$640,247 $651,312 $650,927 $686,700 $671,881 ACLL as a percentage of total loans - net of unearned income(5)2.60 %2.49 %3.73 %1.84 %1.81 %ACLL for consumer loan losses as a percentage of total consumer loans - net of unearned income(5)3.84 %3.73 %5.22 %2.51 %2.52 %ACLL for corporate loan losses as a percentage of total corporate loans - net of unearned income(5)1.01 %0.85 %1.69 %0.93 %0.89 % In North America offices(1) Residential first mortgages(2) Home equity loans(2) In offices outside North America(1) Residential mortgages(2) **Current (2024):** December 31,In millions of dollars20232022202120202019Consumer loansIn North America offices(1)Residential first mortgages(2)$108,711 $96,039 $83,361 $83,956 $78,664 Home equity loans(2)3,592 4,580 5,745 7,890 10,174 Credit cards164,720 150,643 133,868 130,385 149,163 Personal, small business and other36,135 37,752 40,713 39,259 36,548 Total$313,158 $289,014 $263,687 $261,490 $274,549 In offices outside North America(1)Residential mortgages(2)$26,426 $28,114 $37,889 $42,817 $40,467 Credit cards14,233 12,955 17,808 22,692 25,909 Personal, small business and other35,380 37,984 57,150 59,475 60,013 Total$76,039 $79,053 $112,847 $124,984 $126,389 Consumer loans, net of unearned income(3)$389,197 $368,067 $376,534 $386,474 $400,938 Corporate loansIn North America offices(1)Commercial and industrial$61,008 $56,176 $48,364 $53,930 $52,229 Financial institutions39,393 43,399 49,804 39,390 38,782 Mortgage and real estate(2)17,813 17,829 15,965 16,522 13,696 Installment and other23,335 23,767 20,143 17,362 22,219 Lease financing227 308 415 673 1,290 Total$141,776 $141,479 $134,691 $127,877 $128,216 In offices outside North America(1)Commercial and industrial$93,402 $93,967 $102,735 $103,234 $112,332 Financial institutions26,143 21,931 22,158 25,111 28,176 Mortgage and real estate(2)7,197 4,179 4,374 5,277 4,325 Installment and other27,907 23,347 22,812 24,034 21,273 Lease financing48 46 40 65 95 Governments and official institutions3,599 4,205 4,423 3,811 4,128 Total$158,296 $147,675 $156,542 $161,532 $170,329 Corporate loans, net of unearned income, excluding portfolio layer cumulative basis adjustments(4)$300,072 $289,154 $291,233 $289,409 $298,545 Unallocated portfolio layer cumulative basis adjustments$93 $ - $ - $ - $ - Corporate loans, net of unearned income(4)$300,165 $289,154 $291,233 $289,409 $298,545 Total loans - net of unearned income$689,362 $657,221 $667,767 $675,883 $699,483 Allowance for credit losses on loans (ACLL)(18,145)(16,974)(16,455)(24,956)(12,783)Total loans - net of unearned income and ACLL$671,217 $640,247 $651,312 $650,927 $686,700 ACLL as a percentage of total loans - net of unearned income(5)2.66 %2.60 %2.49 %3.73 %1.84 %ACLL for consumer loan losses as a percentage of total consumer loans - net of unearned income(5)3.97 %3.84 %3.73 %5.22 %2.51 %ACLL for corporate loan losses as a percentage of total corporate loans - net of unearned income(5)0.93 %1.01 %0.85 %1.69 %0.93 % In North America offices(1) Residential first mortgages(2) Home equity loans(2) In offices outside North America(1) Residential mortgages(2) --- ## Modified: Changes to Financial Accounting and Reporting Standards or Interpretations Could Have a Material Impact on How Citi Records and Reports Its Financial Condition and Results of Operations. **Key changes:** - Reworded sentence: "Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, U.S." **Prior (2023):** Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition. **Current (2024):** Periodically, the Financial Accounting Standards Board (FASB) issues financial accounting and reporting standards that govern key aspects of Citi's financial statements or interpretations thereof when those standards become effective, including those areas where Citi is required to make assumptions or estimates. Changes to financial accounting or reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, U.S. banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition.If Citi's Risk Management and Other Processes, Strategies or Models Are Deficient or Ineffective, Citi May Incur Significant Losses and Its Regulatory Capital and Capital Ratios Could Be Negatively Impacted.Citi utilizes a broad and diversified set of risk management and other processes and strategies, including the use of models in analyzing and monitoring the various risks Citi assumes in conducting its activities. For example, Citi uses models as part of its comprehensive stress testing initiatives across the Company. Citi also relies on data to aggregate, assess and manage various risk exposures. Management of these risks and the reliability of the data are made more challenging within a large, global financial institution, such as Citi, particularly due to complex, diverse and rapidly changing financial markets and conditions in which Citi operates. Unexpected losses can result from untimely, inaccurate or incomplete processes and data. As discussed below, in October 2020, Citigroup and Citibank entered into consent orders with the FRB and OCC that require Citigroup and Citibank to make improvements in various aspects of enterprise-wide risk management, compliance, data quality management and governance, and internal controls (see "Citi's Consent Order Compliance" above and the legal and regulatory proceedings risk factor below).Citi's risk management and other processes, strategies and models are inherently limited because they involve techniques, including the use of historical data in many circumstances, assumptions and judgments that cannot anticipate every economic and financial outcome in the markets in which Citi operates, particularly given various macroeconomic, geopolitical and other challenges and uncertainties (see the macroeconomic challenges and uncertainties risk factor above), nor can they anticipate the specifics and timing of such outcomes. For example, many models used by Citi include assumptions about correlation or lack thereof among prices of various asset classes or other market indicators that may not necessarily hold in times of market stress, limited liquidity or other unforeseen circumstances, or identify changes in markets or client behaviors not yet inherent in historical data. Citi could incur significant losses, receivenegative regulatory evaluation or examination findings or besubject to additional enforcement actions, and its regulatory capital, capital ratios and ability to return capital could be negatively impacted, if Citi's risk management and other processes, including its ability to manage and aggregate data in a timely and accurate manner, strategies or models are deficient or ineffective. For additional information, see the capital return risk factor above and the heightened regulatory reporting standards or interpretations, whether promulgated or required by the FASB, the SEC, U.S. banking regulators or others, could present operational challenges and could also require Citi to change certain of the assumptions or estimates it previously used in preparing its financial statements, which could negatively impact how it records and reports its financial condition and results of operations generally and/or with respect to particular businesses. See Note 1 for additional information on Citi's accounting policies and changes in accounting, including the expected impacts on Citi's results of operations and financial condition. --- ## Modified: Funded exposure(1) **Key changes:** - Reworded sentence: "Real estate(2) Other industries(3) Total(4) (1) Funded exposure excludes loans carried at fair value of $7.3 billion that are not subject to ACLL under the CECL standard." **Prior (2023):** (1) Funded exposure excludes loans carried at fair value of $5.1 billion that are not subject to ACLL under the CECL standard. (2) As of December 31, 2022, the ACLL shown above reflects coverage of 0.4% of funded investment-grade exposure and 3.0% of funded non-investment-grade exposure. (3) Primarily associated with delinquency-managed loans including commercial credit cards and other loans, and unearned income at December 31, 2022. The following table details Citi's corporate credit ACLL by industry exposure: December 31, 2021In millions of dollars, except percentagesFunded exposure(1)ACLLACLL as a % of funded exposureTransportation and industrials$51,502 $597 1.2 %Technology, media and telecom28,542 170 0.6 Consumer retail32,894 288 0.9 Real estate46,220 509 1.1 Power, chemicals, metals and mining20,224 151 0.7 Banks and finance companies36,804 197 0.5 Energy and commodities13,485 268 2.0 Asset managers and funds26,879 34 0.5 Health8,826 73 0.8 Insurance3,162 8 0.3 Public sector12,464 74 0.6 Financial markets infrastructure109 - - Securities firms613 10 1.6 Other industries2,803 28 1.0 Total classifiably managed loans(2) $284,527 $2,407 0.8 %Loans managed on a delinquency basis(3)$636 $8 1.3 %Total$285,163 $2,415 0.8 % Funded exposure(1) Total classifiably managed loans(2) Loans managed on a delinquency basis(3) (1) Funded exposure excludes loans carried at fair value of $6.1 billion that are not subject to ACLL under the CECL standard. (2) As of December 31, 2021, the ACLL shown above reflects coverage of 0.7% of funded investment-grade exposure and 2.3% of funded non-investment-grade exposure. (3) Primarily associated with delinquency-managed loans including commercial credit cards and other loans, and unearned income at December 31, 2021. 80 80 80 Non-Accrual Loans and Assets and Renegotiated LoansThere is a certain amount of overlap among non-accrual loans and assets and renegotiated loans. The following summary provides a general description of each category.Non-Accrual Loans and Assets:•Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful.•A corporate loan may be classified as non-accrual and still be performing under the terms of the loan structure. Non-accrual loans may still be current on interest payments. Citi's corporate non-accrual loans were $1.1 billion, $1.5 billion and $1.6 billion as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Of these, approximately 50%, 68% and 56% were performing at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.•Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments.•Consumer mortgage loans, other than Federal Housing Administration (FHA) insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due.•North America Branded cards and Retail services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency.Renegotiated Loans:•Includes both corporate and consumer loans whose terms have been modified in a troubled debt restructuring (TDR).•Includes both accrual and non-accrual TDRs. Non-Accrual Loans and Assets and Renegotiated LoansThere is a certain amount of overlap among non-accrual loans and assets and renegotiated loans. The following summary provides a general description of each category.Non-Accrual Loans and Assets:•Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful.•A corporate loan may be classified as non-accrual and still be performing under the terms of the loan structure. Non-accrual loans may still be current on interest payments. Citi's corporate non-accrual loans were $1.1 billion, $1.5 billion and $1.6 billion as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Of these, approximately 50%, 68% and 56% were performing at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.•Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments.•Consumer mortgage loans, other than Federal Housing Administration (FHA) insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due.•North America Branded cards and Retail services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency.Renegotiated Loans:•Includes both corporate and consumer loans whose terms have been modified in a troubled debt restructuring (TDR).•Includes both accrual and non-accrual TDRs. **Current (2024):** Real estate(2) Other industries(3) Total(4) (1) Funded exposure excludes loans carried at fair value of $7.3 billion that are not subject to ACLL under the CECL standard. (2) As of December 31, 2023, the portion of the ACLL attributed to the total funded CRE exposure (including the Private Bank) was approximately 1.49%. (3) Includes $0.6 billion of funded exposure at December 31, 2023, primarily related to commercial credit card delinquency-managed loans. (4) As of December 31, 2023, the ACLL above reflects coverage of 0.3% of funded investment-grade exposure and 2.9% of funded non-investment-grade exposure. The following table details Citi's corporate credit ACLL by industry exposure: December 31, 2022In millions of dollars, except percentagesFunded exposure(1)ACLLACLL as a % of funded exposureTransportation and industrials$57,271 $699 1.2 %Banks and finance companies42,276 225 0.5 Real estate48,539 500 1.0 Commercial34,112 428 1.3 Residential14,427 72 0.5 Consumer retail32,687 358 1.1 Technology, media and telecom28,931 330 1.1 Power, chemicals, metals and mining18,326 288 1.6 Public sector11,736 58 0.5 Energy and commodities13,069 188 1.4 Health8,771 81 0.9 Asset managers and funds13,162 38 0.3 Insurance4,417 11 0.2 Securities firms569 11 1.9 Financial markets infrastructure60 - - Other industries(2)4,217 68 1.6 Total(3)$284,031 $2,855 1.0 % Funded exposure(1) Other industries(2) Total(3) (1) Funded exposure excludes loans carried at fair value of $5.1 billion that are not subject to ACLL under the CECL standard. (2) Includes $0.6 billion of funded exposure at December 31, 2022, primarily related to commercial credit card delinquency-managed loans. (3) As of December 31, 2022, the ACLL above reflects coverage of 0.4% of funded investment-grade exposure and 3.0% of funded non-investment-grade exposure. 87 87 87 Non-Accrual Loans and AssetsThere is a certain amount of overlap among non-accrual loans and assets. The following summary provides a general description of each category:•Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful.•A corporate loan may be classified as non-accrual and still be current on principal and interest payments under the terms of the loan structure. Citi's corporate non-accrual loans were $1.9 billion, $2.0 billion and $1.1 billion as of December 31, 2023, September 30, 2023 and December 31, 2022, respectively. •Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments.•Consumer mortgage loans, other than Federal Housing Administration (FHA)-insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due.•U.S. Branded Cards and Retail Services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency. Non-Accrual Loans and AssetsThere is a certain amount of overlap among non-accrual loans and assets. The following summary provides a general description of each category:•Corporate and consumer (including commercial banking) non-accrual status is based on the determination that payment of interest or principal is doubtful.•A corporate loan may be classified as non-accrual and still be current on principal and interest payments under the terms of the loan structure. Citi's corporate non-accrual loans were $1.9 billion, $2.0 billion and $1.1 billion as of December 31, 2023, September 30, 2023 and December 31, 2022, respectively. •Consumer non-accrual status is generally based on aging, i.e., the borrower has fallen behind on payments.•Consumer mortgage loans, other than Federal Housing Administration (FHA)-insured loans, are classified as non-accrual within 60 days of notification that the borrower has filed for bankruptcy. In addition, home equity loans are classified as non-accrual if the related residential first mortgage loan is 90 days or more past due.•U.S. Branded Cards and Retail Services are not included because, under industry standards, credit card loans accrue interest until such loans are charged off, which typically occurs at 180 days of contractual delinquency. --- ## Modified: 2023 vs. 2022 **Key changes:** - Reworded sentence: "2021 Interest income(1) Interest expense(2) Net interest income, taxable equivalent basis(1) Interest income - average rate(3) Net interest margin(3)(4) (1)Interest income and Net interest income include the taxable equivalent adjustments primarily related to the tax-exempt bond portfolio and certain tax-advantaged loan programs of $101 million, $165 million and $192 million for 2023, 2022 and 2021, respectively." - Reworded sentence: "(3) The average rate on interest income and net interest margin reflects the taxable equivalent gross-up adjustment." **Prior (2023):** Change 2021 vs. 2020 Interest revenue(1) Interest expense(2) Net interest income, taxable equivalent basis(1) Interest revenue - average rate(3) Net interest margin(3)(4) (1)Interest revenue and Net interest income include the taxable equivalent adjustments primarily related to the tax-exempt bond portfolio and certain tax-advantaged loan programs (based on the U.S. federal statutory tax rate of 21%) of $165 million, $192 million and $196 million for 2022, 2021 and 2020, respectively. (2)Interest expense associated with certain hybrid financial instruments, which are classified as Long-term debt and accounted for at fair value, is reported together with any changes in fair value as part of Principal transactions in the Consolidated Statement of Income and is therefore not reflected in Interest expense in the table above. (3) The average rate on interest revenue and net interest margin reflects the taxable equivalent gross-up adjustment. See footnote 1 above. (4) Citi's NIM is calculated by dividing net interest income by average interest-earning assets. 98 98 98 **Current (2024):** Change 2022 vs. 2021 Interest income(1) Interest expense(2) Net interest income, taxable equivalent basis(1) Interest income - average rate(3) Net interest margin(3)(4) (1)Interest income and Net interest income include the taxable equivalent adjustments primarily related to the tax-exempt bond portfolio and certain tax-advantaged loan programs of $101 million, $165 million and $192 million for 2023, 2022 and 2021, respectively. (2)Interest expense associated with certain hybrid financial instruments, which are classified as Long-term debt and accounted for at fair value, is reported together with any changes in fair value as part of Principal transactions in the Consolidated Statement of Income and is therefore not reflected in Interest expense in the table above. (3) The average rate on interest income and net interest margin reflects the taxable equivalent gross-up adjustment. See footnote 1 above. (4) Citi's NIM is calculated by dividing net interest income by average interest-earning assets. 104 104 104 --- ## Modified: Loans at fair value(1) **Key changes:** - Reworded sentence: "December 31, 2022In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as a% of EOP loans(1)ConsumerNorth America cards(2)$11.4 $150.6 7.6 %North America mortgages(3)0.5 100.4 0.5 North America other(3)0.6 37.8 1.6 International cards0.8 13.0 6.2 International other(3)0.8 66.0 1.2 Total(1)$14.1 $367.8 3.8 %CorporateCommercial and industrial$1.9 $147.8 1.3 %Financial institutions0.4 64.9 0.6 Mortgage and real estate0.4 21.9 1.8 Installment and other0.2 49.4 0.4 Total(1)$2.9 $284.0 1.0 %Loans at fair value(1)N/A$5.4 N/ATotal Citigroup$17.0 $657.2 2.6 % ACLL as a % of EOP loans(1) North America cards(2) North America mortgages(3) North America other(3) International other(3) Total(1) Total(1) Loans at fair value(1) (1)Excludes loans carried at fair value, since they do not have an ACLL and are excluded from the ACLL ratio calculation." - Reworded sentence: "The decrease in the coincident coverage ratio at December 31, 2023 was primarily due to the higher levels of NCLs in 4Q23 versus 4Q22." **Prior (2023):** December 31, 2021In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as apercentage of EOP loans(1)ConsumerNorth America cards(2)$10.8 $133.9 8.1 %North America mortgages(3)0.5 89.1 0.6 North America other(3)0.4 40.7 1.0 International cards1.2 17.8 6.7 International other(3)1.2 95.0 1.3 Total(1)$14.1 $376.5 3.7 %CorporateCommercial and industrial$1.6 $147.0 1.1 %Financial institutions0.3 71.8 0.4 Mortgage and real estate0.3 20.3 1.5 Installment and other0.2 46.1 0.4 Total(1)$2.4 $285.2 0.8 %Loans at fair value(1)N/A$6.1 N/ATotal Citigroup$16.5 $667.8 2.5 % ACLL as a percentage of EOP loans(1) North America cards(2) North America mortgages(3) North America other(3) International other(3) Total(1) Total(1) Loans at fair value(1) (1)Excludes loans carried at fair value, since they do not have an ACLL and are excluded from the ACLL ratio calculation. (2)Includes both Branded cards and Retail services. As of December 31, 2022, the $11.4 billion of ACLL represented approximately 43 months of coincident net credit loss coverage (based on 4Q22 NCLs). As of December 31, 2022, Branded cards ACLL as a percentage of EOP loans was 6.2% and Retail services ACLL as a percentage of EOP loans was 10.3%. As of December 31, 2021, the $10.8 billion of ACLL represented approximately 63 months of coincident net credit loss coverage (based on 4Q21 NCLs). The decrease in the coincident coverage ratio at December 31, 2022 was primarily due to the relatively higher levels of NCLs in 4Q22 versus 4Q21. As of December 31, 2021, Branded cards ACLL as a percentage of EOP loans was 7.1% and Retail services ACLL as a percentage of EOP loans was 10.0%. (3)Includes residential mortgages, retail loans and personal, small business and other loans, including those extended through the Private bank network. N/A Not applicable 79 79 79 The following table details Citi's corporate credit ACLL by industry exposure: December 31, 2022In millions of dollars, except percentagesFunded exposure(1)ACLLACLL as a % of funded exposureTransportation and industrials$57,271 $699 1.2 %Technology, media and telecom28,931 330 1.1 Consumer retail32,687 358 1.1 Real estate48,539 500 1.0 Power, chemicals, metals and mining18,326 288 1.6 Banks and finance companies42,276 225 0.5 Energy and commodities13,069 188 1.4 Asset managers and funds13,162 38 0.3 Health8,771 81 0.9 Insurance4,417 11 0.2 Public sector11,736 58 0.5 Financial markets infrastructure60 - - Securities firms569 11 1.9 Other industries3,651 59 1.6 Total classifiably managed loans(2) $283,465 $2,846 1.0 %Loans managed on a delinquency basis(3)$566 $9 1.6 %Total$284,031 $2,855 1.0 % **Current (2024):** December 31, 2022In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as a% of EOP loans(1)ConsumerNorth America cards(2)$11.4 $150.6 7.6 %North America mortgages(3)0.5 100.4 0.5 North America other(3)0.6 37.8 1.6 International cards0.8 13.0 6.2 International other(3)0.8 66.0 1.2 Total(1)$14.1 $367.8 3.8 %CorporateCommercial and industrial$1.9 $147.8 1.3 %Financial institutions0.4 64.9 0.6 Mortgage and real estate0.4 21.9 1.8 Installment and other0.2 49.4 0.4 Total(1)$2.9 $284.0 1.0 %Loans at fair value(1)N/A$5.4 N/ATotal Citigroup$17.0 $657.2 2.6 % ACLL as a % of EOP loans(1) North America cards(2) North America mortgages(3) North America other(3) International other(3) Total(1) Total(1) Loans at fair value(1) (1)Excludes loans carried at fair value, since they do not have an ACLL and are excluded from the ACLL ratio calculation. (2)Includes both Branded Cards and Retail Services. As of December 31, 2023, the $12.6 billion of ACLL represented approximately 25 months of coincident net credit loss coverage (based on 4Q23 NCLs). As of December 31, 2023, Branded Cards ACLL as a percentage of EOP loans was 6.0% and Retail Services ACLL as a percentage of EOP loans was 11.1%. As of December 31, 2022, the $11.4 billion of ACLL represented approximately 43 months of coincident net credit loss coverage (based on 4Q22 NCLs). The decrease in the coincident coverage ratio at December 31, 2023 was primarily due to the higher levels of NCLs in 4Q23 versus 4Q22. As of December 31, 2022, Branded Cards ACLL as a percentage of EOP loans was 6.2% and Retail Services ACLL as a percentage of EOP loans was 10.3%. (3)Includes residential mortgages, retail loans and personal, small business and other loans, including those extended through the Private Bank network. N/A Not applicable 86 86 86 The following table details Citi's corporate credit ACLL by industry exposure: December 31, 2023In millions of dollars, except percentagesFunded exposure(1)ACLLACLL as a % of funded exposureTransportation and industrials$59,917 $453 0.8 %Banks and finance companies52,569 179 0.3 Real estate(2)51,660 663 1.3 Commercial35,058 599 1.7 Residential16,602 64 0.4 Consumer retail33,548 282 0.8 Technology, media and telecom29,832 376 1.3 Power, chemicals, metals and mining19,004 270 1.4 Public sector12,621 102 0.8 Energy and commodities12,606 166 1.3 Health9,135 72 0.8 Asset managers and funds4,232 36 0.9 Insurance2,390 14 0.6 Securities firms734 23 3.1 Financial markets infrastructure156 - - Other industries(3)4,480 78 1.7 Total(4)$292,884 $2,714 0.9 % --- ## Modified: Non-Markets Net Interest Income **Key changes:** - Reworded sentence: "In millions of dollars202320222021Net interest income - taxable equivalent basis(1) per above$55,001 $48,833 $42,686 Markets net interest income - taxable equivalent basis(1)7,267 5,828 6,153 Non-Markets net interest income - taxable equivalent basis(1)$47,734 $43,005 $36,533 Net interest income - taxable equivalent basis(1) per above Markets net interest income - taxable equivalent basis(1) Non-Markets net interest income - taxable equivalent basis(1) (1) Interest income and Net interest income include the taxable equivalent adjustments discussed in the table above." **Prior (2023):** In millions of dollars202220212020Net interest income - taxable equivalent basis(1) per above$48,833 $42,686 $44,947 ICG Markets net interest income - taxable equivalent basis(1)5,173 5,167 5,208 Non-ICG Markets net interest income - taxable equivalent basis(1)$43,660 $37,519 $39,739 Net interest income - taxable equivalent basis(1) per above ICG Markets net interest income - taxable equivalent basis(1) Non-ICG Markets net interest income - taxable equivalent basis(1) (1) Interest revenue and Net interest income include the taxable equivalent adjustments discussed in the table above. Citi's net interest income in the fourth quarter of 2022 was $13.3 billion (also $13.3 billion on a taxable equivalent basis), an increase of $2.5 billion versus the prior year, primarily driven by non-ICG Markets (approximately $2.2 billion), as ICG Markets was largely unchanged (up approximately $0.3 billion across fixed income markets and equity markets). The increase in net interest income in non-ICG Markets was primarily driven by higher interest rates. Citi's net interest margin was 2.39% on a taxable equivalent basis in the fourth quarter of 2022, an increase of eight basis points from the prior quarter, also largely driven by higher interest rates.Citi's net interest income for 2022 increased 15%, or approximately $6.2 billion, to $48.7 billion ($48.8 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-ICG Markets net interest income, largely reflecting higher interest rates and higher loan balances in PBWM. In 2022, Citi's net interest margin increased to 2.25% on a taxable equivalent basis, compared to 1.99% in 2021, primarily driven by higher interest rates and a mix-shift in balances. Citi's net interest income in the fourth quarter of 2022 was $13.3 billion (also $13.3 billion on a taxable equivalent basis), an increase of $2.5 billion versus the prior year, primarily driven by non-ICG Markets (approximately $2.2 billion), as ICG Markets was largely unchanged (up approximately $0.3 billion across fixed income markets and equity markets). The increase in net interest income in non-ICG Markets was primarily driven by higher interest rates. Citi's net interest margin was 2.39% on a taxable equivalent basis in the fourth quarter of 2022, an increase of eight basis points from the prior quarter, also largely driven by higher interest rates.Citi's net interest income for 2022 increased 15%, or approximately $6.2 billion, to $48.7 billion ($48.8 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-ICG Markets net interest income, largely reflecting higher interest rates and higher loan balances in PBWM. In 2022, Citi's net interest margin increased to 2.25% on a taxable equivalent basis, compared to 1.99% in 2021, primarily driven by higher interest rates and a mix-shift in balances. Citi's net interest income in the fourth quarter of 2022 was $13.3 billion (also $13.3 billion on a taxable equivalent basis), an increase of $2.5 billion versus the prior year, primarily driven by non-ICG Markets (approximately $2.2 billion), as ICG Markets was largely unchanged (up approximately $0.3 billion across fixed income markets and equity markets). The increase in net interest income in non-ICG Markets was primarily driven by higher interest rates. Citi's net interest margin was 2.39% on a taxable equivalent basis in the fourth quarter of 2022, an increase of eight basis points from the prior quarter, also largely driven by higher interest rates. Citi's net interest income for 2022 increased 15%, or approximately $6.2 billion, to $48.7 billion ($48.8 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-ICG Markets net interest income, largely reflecting higher interest rates and higher loan balances in PBWM. In 2022, Citi's net interest margin increased to 2.25% on a taxable equivalent basis, compared to 1.99% in 2021, primarily driven by higher interest rates and a mix-shift in balances. 99 99 99 **Current (2024):** In millions of dollars202320222021Net interest income - taxable equivalent basis(1) per above$55,001 $48,833 $42,686 Markets net interest income - taxable equivalent basis(1)7,267 5,828 6,153 Non-Markets net interest income - taxable equivalent basis(1)$47,734 $43,005 $36,533 Net interest income - taxable equivalent basis(1) per above Markets net interest income - taxable equivalent basis(1) Non-Markets net interest income - taxable equivalent basis(1) (1) Interest income and Net interest income include the taxable equivalent adjustments discussed in the table above. Citi's net interest income in the fourth quarter of 2023 was $13.8 billion, on both a reported and taxable equivalent basis, an increase of $0.6 billion versus the prior year, primarily driven by Markets (up approximately $0.4 billion) and non-Markets (up approximately $0.1 billion). The increase in Markets net interest income was primarily driven by Fixed Income. The increase in non-Markets primarily reflected higher interest rates and growth in U.S. cards interest-earning balances, partially offset by a reduction from the exited markets and continued wind-downs in All Other - Legacy Franchises. Citi's net interest margin was 2.46% on a taxable equivalent basis in the fourth quarter of 2023, a decrease of three basis points from the prior quarter, largely driven by higher deposit costs, partially offset by higher Markets net interest margin.Citi's net interest income for 2023 increased 13%, or approximately $6.2 billion, to $54.9 billion ($55.0 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-Markets net interest income, largely reflecting higher interest rates and higher loan balances in USPB. In 2023, Citi's net interest margin increased to 2.46% on a taxable equivalent basis, compared to 2.25% in 2022, primarily driven by higher interest rates and a mix-shift in balances. Citi's net interest income in the fourth quarter of 2023 was $13.8 billion, on both a reported and taxable equivalent basis, an increase of $0.6 billion versus the prior year, primarily driven by Markets (up approximately $0.4 billion) and non-Markets (up approximately $0.1 billion). The increase in Markets net interest income was primarily driven by Fixed Income. The increase in non-Markets primarily reflected higher interest rates and growth in U.S. cards interest-earning balances, partially offset by a reduction from the exited markets and continued wind-downs in All Other - Legacy Franchises. Citi's net interest margin was 2.46% on a taxable equivalent basis in the fourth quarter of 2023, a decrease of three basis points from the prior quarter, largely driven by higher deposit costs, partially offset by higher Markets net interest margin.Citi's net interest income for 2023 increased 13%, or approximately $6.2 billion, to $54.9 billion ($55.0 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-Markets net interest income, largely reflecting higher interest rates and higher loan balances in USPB. In 2023, Citi's net interest margin increased to 2.46% on a taxable equivalent basis, compared to 2.25% in 2022, primarily driven by higher interest rates and a mix-shift in balances. Citi's net interest income in the fourth quarter of 2023 was $13.8 billion, on both a reported and taxable equivalent basis, an increase of $0.6 billion versus the prior year, primarily driven by Markets (up approximately $0.4 billion) and non-Markets (up approximately $0.1 billion). The increase in Markets net interest income was primarily driven by Fixed Income. The increase in non-Markets primarily reflected higher interest rates and growth in U.S. cards interest-earning balances, partially offset by a reduction from the exited markets and continued wind-downs in All Other - Legacy Franchises. Citi's net interest margin was 2.46% on a taxable equivalent basis in the fourth quarter of 2023, a decrease of three basis points from the prior quarter, largely driven by higher deposit costs, partially offset by higher Markets net interest margin. Citi's net interest income for 2023 increased 13%, or approximately $6.2 billion, to $54.9 billion ($55.0 billion on a taxable equivalent basis) versus the prior year. The increase was primarily due to an increase in non-Markets net interest income, largely reflecting higher interest rates and higher loan balances in USPB. In 2023, Citi's net interest margin increased to 2.46% on a taxable equivalent basis, compared to 2.25% in 2022, primarily driven by higher interest rates and a mix-shift in balances. 105 105 105 --- ## Modified: Workforce Size and Distribution **Key changes:** - Reworded sentence: "As of December 31, 2023, Citi employed approximately 239,000 colleagues in over 90 countries." - Reworded sentence: "In 2023, Citi welcomed over 38,000 new colleagues in addition to 44,600 roles filled by colleagues through internal mobility and promotions." **Prior (2023):** As of December 31, 2022, Citi employed approximately 240,000 colleagues in over 90 countries. The Company's workforce is constantly evolving and developing, benefiting from a strong mix of internal and external hiring into new and existing positions. In 2022, Citi welcomed nearly 60,000 new colleagues in addition to the roles filled by colleagues through internal mobility. The following table shows the geographic distribution of Citi's employee population by segment, region and gender: **Current (2024):** As of December 31, 2023, Citi employed approximately 239,000 colleagues in over 90 countries. The Company's workforce is constantly evolving and developing, benefiting from a strong mix of internal and external hiring into new and existing positions. In 2023, Citi welcomed over 38,000 new colleagues in addition to 44,600 roles filled by colleagues through internal mobility and promotions. Citi also sustains connections with former colleagues through its Alumni Network, and in 2023 hired more than 3,000 "returnees" back to Citi. The following table presents the geographic distribution of Citi's colleagues by segment or component and gender: --- ## Modified: Secured Funding Transactions **Key changes:** - Reworded sentence: "Secured funding is primarily accessed through Citi's broker-dealer subsidiaries, with a smaller portion executed through Citi's bank entities to efficiently fund both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities." - Reworded sentence: "Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets." **Prior (2023):** Secured funding is primarily accessed through Citi's broker-dealer subsidiaries to fund efficiently both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Citi also executes a smaller portion of its secured funding transactions through its bank entities, which are typically collateralized by government debt securities. Generally, daily changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and securities inventory. Secured funding of $202 billion as of December 31, 2022 increased 6% from the prior year and was unchanged sequentially, driven by normal business activity. The average balance for secured funding was approximately $205 billion for the quarter ended December 31, 2022. The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity. The majority of this activity is secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other secured funding is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding matched book assets. The remainder of the secured funding activity in the broker-dealer subsidiaries serves to fund securities inventory held in the context of market making and customer activities. To maintain reliable funding under a wide range of market conditions, including under periods of stress, Citi manages these activities by taking into consideration the quality of the underlying collateral and establishing minimum required funding tenors. The weighted average maturity of Citi's secured funding of less liquid securities inventory was greater than 110 days as of December 31, 2022.Citi manages the risks in its secured funding by conducting daily stress tests to account for changes in capacity, tenor, haircut, collateral profile and client actions. In addition, Citi maintains counterparty diversification by establishing concentration triggers and assessing counterparty reliability and stability under stress. Citi generally sources secured funding from more than 150 counterparties.Short-Term BorrowingsCiti's short-term borrowings of $47 billion as of the fourth quarter of 2022 increased 68% year-over-year, reflecting an increase in FHLB advances and commercial paper issuance, as Citi continues to diversify its funding profile, and decreased 1% sequentially, driven by normal business activity (see Note 18 for further information on Citigroup's and its affiliates' outstanding short-term borrowings). The remainder of the secured funding activity in the broker-dealer subsidiaries serves to fund securities inventory held in the context of market making and customer activities. To maintain reliable funding under a wide range of market conditions, including under periods of stress, Citi manages these activities by taking into consideration the quality of the underlying collateral and establishing minimum required funding tenors. The weighted average maturity of Citi's secured funding of less liquid securities inventory was greater than 110 days as of December 31, 2022. Citi manages the risks in its secured funding by conducting daily stress tests to account for changes in capacity, tenor, haircut, collateral profile and client actions. In addition, Citi maintains counterparty diversification by establishing concentration triggers and assessing counterparty reliability and stability under stress. Citi generally sources secured funding from more than 150 counterparties. **Current (2024):** Secured funding is primarily accessed through Citi's broker-dealer subsidiaries, with a smaller portion executed through Citi's bank entities to efficiently fund both (i) secured lending activity and (ii) a portion of the securities inventory held in the context of market making and customer activities. Secured funding transactions are predominantly collateralized by government debt securities. Generally, changes in the level of Citi's secured funding are primarily due to fluctuations in secured lending activity in the matched book (as described below) and changes in securities inventory. In order to maintain reliable funding under a wide range of market conditions, Citi manages risks related to its secured funding by establishing secured funding limits and conducting daily stress tests that account for risks related to capacity, tenor, haircut, collateral type, counterparty and client actions. Secured funding of $269 billion as of December 31, 2023 increased 33% year-over-year and 5% sequentially, largely driven by additional financing to support increases in trading-related assets within Citi's broker-dealer subsidiaries. As of the quarter ended December 31, 2023, on an average basis, secured funding was $288 billion. The portion of secured funding in the broker-dealer subsidiaries that funds secured lending is commonly referred to as "matched book" activity and is primarily secured by high-quality liquid securities such as U.S. Treasury securities, U.S. agency securities and foreign government debt securities. Other "matched book" activity is secured by less liquid securities, including equity securities, corporate bonds and asset-backed securities, the tenor of which is generally equal to or longer than the tenor of the corresponding assets. As indicated above, the remaining portion of secured funding is used to fund securities inventory held in the context of market making and customer activities. --- ## Modified: Additional Information **Key changes:** - Reworded sentence: "For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2024 Annual Meeting Proxy Statement to be filed with the SEC in March 2024." **Prior (2023):** For additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2023 Annual Meeting Proxy Statement to be filed with the SEC in March 2023, as well as its 2022 TCFD Report to be published and available on Citi's investor relations website in March 2023. The 2022 TCFD Report and any other ESG-related reports and information included elsewhere on Citi's investor relations website are not incorporated by reference into, and do not form any part of, this 2022 Annual Report on Form 10-K. 56 56 56 **Current (2024):** For additional information on Citi's environmental and social policies and priorities, click on "Our Impact" on Citi's website at www.citigroup.com. For information on Citi's ESG and Sustainability (including climate change) governance, see Citi's 2024 Annual Meeting Proxy Statement to be filed with the SEC in March 2024. Citi's climate reporting and any other ESG-related reports and information included elsewhere on Citi's website are not incorporated by reference into, and do not form any part of, this 2023 Annual Report on Form 10-K. --- ## Modified: Diversity, Equity and Inclusion **Key changes:** - Reworded sentence: "Citigroup's Board is committed to ensuring that the Board and Citi's Executive Management Team are composed of individuals whose backgrounds reflect the diversity of Citi's employees, customers and other stakeholders." - Reworded sentence: "In addition, Citi has focused on measuring and addressing pay equity within the organization: •In 2018, Citi was the first major U.S." - Reworded sentence: "•In 2023, due to its organizational and management simplification initiatives, Citi paused its annual pay equity analysis, as the Company continues the process of aligning roles to its new organizational structure." - Reworded sentence: "•Citi's 2022 raw pay gap analysis showed that the median pay for women globally was 78% of the median for men, up from 74% in 2021 and 2020." - Reworded sentence: "minorities was more than 97% of the median for non- minorities, which was up from just above 96% in 2021 and 94% in 2020." **Prior (2023):** Citi values pay transparency and has taken significant action to ensure that both managers and employees have greater clarity around Citi's compensation philosophy. Over the past two years, Citi introduced market-based salary structures and bonus opportunity guidelines in various countries worldwide. In addition, Citi recently began posting salary ranges on all external U.S. job postings, which aligns with strategic objectives of pay equity and transparency. Citi also raised its U.S. minimum wage in 2022, the second broad-based increase in less than two years. Citi has focused on measuring and addressing pay equity within the organization: •In 2018, Citi was the first major U.S. financial institution to publicly release the results of a pay equity review comparing its compensation of women to that of men, as well as U.S. minorities to U.S. non-minorities. Since 2018, Citi has continued to be transparent about pay equity, including disclosing its unadjusted or "raw" pay gap for both women and U.S. minorities. The raw gap measures the difference in median compensation. The existence of Citi's raw pay gap reflects a need to increase representation of women and U.S. minorities in senior and higher-paying roles. •Citi's 2022 pay equity review determined that on an adjusted basis, women globally are paid on average more than 99% of what men are paid at Citi, and that there was not a statistically significant difference in adjusted compensation for U.S. minorities and non-minorities. •Citi's 2022 raw pay gap analysis showed that the median pay for women globally is 78% of the median for men, up from 74% in 2021 and 2020. The median pay for U.S. minorities is more than 97% of the median for non-minorities, which is up from just above 96% in 2021 and 94% in 2020. **Current (2024):** Citigroup's Board is committed to ensuring that the Board and Citi's Executive Management Team are composed of individuals whose backgrounds reflect the diversity of Citi's employees, customers and other stakeholders. In addition, Citi has continued its efforts to support its globally diverse workforce, including, among other things, taking actions with respect to pay equity, setting aspirational representation goals and the use of diverse slates and hiring panels in recruiting. Citi's commitment to diversity, equity and inclusion continues to reflect a workforce that represents the clients it serves globally from all walks of life, backgrounds and origins. Understanding that diversity fuels the Company's culture and business success, Citi's 2025 aspirational representation goals are embedded in its business strategy. Having aspirational goals across all levels - from early career through senior leadership roles - will help ensure Citi not only has diverse talent in leadership roles but will also help build a diverse talent pipeline for the future. The Company constantly strives to ensure Citi remains a great place to work, where people can thrive professionally and personally. In 2023, Citi increased its unique Inclusion Network membership by 23.8% and added 15 new global Inclusion Network chapters. The Company launched the Allyship 365 initiative, focused on cultivating allyship year round and educating colleagues on its diversity, equity and inclusion efforts. Citi values pay transparency and has taken significant action to provide both managers and colleagues with greater clarity around Citi's compensation philosophy. Citi has introduced market-based salary structures and bonus opportunity guidelines in various countries worldwide, and posts salary ranges on all external U.S. job postings, which aligns with strategic objectives of pay equity and transparency. Citi also raised its U.S. minimum wage in 2022, the second broad-based increase in less than two years. In addition, Citi has focused on measuring and addressing pay equity within the organization: •In 2018, Citi was the first major U.S. financial institution to publicly release the results of a pay equity review comparing its compensation of women to that of men, as well as U.S. minorities to U.S. non-minorities. Since 2018, Citi has continued to be transparent about pay equity, including disclosing its unadjusted or "raw" pay gap for both women and U.S. minorities. The raw gap measures the difference in median compensation. The existence of Citi's raw pay gap reflects a need to increase representation of women and U.S. minorities in senior and higher-paying roles. •In 2023, due to its organizational and management simplification initiatives, Citi paused its annual pay equity analysis, as the Company continues the process of aligning roles to its new organizational structure. Citi looks forward to resuming routine pay equity reviews once that work is complete. •For historical context, Citi's 2022 pay equity review determined that on an adjusted basis, women globally are paid on average more than 99% of what men are paid at Citi, and that there was not a statistically significant difference in adjusted compensation for U.S. minorities and non-minorities. •Citi's 2022 raw pay gap analysis showed that the median pay for women globally was 78% of the median for men, up from 74% in 2021 and 2020. The median pay for U.S. minorities was more than 97% of the median for non- minorities, which was up from just above 96% in 2021 and 94% in 2020. --- ## Modified: A Deterioration in or Failure to Maintain Citi's Co-Branding or Private Label Credit Card Relationships Could Have a Negative Impact on Citi. **Key changes:** - Reworded sentence: "Citi has co-branding and private label relationships through its Branded Cards and Retail Services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to consumers, including customers of the retailers or merchants." - Reworded sentence: "Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of continued elevated interest rates and inflation, and lower economic growth rates, as well as a continuing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to a challenging macroeconomic environment or otherwise." - Reworded sentence: "Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings." - Reworded sentence: "If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan (see discussion below)." - Reworded sentence: "Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy.Citi's Performance and Its Ability to Effectively Execute Its Transformation and Strategic and Other Initiatives Could Be Negatively Impacted if It Is Not Able to Hire and Retain Qualified Employees.Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues." **Prior (2023):** Citi has co-branding and private label relationships through its Branded cards and Retail services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to customers of the retailers or merchants. The five largest relationships across both businesses in U.S. Personal Banking constituted an aggregate of approximately 10% of Citi's revenues in 2022 (for additional information, see "Personal Banking and Wealth Management" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term. Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of significantly elevated levels of inflation, higher interest rates, global supply shocks and lower economic growth rates, as well as an increasing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to the challenging macroeconomic environment or otherwise. These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded cards, Retail services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 16 for information on Citi's credit card related intangibles generally). 45 45 45 Citi's Inability in Its Resolution Plan Submissions to Address Any Shortcomings or Deficiencies or Guidance Provided Could Subject Citi to More Stringent Capital, Leverage or Liquidity Requirements, or Restrictions on Its Growth, Activities or Operations, and Could Eventually Require Citi to Divest Assets or Operations.Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan. For additional information on Citi's resolution plan submissions, see "Managing Global Risk - Liquidity Risk" below.Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally believed to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy.Citi's Performance and Its Ability to Effectively Execute Its Transformation and Other Strategic Initiatives Could Be Negatively Impacted if It Is Not Able to Compete for, Retain and Motivate Highly Qualified Colleagues.Recent employment conditions and inflationary pressures have made the competition to hire and retain qualified employees significantly more challenging and costly. Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and other strategic initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support transformation of its risk, controls, data and finance infrastructure and compliance, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues. If Citi is unable to continue to attract, retain and motivate the most highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and other strategic initiatives and its results of operations could be negatively impacted.Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of its control. For example, the competition for talent recently has been particularly intense, and attrition rates have risen due to factors such as low unemployment, a strong job market with a large number of open positions, and changes in worker's expectations, concerns and preferences, in part due to the pandemic, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including for example technology companies, that are not subject to such regulation. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities and employee benefits it offers, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below.Citi Faces Increased Competitive Challenges, Including from Financial Services and Other Companies and Emerging Technologies.Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage. For example, Citi competes with other financial services companies in the U.S. and globally that continue to develop and introduce new products and services. In recent years, non-traditional financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions, such as Citi, and have sought bank charters to provide these services. These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to borrow, save and invest money. Emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite recent turmoil in the digital asset market, there is sustained interest from clients and investors in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. However, Citi may not be able to provide the same or similar services for legal or regulatory reasons and due to increased compliance and other risks. In Citi's Inability in Its Resolution Plan Submissions to Address Any Shortcomings or Deficiencies or Guidance Provided Could Subject Citi to More Stringent Capital, Leverage or Liquidity Requirements, or Restrictions on Its Growth, Activities or Operations, and Could Eventually Require Citi to Divest Assets or Operations.Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan. For additional information on Citi's resolution plan submissions, see "Managing Global Risk - Liquidity Risk" below.Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally believed to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy.Citi's Performance and Its Ability to Effectively Execute Its Transformation and Other Strategic Initiatives Could Be Negatively Impacted if It Is Not Able to Compete for, Retain and Motivate Highly Qualified Colleagues.Recent employment conditions and inflationary pressures have made the competition to hire and retain qualified employees significantly more challenging and costly. Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and other strategic initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support transformation of its risk, controls, data and finance infrastructure and compliance, depends on its ability to attract new colleagues and to retain and motivate its existing **Current (2024):** Citi has co-branding and private label relationships through its Branded Cards and Retail Services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to consumers, including customers of the retailers or merchants. The five largest relationships across both businesses in USPB constituted an aggregate of approximately 11% of Citi's revenues in 2023 (see "U.S. Personal Banking" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term. Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of continued elevated interest rates and inflation, and lower economic growth rates, as well as a continuing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to a challenging macroeconomic environment or otherwise. These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded Cards, Retail Services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 17 for information on Citi's credit card related intangibles generally). 52 52 52 The Application of U.S. Resolution Plan Requirements May Pose a Greater Risk of Loss to Citi's Debt and Equity Securities Holders, and Citi's Inability in Its Resolution Plan Submissions to Address Any Shortcomings or Deficiencies or Guidance Could Subject Citi to More Stringent Capital, Leverage or Liquidity Requirements, or Restrictions on Its Growth, Activities or Operations, and Could Eventually Require Citi to Divest Assets or Operations.Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. As a result, Citigroup's losses and any losses incurred by its material legal entity subsidiaries would be imposed first on holders of Citigroup's equity securities and thereafter on its unsecured creditors, including holders of eligible long-term debt and other debt securities. In addition, a wholly owned, direct subsidiary of Citigroup serves as a resolution funding vehicle (the IHC) to which Citigroup has transferred, and has agreed to transfer on an ongoing basis, certain assets. The obligations of Citigroup and of the IHC, respectively, under the amended and restated secured support agreement, are secured on a senior basis by the assets of Citigroup (other than shares in subsidiaries of the parent company and certain other assets), and the assets of the IHC, as applicable. As a result, claims of the operating material legal entities against the assets of Citigroup with respect to such secured assets are effectively senior to unsecured obligations of Citigroup. Citi's single point of entry resolution plan strategy and the obligations under the amended and restated secured support agreement may result in the recapitalization of and/or provision of liquidity to Citi's operating material legal entities, and the commencement of bankruptcy proceedings by Citigroup at an earlier stage of financial stress than might otherwise occur without such mechanisms in place.In line with the FRB's TLAC rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - would bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup. For additional information on Citi's single point of entry resolution plan strategy and the IHC and secured support agreement, see "Managing Global Risk - Liquidity Risk" below.On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in Citi's processes and practices for producing certain data that could materially impact its resolution capabilities. If a shortcoming is not satisfactorily explained or addressed before, or in, the submission of the next resolution plan, the shortcoming may be found to be a deficiency in the next resolution plan (see discussion below). Citi submitted its 2023 resolution plan in June 2023. More generally, data continuesto be a subject of regulatory focus, and Citi continues to workon enhancing its data availability and quality.Under Title I, if the FRB and the FDIC jointly determine that Citi's resolution plan is not "credible" (which, although not defined, is generally understood to mean the regulators do not believe the plan is feasible or would otherwise allow Citi to be resolved in a way that protects systemically important functions without severe systemic disruption), or would not facilitate an orderly resolution of Citi under the U.S. Bankruptcy Code, and Citi fails to resubmit a resolution plan that remedies any identified deficiencies, Citi could be subjected to more stringent capital, leverage or liquidity requirements, or restrictions on its growth, activities or operations. If within two years from the imposition of any such requirements or restrictions Citi has still not remediated any identified deficiencies, then Citi could eventually be required to divest certain assets or operations. Any such restrictions or actions would negatively impact Citi's reputation, market and investor perception, operations and strategy.Citi's Performance and Its Ability to Effectively Execute Its Transformation and Strategic and Other Initiatives Could Be Negatively Impacted if It Is Not Able to Hire and Retain Qualified Employees.Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and strategic and other initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support Citi's transformation and strategic and other initiatives, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues. If Citi is unable to continue to attract, retain and motivate highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and strategic and other initiatives and its results of operations could be negatively impacted.Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of Citi's control. For example, the competition for talent continues to be particularly intense due to factors such as low unemployment and changes in worker expectations, concerns and preferences, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including, for example, technology companies, that are not subject to The Application of U.S. Resolution Plan Requirements May Pose a Greater Risk of Loss to Citi's Debt and Equity Securities Holders, and Citi's Inability in Its Resolution Plan Submissions to Address Any Shortcomings or Deficiencies or Guidance Could Subject Citi to More Stringent Capital, Leverage or Liquidity Requirements, or Restrictions on Its Growth, Activities or Operations, and Could Eventually Require Citi to Divest Assets or Operations.Title I of the Dodd-Frank Act requires Citi to prepare and submit a plan to the FRB and the FDIC for the orderly resolution of Citigroup (the bank holding company) and its significant legal entities under the U.S. Bankruptcy Code in the event of future material financial distress or failure. Under Citi's preferred "single point of entry" resolution plan strategy, only Citigroup, the parent holding company, would enter into bankruptcy, while Citigroup's material legal entities (as defined in the public section of its 2023 resolution plan, which can be found on the FRB's and FDIC's websites) would remain operational outside of any resolution or insolvency proceedings. As a result, Citigroup's losses and any losses incurred by its material legal entity subsidiaries would be imposed first on holders of Citigroup's equity securities and thereafter on its unsecured creditors, including holders of eligible long-term debt and other debt securities. In addition, a wholly owned, direct subsidiary of Citigroup serves as a resolution funding vehicle (the IHC) to which Citigroup has transferred, and has agreed to transfer on an ongoing basis, certain assets. The obligations of Citigroup and of the IHC, respectively, under the amended and restated secured support agreement, are secured on a senior basis by the assets of Citigroup (other than shares in subsidiaries of the parent company and certain other assets), and the assets of the IHC, as applicable. As a result, claims of the operating material legal entities against the assets of Citigroup with respect to such secured assets are effectively senior to unsecured obligations of Citigroup. Citi's single point of entry resolution plan strategy and the obligations under the amended and restated secured support agreement may result in the recapitalization of and/or provision of liquidity to Citi's operating material legal entities, and the commencement of bankruptcy proceedings by Citigroup at an earlier stage of financial stress than might otherwise occur without such mechanisms in place.In line with the FRB's TLAC rule, Citigroup's shareholders and unsecured creditors - including its unsecured long-term debt holders - would bear any losses resulting from Citigroup's bankruptcy. Accordingly, any value realized by holders of its unsecured long-term debt may not be sufficient to repay the amounts owed to such debt holders in the event of a bankruptcy or other resolution proceeding of Citigroup. For additional information on Citi's single point of entry resolution plan strategy and the IHC and secured support agreement, see "Managing Global Risk - Liquidity Risk" below.On November 22, 2022, the FRB and FDIC issued feedback on the resolution plans filed on July 1, 2021 by the eight U.S. GSIBs, including Citi. The FRB and FDIC identified one shortcoming, but no deficiencies, in Citi's 2021 resolution plan. The shortcoming related to data integrity and data quality management issues, specifically, weaknesses in --- ## Modified: Non-Accrual Loans **Key changes:** - Reworded sentence: "December 31,In millions of dollars20232022202120202019Corporate non-accrual loans by region(1)(2)(3)North America(4)$978 $138 $510 $1,486 $1,082 International904 984 1,043 1,560 942 Total$1,882 $1,122 $1,553 $3,046 $2,024 Corporate non-accrual loans(1)(2)(3)Banking$799 $757 $1,166 $2,595 $1,565 Services1031537079113Markets(4)7911385193179Mexico SBMM189199232179167Total$1,882 $1,122 $1,553 $3,046 $2,024 Consumer non-accrual loans(1)USPB$291 $282 $344 $456 $269 Wealth288 259 336 494 174 Asia Consumer(5)22 30 209 296 267 Mexico Consumer479 457 524 774 632 Legacy Holdings Assets (consumer)235 289 413 602 638 Total $1,315 $1,317 $1,826 $2,622 $1,980 Total non-accrual loans$3,197 $2,439 $3,379 $5,668 $4,004" **Prior (2023):** The table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. December 31,In millions of dollars20222021202020192018Corporate non-accrual loans by region(1)(2)North America$138 $510 $1,486 $1,082 $416 EMEA502 367 629 398 344 Latin America429 568 719 473 307 Asia 53 108 212 71 243 Total$1,122 $1,553 $3,046 $2,024 $1,310 Corporate non-accrual loans(1)(2)Banking$767 $1,239 $2,767 $1,742 $1,097 Services1537079113137Markets3122121Mexico SBMM19923217916775Total$1,122 $1,553 $3,046 $2,024 $1,310 Consumer non-accrual loans(1)U.S. Personal Banking and Global Wealth$541 $680 $950 $443 $455 Asia Consumer(3)30 209 296 267 242 Mexico Consumer457 524 774 632 638 Legacy Holdings Assets - Consumer289 413 602 638 892 Total $1,317 $1,826 $2,622 $1,980 $2,227 Total non-accrual loans$2,439 $3,379 $5,668 $4,004 $3,537 **Current (2024):** The table below summarizes Citigroup's non-accrual loans as of the periods indicated. Non-accrual loans may still be current on interest payments. In situations where Citi reasonably expects that only a portion of the principal owed will ultimately be collected, all payments received are reflected as a reduction of principal and not as interest income. For all other non-accrual loans, cash interest receipts are generally recorded as revenue. December 31,In millions of dollars20232022202120202019Corporate non-accrual loans by region(1)(2)(3)North America(4)$978 $138 $510 $1,486 $1,082 International904 984 1,043 1,560 942 Total$1,882 $1,122 $1,553 $3,046 $2,024 Corporate non-accrual loans(1)(2)(3)Banking$799 $757 $1,166 $2,595 $1,565 Services1031537079113Markets(4)7911385193179Mexico SBMM189199232179167Total$1,882 $1,122 $1,553 $3,046 $2,024 Consumer non-accrual loans(1)USPB$291 $282 $344 $456 $269 Wealth288 259 336 494 174 Asia Consumer(5)22 30 209 296 267 Mexico Consumer479 457 524 774 632 Legacy Holdings Assets (consumer)235 289 413 602 638 Total $1,315 $1,317 $1,826 $2,622 $1,980 Total non-accrual loans$3,197 $2,439 $3,379 $5,668 $4,004 --- ## Modified: Allowance for Credit Losses on Loans (ACLL) **Key changes:** - Reworded sentence: "The following tables detail information on Citi's ACLL, loans and coverage ratios: December 31, 2023In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as a% of EOP loans(1)ConsumerNorth America cards(2)$12.6 $164.7 7.7 %North America mortgages(3)0.2 112.0 0.2 North America other(3)0.7 36.2 1.9 International cards0.9 14.2 6.3 International other(3)1.0 61.8 1.6 Total(1)$15.4 $388.9 4.0 %CorporateCommercial and industrial$1.7 $151.5 1.1 %Financial institutions0.3 65.1 0.5 Mortgage and real estate0.6 24.9 2.4 Installment and other0.1 51.3 0.2 Total(1)$2.7 $292.9 0.9 %Loans at fair value(1)N/A$7.6 N/ATotal Citigroup$18.1 $689.4 2.7 % ACLL as a" **Prior (2023):** The following tables detail information on Citi's ACLL, loans and coverage ratios: December 31, 2022In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as apercentage of EOP loans(1)ConsumerNorth America cards(2)$11.4 $150.6 7.6 %North America mortgages(3)0.5 100.4 0.5 North America other(3)0.6 37.8 1.6 International cards0.8 13.0 6.2 International other(3)0.8 66.0 1.2 Total(1)$14.1 $367.8 3.8 %CorporateCommercial and industrial$1.9 $147.8 1.3 %Financial institutions0.4 64.9 0.6 Mortgage and real estate0.4 21.9 1.8 Installment and other0.2 49.4 0.4 Total(1)$2.9 $284.0 1.0 %Loans at fair value(1)N/A$5.4 N/ATotal Citigroup$17.0 $657.2 2.6 % ACLL as a **Current (2024):** The following tables detail information on Citi's ACLL, loans and coverage ratios: December 31, 2023In billions of dollarsACLLEOP loans, net ofunearned incomeACLL as a% of EOP loans(1)ConsumerNorth America cards(2)$12.6 $164.7 7.7 %North America mortgages(3)0.2 112.0 0.2 North America other(3)0.7 36.2 1.9 International cards0.9 14.2 6.3 International other(3)1.0 61.8 1.6 Total(1)$15.4 $388.9 4.0 %CorporateCommercial and industrial$1.7 $151.5 1.1 %Financial institutions0.3 65.1 0.5 Mortgage and real estate0.6 24.9 2.4 Installment and other0.1 51.3 0.2 Total(1)$2.7 $292.9 0.9 %Loans at fair value(1)N/A$7.6 N/ATotal Citigroup$18.1 $689.4 2.7 % ACLL as a --- ## Modified: Citi's Performance and Its Ability to Effectively Execute Its Transformation and Strategic and Other Initiatives Could Be Negatively Impacted if It Is Not Able to Hire and Retain Qualified Employees. **Key changes:** - Removed sentence: "Recent employment conditions and inflationary pressures have made the competition to hire and retain qualified employees significantly more challenging and costly." - Reworded sentence: "Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and strategic and other initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support Citi's transformation and strategic and other initiatives, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues." - Reworded sentence: "Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage.For example, Citi competes with other financial services companies in the U.S." - Reworded sentence: "Citi may not be able to provide the same or similar services for legal or regulatory reasons, which may be exacerbated by rapidly evolving and conflicting regulatory requirements, and due to increased compliance and other risks." **Prior (2023):** Recent employment conditions and inflationary pressures have made the competition to hire and retain qualified employees significantly more challenging and costly. Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and other strategic initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support transformation of its risk, controls, data and finance infrastructure and compliance, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues. If Citi is unable to continue to attract, retain and motivate the most highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and other strategic initiatives and its results of operations could be negatively impacted.Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of its control. For example, the competition for talent recently has been particularly intense, and attrition rates have risen due to factors such as low unemployment, a strong job market with a large number of open positions, and changes in worker's expectations, concerns and preferences, in part due to the pandemic, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including for example technology companies, that are not subject to such regulation. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities and employee benefits it offers, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below.Citi Faces Increased Competitive Challenges, Including from Financial Services and Other Companies and Emerging Technologies.Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage. For example, Citi competes with other financial services companies in the U.S. and globally that continue to develop and introduce new products and services. In recent years, non-traditional financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions, such as Citi, and have sought bank charters to provide these services. These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to borrow, save and invest money. Emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite recent turmoil in the digital asset market, there is sustained interest from clients and investors in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. However, Citi may not be able to provide the same or similar services for legal or regulatory reasons and due to increased compliance and other risks. In colleagues. If Citi is unable to continue to attract, retain and motivate the most highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and other strategic initiatives and its results of operations could be negatively impacted. Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of its control. For example, the competition for talent recently has been particularly intense, and attrition rates have risen due to factors such as low unemployment, a strong job market with a large number of open positions, and changes in worker's expectations, concerns and preferences, in part due to the pandemic, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including for example technology companies, that are not subject to such regulation. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities and employee benefits it offers, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below. **Current (2024):** Citi's performance and the performance of its individual businesses largely depend on the talents and efforts of its diverse and highly qualified colleagues. Specifically, Citi's continued ability to compete in each of its lines of business, to manage its businesses effectively and to execute its transformation and strategic and other initiatives, including, for example, hiring front office colleagues to grow businesses or hiring colleagues to support Citi's transformation and strategic and other initiatives, depends on its ability to attract new colleagues and to retain and motivate its existing colleagues. If Citi is unable to continue to attract, retain and motivate highly qualified colleagues, Citi's performance, including its competitive position, the execution of its transformation and strategic and other initiatives and its results of operations could be negatively impacted. Citi's ability to attract, retain and motivate colleagues depends on numerous factors, some of which are outside of Citi's control. For example, the competition for talent continues to be particularly intense due to factors such as low unemployment and changes in worker expectations, concerns and preferences, including an increased demand for remote work options and other job flexibility. Also, the banking industry generally is subject to more comprehensive regulation of employee compensation than other industries, including deferral and clawback requirements for incentive compensation, which can make it unusually challenging for Citi to compete in labor markets against businesses, including, for example, technology companies, that are not subject to 53 53 53 such regulation. In addition, in 2023 Citi announced plans to reduce management layers from 13 to a median of eight as part of organizational simplification initiatives that also involve significant reductions in functional roles, which could also impact its ability to attract and retain colleagues. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below.Citi Faces Increased Competitive Challenges, Including from Financial Services and Other Companies and Emerging Technologies.Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, private credit and financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage.For example, Citi competes with other financial services companies in the U.S. and globally that have grown rapidly over the last several years or have developed and introduced new products and services. Potential mergers and acquisitions involving traditional financial services companies such as regional banks or credit card issuers, as well as networks and merchant acquirers, may also increase competition and impact Citi's ability to offer competitive pricing and rewards. Non-traditional financial services firms, such as private credit and financial technology companies, are less regulated and continue to expand their offerings of services traditionally provided by financial institutions. The growth of certain of these competitors has increased market and counterparty credit risks, particularly in a more challenging macroeconomic environment (see the risk factor on credit and concentrations of risk below). In addition, emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite difficulties and turmoil faced by the digital asset market in recent years, clients and investors have exhibited a sustained interest in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. Citi may not be able to provide the same or similar services for legal or regulatory reasons, which may be exacerbated by rapidly evolving and conflicting regulatory requirements, and due to increased compliance and other risks. Further, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive. Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services, as well as invest in and develop related infrastructure, to attract and retain customers or clients or to compete more effectively with competitors, including new market entrants. Simultaneously, as Citi develops new products and services leveraging emerging technologies, new risks may emerge that, if not designed and governed adequately, may result in control gaps and in Citi operating outside of its risk appetite. For example, failure to strategically embrace the potential of artificial intelligence (AI) may result in a competitive disadvantage to Citi. At the same time, as a new technology, use of AI without sufficient controls, governance and risk management may result in increased risks across all of Citi's risk categories. As another example, instant and 24x7 payments products could be accompanied by challenges to forecasting and managing liquidity, as well as increased operational and compliance risks. Moreover, Citi relies on third parties to support certain of its product and service offerings, which may put Citi at a disadvantage to competitors who may directly offer a broader array of products and services. Also, Citi's businesses, results of operations and reputation may suffer if any third party is unable to provide adequate support for such product and service offerings, whether due to operational incidents or otherwise (see the operational processes and systems, cybersecurity and emerging markets risk factors below).To the extent that Citi is not able to compete effectively with financial services companies, including private credit and financial technology companies, and non-financial services firms, Citi could be placed at a competitive disadvantage, which could result in loss of customers and market share, and its businesses, results of operations and financial condition could suffer. For additional information on Citi's competitors, see the co-brand and private label cards and qualified colleagues risk factors above and "Supervision, Regulation and Other - Competition" below.OPERATIONAL RISKSA Failure or Disruption of Citi's Operational Processes or Systems Could Negatively Impact Its Reputation, Customers, Clients, Businesses or Results of Operations and Financial Condition.Citi's global operations rely heavily on its technology systems and infrastructure, including the accurate, timely and secure processing, management, storage and transmission of data, including confidential transactions, and other information, as well as the monitoring of a substantial amount of data and complex transactions in real time. Citi obtains and stores an extensive amount of personal and client-specific information for its consumer and institutional customers and clients, and must accurately record and reflect their account transactions. Citi's operations must also comply with complex and evolving laws, regulations and heightened regulatory expectations in the countries in which it operates (see the implementation and interpretation of regulatory changes and legal proceedings risk factors below). With the evolving proliferation of new technologies and the increasing use of the internet, mobile devices and cloud services to conduct financial transactions and customers' and clients' increasing use of online banking and trading systems and other platforms, large global financial institutions such as Citi have been, and will continue to be, subject to an ever-increasing risk of operational loss, failure or disruption. such regulation. In addition, in 2023 Citi announced plans to reduce management layers from 13 to a median of eight as part of organizational simplification initiatives that also involve significant reductions in functional roles, which could also impact its ability to attract and retain colleagues. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below.Citi Faces Increased Competitive Challenges, Including from Financial Services and Other Companies and Emerging Technologies.Citi operates in an increasingly evolving and competitive business environment, which includes both financial and non-financial services firms, such as traditional banks, online banks, private credit and financial technology companies and others. These companies compete on the basis of, among other factors, size, reach, quality and type of products and services offered, price, technology and reputation. Certain competitors may be subject to different and, in some cases, less stringent legal and regulatory requirements, whether due to size, jurisdiction, entity type or other factors, placing Citi at a competitive disadvantage.For example, Citi competes with other financial services companies in the U.S. and globally that have grown rapidly over the last several years or have developed and introduced new products and services. Potential mergers and acquisitions involving traditional financial services companies such as regional banks or credit card issuers, as well as networks and merchant acquirers, may also increase competition and impact Citi's ability to offer competitive pricing and rewards. Non-traditional financial services firms, such as private credit and financial technology companies, are less regulated and continue to expand their offerings of services traditionally provided by financial institutions. The growth of certain of these competitors has increased market and counterparty credit risks, particularly in a more challenging macroeconomic environment (see the risk factor on credit and concentrations of risk below). In addition, emerging technologies have the potential to intensify competition and accelerate disruption in the financial services industry. For example, despite difficulties and turmoil faced by the digital asset market in recent years, clients and investors have exhibited a sustained interest in digital assets. Financial services firms and other market participants have begun to offer services related to those assets. Citi may not be able to provide the same or similar services for legal or regulatory reasons, which may be exacerbated by rapidly evolving and conflicting regulatory requirements, and due to increased compliance and other risks. Further, changes in the payments space (e.g., instant and 24x7 payments) are accelerating, and, as a result, certain of Citi's products and services could become less competitive. Increased competition and emerging technologies have required and could require Citi to change or adapt its products and services, as well as invest in and develop related infrastructure, to attract and retain customers or clients or to compete more effectively with competitors, including new such regulation. In addition, in 2023 Citi announced plans to reduce management layers from 13 to a median of eight as part of organizational simplification initiatives that also involve significant reductions in functional roles, which could also impact its ability to attract and retain colleagues. Other factors that could impact its ability to attract, retain and motivate colleagues include, among other things, Citi's presence in a particular market or region, the professional and development opportunities, its reputation and its diversity. For information on Citi's colleagues and workforce management, see "Human Capital Resources and Management" below. --- ## Modified: FICO distribution(1) **Key changes:** - Reworded sentence: "The FICO distribution of both card portfolios declined slightly during 2023, primarily reflecting the normalization in net credit loss and delinquency rates." **Prior (2023):** (1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both cards portfolios shifted slightly lower across the credit bands from the prior quarter and the prior year consistent with the ongoing normalization in net credit loss and delinquency rates in the portfolios. The FICO distribution continues to reflect strong underlying credit quality and a benefit from the continued impacts of government stimulus, unemployment benefits and customer relief programs. See Note 14 for additional information on FICO scores. 72 72 72 **Current (2024):** (1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both card portfolios declined slightly during 2023, primarily reflecting the normalization in net credit loss and delinquency rates. The FICO distribution continued to reflect strong underlying credit quality of the portfolios. See Note 15 for additional information on FICO scores. 79 79 79 --- ## Modified: Climate Change Presents Various Financial and Non-Financial Risks to Citi and Its Customers and Clients. **Key changes:** - Reworded sentence: "Physical risks from climate change include acute risks, such as hurricanes, floods and droughts, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration." - Reworded sentence: "Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization." - Reworded sentence: "Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a time-lag, and variable in quality." - Reworded sentence: "For example, in October 2023, the FRB, FDIC and OCC jointly released principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, including physical and transition risks, for financial institutions with more than $100 billion in assets." - Reworded sentence: "Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization." **Prior (2023):** Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes and floods, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. Such physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of properties and other assets, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses. Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, the need to decarbonize in a gradual and orderly way, while promoting energy security, may lead to continued exposure to carbon-intensive activity that in turn may raise such reputational risks. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. Moreover, U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in December 2022, the FRB requested comment on draft principles that would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for FRB-supervised financial institutions with more than $100 billion in assets.Legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs for Citi (for additional information, see the ongoing regulatory and legislative uncertainties and changes risk factor above). In addition, Citi could face increased regulatory, reputational and legal scrutiny as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Citi also faces potentially conflicting anti-ESG initiatives from certain U.S. state governments that may impact its ability to conduct certain business within those jurisdictions, as well as from Congress. For information on Citi's climate and other sustainability initiatives, see "Sustainability and Other ESG Matters" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below.Citi's Ability to Utilize Its DTAs, and Thus Reduce the Negative Impact of the DTAs on Citi's Regulatory Capital, Will Be Driven by Its Ability to Generate U.S. Taxable Income.At December 31, 2022, Citi's net DTAs were $27.7 billion, net of a valuation allowance of $2.4 billion, of which $10.9 billion was deducted from Citi's CET1 Capital under the U.S. results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, the need to decarbonize in a gradual and orderly way, while promoting energy security, may lead to continued exposure to carbon-intensive activity that in turn may raise such reputational risks. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. Moreover, U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in December 2022, the FRB requested comment on draft principles that would provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for FRB-supervised financial institutions with more than $100 billion in assets. Legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs for Citi (for additional information, see the ongoing regulatory and legislative uncertainties and changes risk factor above). In addition, Citi could face increased regulatory, reputational and legal scrutiny as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Citi also faces potentially conflicting anti-ESG initiatives from certain U.S. state governments that may impact its ability to conduct certain business within those jurisdictions, as well as from Congress. For information on Citi's climate and other sustainability initiatives, see "Sustainability and Other ESG Matters" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below. **Current (2024):** Climate change presents both immediate and long-term risks to Citi and its customers and clients, with the risks expected to increase over time. Climate risks can arise from both physical risks (those risks related to the physical effects of climate change) and transition risks (risks related to regulatory, market, technological, stakeholder and legal changes from a transition to a low-carbon economy). Physical and transition risks can manifest themselves differently across Citi's risk categories in the short, medium and long terms. Physical risks from climate change include acute risks, such as hurricanes, floods and droughts, as well as consequences of chronic changes in climate, such as rising sea levels, prolonged droughts and systemic changes to geographies and any resulting population migration. For example, physical risks could have adverse financial, operational and other impacts on Citi, both directly on its business and operations, and indirectly as a result of impacts to Citi's clients, customers, vendors and other counterparties. These impacts can include destruction, damage or impairment of owned or leased properties and other assets, destruction or deterioration of the value of collateral, such as real estate, disruptions to business operations and supply chains and reduced availability or increase in the cost of insurance. Physical risks can also impact Citi's credit risk exposures, for example, in its mortgage and commercial real estate lending businesses. Transition risks may arise from changes in regulations or market preferences toward low-carbon industries or sectors, which in turn could have negative impacts on asset values, results of operations or the reputations of Citi and its customers and clients. For example, Citi's corporate credit exposures include oil and gas, power and other industries that may experience reduced demand for carbon-intensive products due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization. Moreover, increasing legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in increased regulatory, compliance, credit, reputational and other risks and costs for Citi. New regulations have been enacted and/or are expected in several jurisdictions, including the EU's Corporate Sustainability Reporting Directive (CSRD), the SEC climate-related disclosures that could require disclosure of climate-related information and the State of California's legislation enacted in October 2023 requiring broad disclosure of greenhouse gas emissions and other climate-related information largely beginning in 2026. In addition, Citi could face increased regulatory scrutiny and reputation and litigation risks as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a time-lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in October 2023, the FRB, FDIC and OCC jointly released principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, including physical and transition risks, for financial institutions with more than $100 billion in assets. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, Citi's approach to supporting client decarbonization in a gradual and orderly way, while promoting energy security, may lead to both continued exposure to carbon-intensive activity and increased reputation risks from stakeholders with divergent points of view. Citi also faces anti-ESG challenges from certain U.S. state and other governments that may impact its ability to conduct certain business within those jurisdictions.For information on Citi's climate and other sustainability initiatives, see "Climate Change and Net Zero" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. due to the transition to a low-carbon economy. Failure to adequately consider transition risk in developing and executing on its business strategy could lead to a loss of market share, lower revenues and higher credit costs. Transition risks also include potential increased operational, compliance and energy costs driven by government policies to promote decarbonization. Moreover, increasing legislative and regulatory changes and uncertainties regarding climate-related risk management and disclosures are likely to result in increased regulatory, compliance, credit, reputational and other risks and costs for Citi. New regulations have been enacted and/or are expected in several jurisdictions, including the EU's Corporate Sustainability Reporting Directive (CSRD), the SEC climate-related disclosures that could require disclosure of climate-related information and the State of California's legislation enacted in October 2023 requiring broad disclosure of greenhouse gas emissions and other climate-related information largely beginning in 2026. In addition, Citi could face increased regulatory scrutiny and reputation and litigation risks as a result of its climate risk, sustainability and other ESG-related commitments and disclosures. Even as some regulators seek to mandate additional disclosure of climate-related information, Citi's ability to comply with such requirements and conduct more robust climate-related risk analyses may be hampered by lack of information and reliable data. Data on climate-related risks is limited in availability, often based on estimated or unverified figures, collected and reported on a time-lag, and variable in quality. Modeling capabilities to analyze climate-related risks and interconnections are improving, but remain incomplete. U.S. and non-U.S. banking regulators and others are increasingly focusing on the issue of climate risk at financial institutions, both directly and with respect to their clients. For example, in October 2023, the FRB, FDIC and OCC jointly released principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, including physical and transition risks, for financial institutions with more than $100 billion in assets. Additionally, if Citi's response to climate change is perceived to be ineffective or insufficient or Citi is unable to achieve its objectives or commitments relating to climate change, its businesses, reputation, attractiveness to certain investors and efforts to recruit and retain employees may suffer. For example, Citi's approach to supporting client decarbonization in a gradual and orderly way, while promoting energy security, may lead to both continued exposure to carbon-intensive activity and increased reputation risks from stakeholders with divergent points of view. Citi also faces anti-ESG challenges from certain U.S. state and other governments that may impact its ability to conduct certain business within those jurisdictions. For information on Citi's climate and other sustainability initiatives, see "Climate Change and Net Zero" below. For additional information on Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. 51 51 51 Citi's Ability to Utilize Its DTAs, and Thus Reduce the Negative Impact of the DTAs on Citi's Regulatory Capital, Will Be Driven by Its Ability to Generate U.S. Taxable Income.At December 31, 2023, Citi's net DTAs were $29.6 billion, net of a valuation allowance of $3.6 billion, of which $12.8 billion was deducted from Citi's CET1 Capital under the U.S. Basel III rules. Of this deducted amount, $12.1 billion related to net operating losses, foreign tax credit and general business credit carry-forwards, with $2.3 billion related to temporary differences in excess of the 10%/15% regulatory limitations, reduced by $1.6 billion of deferred tax liabilities, primarily associated with goodwill and certain other intangible assets that were separately deducted from capital.Citi's overall ability to realize its DTAs will primarily be dependent upon Citi's ability to generate U.S. taxable income in the relevant reversal periods. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns.The accounting treatment for realization of DTAs is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTAs, which may subject more of Citi's DTAs to exclusion from regulatory capital. Citi has not been and does not expect to be subject to the base erosion anti-abuse tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 10.Citi's Interpretation or Application of the Complex Tax Laws to Which It Is Subject Could Differ from Those of Governmental Authorities, Which Could Result in Litigation or Examinations and the Payment of Additional Taxes, Penalties or Interest.Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each country. EU member states were required to adopt the OECD Pillar 2 rules in 2023, with an effective date of January 1, 2024 (unless an exception applied), and other non-U.S. countries have similarly adopted or are expected to adopt the rules. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. Beginning in 2024, countries that adopted the OECD Pillar 2 rules in 2023 can collect the top-up tax only with respect to earnings of entities in their jurisdiction or subsidiaries of such entities. Beginning in 2025, all countries that have adopted the OECD Pillar 2 rules can collect a share of the top-up tax owed with respect to any member of the Pillar 2 multinational group. While Citi does not currently expect the rules to have a material impact on its earnings, many aspects of the application of the rules remain uncertain.Additionally, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed reasonably possible losses, the outcome of the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, the reduction of certain tax benefits or the requirement to make adjustments to amounts recorded, which could be material. See Note 30 for additional information on litigation and examinations involving non-U.S. tax authorities.A Deterioration in or Failure to Maintain Citi's Co-Branding or Private Label Credit Card Relationships Could Have a Negative Impact on Citi.Citi has co-branding and private label relationships through its Branded Cards and Retail Services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to consumers, including customers of the retailers or merchants. The five largest relationships across both businesses in USPB constituted an aggregate of approximately 11% of Citi's revenues in 2023 (see "U.S. Personal Banking" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term.Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of continued elevated interest rates and inflation, and lower economic growth rates, as well as a continuing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to a challenging macroeconomic environment or otherwise.These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded Cards, Retail Services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 17 for information on Citi's credit card related intangibles generally). Citi's Ability to Utilize Its DTAs, and Thus Reduce the Negative Impact of the DTAs on Citi's Regulatory Capital, Will Be Driven by Its Ability to Generate U.S. Taxable Income.At December 31, 2023, Citi's net DTAs were $29.6 billion, net of a valuation allowance of $3.6 billion, of which $12.8 billion was deducted from Citi's CET1 Capital under the U.S. Basel III rules. Of this deducted amount, $12.1 billion related to net operating losses, foreign tax credit and general business credit carry-forwards, with $2.3 billion related to temporary differences in excess of the 10%/15% regulatory limitations, reduced by $1.6 billion of deferred tax liabilities, primarily associated with goodwill and certain other intangible assets that were separately deducted from capital.Citi's overall ability to realize its DTAs will primarily be dependent upon Citi's ability to generate U.S. taxable income in the relevant reversal periods. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns.The accounting treatment for realization of DTAs is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTAs, which may subject more of Citi's DTAs to exclusion from regulatory capital. Citi has not been and does not expect to be subject to the base erosion anti-abuse tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 10.Citi's Interpretation or Application of the Complex Tax Laws to Which It Is Subject Could Differ from Those of Governmental Authorities, Which Could Result in Litigation or Examinations and the Payment of Additional Taxes, Penalties or Interest.Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each country. EU member states were required to adopt the OECD Pillar 2 rules in 2023, with an effective date of January 1, 2024 (unless an exception applied), and other non-U.S. countries have similarly adopted or are expected to adopt the rules. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. Beginning in 2024, countries that adopted the OECD Pillar 2 rules in 2023 can collect the top-up tax only with respect to earnings of entities in their jurisdiction or subsidiaries of such entities. Beginning in 2025, all countries --- ## Modified: Exposure to Commercial Real Estate **Key changes:** - Reworded sentence: "As of December 31, 2023, Citi's total credit exposure to commercial real estate (CRE) was $66 billion, including $8 billion of exposure related to office buildings." - Reworded sentence: "(4) Autos total credit exposure includes securitization financing facilities secured by auto loans and leases, extended mainly to the finance company subsidiaries of global auto manufacturers, bank subsidiaries and independent auto finance companies, of approximately $17.4 billion ($10.3 billion in funded, with more than 99% rated investment grade) at December 31, 2022." - Reworded sentence: "(6) Includes $0.6 billion and $0.1 billion of funded and unfunded exposure at December 31, 2022, respectively, primarily related to commercial credit card delinquency-managed loans." - Reworded sentence: "The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 % Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses credit derivatives, both partial and full term, and other risk mitigants to economically hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales." - Reworded sentence: "The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 %" **Prior (2023):** (1) Excludes $0.6 billion and $0.1 billion of funded and unfunded exposure at December 31, 2022, respectively, primarily related to the delinquency-managed loans and unearned income. Funded balances also exclude loans carried at fair value of $5.1 billion at December 31, 2022. (2) Includes non-accrual loan exposures and criticized unfunded exposures. (3) Represents the amount of purchased credit protection in the form of derivatives to economically hedge funded and unfunded exposures. Of the $39.8 billion of purchased credit protection, $36.6 billion represents the total notional amount of purchased credit derivatives on individual reference entities. The remaining $3.2 billion represents the first loss tranche of portfolios of purchased credit derivatives with a total notional of $27.6 billion, where the protection seller absorbs the first loss on the referenced loan portfolios. (4) Autos total credit exposure includes securitization financing facilities secured by auto loans and leases, extended mainly to the finance company subsidiaries of global auto manufacturers, bank subsidiaries and independent auto finance companies, of approximately $17.4 billion ($10.3 billion in funded, with more than 99% rated investment grade) as of December 31, 2022. (5) In addition to this exposure, Citi has energy-related exposure within the public sector (e.g., energy-related state-owned entities) and the transportation and industrials sector (e.g., off-shore drilling entities) included in the table above. As of December 31, 2022, Citi's total exposure to these energy-related entities was approximately $4.7 billion, of which approximately $2.4 billion consisted of direct outstanding funded loans. 65 65 65 The following table details Citi's corporate credit portfolio by industry as of December 31, 2021: Non-investment gradeSelected metricsIn millions of dollarsTotal credit exposureFunded(1)Unfunded(1)Investment gradeNon-criticizedCriticized performingCriticized non-performing(2)30 days or more past due and accruingNet credit losses (recoveries)Credit derivative hedges(3)Transportation and industrials$143,445 $51,502 $91,943 $110,047 $19,051 $13,196 $1,151 $384 $127 $(8,791)Autos(4)48,210 18,662 29,548 39,824 5,365 2,906 115 49 2 (3,228)Transportation26,897 12,085 14,812 19,233 2,344 4,447 873 105 104 (1,334)Industrials68,338 20,755 47,583 50,990 11,342 5,843 163 230 21 (4,229)Technology, media and telecom84,333 28,542 55,791 64,676 15,873 3,587 197 156 11 (6,875)Consumer retail78,994 32,894 46,100 60,686 13,590 4,311 407 224 100 (5,115)Real estate69,808 46,220 23,588 58,089 6,761 4,923 35 116 50 (798)Power, chemicals, metals and mining65,641 20,224 45,417 53,575 10,708 1,241 117 292 22 (5,808)Power26,199 5,610 20,589 22,860 2,832 420 87 100 17 (3,032)Chemicals25,550 8,525 17,025 20,788 4,224 528 10 88 6 (2,141)Metals and mining13,892 6,089 7,803 9,927 3,652 293 20 104 (1)(635)Banks and finance companies58,252 36,804 21,448 49,465 4,892 3,890 5 150 (5)(680)Energy and commodities(5)48,973 13,485 35,488 38,972 7,517 2,220 264 224 78 (3,679)Asset managers and funds55,517 26,879 28,638 54,119 1,019 377 2 211 - (869)Health33,393 8,826 24,567 27,600 4,702 942 149 95 - (2,465)Insurance28,495 3,162 25,333 27,447 987 61 - 2 1 (2,711)Public sector23,842 12,464 11,378 21,035 1,527 1,275 5 37 (3)(1,282)Financial markets infrastructure14,341 109 14,232 14,323 18 - - - - (22)Securities firms1,472 613 859 605 816 51 - 4 - (5)Other industries6,591 2,803 3,788 4,151 1,890 489 61 - 5 (169)Total$713,097 $284,527 $428,570 $584,790 $89,351 $36,563 $2,393 $1,895 $386 $(39,269) Funded(1) Unfunded(1) Criticized non-performing(2) Credit derivative hedges(3) Autos(4) Energy and commodities(5) (1) Excludes $0.6 billion and $0.1 billion of funded and unfunded exposure at December 31, 2021, respectively, primarily related to the delinquency-managed loans and unearned income. Funded balances also excludes loans carried at fair value of $6.1 billion at December 31, 2021. (2) Includes non-accrual loan exposures and criticized unfunded exposures. (3) Represents the amount of purchased credit protection in the form of derivatives to economically hedge funded and unfunded exposures. Of the $39.3 billion of purchased credit protection, $36.0 billion represents the total notional amount of purchased credit derivatives on individual reference entities. The remaining $3.3 billion represents the first loss tranche of portfolios of purchased credit derivatives with a total notional of $28.4 billion, where the protection seller absorbs the first loss on the referenced loan portfolios. (4) Autos total credit exposure includes securitization financing facilities secured by auto loans and leases, extended mainly to the finance company subsidiaries of global auto manufacturers, bank subsidiaries and independent auto finance companies, of approximately $17.9 billion ($6.5 billion in funded, with more than 99% rated investment grade) at December 31, 2021. (5) In addition to this exposure, Citi has energy-related exposure within the public sector (e.g., energy-related state-owned entities) and the transportation and industrials sector (e.g., off-shore drilling entities) included in the table above. As of December 31, 2021, Citi's total exposure to these energy-related entities was approximately $5.1 billion, of which approximately $2.6 billion consisted of direct outstanding funded loans. 66 66 66 Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses credit derivatives and other risk mitigants to hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. Citi may enter into partial-term hedges as well as full-term hedges. In advance of the expiration of partial-term hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income.At December 31, 2022, September 30, 2022 and December 31, 2021, ICG had economic hedges on the corporate credit portfolio of $39.8 billion, $36.5 billion and $39.3 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying ICG corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2022September 30,2022December 31,2021AAA/AA/A39 %38 %35 %BBB45 45 49 BB/B12 13 13 CCC or below4 4 3 Total100 %100 %100 % Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses credit derivatives and other risk mitigants to hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. Citi may enter into partial-term hedges as well as full-term hedges. In advance of the expiration of partial-term hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income.At December 31, 2022, September 30, 2022 and December 31, 2021, ICG had economic hedges on the corporate credit portfolio of $39.8 billion, $36.5 billion and $39.3 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying ICG corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2022September 30,2022December 31,2021AAA/AA/A39 %38 %35 %BBB45 45 49 BB/B12 13 13 CCC or below4 4 3 Total100 %100 %100 % **Current (2024):** As of December 31, 2023, Citi's total credit exposure to commercial real estate (CRE) was $66 billion, including $8 billion of exposure related to office buildings. This total CRE exposure consisted of approximately $55 billion related to corporate clients, included in the real estate category in the table above, and approximately $11 billion related to Wealth clients that is not in the table above as they are not considered corporate exposures. In addition, as of December 31, 2023, approximately 80% of Citi's total CRE exposure was rated investment grade and more than 77% was to borrowers in the U.S.As of December 31, 2023, the ACLL attributed to the total funded CRE exposure (including the Private Bank) was approximately 1.49%, and there were $759 million of non-accrual CRE loans. In addition, as of December 31, 2023, approximately 80% of Citi's total CRE exposure was rated investment grade and more than 77% was to borrowers in the U.S. As of December 31, 2023, the ACLL attributed to the total funded CRE exposure (including the Private Bank) was approximately 1.49%, and there were $759 million of non-accrual CRE loans. 72 72 72 The following table details Citi's corporate credit portfolio by industry as of December 31, 2022: Non-investment gradeSelected metricsIn millions of dollarsTotal credit exposureFunded(1)UnfundedInvestment gradeNon-criticizedCriticized performingCriticized non-performing(2)30 days or more past due and accruingNet credit losses (recoveries)Credit derivative hedges(3)Transportation and industrials$139,225 $57,271 $81,954 $109,197 $19,697 $9,850 $481 $403 $ - $(8,459)Autos(4)47,482 21,995 25,487 40,795 5,171 1,391 125 52 - (3,084)Transportation24,843 10,374 14,469 18,078 3,156 3,444 165 57 (30)(1,270)Industrials66,900 24,902 41,998 50,324 11,370 5,015 191 294 30 (4,105)Technology, media and telecom81,211 28,931 52,280 65,386 12,308 3,308 209 169 11 (6,050)Banks and finance companies65,623 42,276 23,347 57,368 5,718 2,387 150 266 65 (1,113)Consumer retail78,255 32,687 45,568 60,215 14,830 2,910 300 195 28 (5,395)Real estate70,676 48,539 22,137 63,023 4,722 2,881 50 138 2 (739)Commercial54,139 34,112 20,027 46,670 4,716 2,703 50 96 2 (739)Residential16,537 14,427 2,110 16,353 6 178 - 42 - - Power, chemicals, metals and mining59,404 18,326 41,078 47,395 10,466 1,437 106 226 34 (5,063)Power22,718 4,827 17,891 18,822 3,325 512 59 129 (3)(2,306)Chemicals23,147 7,765 15,382 19,033 3,534 564 16 55 30 (2,098)Metals and mining13,539 5,734 7,805 9,540 3,607 361 31 42 7 (659)Energy and commodities(5)46,309 13,069 33,240 38,918 6,076 1,200 115 180 11 (3,852)Health41,836 8,771 33,065 36,954 3,737 978 167 84 7 (2,855)Insurance29,932 4,417 25,515 29,090 801 41 - 44 - (3,884)Public sector23,705 11,736 11,969 20,663 2,084 956 2 77 4 (1,633)Asset managers and funds35,983 13,162 22,821 34,431 1,492 60 - 95 - (759)Financial markets infrastructure8,742 60 8,682 8,672 70 - - - - (18)Securities firms1,462 569 893 625 678 157 2 2 - (2)Other industries(6)7,374 4,217 3,157 4,842 2,245 238 49 19 16 (8)Total$689,737 $284,031 $405,706 $576,779 $84,924 $26,403 $1,631 $1,898 $178 $(39,830) Funded(1) Criticized non-performing(2) Credit derivative hedges(3) Autos(4) Energy and commodities(5) Other industries(6) (1) Funded excludes loans carried at fair value of $5.1 billion at December 31, 2022. (2) Includes non-accrual loan exposures and related criticized unfunded exposures. (3) Represents the amount of purchased credit protection in the form of derivatives to economically hedge funded and unfunded exposures. Of the $39.8 billion of purchased credit protection, $36.6 billion represents the total notional amount of purchased credit derivatives on individual reference entities. The remaining $3.2 billion represents the first loss tranche of portfolios of purchased credit derivatives with a total notional of $27.6 billion, where the protection seller absorbs the first loss on the referenced loan portfolios. (4) Autos total credit exposure includes securitization financing facilities secured by auto loans and leases, extended mainly to the finance company subsidiaries of global auto manufacturers, bank subsidiaries and independent auto finance companies, of approximately $17.4 billion ($10.3 billion in funded, with more than 99% rated investment grade) at December 31, 2022. (5) In addition to this exposure, Citi has energy-related exposure within the public sector (e.g., energy-related state-owned entities) and the transportation and industrials sector (e.g., off-shore drilling entities) included in the table above. As of December 31, 2022, Citi's total exposure to these energy-related entities was approximately $4.7 billion, of which approximately $2.4 billion consisted of direct outstanding funded loans. (6) Includes $0.6 billion and $0.1 billion of funded and unfunded exposure at December 31, 2022, respectively, primarily related to commercial credit card delinquency-managed loans. 73 73 73 Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses credit derivatives, both partial and full term, and other risk mitigants to economically hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. In advance of the expiration of partial-term economic hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income.At December 31, 2023, September 30, 2023 and December 31, 2022, Banking had economic hedges on the corporate credit portfolio of $35.9 billion, $36.0 billion and $39.8 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 % Credit Risk MitigationAs part of its overall risk management activities, Citigroup uses credit derivatives, both partial and full term, and other risk mitigants to economically hedge portions of the credit risk in its corporate credit portfolio, in addition to outright asset sales. In advance of the expiration of partial-term economic hedges, Citi will determine, among other factors, the economic feasibility of hedging the remaining life of the instrument. The results of the mark-to-market and any realized gains or losses on credit derivatives are reflected primarily in Principal transactions in the Consolidated Statement of Income.At December 31, 2023, September 30, 2023 and December 31, 2022, Banking had economic hedges on the corporate credit portfolio of $35.9 billion, $36.0 billion and $39.8 billion, respectively. Citi's expected credit loss model used in the calculation of its ACL does not include the favorable impact of credit derivatives and other mitigants that are marked-to-market. In addition, the reported amounts of direct outstandings and unfunded lending commitments in the tables above do not reflect the impact of these hedging transactions. The credit protection was economically hedging underlying Banking corporate credit portfolio exposures with the following risk rating distribution:Rating of Hedged ExposureDecember 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 % --- ## Modified: ESG and Climate-Related Governance **Key changes:** - Reworded sentence: "Citi's Board of Directors (Board) provides oversight of Citi's management activities (see "Managing Global Risk - Risk Governance" below)." **Prior (2023):** Citi's Board of Directors (Board) provides oversight of Citi's management activities (for additional information, see "Managing Global Risk - Risk Governance" below). For example, the Nomination, Governance and Public Affairs Committee of the Board oversees many of Citi's ESG activities, including reviewing Citi's policies and programs for environmental and social sustainability, climate change, human rights, diversity and other ESG issues, as well as overseeing engagement with external stakeholders. The Risk Management Committee of the Board provides oversight of Citi's Independent Risk Management function and reviews Citi's risk policies and frameworks, including receiving climate risk-related updates. The Audit Committee of the Board has recently been chartered to provide oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and voluntary ESG reporting, as well as management's evaluation of Citi's disclosure controls and procedures for ESG reporting. Citi's Global ESG Council consists of senior members of its management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities. In addition, a number of teams and senior managers contribute to the oversight and management of areas such as environmental sustainability; community investing; talent and diversity; ethics and business practices; and remuneration. Citi's climate governance structure continues to evolve as Citi advances its understanding of its climate risk and its progress under the Net Zero plan. In addition to the expansion of the Board's oversight of climate matters (see Risk Management Committee and Audit Committee descriptions above), Citi has: •Expanded and realigned its climate risk team to be part of the Enterprise Risk Management function within Risk; •Further built out its Clean Energy Transition (CET) team (formed in 2021 and expanded in 2022 to include Corporate Banking), which focuses on providing advisory and capital-raising services to companies involved in energy transition; and •Launched two climate training pilots for its BCMA (Banking, Capital Markets and Advisory), Risk Management and Global Functions teams involving in-person workshops focused on providing foundational knowledge of climate risks and client engagement. **Current (2024):** Citi's Board of Directors (Board) provides oversight of Citi's management activities (see "Managing Global Risk - Risk Governance" below). •The Nomination, Governance and Public Affairs Committee of the Board provides oversight and receives updates on Citi's environmental and social policies and commitments. •The Risk Management Committee of the Board provides oversight of Citi's Risk Management Framework and risk culture and reviews Citi's key risk policies and frameworks, including receiving climate risk-related updates. •The Audit Committee of the Board provides oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and group-level voluntary ESG reporting, as well as management's evaluation of the effectiveness of Citi's disclosure controls and procedures for group-level ESG reporting. Additionally, Citi's ESG Council consists of senior members of the management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities. --- ## Modified: Net Zero Emissions by 2050 **Key changes:** - Removed sentence: "Citi is a member of several initiatives that enhance its understanding of climate-related issues, improve its access to data and promote a common understanding and terminology across various climate efforts." - Removed sentence: "These initiatives include the Partnership for Carbon Accounting Financials, the Glasgow Financial Alliance for Net Zero and the Net Zero Banking Alliance." - Reworded sentence: "Citi's Net Zero plan includes: •Net Zero Metrics and Target Setting: Calculate metrics and assess targets for carbon-intensive sectors •Client Engagement and Assessment: Seek to understand client GHG emissions and transition plans and advise on capacity building •Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management •Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance products and services •Portfolio Management: Active portfolio management of Citi financings to align with net zero targets, including considerations of transition measures taken by clients •Public Policy and Regulatory Engagement: Contribute to an enabling public policy and regulatory environment which is essential to stimulating demand for clean technologies and helping ensure a responsible transition Progress on Citi's Net Zero plan: •Citi has published interim 2030 emissions targets for six loan portfolios: auto manufacturing, commercial real estate (North America), energy, power, steel and thermal coal mining." **Prior (2023):** Citi is a member of several initiatives that enhance its understanding of climate-related issues, improve its access to data and promote a common understanding and terminology across various climate efforts. These initiatives include the Partnership for Carbon Accounting Financials, the Glasgow Financial Alliance for Net Zero and the Net Zero Banking Alliance. As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint. Citi made this commitment as part of its ongoing work to reduce its climate risk and impact, grow its business in the clean energy transition and help address the challenges that climate change poses to the global economy and broader society. Citi's net zero commitment demonstrates how identifying, assessing and managing climate-related risks and opportunities remains a top business priority for Citi. While many financial institutions, including Citi, face increasing public pressure to divest from carbon-intensive sectors, Citi believes it has an important role to play in advising and financing the transition to net zero, and it plans to work closely with clients in this effort. Citi recognizes that large-scale, rapid divestment could result in an abrupt and disorderly transition to a low-carbon economy, creating both economic and social upheaval. Citi believes that an orderly, responsible and equitable transition, which accounts for the immediate economic needs of communities and workers, continued access to energy, environmental justice considerations and broader economic development concerns, is essential for the retention of political and social support to move to a low-carbon economy. The 2050 net zero commitment includes the following framework, delineating the key areas required to achieve its targets: •Calculate Emissions: Calculate baseline financed emissions for each carbon-intensive sector •Transition Pathway: Identify the appropriate climate scenario transition pathway •Target Setting: Establish emissions reduction targets for 2030 and beyond•Implementation Strategy: Engage with and assess clients to determine transition opportunities •External Engagement: Solicit feedback from clients, investors and other stakeholders, as the work continues to evolve and the parties collectively define net zero for the banking sectorCiti's Net Zero plan includes:•Net Zero Metrics and Target Setting: Assess targets for carbon-intensive sectors and explore methodologies for calculating financed emissions beyond lending portfolios •Client Engagement and Assessment: Seek to understand clients' GHG emissions and work with them to develop their transition plans and advise on capacity building•Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management•Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance, via debt and equity underwriting •Portfolio Management: Active portfolio management to align with net zero targets, including considerations of transition measures taken by clients•Public Policy and Regulatory Engagement: Support enabling public policy and regulation in the U.S. and other countries where relevantIn 2022, Citi took the following steps to operationalize its Net Zero plan:•In addition to the energy and power targets established last year, Citi has set 2030 emissions reduction targets for four additional loan portfolio sectors: automotive manufacturing, commercial real estate, steel and thermal coal mining.•Citi has begun piloting a Net Zero Review Template for its energy and power clients to better understand their transition plans. •Citi worked with RMI to help develop and launch the Sustainable STEEL Principles, a solution for measuring and disclosing the alignment of steel lending portfolios with 1.5°C climate targets.Financial Inclusion and Racial Equity Building on Citi's longstanding focus on advancing financial inclusion and economic opportunity for communities of color, in September 2020, Citi and the Citi Foundation announced Action for Racial Equity (ARE), a set of strategic initiatives to help close the racial wealth gap and increase economic mobility in the U.S. As part of ARE, Citi and the Citi Foundation have invested more than $1 billion in strategic initiatives to provide greater access to banking and credit in communities of color, increase investment in Black-owned businesses, expand access to affordable housing and •Target Setting: Establish emissions reduction targets for 2030 and beyond •Implementation Strategy: Engage with and assess clients to determine transition opportunities •External Engagement: Solicit feedback from clients, investors and other stakeholders, as the work continues to evolve and the parties collectively define net zero for the banking sector Citi's Net Zero plan includes: •Net Zero Metrics and Target Setting: Assess targets for carbon-intensive sectors and explore methodologies for calculating financed emissions beyond lending portfolios •Client Engagement and Assessment: Seek to understand clients' GHG emissions and work with them to develop their transition plans and advise on capacity building •Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management •Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance, via debt and equity underwriting •Portfolio Management: Active portfolio management to align with net zero targets, including considerations of transition measures taken by clients •Public Policy and Regulatory Engagement: Support enabling public policy and regulation in the U.S. and other countries where relevant In 2022, Citi took the following steps to operationalize its Net Zero plan: •In addition to the energy and power targets established last year, Citi has set 2030 emissions reduction targets for four additional loan portfolio sectors: automotive manufacturing, commercial real estate, steel and thermal coal mining. •Citi has begun piloting a Net Zero Review Template for its energy and power clients to better understand their transition plans. •Citi worked with RMI to help develop and launch the Sustainable STEEL Principles, a solution for measuring and disclosing the alignment of steel lending portfolios with 1.5°C climate targets. **Current (2024):** As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint. Citi's Net Zero plan includes: •Net Zero Metrics and Target Setting: Calculate metrics and assess targets for carbon-intensive sectors •Client Engagement and Assessment: Seek to understand client GHG emissions and transition plans and advise on capacity building •Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management •Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance products and services •Portfolio Management: Active portfolio management of Citi financings to align with net zero targets, including considerations of transition measures taken by clients •Public Policy and Regulatory Engagement: Contribute to an enabling public policy and regulatory environment which is essential to stimulating demand for clean technologies and helping ensure a responsible transition Progress on Citi's Net Zero plan: •Citi has published interim 2030 emissions targets for six loan portfolios: auto manufacturing, commercial real estate (North America), energy, power, steel and thermal coal mining. •Citi has developed a client transition assessment process to help internal teams better understand the alignment of clients' strategies with transition or decarbonization pathways applicable to their respective sectors. In 2022-2023, Citi completed the initial assessment process for energy and power clients, and in 2023 began the transition assessment process for auto manufacturing and steel clients. The assessment process focuses on clients with material emissions relative to each sector's baseline emission profiles. --- ## Modified: Citi's Ability to Utilize Its DTAs, and Thus Reduce the Negative Impact of the DTAs on Citi's Regulatory Capital, Will Be Driven by Its Ability to Generate U.S. Taxable Income. **Key changes:** - Reworded sentence: "At December 31, 2023, Citi's net DTAs were $29.6 billion, net of a valuation allowance of $3.6 billion, of which $12.8 billion was deducted from Citi's CET1 Capital under the U.S." - Reworded sentence: "corporate tax rates could result in an increase in Citi's DTAs, which may subject more of Citi's DTAs to exclusion from regulatory capital." **Prior (2023):** At December 31, 2022, Citi's net DTAs were $27.7 billion, net of a valuation allowance of $2.4 billion, of which $10.9 billion was deducted from Citi's CET1 Capital under the U.S. 44 44 44 Basel III rules, primarily relating to net operating losses, foreign tax credit and general business credit carry-forwards. Of the net DTAs at December 31, 2022, $1.9 billion related to foreign tax credit (FTC) carry-forwards, net of a valuation allowance. The carry-forward utilization period for FTCs is 10 years and represents the most time-sensitive component of Citi's DTAs. The FTC carry-forwards at December 31, 2022 expire over the period of 2025-2029. Citi must utilize any FTCs generated in the then-current-year tax return prior to utilizing any carry-forward FTCs.The accounting treatment for realization of DTAs, including FTCs, is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTA, which may subject more of Citi's existing DTA to exclusion from regulatory capital while improving Citi's ability to utilize its FTC carry-forwards. Citi's overall ability to realize its DTAs will primarily be dependent upon its ability to generate U.S. taxable income in the relevant tax carry-forward periods. Although utilization of FTCs in any year is generally limited to 21% of foreign source taxable income in that year, overall domestic losses (ODL) that Citi has incurred in the past allow it to reclassify domestic source income as foreign source. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns. Citi has not been and does not expect to be subject to the Base Erosion Anti-Abuse Tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 9.Citi's Interpretation or Application of the Complex Tax Laws to Which It Is Subject Could Differ from Those of Governmental Authorities, Which Could Result in Litigation or Examinations and the Payment of Additional Taxes, Penalties or Interest.Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each separate country. EU member states are required to adopt the OECD Pillar 2 rules in 2023, and other non-U.S. countries are expected to follow suit. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. The U.S. is not expected to pass Pillar 2 legislation in the near term, but the top-up tax can be collected by other countries. While many aspects of the application of the rules remain uncertain, Citi does not expect a material effect to its earnings.In addition, Citi is subject to litigation or examinations with U.S. and non-U.S. tax authorities regarding non-income-based tax matters. While Citi has appropriately reserved for such matters where there is a probable loss, and has disclosed, as reasonably possible, matters that are more-likely-than-not, the outcome from the matters may be different than Citi's expectations. Citi's interpretations or application of the tax laws, including with respect to withholding, stamp, service and other non-income taxes, could differ from that of the relevant governmental taxing authority, which could result in the requirement to pay additional taxes, penalties or interest, which could be material. See Note 29 for additional information on litigation and examinations involving non-U.S. tax authorities.A Deterioration in or Failure to Maintain Citi's Co-Branding or Private Label Credit Card Relationships Could Have a Negative Impact on Citi.Citi has co-branding and private label relationships through its Branded cards and Retail services credit card businesses with various retailers and merchants, whereby in the ordinary course of business Citi issues credit cards to customers of the retailers or merchants. The five largest relationships across both businesses in U.S. Personal Banking constituted an aggregate of approximately 10% of Citi's revenues in 2022 (for additional information, see "Personal Banking and Wealth Management" above). Citi's co-branding and private label agreements often provide for shared economics between the parties and generally have a fixed term.Competition among card issuers, including Citi, for these relationships is significant, and Citi may not be able to maintain such relationships on existing terms or at all. Citi's co-branding and private label relationships could also be negatively impacted by, among other things, the general economic environment, including the impacts of significantly elevated levels of inflation, higher interest rates, global supply shocks and lower economic growth rates, as well as an increasing risk of recession; changes in consumer sentiment, spending patterns and credit card usage behaviors; a decline in sales and revenues, partner store closures, any reduction in air and business travel, or other operational difficulties of the retailer or merchant; early termination due to a contractual breach or exercise of other early termination right; or other factors, including bankruptcies, liquidations, restructurings, consolidations or other similar events, whether due to the challenging macroeconomic environment or otherwise.These events, particularly early termination and bankruptcies or liquidations, could negatively impact the results of operations or financial condition of Branded cards, Retail services or Citi as a whole, including as a result of loss of revenues, increased expenses, higher cost of credit, impairment of purchased credit card relationships and contract-related intangibles or other losses (see Note 16 for information on Citi's credit card related intangibles generally). Basel III rules, primarily relating to net operating losses, foreign tax credit and general business credit carry-forwards. Of the net DTAs at December 31, 2022, $1.9 billion related to foreign tax credit (FTC) carry-forwards, net of a valuation allowance. The carry-forward utilization period for FTCs is 10 years and represents the most time-sensitive component of Citi's DTAs. The FTC carry-forwards at December 31, 2022 expire over the period of 2025-2029. Citi must utilize any FTCs generated in the then-current-year tax return prior to utilizing any carry-forward FTCs.The accounting treatment for realization of DTAs, including FTCs, is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTA, which may subject more of Citi's existing DTA to exclusion from regulatory capital while improving Citi's ability to utilize its FTC carry-forwards. Citi's overall ability to realize its DTAs will primarily be dependent upon its ability to generate U.S. taxable income in the relevant tax carry-forward periods. Although utilization of FTCs in any year is generally limited to 21% of foreign source taxable income in that year, overall domestic losses (ODL) that Citi has incurred in the past allow it to reclassify domestic source income as foreign source. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns. Citi has not been and does not expect to be subject to the Base Erosion Anti-Abuse Tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 9.Citi's Interpretation or Application of the Complex Tax Laws to Which It Is Subject Could Differ from Those of Governmental Authorities, Which Could Result in Litigation or Examinations and the Payment of Additional Taxes, Penalties or Interest.Citi is subject to various income-based tax laws of the U.S. and its states and municipalities, as well as the numerous non-U.S. jurisdictions in which it operates. These tax laws are inherently complex, and Citi must make judgments and interpretations about the application of these laws to its entities, operations and businesses. For example, the Organization for Economic Cooperation and Development (OECD) Pillar 2 initiative contemplates a 15% global minimum tax with respect to earnings in each separate country. EU member states are required to adopt the OECD Pillar 2 rules in 2023, and other non-U.S. countries are expected to follow suit. Under these rules, Citi will be required to pay a "top-up" tax to the extent that Citi's effective tax rate in any given country is below 15%. The U.S. is not expected to pass Pillar 2 legislation in the near term, but the top-up tax can be collected by other countries. While many aspects of the Basel III rules, primarily relating to net operating losses, foreign tax credit and general business credit carry-forwards. Of the net DTAs at December 31, 2022, $1.9 billion related to foreign tax credit (FTC) carry-forwards, net of a valuation allowance. The carry-forward utilization period for FTCs is 10 years and represents the most time-sensitive component of Citi's DTAs. The FTC carry-forwards at December 31, 2022 expire over the period of 2025-2029. Citi must utilize any FTCs generated in the then-current-year tax return prior to utilizing any carry-forward FTCs. The accounting treatment for realization of DTAs, including FTCs, is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTA, which may subject more of Citi's existing DTA to exclusion from regulatory capital while improving Citi's ability to utilize its FTC carry-forwards. Citi's overall ability to realize its DTAs will primarily be dependent upon its ability to generate U.S. taxable income in the relevant tax carry-forward periods. Although utilization of FTCs in any year is generally limited to 21% of foreign source taxable income in that year, overall domestic losses (ODL) that Citi has incurred in the past allow it to reclassify domestic source income as foreign source. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns. Citi has not been and does not expect to be subject to the Base Erosion Anti-Abuse Tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 9. **Current (2024):** At December 31, 2023, Citi's net DTAs were $29.6 billion, net of a valuation allowance of $3.6 billion, of which $12.8 billion was deducted from Citi's CET1 Capital under the U.S. Basel III rules. Of this deducted amount, $12.1 billion related to net operating losses, foreign tax credit and general business credit carry-forwards, with $2.3 billion related to temporary differences in excess of the 10%/15% regulatory limitations, reduced by $1.6 billion of deferred tax liabilities, primarily associated with goodwill and certain other intangible assets that were separately deducted from capital. Citi's overall ability to realize its DTAs will primarily be dependent upon Citi's ability to generate U.S. taxable income in the relevant reversal periods. Failure to realize any portion of the net DTAs would have a corresponding negative impact on Citi's net income and financial returns. The accounting treatment for realization of DTAs is complex and requires significant judgment and estimates regarding future taxable earnings in the jurisdictions in which the DTAs arise and available tax planning strategies. Forecasts of future taxable earnings will depend upon various factors, including, among others, macroeconomic conditions. In addition, any future increase in U.S. corporate tax rates could result in an increase in Citi's DTAs, which may subject more of Citi's DTAs to exclusion from regulatory capital. Citi has not been and does not expect to be subject to the base erosion anti-abuse tax (BEAT), which, if applicable to Citi in any given year, would have a significantly adverse effect on both Citi's net income and regulatory capital. For additional information on Citi's DTAs, including FTCs, see "Significant Accounting Policies and Significant Estimates - Income Taxes" below and Notes 1 and 10. --- ## Modified: Taxable Equivalent Basis **Key changes:** - Reworded sentence: "Average balanceInterest income% Average rateIn millions of dollars, except rates202320222021202320222021202320222021Assets Deposits with banks(4)$287,518 $262,504 $298,319 $11,238 $4,515 $577 3.91 %1.72 %0.19 %Securities borrowed and purchased under agreements to resell(5)In U.S." **Prior (2023):** Average balanceInterest revenue% Average rateIn millions of dollars, except rates202220212020202220212020202220212020Assets Deposits with banks(4)$262,504 $298,319 $288,629 $4,515 $577 $928 1.72 %0.19 %0.32 %Securities borrowed and purchased under agreements to resell(5)In U.S. offices$188,672 $172,716 $149,076 $3,933 $385 $1,202 2.08 %0.22 %0.81 %In offices outside the U.S.(4)164,675 149,944 138,074 3,221 667 1,081 1.96 0.44 0.78 Total$353,347 $322,660 $287,150 $7,154 $1,052 $2,283 2.02 %0.33 %0.80 %Trading account assets(6)(7)In U.S. offices$142,146 $140,215 $144,130 $4,005 $2,653 $3,624 2.82 %1.89 %2.51 %In offices outside the U.S.(4)132,046 151,722 134,078 3,422 2,718 2,509 2.59 1.79 1.87 Total$274,192 $291,937 $278,208 $7,427 $5,371 $6,133 2.71 %1.84 %2.20 %InvestmentsIn U.S. officesTaxable$355,012 $322,884 $265,833 $5,642 $3,547 $3,860 1.59 %1.10 %1.45 %Exempt from U.S. income tax11,742 12,296 14,084 424 437 452 3.61 3.55 3.21 In offices outside the U.S.(4)150,968 152,940 139,400 5,210 3,498 3,781 3.45 2.29 2.71 Total$517,722 $488,120 $419,317 $11,276 $7,482 $8,093 2.18 %1.53 %1.93 %Consumer loans(8)In U.S. offices$268,910 $253,184 $258,614 $23,127 $19,810 $20,436 8.60 %7.82 %7.90 %In offices outside the U.S.(4)86,497 121,794 120,974 5,264 6,598 7,327 6.09 5.42 6.06 Total$355,407 $374,978 $379,588 $28,391 $26,408 $27,763 7.99 %7.04 %7.31 %Corporate loans(8)In U.S. offices$139,906 $132,957 $138,232 $5,417 $4,213 $6,264 3.87 %3.17 %4.53 %In offices outside the U.S.(4)158,008 160,101 167,405 7,528 4,911 6,242 4.76 3.07 3.73 Total$297,914 $293,058 $305,637 $12,945 $9,124 $12,506 4.35 %3.11 %4.09 %Total loans(8)In U.S. offices$408,816 $386,141 $396,846 $28,544 $24,023 $26,700 6.98 %6.22 %6.73 %In offices outside the U.S.(4)244,505 281,895 288,379 12,792 11,509 13,569 5.23 4.08 4.71 Total$653,321 $668,036 $685,225 $41,336 $35,532 $40,269 6.33 %5.32 %5.88 %Other interest-earning assets(9)$112,549 $75,876 $67,547 $2,865 $653 $579 2.55 %0.86 %0.86 %Total interest-earning assets$2,173,635 $2,144,948 $2,026,076 $74,573 $50,667 $58,285 3.43 %2.36 %2.88 %Non-interest-earning assets(6)$222,388 $202,761 $200,378 Total assets$2,396,023 $2,347,709 $2,226,454 **Current (2024):** Average balanceInterest income% Average rateIn millions of dollars, except rates202320222021202320222021202320222021Assets Deposits with banks(4)$287,518 $262,504 $298,319 $11,238 $4,515 $577 3.91 %1.72 %0.19 %Securities borrowed and purchased under agreements to resell(5)In U.S. offices$171,307 $188,672 $172,716 $13,194 $3,933 $385 7.70 %2.08 %0.22 %In offices outside the U.S.(4)189,548 164,675 149,944 13,693 3,221 667 7.22 1.96 0.44 Total$360,855 $353,347 $322,660 $26,887 $7,154 $1,052 7.45 %2.02 %0.33 %Trading account assets(6)(7)In U.S. offices$187,318 $142,146 $140,215 $8,808 $4,005 $2,653 4.70 %2.82 %1.89 %In offices outside the U.S.(4)144,684 132,046 151,722 5,652 3,422 2,718 3.91 2.59 1.79 Total$332,002 $274,192 $291,937 $14,460 $7,427 $5,371 4.36 %2.71 %1.84 %InvestmentsIn U.S. officesTaxable$335,975 $355,012 $322,884 $8,903 $5,642 $3,547 2.65 %1.59 %1.10 %Exempt from U.S. income tax11,502 11,742 12,296 454 424 437 3.95 3.61 3.55 In offices outside the U.S.(4)164,923 150,968 152,940 8,978 5,210 3,498 5.44 3.45 2.29 Total$512,400 $517,722 $488,120 $18,335 $11,276 $7,482 3.58 %2.18 %1.53 %Consumer loans(8)In U.S. offices$293,476 $268,910 $253,184 $30,127 $23,127 $19,810 10.27 %8.60 %7.82 %In offices outside the U.S.(4)78,420 86,497 121,794 6,737 5,264 6,598 8.59 6.09 5.42 Total$371,896 $355,407 $374,978 $36,864 $28,391 $26,408 9.91 %7.99 %7.04 %Corporate loans(8)In U.S. offices$136,065 $139,906 $132,957 $7,561 $5,417 $4,213 5.56 %3.87 %3.17 %In offices outside the U.S.(4)153,111 158,008 160,101 13,507 7,528 4,911 8.82 4.76 3.07 Total$289,176 $297,914 $293,058 $21,068 $12,945 $9,124 7.29 %4.35 %3.11 %Total loans(8)In U.S. offices$429,541 $408,816 $386,141 $37,688 $28,544 $24,023 8.77 %6.98 %6.22 %In offices outside the U.S.(4)231,531 244,505 281,895 20,244 12,792 11,509 8.74 5.23 4.08 Total$661,072 $653,321 $668,036 $57,932 $41,336 $35,532 8.76 %6.33 %5.32 %Other interest-earning assets(9)$81,431 $112,549 $75,876 $4,507 $2,865 $653 5.53 %2.55 %0.86 %Total interest-earning assets$2,235,278 $2,173,635 $2,144,948 $133,359 $74,573 $50,667 5.97 %3.43 %2.36 %Non-interest-earning assets(6)$206,955 $222,388 $202,761 Total assets$2,442,233 $2,396,023 $2,347,709 --- ## Modified: Well-being and Benefits **Key changes:** - Reworded sentence: "Citi is proud to provide a wide range of benefits that support its colleagues' mental, emotional, physical and financial well-being through various life stages and events." - Reworded sentence: "Citi continues to make modern telemedicine programs increasingly available to colleagues and their family members through programs like Sword Health's digital physical therapy, which rolled out in the U.S." - Reworded sentence: "For additional information about Citi's human capital management initiatives and goals, see Citi's 2022 ESG Report available at www.citigroup.com." **Prior (2023):** Citi is proud to provide a wide range of benefits that support its colleagues mentally, emotionally, physically and financially and through various life stages and events. The Company is focused on providing equitable benefits that are designed to attract, engage and retain colleagues. Citi has significantly enhanced mental well-being programs by offering free counseling sessions for colleagues and their family members and adding real-time text, video and message-based counseling in the U.S., as well as offering an online tool so that all colleagues around the globe can easily find their local Employee Assistance Programs and resources. Citi also continues to value the importance of physical well-being - providing employees in several office locations and countries access to onsite medical care clinics, fitness centers, subsidized gym memberships and virtual fitness programs. Citi continues expanding employee benefits to support colleagues and their families. In early 2020, Citi expanded its Paid Parental Leave Policy to include Citi colleagues around the world. Citi also began to offer additional leave opportunities to eligible colleagues, including the "Refresh, Recharge, Reenergize" program, whereby employees are able to take up to 12 weeks for a sabbatical to pursue a personal interest, and the "Giving Back" program, allowing employees to take up to four weeks to work with a charitable institution. In 2022, Citi implemented a global, flexible work approach to provide colleagues with the ability to balance the demands of their home lives with the work conditions that are necessary for success. The "How We Work" approach includes a new work model for Citi, defined by three role designations for colleagues globally: Resident, Hybrid or Remote. By embracing a flexible model of work, Citi has focused on keeping its approach consistent and aligned with its values and priorities. For additional information about Citi's human capital management initiatives and goals, see Citi's 2021 ESG report available at www.citigroup.com. The 2021 ESG report and other information included elsewhere on Citi's investor relations website are not incorporated by reference into, and do not form any part of, this 2022 Annual Report on Form 10-K. 57 57 57 **Current (2024):** Citi is proud to provide a wide range of benefits that support its colleagues' mental, emotional, physical and financial well-being through various life stages and events. Citi is focused on providing equitable benefits that are designed to attract, engage and retain colleagues. Citi has significantly enhanced mental well-being programs by offering free, accessible counseling sessions for colleagues and their family members, as well as offering an online tool so that all colleagues around the globe can easily find their local Employee Assistance Programs and resources. Citi offers instructor-led mental health training for people managers to equip them in supporting their team members. Citi also continues to value the importance of physical well-being - providing employees in several office locations and countries access to onsite medical care clinics, fitness centers, subsidized gym memberships and virtual fitness programs. Citi continues to make modern telemedicine programs increasingly available to colleagues and their family members through programs like Sword Health's digital physical therapy, which rolled out in the U.S. in 2022. In 2023, one year after the Company became the first major U.S. bank to publicly embrace a flexible, hybrid work model, Citi fully implemented it across the organization. Most of Citi's colleagues now work in hybrid roles, working remotely up to two days a week. How We Work provides the majority of colleagues with the ability to balance the demands of their home lives with the work commitments that are necessary for success. The program includes three role designations for colleagues globally: Resident, Hybrid or Remote. The implementation and continuation of this program differentiates Citi from other financial organizations with respect to flexible working arrangements. By embracing a flexible model of work, Citi has focused on keeping its approach consistent and aligned with its values and priorities. For additional information about Citi's human capital management initiatives and goals, see Citi's 2022 ESG Report available at www.citigroup.com. The 2022 ESG Report and other information included elsewhere on Citi's Investor Relations website are not incorporated by reference into, and do not form any part of, this 2023 Annual Report on Form 10- K. --- ## Modified: Total fixed/variable pricing of corporate loans with maturities due after one year, net of unearned income(3)(4) **Key changes:** - Reworded sentence: "(3) Corporate loans are net of unearned income of ($917) million." - Reworded sentence: "(6) Other includes installment and other and loans to government and official institutions." **Prior (2023):** (1) North America includes the U.S., Canada and Puerto Rico. Mexico is included in offices outside North America. The classification between offices in North America and outside North America is based on the domicile of the booking unit. The differences between the domicile of the booking unit and the domicile of the managing unit are not material. (2) Loans secured primarily by real estate. (3) Corporate loans are net of unearned income of ($797) million. Unearned income on corporate loans primarily represents interest received in advance, but not yet earned, on loans originated on a discounted basis. (4) Based on contractual terms. Repricing characteristics may effectively be modified from time to time using derivative contracts. See Note 23. (5) Other includes installment and other and loans to government and official institutions. 68 68 68 CONSUMER CREDITPBWM fulfills a broad spectrum of customer financial needs, with U.S. Personal Banking providing retail banking, credit card, personal loan, mortgage and small business banking, and Global Wealth offering wealth management lending and other products globally to affluent to ultra-high-net-worth customer segments through the Private bank, Wealth at Work and Citigold. PBWM's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. Legacy Franchises also provides such activities in its remaining markets through Asia Consumer and Mexico Consumer. The Legacy Franchises consumer credit information discussed below reflects only those exit market portfolios that remained held-for-investment (versus held-for-sale) as of each period. The Philippines was reclassified to held-for-sale as of 4Q21, followed by Malaysia, Thailand, Indonesia, Vietnam, Taiwan, India and Bahrain in 1Q22. As a result, China, Korea, Russia and Poland were the only portfolios that remained held-for-investment and are reflected in the discussion below as of 4Q22. CONSUMER CREDITPBWM fulfills a broad spectrum of customer financial needs, with U.S. Personal Banking providing retail banking, credit card, personal loan, mortgage and small business banking, and Global Wealth offering wealth management lending and other products globally to affluent to ultra-high-net-worth customer segments through the Private bank, Wealth at Work and Citigold. PBWM's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. **Current (2024):** (1) North America includes the U.S., Canada and Puerto Rico. Mexico is included in offices outside North America. The classification between offices in North America and outside North America is based on the domicile of the booking unit. The differences between the domicile of the booking unit and the domicile of the managing unit are not material. (2) Loans secured primarily by real estate. (3) Corporate loans are net of unearned income of ($917) million. Unearned income on corporate loans primarily represents loan origination fees, net of certain direct origination costs, that are deferred and recognized as Interest income over the lives of the related loans. (4) Excludes $93 million of unallocated portfolio layer cumulative basis adjustments at December 31, 2023. (5) Based on contractual terms. Repricing characteristics may effectively be modified from time to time using derivative contracts. See Note 24. (6) Other includes installment and other and loans to government and official institutions. 75 75 75 CONSUMER CREDITCiti's consumer credit risk management framework is designed for a variety of environments. Underwriting and portfolio management policies are calibrated based on risk-return trade-offs by product and segment and changes are made based on performance against benchmarks as well as environmental stress. As warranted, Citi adjusts underwriting criteria to address consumer credit risks and macroeconomic challenges and uncertainties.USPB provides credit cards, mortgages, personal loans, small business banking and retail banking, and Wealth offers wealth management lending and other products globally that range from the affluent to ultra-high net worth customer segments through the Private Bank, Wealth at Work and Citigold. USPB's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. All Other - Legacy Franchises also provides such products in its remaining markets through Mexico Consumer and Asia Consumer (Korea, Poland, China and Russia). CONSUMER CREDITCiti's consumer credit risk management framework is designed for a variety of environments. Underwriting and portfolio management policies are calibrated based on risk-return trade-offs by product and segment and changes are made based on performance against benchmarks as well as environmental stress. As warranted, Citi adjusts underwriting criteria to address consumer credit risks and macroeconomic challenges and uncertainties.USPB provides credit cards, mortgages, personal loans, small business banking and retail banking, and Wealth offers wealth management lending and other products globally that range from the affluent to ultra-high net worth customer segments through the Private Bank, Wealth at Work and Citigold. USPB's retail banking products include a generally prime portfolio built through well-defined lending parameters within Citi's risk appetite framework. --- ## Modified: CREDIT RISK **Key changes:** - Reworded sentence: "Credit risk is one of the most significant risks Citi faces as an institution (see "Risk Factors - Credit Risks" above)." - Reworded sentence: "Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 16), as well as through regular stress testing at the company, business, geography and product levels." - Reworded sentence: "See Note 15 for additional information on Citi's credit risk management." **Prior (2023):** Overview Credit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution. For additional information, see "Risk Factors - Credit Risk" above. Credit risk arises in many of Citigroup's business activities, including: •consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed). Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category. Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures. To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework. Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 15), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 14 for additional information on Citi's credit risk management. Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 15), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 14 for additional information on Citi's credit risk management. 62 62 62 CORPORATE CREDITConsistent with its overall strategy, Citi's corporate clients are typically corporations that value the depth and breadth of Citi's global network. Citi aims to establish relationships with these clients whose needs encompass multiple products, including cash management and trade services, foreign exchange, lending, capital markets and M&A advisory. CORPORATE CREDITConsistent with its overall strategy, Citi's corporate clients are typically corporations that value the depth and breadth of Citi's global network. Citi aims to establish relationships with these clients whose needs encompass multiple products, including cash management and trade services, foreign exchange, lending, capital markets and M&A advisory. **Current (2024):** Overview Credit risk is the risk of loss resulting from the decline in credit quality of a client, customer or counterparty (or downgrade risk) or the failure of a borrower, counterparty, third party or issuer to honor its financial or contractual obligations. Credit risk is one of the most significant risks Citi faces as an institution (see "Risk Factors - Credit Risks" above). Credit risk arises in many of Citigroup's business activities, including: •consumer, commercial and corporate lending; •capital markets derivative transactions; •structured finance; and •securities financing transactions (repurchase and reverse repurchase agreements, and securities loaned and borrowed). Credit risk also arises from clearing and settlement activities, when Citi transfers an asset in advance of receiving its counter-value or advances funds to settle a transaction on behalf of a client. Concentration risk, within credit risk, is the risk associated with having credit exposure concentrated within a specific client, industry, region or other category. Citi has an established framework in place for managing credit risk across all businesses that includes a defined risk appetite, credit limits and credit policies. Citi's credit risk management framework also includes policies and procedures to manage problem exposures. To manage concentration risk, Citi has in place a framework consisting of industry limits, single-name concentrations for each business and across Citigroup and a specialized product limit framework. Credit exposures are generally reported in notional terms for accrual loans, reflecting the value at which the loans as well as other off-balance sheet commitments are carried on the Consolidated Balance Sheet. Credit exposure arising from capital markets activities is generally expressed as the current mark-to-market, net of margin, reflecting the net value owed to Citi by a given counterparty. The credit risk associated with Citi's credit exposures is a function of the idiosyncratic creditworthiness of the obligor, as well as the terms and conditions of the specific obligation. Citi assesses the credit risk associated with its credit exposures on a regular basis through its allowance for credit losses (ACL) process (see "Significant Accounting Policies and Significant Estimates - Allowance for Credit Losses" below and Notes 1 and 16), as well as through regular stress testing at the company, business, geography and product levels. These stress-testing processes typically estimate potential incremental credit costs that would occur as a result of either downgrades in the credit quality or defaults of the obligors or counterparties. See Note 15 for additional information on Citi's credit risk management. LoansThe table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated:In billions of dollars4Q233Q234Q22Services$83 $83 $78 Markets115 108 111 Banking87 87 96 USPB Branded Cards$107 $103 $95 Retail Services52 50 48 Retail Banking43 43 37 Total USPB$202 $196 $180 Wealth$150 $151 $150 All Other(1)$38 $37 $38 Total Citigroup loans (AVG)$675 $662 $653 Total Citigroup loans (EOP)$689 $666 $657 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" below.End-of-period loans increased 5% year-over-year, largely reflecting growth in cards in USPB. End-of-period loans increased 3% sequentially.On an average basis, loans increased 3% year-over-year and 2% sequentially. The year-over-year increase was largely due to growth in USPB, Services and Markets, partially offset by a decline in Banking. As of the fourth quarter of 2023, average loans for: •USPB increased 12% year-over-year, driven by growth in Branded Cards, Retail Banking and Retail Services. •Wealth were largely unchanged. •Services increased 6% year-over-year, primarily driven by strong demand for working capital loans in TTS in North America and internationally. •Markets increased 4% year-over-year, reflecting increased client demand in warehouse lending. •Banking decreased 9% year-over-year, primarily driven by capital optimization efforts. Loans The table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated: In billions of dollars4Q233Q234Q22Services$83 $83 $78 Markets115 108 111 Banking87 87 96 USPB Branded Cards$107 $103 $95 Retail Services52 50 48 Retail Banking43 43 37 Total USPB$202 $196 $180 Wealth$150 $151 $150 All Other(1)$38 $37 $38 Total Citigroup loans (AVG)$675 $662 $653 Total Citigroup loans (EOP)$689 $666 $657 Retail Banking Total USPB --- ## Modified: Markets and Banking **Key changes:** - Reworded sentence: "All Other - Legacy Franchises All Other - Corporate/Other End-of-period deposits decreased 4% year-over-year, largely due to a reduction in Services reflecting quantitative tightening, and a reduction in USPB and Wealth reflecting a shift of deposits to higher-yielding products." - Reworded sentence: "During 2023, Citi redeemed or repurchased an aggregate of approximately $32.0 billion of its outstanding long-term debt." - Reworded sentence: "Weighted-Average Maturity (WAM) The following table presents Citigroup and its affiliates' (including Citibank) WAM of unsecured long-term debt issued with a remaining life greater than one year:WAM in yearsDec." **Prior (2023):** As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. The rule became effective beginning July 1, 2021, while public disclosure requirements to report the ratio will occur on a semiannual basis beginning June 30, 2023. Citi was in compliance with the rule as of December 31, 2022. Loans As part of its funding and liquidity objectives, Citi seeks to fund its existing asset base appropriately as well as maintain sufficient liquidity to grow its PBWM and ICG businesses, including its loan portfolio. Citi maintains a diversified portfolio of loans to its consumer and institutional clients. The table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated: In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Retail banking$37 $36 $34 U.S. Cards143 138 128 Global Wealth150 151 150 Total$330 $325 $312 Institutional Clients GroupServices$79 $82 $77 Banking194 197 195 Markets12 12 17 Total$285 $291 $289 Total Legacy Franchises(1)$38 $39 $66 Total Citigroup loans (AVG)$653 $655 $667 Total Citigroup loans (EOP)$657 $646 $668 Global Wealth Markets Total Legacy Franchises(1) (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above. End-of-period loans decreased 2% year-over-year, largely driven by lower balances in Legacy Franchises and the impact of foreign exchange translation. End-of-period loans increased 2% sequentially. On an average basis, loans declined 2% year-over-year and were largely unchanged sequentially. The year-over-year decline was primarily due to the impact of foreign exchange translation and lower balances in Legacy Franchises, which more than offset growth in PBWM. The decline in Legacy Franchises primarily reflected the reclassification of loans to Other assets to reflect held-for-sale accounting as a result of the signing of sale agreements for consumer franchises, as well as the impact of the ongoing Korea and Russia wind-downs. Average PBWM loans as of the fourth quarter of 2022 increased 6% year-over-year, primarily driven by Branded cards and Retail services. Average ICG loans as of the fourth quarter of 2022 decreased 1% year-over-year, primarily driven by RWA optimization efforts within Banking, which more than offset growth in Services from trade finance in TTS. DepositsThe table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated:In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Personal Banking$111 $115 $114 Global Wealth320 313 323 Total$431 $428 $437 Institutional Clients GroupTTS $694 $664 $689 Securities services129 131 140 Markets and Banking25 22 23 Total$848 $817 $852 Legacy Franchises(1)$50 $50 $74 Corporate/Other$32 $21 $7 Total Citigroup deposits (AVG)$1,361 $1,316 $1,370 Total Citigroup deposits (EOP)$1,366 $1,306 $1,317 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above.End-of-period deposits increased 4% year-over-year, largely driven by Treasury and trade solutions in ICG, partially offset by the impact of foreign exchange translation. End-of-period deposits increased 5% sequentially.On an average basis, deposits declined 1% year-over-year and increased 3% sequentially. The year-over-year decline primarily reflected the impact of foreign exchange translation and a decline in Legacy Franchises, partially offset by growth in Corporate/Other. The decline in Legacy Franchises was due to the impact of held-for-sale accounting as a result of the signing of sale agreements for consumer franchises, as well as the ongoing Korea and Russia wind-downs. ICG average deposits were largely unchanged year-over-year. PBWM average deposits decreased 1% year-over-year, driven by modest decreases in both U.S. Personal Banking and Global Wealth. Corporate/Other average deposits increased $25 billion year-over-year, due to the issuance of institutional certificates of deposit as Citi continues to diversify its funding profile. the signing of sale agreements for consumer franchises, as well as the impact of the ongoing Korea and Russia wind-downs. Average PBWM loans as of the fourth quarter of 2022 increased 6% year-over-year, primarily driven by Branded cards and Retail services. Average ICG loans as of the fourth quarter of 2022 decreased 1% year-over-year, primarily driven by RWA optimization efforts within Banking, which more than offset growth in Services from trade finance in TTS. Deposits The table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated: In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Personal Banking$111 $115 $114 Global Wealth320 313 323 Total$431 $428 $437 Institutional Clients GroupTTS $694 $664 $689 Securities services129 131 140 Markets and Banking25 22 23 Total$848 $817 $852 Legacy Franchises(1)$50 $50 $74 Corporate/Other$32 $21 $7 Total Citigroup deposits (AVG)$1,361 $1,316 $1,370 Total Citigroup deposits (EOP)$1,366 $1,306 $1,317 Securities services Legacy Franchises(1) (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above. End-of-period deposits increased 4% year-over-year, largely driven by Treasury and trade solutions in ICG, partially offset by the impact of foreign exchange translation. End-of-period deposits increased 5% sequentially. On an average basis, deposits declined 1% year-over-year and increased 3% sequentially. The year-over-year decline primarily reflected the impact of foreign exchange translation and a decline in Legacy Franchises, partially offset by growth in Corporate/Other. The decline in Legacy Franchises was due to the impact of held-for-sale accounting as a result of the signing of sale agreements for consumer franchises, as well as the ongoing Korea and Russia wind-downs. ICG average deposits were largely unchanged year-over-year. PBWM average deposits decreased 1% year-over-year, driven by modest decreases in both U.S. Personal Banking and Global Wealth. Corporate/Other average deposits increased $25 billion year-over-year, due to the issuance of institutional certificates of deposit as Citi continues to diversify its funding profile. 87 87 87 Long-Term DebtLong-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Long-term debt is an important funding source due in part to its multiyear contractual maturity structure. The weighted-average maturity of unsecured long-term debt issued by Citigroup and its affiliates (including Citibank) with a remaining life greater than one year was approximately 7.6 years as of December 31, 2022, compared to 8.6 years as of the prior year and 7.8 years as of the prior quarter. The weighted-average maturity is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity at the option of the holder, the weighted-average maturity is calculated based on the earliest date an option becomes exercisable.Citi's long-term debt outstanding at the Citigroup parent company includes benchmark senior and subordinated debt and what Citi refers to as customer-related debt, consisting of structured notes, such as equity- and credit-linked notes, as well as non-structured notes. Citi's issuance of customer-related debt is generally driven by customer demand and complements benchmark debt issuance as a source of funding for Citi's non-bank entities. Citi's long-term debt at the bank includes bank notes, FHLB advances and securitizations. Long-Term Debt OutstandingThe following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated:In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021Non-bank(1)Benchmark debt:Senior debt$117.5 $112.7 $117.8 Subordinated debt22.5 22.4 25.7 Trust preferred1.6 1.6 1.7 Customer-related debt101.1 86.9 78.3 Local country and other(2)7.8 7.0 7.3 Total non-bank$250.5 $230.6 $230.8 BankFHLB borrowings$7.3 $7.3 $5.3 Securitizations(3)7.6 8.4 9.6 Citibank benchmark senior debt2.6 2.5 3.6 Local country and other(2)3.6 4.3 5.1 Total bank$21.1 $22.5 $23.6 Total long-term debt$271.6 $253.1 $254.4 Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums.(1)Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2022, non-bank included $84.2 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line.(2)Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included.(3)Predominantly credit card securitizations, primarily backed by Branded cards receivables.Citi's total long-term debt outstanding increased 7% year-over-year, primarily driven by an increase in customer-related debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 7%, largely driven by an increase in customer-related debt and benchmark senior debt at the non-bank entities.As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2022, Citi redeemed or repurchased an aggregate of approximately $20.8 billion of its outstanding long-term debt. Long-Term DebtLong-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Long-term debt is an important funding source due in part to its multiyear contractual maturity structure. The weighted-average maturity of unsecured long-term debt issued by Citigroup and its affiliates (including Citibank) with a remaining life greater than one year was approximately 7.6 years as of December 31, 2022, compared to 8.6 years as of the prior year and 7.8 years as of the prior quarter. The weighted-average maturity is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity at the option of the holder, the weighted-average maturity is calculated based on the earliest date an option becomes exercisable.Citi's long-term debt outstanding at the Citigroup parent company includes benchmark senior and subordinated debt and what Citi refers to as customer-related debt, consisting of structured notes, such as equity- and credit-linked notes, as well as non-structured notes. Citi's issuance of customer-related debt is generally driven by customer demand and complements benchmark debt issuance as a source of funding for Citi's non-bank entities. Citi's long-term debt at the bank includes bank notes, FHLB advances and securitizations. **Current (2024):** All Other - Legacy Franchises All Other - Corporate/Other End-of-period deposits decreased 4% year-over-year, largely due to a reduction in Services reflecting quantitative tightening, and a reduction in USPB and Wealth reflecting a shift of deposits to higher-yielding products. End-of-period deposits increased 3% sequentially. On an average basis, deposits declined 3% year-over-year and were largely unchanged sequentially. As of the fourth quarter of 2023, average deposits for: •Services decreased 3% year-over-year, while TTS and Securities Services decreased 2% and 7%, respectively. These declines reflected the impact of quantitative tightening that more than offset deposits from new client acquisitions and deepening of relationships with existing clients. •USPB decreased 5% year-over-year, driven by the transfer of relationships and the associated deposits to Wealth. •Wealth decreased 3% year-over-year, reflecting the continued mix shift of deposits to higher-yielding investments on Citi's platform, partially offset by the benefits of the transfer of certain relationships and the associated deposit balances from USPB. 93 93 93 Long-Term DebtLong-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Weighted-Average Maturity (WAM) The following table presents Citigroup and its affiliates' (including Citibank) WAM of unsecured long-term debt issued with a remaining life greater than one year:WAM in yearsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Unsecured debt7.5 7.4 7.6 Non-bank benchmark debt7.0 7.1 7.4 Customer-related debt8.6 8.2 8.1 TLAC-eligible debt8.6 8.7 9.0 The WAM is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity where the option is not held by the issuer, the WAM is calculated based on the earliest date an option becomes exercisable.Long-Term Debt OutstandingThe following table presents Citi's end-of-period total long-term debt outstanding for each of the dates indicated:In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Non-bank(1)Benchmark debt:Senior debt$110.3 $110.3 $117.5 Subordinated debt24.9 24.5 22.5 Trust preferred1.6 1.6 1.6 Customer-related debt110.1 106.4 101.1 Local country and other(2)8.0 8.5 7.8 Total non-bank$254.9 $251.3 $250.5 BankFHLB borrowings$11.5 $8.5 $7.3 Securitizations(3)6.7 5.2 7.6 Citibank benchmark senior debt10.1 7.6 2.6 Local country and other(2)3.4 3.2 3.6 Total bank$31.7 $24.5 $21.1 Total long-term debt$286.6 $275.8 $271.6 Note: Amounts represent the current value of long-term debt on Citi's Consolidated Balance Sheet that, for certain debt instruments, includes consideration of fair value, hedging impacts and unamortized discounts and premiums.(1) Non-bank includes long-term debt issued to third parties by the parent holding company (Citigroup) and Citi's non-bank subsidiaries (including broker-dealer subsidiaries) that are consolidated into Citigroup. As of December 31, 2023, non-bank included $92.6 billion of long-term debt issued by Citi's broker-dealer and other subsidiaries that are consolidated into Citigroup. Certain Citigroup consolidated hedging activities are also included in this line.(2) Local country and other includes debt issued by Citi's affiliates in support of their local operations. Within non-bank, certain secured financing is also included.(3) Predominantly credit card securitizations, primarily backed by Branded Cards receivables.Citi's total long-term debt outstanding increased 6% year-over-year, largely driven by issuance of customer-related debt at the non-bank entities, as well as increased senior benchmark debt and FHLB borrowings at the bank. The increase was partially offset by a decline in senior benchmark debt at the non-bank entities. Sequentially, long-term debt outstanding also increased 4%, largely driven by an increase in customer-related debt at the non-bank entities and increased FHLB borrowings and benchmark senior debt at the bank.As part of its liability management, Citi has considered, and may continue to consider, opportunities to redeem or repurchase its long-term debt pursuant to open market purchases, tender offers or other means. Such redemptions and repurchases help reduce Citi's overall funding costs. During 2023, Citi redeemed or repurchased an aggregate of approximately $32.0 billion of its outstanding long-term debt. Long-Term DebtLong-term debt (generally defined as debt with original maturities of one year or more) represents the most significant component of Citi's funding for the Citigroup parent company and Citi's non-bank subsidiaries and is a supplementary source of funding for the bank entities. Weighted-Average Maturity (WAM) The following table presents Citigroup and its affiliates' (including Citibank) WAM of unsecured long-term debt issued with a remaining life greater than one year:WAM in yearsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022Unsecured debt7.5 7.4 7.6 Non-bank benchmark debt7.0 7.1 7.4 Customer-related debt8.6 8.2 8.1 TLAC-eligible debt8.6 8.7 9.0 The WAM is calculated based on the contractual maturity of each security. For securities that are redeemable prior to maturity where the option is not held by the issuer, the WAM is calculated based on the earliest date an option becomes exercisable. --- ## Modified: Mexico Consumer **Key changes:** - Removed sentence: "71 71 71 Mexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans." - Removed sentence: "Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Mexico Consumer decreased quarter-over-quarter and year-over-year, primarily driven by the impact of the charge-off of peak delinquencies in early 2021, which resulted in lower delinquencies, leading to lower net credit losses in the current quarter." - Removed sentence: "The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, primarily driven by the impact of the charge-off of peak delinquencies and higher payment rates.For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 14.U.S." - Removed sentence: "Cards FICO DistributionThe following tables show the current FICO score distributions for Citi's Branded cards and Retail services portfolios based on end-of-period receivables." - Removed sentence: "FICO scores are updated monthly for substantially all of the portfolio and on a quarterly basis for the remaining portfolio.Branded CardsFICO distribution(1)Dec." **Prior (2023):** 71 71 71 Mexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Mexico Consumer decreased quarter-over-quarter and year-over-year, primarily driven by the impact of the charge-off of peak delinquencies in early 2021, which resulted in lower delinquencies, leading to lower net credit losses in the current quarter. The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, primarily driven by the impact of the charge-off of peak delinquencies and higher payment rates.For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 14.U.S. Cards FICO DistributionThe following tables show the current FICO score distributions for Citi's Branded cards and Retail services portfolios based on end-of-period receivables. FICO scores are updated monthly for substantially all of the portfolio and on a quarterly basis for the remaining portfolio.Branded CardsFICO distribution(1)Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021> 76048 %48 %49 %680-76038 38 38 < 68014 14 13 Total100 %100 %100 %Retail ServicesFICO distribution(1)Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021> 76027 %27 %28 %680-76042 43 44 < 68031 30 28 Total100 %100 %100 %(1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both cards portfolios shifted slightly lower across the credit bands from the prior quarter and the prior year consistent with the ongoing normalization in net credit loss and delinquency rates in the portfolios. The FICO distribution continues to reflect strong underlying credit quality and a benefit from the continued impacts of government stimulus, unemployment benefits and customer relief programs. See Note 14 for additional information on FICO scores. Mexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Mexico Consumer decreased quarter-over-quarter and year-over-year, primarily driven by the impact of the charge-off of peak delinquencies in early 2021, which resulted in lower delinquencies, leading to lower net credit losses in the current quarter. The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, primarily driven by the impact of the charge-off of peak delinquencies and higher payment rates.For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 14. Mexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Mexico Consumer decreased quarter-over-quarter and year-over-year, primarily driven by the impact of the charge-off of peak delinquencies in early 2021, which resulted in lower delinquencies, leading to lower net credit losses in the current quarter. The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, primarily driven by the impact of the charge-off of peak delinquencies and higher payment rates. For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 14. U.S. Cards FICO DistributionThe following tables show the current FICO score distributions for Citi's Branded cards and Retail services portfolios based on end-of-period receivables. FICO scores are updated monthly for substantially all of the portfolio and on a quarterly basis for the remaining portfolio.Branded CardsFICO distribution(1)Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021> 76048 %48 %49 %680-76038 38 38 < 68014 14 13 Total100 %100 %100 %Retail ServicesFICO distribution(1)Dec. 31, 2022Sept. 30, 2022Dec. 31, 2021> 76027 %27 %28 %680-76042 43 44 < 68031 30 28 Total100 %100 %100 %(1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both cards portfolios shifted slightly lower across the credit bands from the prior quarter and the prior year consistent with the ongoing normalization in net credit loss and delinquency rates in the portfolios. The FICO distribution continues to reflect strong underlying credit quality and a benefit from the continued impacts of government stimulus, unemployment benefits and customer relief programs. See Note 14 for additional information on FICO scores. **Current (2024):** Mexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers. As presented in the chart above, the fourth quarter of 2023 net credit loss rate in Mexico Consumer increased quarter-over-quarter and year-over-year, primarily driven by the ongoing normalization of loss rates from post-pandemic lows. The 90+ days past due delinquency rate was relatively stable quarter-over-quarter and year-over-year. For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 15. 78 78 78 U.S. Cards FICO DistributionThe following tables present the current FICO score distributions for Citi's Branded Cards and Retail Services portfolios based on end-of-period receivables. FICO scores are updated monthly for substantially all of the portfolio and on a quarterly basis for the remaining portfolio.Branded CardsFICO distribution(1)Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022> 76046 %46 %48 %680-76038 39 38 < 68016 15 14 Total100 %100 %100 %Retail ServicesFICO distribution(1)Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022> 76027 %26 %27 %680-76041 42 42 < 68032 32 31 Total100 %100 %100 %(1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both card portfolios declined slightly during 2023, primarily reflecting the normalization in net credit loss and delinquency rates. The FICO distribution continued to reflect strong underlying credit quality of the portfolios. See Note 15 for additional information on FICO scores. U.S. Cards FICO DistributionThe following tables present the current FICO score distributions for Citi's Branded Cards and Retail Services portfolios based on end-of-period receivables. FICO scores are updated monthly for substantially all of the portfolio and on a quarterly basis for the remaining portfolio.Branded CardsFICO distribution(1)Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022> 76046 %46 %48 %680-76038 39 38 < 68016 15 14 Total100 %100 %100 %Retail ServicesFICO distribution(1)Dec. 31, 2023Sept. 30, 2023Dec. 31, 2022> 76027 %26 %27 %680-76041 42 42 < 68032 32 31 Total100 %100 %100 %(1)The FICO bands in the tables are consistent with general industry peer presentations. The FICO distribution of both card portfolios declined slightly during 2023, primarily reflecting the normalization in net credit loss and delinquency rates. The FICO distribution continued to reflect strong underlying credit quality of the portfolios. See Note 15 for additional information on FICO scores. --- ## Modified: Interest Income/Expense and Net Interest Margin (NIM) **Key changes:** - Reworded sentence: "In millions of dollars, except as otherwise noted2023 2022 2021Change 2023 vs." **Prior (2023):** In millions of dollars, except as otherwise noted2022 2021 2020Change 2022 vs. 2021Change 2021 vs. 2020Interest revenue(1)$74,573 $50,667 $58,285 47 %(13)%Interest expense(2)25,740 7,981 13,338 223 (40)Net interest income, taxable equivalent basis(1)$48,833 $42,686 $44,947 14 %(5)%Interest revenue - average rate(3)3.43 %2.36 %2.88 %107 bps(52)bpsInterest expense - average rate1.48 0.46 0.81 102 bps(35)bpsNet interest margin(3)(4)2.25 1.99 2.22 26 bps(23)bpsInterest rate benchmarks Two-year U.S. Treasury note - average rate2.99 %0.27 %0.39 %272 bps(12)bps10-year U.S. Treasury note - average rate2.95 1.45 0.89 150 bps56 bps10-year vs. two-year spread(4)bps118 bps50 bps Change **Current (2024):** In millions of dollars, except as otherwise noted2023 2022 2021Change 2023 vs. 2022Change 2022 vs. 2021Interest income(1)$133,359 $74,573 $50,667 79 %47 %Interest expense(2)78,358 25,740 7,981 204 223 Net interest income, taxable equivalent basis(1)$55,001 $48,833 $42,686 13 %14 %Interest income - average rate(3)5.97 %3.43 %2.36 %254 bps107 bpsInterest expense - average rate4.35 1.48 0.46 287 bps102 bpsNet interest margin(3)(4)2.46 2.25 1.99 21 bps26 bpsInterest rate benchmarks Two-year U.S. Treasury note - average rate4.58 %2.99 %0.27 %159 bps272 bps10-year U.S. Treasury note - average rate3.96 2.95 1.45 101 bps150 bps10-year vs. two-year spread(62)bps(4)bps118 bps Change --- ## Modified: HUMAN CAPITAL RESOURCES AND MANAGEMENT **Key changes:** - Reworded sentence: "Citi strives to deliver to its full potential by focusing on its strategic priority of attracting and retaining highly qualified and motivated colleagues." **Prior (2023):** Attracting and retaining a highly qualified and motivated workforce is a strategic priority for Citi. Citi seeks to enhance the competitive strength of its workforce through the following efforts: •Continuously innovating the recruitment, training, compensation, promotion and engagement of colleagues •Actively seeking and listening to diverse perspectives at all levels of the organization •Optimizing transparency concerning workforce goals to promote accountability, credibility and effectiveness in achieving those goals •Providing compensation programs that are competitive in the market and aligned to strategic objectives **Current (2024):** Citi strives to deliver to its full potential by focusing on its strategic priority of attracting and retaining highly qualified and motivated colleagues. Citi seeks to enhance the competitive strength of its workforce through the following efforts: •Continuously innovating its efforts to recruit, train, develop, compensate, promote and engage colleagues •Actively seeking and listening to diverse perspectives at all levels of the organization •Optimizing transparency concerning workforce goals to promote accountability, credibility and effectiveness in achieving those goals •Providing compensation programs that are competitive in the market and aligned to strategic objectives In 2023, Citi undertook significant changes to simplify the Company and accelerate the progress it is making in executing its strategy. As previously disclosed, Citi aligned its organizational structure to its business strategy - making the Company more client centric and agile, speeding up decision-making, improving productivity to deliver efficiency and driving increased accountability across the organization. Citi is aligned around five businesses - Services, Markets, Banking, USPB and Wealth - focusing on a streamlined client organization to strengthen how Citi delivers for clients across the Company and around the globe. --- ## Modified: Citi's Emerging Markets Presence Subjects It to Various Risks as well as Increased Compliance and Regulatory Risks and Costs. **Key changes:** - Reworded sentence: "During 2023, emerging markets revenues accounted for approximately 40% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa)." **Prior (2023):** Citi has worked on Environmental, Social and Governance (ESG) issues for more than 20 years and has a demonstrated record of ESG progress, including participating in the creation and adoption of ESG-related principles and standards. This section summarizes some of Citi's key ESG initiatives, including its Sustainable Progress Strategy, Net Zero, and Financial Inclusion and Racial Equity commitments. Citi's ESG Report provides information on a broad set of ESG-related efforts. Citi's Task Force on Climate-Related Financial Disclosures (TCFD) Report provides its stakeholders with information on Citi's continued progress to manage climate risk and its Net Zero plan, including information on financed emissions and 2030 emissions targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below. ESG and Climate-Related GovernanceCiti's Board of Directors (Board) provides oversight of Citi's management activities (for additional information, see "Managing Global Risk - Risk Governance" below). For example, the Nomination, Governance and Public Affairs Committee of the Board oversees many of Citi's ESG activities, including reviewing Citi's policies and programs for environmental and social sustainability, climate change, human rights, diversity and other ESG issues, as well as overseeing engagement with external stakeholders. The Risk Management Committee of the Board provides oversight of Citi's Independent Risk Management function and reviews Citi's risk policies and frameworks, including receiving climate risk-related updates.The Audit Committee of the Board has recently been chartered to provide oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and voluntary ESG reporting, as well as management's evaluation of Citi's disclosure controls and procedures for ESG reporting.Citi's Global ESG Council consists of senior members of its management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities. In addition, a number of teams and senior managers contribute to the oversight and management of areas such as environmental sustainability; community investing; talent and diversity; ethics and business practices; and remuneration.Citi's climate governance structure continues to evolve as Citi advances its understanding of its climate risk and its progress under the Net Zero plan. In addition to the expansion of the Board's oversight of climate matters (see Risk Management Committee and Audit Committee descriptions above), Citi has: •Expanded and realigned its climate risk team to be part of the Enterprise Risk Management function within Risk; •Further built out its Clean Energy Transition (CET) team (formed in 2021 and expanded in 2022 to include Corporate Banking), which focuses on providing advisory and capital-raising services to companies involved in energy transition; and•Launched two climate training pilots for its BCMA (Banking, Capital Markets and Advisory), Risk Management and Global Functions teams involving in-person workshops focused on providing foundational knowledge of climate risks and client engagement.Key ESG InitiativesSustainable Progress StrategyCiti's Sustainable Progress Strategy is summarized in its Environmental and Social Policy Framework. The three pillars of the strategy each have climate-related elements and serve as the foundation for Citi's climate commitments: climate risk and its Net Zero plan, including information on financed emissions and 2030 emissions targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risks - Climate Risk" below. **Current (2024):** During 2023, emerging markets revenues accounted for approximately 40% of Citi's total revenues (Citi generally defines emerging markets as countries in Latin America, Asia (other than Japan, Australia and New Zealand), and central and Eastern Europe, the Middle East and Africa). Citi's presence in the emerging markets subjects it to various risks. Emerging market risks include, among others, limitations or unavailability of hedges on foreign investments; foreign currency volatility, including devaluations and strength in the U.S. dollar; sustained elevated interest rates and quantitative tightening; elevated inflation and hyperinflation; foreign exchange controls, including an inability to access indirect foreign exchange mechanisms; macroeconomic, geopolitical and domestic political challenges, uncertainties and volatility, including with respect to Russia (see the macroeconomic and geopolitical risk factor above and "Managing Global Risk - Other Risks - Country Risk - Russia" and " - Ukraine" below); cyberattacks; restrictions arising from retaliatory laws and regulations; sanctions or asset freezes; sovereign debt volatility; fluctuations in commodity prices; election outcomes; regulatory changes, including potential conflicts among regulations with other jurisdictions where Citi does business; limitations on foreign investment; sociopolitical instability; civil unrest; crime, corruption and fraud; nationalization or loss of licenses; potential criminal charges; closure of branches or subsidiaries; and confiscation of assets; and these risks can be exacerbated in the event of a deterioration in the relationship between the U.S. and an emerging market country. For example, Citi operates in several countries that have, or have had in the past, strict capital controls, currency controls and/or sanctions, such as Argentina and Russia, that limit its ability to convert local currency into U.S. dollars and/or transfer funds outside of those countries. For instance, Citi may need to record additional translation losses due to currency controls in Argentina (see "Managing Global Risk - Other Risks - Country Risk - Argentina" below). Moreover, Citi may need to record additional reserves for expected losses for its credit exposures based on the transfer risk associated with exposures outside the U.S., driven by safety and soundness considerations under U.S. banking law (see "Managing Global Risk - Other Risks - Country Risk - Argentina" and " - Russia" and "Significant Accounting Policies and Significant Estimates" below). In addition, political turmoil and instability; geopolitical challenges, tensions and conflicts (including those related to Russia's war in Ukraine as well as a persistent and/or escalating conflict in the Middle East); terrorism; and other instabilities have occurred in various regions and emerging market countries across the globe, which impact Citi's businesses, results of operations and financial conditions in affected countries and have required, and may continue to require, management time and attention and other resources, such as managing the impact of sanctions and their effect on Citi's operations in certain emerging market countries. For 61 61 61 additional information, see the macroeconomic challenges and uncertainties risk factor above. CLIMATE CHANGE AND NET ZEROIntroduction This section summarizes Citi's Operational Footprint goals and Net Zero commitment. Citi's annual ESG Report provides information on a broad set of ESG-related efforts. The upcoming Citi Climate Report, formerly named the Task Force on Climate-Related Financial Disclosures (TCFD) Report, provides information on Citi's continued progress to manage climate risk and its Net Zero plan, including information on financed emissions and 2030 interim emissions reduction targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. ESG and Climate-Related GovernanceCiti's Board of Directors (Board) provides oversight of Citi's management activities (see "Managing Global Risk - Risk Governance" below). •The Nomination, Governance and Public Affairs Committee of the Board provides oversight and receives updates on Citi's environmental and social policies and commitments.•The Risk Management Committee of the Board provides oversight of Citi's Risk Management Framework and risk culture and reviews Citi's key risk policies and frameworks, including receiving climate risk-related updates.•The Audit Committee of the Board provides oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and group-level voluntary ESG reporting, as well as management's evaluation of the effectiveness of Citi's disclosure controls and procedures for group-level ESG reporting.Additionally, Citi's ESG Council consists of senior members of the management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities.Sustainable FinanceCiti's Sustainable Finance Goal, as previously disclosed, supports a combination of environmental and social finance activities. Delivering on the sustainable finance goal is an integrated effort across the organization with products and service offerings across multiple lines of business. Net Zero Emissions by 2050As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint.Citi's Net Zero plan includes:•Net Zero Metrics and Target Setting: Calculate metrics and assess targets for carbon-intensive sectors•Client Engagement and Assessment: Seek to understand client GHG emissions and transition plans and advise on capacity building•Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management•Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance products and services•Portfolio Management: Active portfolio management of Citi financings to align with net zero targets, including considerations of transition measures taken by clients•Public Policy and Regulatory Engagement: Contribute to an enabling public policy and regulatory environment which is essential to stimulating demand for clean technologies and helping ensure a responsible transitionProgress on Citi's Net Zero plan: •Citi has published interim 2030 emissions targets for six loan portfolios: auto manufacturing, commercial real estate (North America), energy, power, steel and thermal coal mining. •Citi has developed a client transition assessment process to help internal teams better understand the alignment of clients' strategies with transition or decarbonization pathways applicable to their respective sectors. In 2022-2023, Citi completed the initial assessment process for energy and power clients, and in 2023 began the transition assessment process for auto manufacturing and steel clients. The assessment process focuses on clients with material emissions relative to each sector's baseline emission profiles.Operational Footprint GoalsCiti measures progress against operational footprint goals, which include efforts to reduce the environmental impact of its facilities through reductions in emissions, energy, water consumption and waste generation. Citi's efforts to integrate sustainable practices include sustainable building certifications, renewable electricity sourcing, employee engagement and seeking opportunities for efficiency in business travel. In 2023, Citi made progress toward these goals by increasing on-site solar generation, promoting initiatives on waste diversion and recycling, mapping weather- additional information, see the macroeconomic challenges and uncertainties risk factor above. CLIMATE CHANGE AND NET ZEROIntroduction This section summarizes Citi's Operational Footprint goals and Net Zero commitment. Citi's annual ESG Report provides information on a broad set of ESG-related efforts. The upcoming Citi Climate Report, formerly named the Task Force on Climate-Related Financial Disclosures (TCFD) Report, provides information on Citi's continued progress to manage climate risk and its Net Zero plan, including information on financed emissions and 2030 interim emissions reduction targets. For information regarding Citi's management of climate risk, see "Managing Global Risk - Strategic Risk - Climate Risk" below. ESG and Climate-Related GovernanceCiti's Board of Directors (Board) provides oversight of Citi's management activities (see "Managing Global Risk - Risk Governance" below). •The Nomination, Governance and Public Affairs Committee of the Board provides oversight and receives updates on Citi's environmental and social policies and commitments.•The Risk Management Committee of the Board provides oversight of Citi's Risk Management Framework and risk culture and reviews Citi's key risk policies and frameworks, including receiving climate risk-related updates.•The Audit Committee of the Board provides oversight of controls and procedures pertaining to the ESG-related metrics and related disclosures in Citi's SEC filed reports and group-level voluntary ESG reporting, as well as management's evaluation of the effectiveness of Citi's disclosure controls and procedures for group-level ESG reporting.Additionally, Citi's ESG Council consists of senior members of the management team and certain subject matter experts who provide oversight of Citi's ESG goals and activities.Sustainable FinanceCiti's Sustainable Finance Goal, as previously disclosed, supports a combination of environmental and social finance activities. Delivering on the sustainable finance goal is an integrated effort across the organization with products and service offerings across multiple lines of business. additional information, see the macroeconomic challenges and uncertainties risk factor above. --- ## Modified: Branded Cards **Key changes:** - Reworded sentence: "USPB's Branded Cards portfolio includes proprietary and co-branded cards." **Prior (2023):** U.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization.Retail ServicesU.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14.Retail Banking U.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels. The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. **Current (2024):** USPB's Branded Cards portfolio includes proprietary and co-branded cards. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Branded Cards increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. --- ## Modified: All Other - Legacy Franchises **Key changes:** - Reworded sentence: "(2)See Note 15 for details on loan-to-value ratios for the portfolios and FICO scores for the U.S." - Reworded sentence: "For information on changes to Citi's consumer loans, see "Credit Risk - Loans" above." **Prior (2023):** Asia Consumer(7) Legacy Holdings Assets(8) (1)End-of-period loans include interest and fees on credit cards. (2)Legacy Franchises - 4Q22 Asia Consumer loan balances exclude approximately $12 billion of loans ($9 billion of retail banking loans and $3 billion of credit card loan balances) reclassified to held-for-sale (HFS) (in Other assets on the Consolidated Balance Sheet) as a result of Citi's signed agreements to sell its consumer banking businesses in four countries: Indonesia, Vietnam, Taiwan and India, which were reclassified to HFS starting 1Q22. (See Legacy Franchises above and Note 2 for additional information.) The Malaysia, Thailand and Bahrain sales closed during the fourth quarter of 2022 and were also reclassified to HFS starting 1Q22. The Philippines consumer banking business was reclassified to HFS from 4Q21 until the closing of its sale on August 1, 2022. Accordingly, loans from these sold businesses are excluded from the Asia Consumer loan balances as of the end of such periods. (3)Consists of $98.2 billion, $99.3 billion, $94.6 billion, $94.1 billion and $92.7 billion of loans in North America as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively. For additional information on the credit quality of the Global Wealth portfolio, see Note 14. (4)Consists of $51.0 billion, $51.8 billion, $54.2 billion, $56.1 billion and $58.6 billion of loans outside North America as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively. (5)See Note 14 for details on loan-to-value ratios for the portfolios and FICO scores for the U.S. portfolio. (6)At December 31, 2022, includes approximately $49 billion of classifiably managed loans. Over 90% of these loans are fully collateralized (consisting primarily of marketable investment securities, commercial real estate and limited partner capital commitments in private equity) and have experienced very low historical NCLs. As discussed below, approximately 95% of the classifiably managed portion of these loans are investment grade. See "Consumer Loan Delinquencies Amounts and Ratios" below for details on the delinquency-managed portfolio. (7)Asia Consumer also includes loans and leases in certain EMEA countries for all periods presented. (8)Primarily consists of certain North America consumer mortgages. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. For information on changes to Citi's consumer loans, see "Liquidity Risk - Loans" below. 69 69 69 Consumer Credit TrendsPersonal Banking and Wealth Management (PBWM)Personal Banking and Wealth ManagementAs indicated above, PBWM consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking provides card products through Branded cards and Retail services, and also includes mortgages and home equity, small business and personal consumer loans through Citi's Retail banking network. The Retail bank is concentrated in six major U.S. metropolitan areas. Global Wealth provides investment services, cards, mortgages and personal, small business and other consumer loans through the Private bank, Wealth at Work and Citigold. As of December 31, 2022, approximately 45% of PBWM consumer loans consisted of Branded cards and Retail services card loans, which generally drives the overall credit performance of PBWM, as U.S. Cards net credit losses represent approximately 90% of total PBWM losses. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in PBWM increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels in U.S. Cards.PBWM's 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization in U.S. Cards.Branded CardsU.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization.Retail ServicesU.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14.Retail Banking Consumer Credit TrendsPersonal Banking and Wealth Management (PBWM)Personal Banking and Wealth ManagementAs indicated above, PBWM consists of U.S. Personal Banking and Global Wealth Management (Global Wealth). U.S. Personal Banking provides card products through Branded cards and Retail services, and also includes mortgages and home equity, small business and personal consumer loans through Citi's Retail banking network. The Retail bank is concentrated in six major U.S. metropolitan areas. Global Wealth provides investment services, cards, mortgages and personal, small business and other consumer loans through the Private bank, Wealth at Work and Citigold. As of December 31, 2022, approximately 45% of PBWM consumer loans consisted of Branded cards and Retail services card loans, which generally drives the overall credit performance of PBWM, as U.S. Cards net credit losses represent approximately 90% of total PBWM losses. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in PBWM increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels in U.S. Cards.PBWM's 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization in U.S. Cards.Branded Cards **Current (2024):** Asia Consumer(7) Legacy Holdings Assets(8) (1)End-of-period loans include interest and fees on credit cards. (2)See Note 15 for details on loan-to-value ratios for the portfolios and FICO scores for the U.S. portfolio. (3)Consists of $101.6 billion, $101.1 billion, $99.5 billion, $98.9 billion and $98.2 billion of loans in North America as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively. For additional information on the credit quality of the Wealth portfolio, see Note 15. (4)Consists of $49.9 billion, $49.5 billion, $51.0 billion, $51.0 billion and $51.0 billion of loans outside North America as of December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022, respectively. (5)At December 31, 2023, includes approximately $24 billion of classifiably managed loans fully collateralized by eligible financial assets and securities that have experienced very low historical net credit losses (NCLs). Approximately 85% of the classifiably managed portion of these loans are investment grade. (6)At December 31, 2023, includes approximately $22 billion of classifiably managed loans. Approximately 87% of these loans are fully collateralized (consisting primarily of commercial real estate and limited partner capital commitments in private equity) and have experienced very low historical net credit losses (NCLs). Approximately 85% of the classifiably managed portion of these loans are investment grade. (7)Asia Consumer loan balances, reported within All Other - Legacy Franchises, include the four remaining Asia Consumer loan portfolios: Korea, Poland, China and Russia. (8)Primarily consists of certain North America consumer mortgages. For information on changes to Citi's consumer loans, see "Credit Risk - Loans" above. For information on changes to Citi's consumer loans, see "Credit Risk - Loans" above. For information on changes to Citi's consumer loans, see "Credit Risk - Loans" above. 76 76 76 Consumer Credit TrendsU.S. Personal BankingAs indicated above, USPB provides card products through Branded Cards and Retail Services, and mortgages and home equity, small business and personal consumer loans through Citi's Retail Banking network. Retail Banking is concentrated in six major U.S. metropolitan areas. USPB also provides mortgages through correspondent channels.As of December 31, 2023, approximately 79% of USPB EOP loans consisted of Branded Cards and Retail Services card loans, which generally drives the overall credit performance of USPB, as U.S. cards net credit losses represented approximately 96% of total USPB net credit losses for the fourth quarter of 2023. As of December 31, 2023, Branded Cards represented 67% of total U.S. cards EOP loans and Retail Services represented 33% of U.S. cards EOP loans.As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in USPB increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels in Branded Cards and Retail Services as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. Citi expects the net credit loss rate for both Branded Cards and Retail Services to continue to rise above pre-pandemic levels and, on a full-year basis, peak in 2024. The higher net credit losses expectation is already reflected in the Company's ACL on loans for outstanding balances at December 31, 2023.Branded CardsUSPB's Branded Cards portfolio includes proprietary and co-branded cards. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Branded Cards increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment.Retail ServicesUSPB's Retail Services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail Services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail Services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Retail Services increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment.For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 15. Consumer Credit TrendsU.S. Personal BankingAs indicated above, USPB provides card products through Branded Cards and Retail Services, and mortgages and home equity, small business and personal consumer loans through Citi's Retail Banking network. Retail Banking is concentrated in six major U.S. metropolitan areas. USPB also provides mortgages through correspondent channels.As of December 31, 2023, approximately 79% of USPB EOP loans consisted of Branded Cards and Retail Services card loans, which generally drives the overall credit performance of USPB, as U.S. cards net credit losses represented approximately 96% of total USPB net credit losses for the fourth quarter of 2023. As of December 31, 2023, Branded Cards represented 67% of total U.S. cards EOP loans and Retail Services represented 33% of U.S. cards EOP loans.As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in USPB increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels in Branded Cards and Retail Services as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. Citi expects the net credit loss rate for both Branded Cards and Retail Services to continue to rise above pre-pandemic levels and, on a full-year basis, peak in 2024. The higher net credit losses expectation is already reflected in the Company's ACL on loans for outstanding balances at December 31, 2023. --- ## Modified: Retail Services **Key changes:** - Reworded sentence: "USPB's Retail Services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards." **Prior (2023):** As discussed above, the Global Wealth credit portfolio primarily consists of consumer mortgages, cards and other lending products extended to customer segments that range from the affluent to ultra-high-net-worth through the Private bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies. As of December 31, 2022, approximately $49 billion, or 33%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 95% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios. As shown in the chart above, the net credit loss rate and 90+ days past due delinquency rate were broadly stable quarter-over-quarter and year-over-year, reflecting the strong credit profiles of the portfolios. The net credit loss rate increased slightly quarter-over-quarter, due to a classifiably managed loan charge-off. The low levels of net credit losses and the 90+ days past due delinquency rate continued to reflect the strong credit profiles of the portfolios. Legacy FranchisesLegacy Franchises provides traditional retail banking and branded card products to retail and small business customers in Asia Consumer and Mexico Consumer.Asia(1) Consumer (1) Asia Consumer includes Legacy Franchises activities in certain EMEA countries for all periods presented.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Asia Consumer for the remaining portfolios held-for-investment (China, Korea, Russia and Poland) increased quarter-over-quarter, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $1.5 billion) and the sale of the personal loan portfolio in Russia in the fourth quarter of 2022. The net credit loss rate increased year-over-year, primarily driven by lower average loans due to the ongoing wind-down of the businesses, particularly in Korea (decline of $7.8 billion) and the sale of the personal loan portfolio in Russia, partially offset by the reclassification of loans to held-for-sale during 2022.The 90+ days past due delinquency rate was largely unchanged quarter-over-quarter and decreased year-over-year, mainly driven by the impact of the Asia Consumer held-for-sale reclassifications, partially offset by the effect of declining loans due to the ongoing wind-down of the businesses, including the sale of the personal loan portfolio in Russia.The performance of Asia Consumer's portfolios continues to reflect the strong credit profiles in the region's target customer segments.Mexico Consumer and the 90+ days past due delinquency rate continued to reflect the strong credit profiles of the portfolios. **Current (2024):** USPB's Retail Services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail Services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail Services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Retail Services increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 15. 77 77 77 Retail BankingUSPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15.As presented in the chart above, the net credit loss rate in Retail Banking for the fourth quarter of 2023 was broadly stable quarter-over-quarter and increased year-over-year, primarily driven by the growth and seasoning of personal loans.The 90+ days past due delinquency rate was broadly stable quarter-over-quarter and decreased year-over-year, primarily driven by lower delinquencies in U.S. mortgages.WealthAs indicated above, Wealth provides consumer mortgages, margin lending, cards and other lending products to customer segments that range from affluent to ultra-high net worth through the Private Bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies and includes loans that are delinquency managed or classifiably managed. The delinquency-managed portfolio consists primarily of mortgages, margin lending and cards. As of December 31, 2023, approximately $46 billion, or 30%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 85% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios.As presented in the chart above, the net credit loss rate and 90+ days past due delinquency rate in Wealth for the fourth quarter of 2023 were broadly stable quarter-over-quarter and year-over-year. The low net credit loss and the 90+ days past due delinquency rates continued to reflect the strong credit profiles of the portfolios. Mexico ConsumerMexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As presented in the chart above, the fourth quarter of 2023 net credit loss rate in Mexico Consumer increased quarter-over-quarter and year-over-year, primarily driven by the ongoing normalization of loss rates from post-pandemic lows. The 90+ days past due delinquency rate was relatively stable quarter-over-quarter and year-over-year. For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 15. Retail BankingUSPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15.As presented in the chart above, the net credit loss rate in Retail Banking for the fourth quarter of 2023 was broadly stable quarter-over-quarter and increased year-over-year, primarily driven by the growth and seasoning of personal loans.The 90+ days past due delinquency rate was broadly stable quarter-over-quarter and decreased year-over-year, primarily driven by lower delinquencies in U.S. mortgages.WealthAs indicated above, Wealth provides consumer mortgages, margin lending, cards and other lending products to customer segments that range from affluent to ultra-high net worth through the Private Bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies and includes loans that are delinquency managed or classifiably managed. The delinquency-managed portfolio consists primarily of mortgages, margin lending and cards. As of December 31, 2023, approximately $46 billion, or 30%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit --- ## Modified: U.S. Personal Banking **Key changes:** - Reworded sentence: "As indicated above, USPB provides card products through Branded Cards and Retail Services, and mortgages and home equity, small business and personal consumer loans through Citi's Retail Banking network." **Prior (2023):** U.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels. The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14. **Current (2024):** As indicated above, USPB provides card products through Branded Cards and Retail Services, and mortgages and home equity, small business and personal consumer loans through Citi's Retail Banking network. Retail Banking is concentrated in six major U.S. metropolitan areas. USPB also provides mortgages through correspondent channels. As of December 31, 2023, approximately 79% of USPB EOP loans consisted of Branded Cards and Retail Services card loans, which generally drives the overall credit performance of USPB, as U.S. cards net credit losses represented approximately 96% of total USPB net credit losses for the fourth quarter of 2023. As of December 31, 2023, Branded Cards represented 67% of total U.S. cards EOP loans and Retail Services represented 33% of U.S. cards EOP loans. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in USPB increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels in Branded Cards and Retail Services as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. Citi expects the net credit loss rate for both Branded Cards and Retail Services to continue to rise above pre-pandemic levels and, on a full-year basis, peak in 2024. The higher net credit losses expectation is already reflected in the Company's ACL on loans for outstanding balances at December 31, 2023. Branded CardsUSPB's Branded Cards portfolio includes proprietary and co-branded cards. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Branded Cards increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment.Retail ServicesUSPB's Retail Services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail Services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail Services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Retail Services increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment.For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 15. --- ## Modified: Consumer Loan Delinquencies Amounts and Ratios **Key changes:** - Reworded sentence: "EOPloans(1)90+ days past due(2)30-89 days past due(2)December 31,December 31,December 31,In millions of dollars, except EOP loan amounts in billions2023202320222021202320222021USPB(3)(4)Total$209.1 $2,635 $1,578 $1,069 $2,563 $1,720 $1,130 Ratio1.26 %0.84 %0.64 %1.23 %0.92 %0.68 %Cards(4)Total164.7 2,461 1,415 871 2,293 1,511 947 Ratio1.49 %0.94 %0.65 %1.39 %1.00 %0.71 %Branded Cards111.1 1,194 629 389 1,143 693 408 Ratio1.07 %0.63 %0.44 %1.03 %0.69 %0.46 %Retail Services53.6 1,267 786 482 1,150 818 539 Ratio2.36 %1.56 %1.05 %2.15 %1.62 %1.17 %Retail Banking(3)44.4 174 163 198 270 209 183 Ratio0.40 %0.45 %0.62 %0.62 %0.57 %0.57 %Wealth delinquency-managed loans(5)$105.3 $191 $186 $281 $312 $317 $323 Ratio0.18 %0.19 %0.31 %0.30 %0.32 %0.35 %Wealth classifiably managed loans(6)$46.2 N/AN/AN/AN/AN/AN/AAll OtherTotal$28.6 $407 $389 $613 $384 $335 $546 Ratio1.43 %1.26 %1.06 %1.35 %1.09 %0.94 %Mexico Consumer18.7 252 190 183 252 186 173 Ratio1.35 %1.28 %1.38 %1.35 %1.26 %1.30 %Asia Consumer(7)(8)7.4 51 49 209 59 70 285 Ratio0.69 %0.37 %0.51 %0.80 %0.53 %0.69 %Legacy Holdings Assets (consumer)(9)2.5 104 150 221 73 79 88 Ratio4.52 %5.56 %6.31 %3.17 %2.93 %2.51 %Total Citigroup consumer$389.2 $3,233 $2,153 $1,963 $3,259 $2,372 $1,999 Ratio0.94 %0.68 %0.62 %0.95 %0.75 %0.63 % EOP loans(1)" **Prior (2023):** EOPloans(1)90+ days past due(2)30-89 days past due(2)December 31,December 31,December 31,In millions of dollars, except EOP loan amounts in billions2022202220212020202220212020Personal Banking and Wealth Management(3)(4)(5)Total$337.0 $1,764 $1,350 $1,879 $2,037 $1,453 $1,794 Ratio0.61 %0.52 %0.74 %0.71 %0.56 %0.71 %U.S. Personal BankingTotal$187.8 $1,578 $1,069 $1,588 $1,720 $1,130 $1,513 Ratio0.84 %0.64 %0.95 %0.92 %0.68 %0.90 %Cards(4)Total$150.7 $1,415 $871 $1,330 $1,511 $947 $1,228 Ratio0.94 %0.65 %1.02 %1.00 %0.71 %0.94 %Branded cards100.2 629 389 686 693 408 589 Ratio0.63 %0.44 %0.82 %0.69 %0.46 %0.70 %Retail services50.5 786 482 644 818 539 639 Ratio1.56 %1.05 %1.39 %1.62 %1.17 %1.38 %Retail banking(3)37.1 163 198 258 209 183 285 Ratio0.45 %0.62 %0.70 %0.57 %0.57 %0.77 %Global Wealthdelinquency-managed loans(5)$100.0 $186 $281 $291 $317 $323 $281 Ratio0.19 %0.31 %0.34 %0.32 %0.35 %0.33 %Global Wealthclassifiably managed loans(6)$49.2 N/AN/AN/AN/AN/AN/ALegacy FranchisesTotal$31.1 $389 $613 $1,131 $335 $546 $1,083 Ratio1.26 %1.06 %1.47 %1.09 %0.94 %1.41 %Asia Consumer(7)(8)13.3 49 209 456 70 285 514 Ratio0.37 %0.51 %0.81 %0.53 %0.69 %0.92 %Mexico Consumer14.8 190 183 363 186 173 390 Ratio1.28 %1.38 %2.49 %1.26 %1.30 %2.67 %Legacy Holdings Assets (consumer)(9)3.0 150 221 312 79 88 179 Ratio5.56 %6.31 %5.03 %2.93 %2.51 %2.89 %Total Citigroup consumer$368.1 $2,153 $1,963 $3,010 $2,372 $1,999 $2,877 Ratio0.68 %0.62 %0.91 %0.75 %0.63 %0.87 % EOP loans(1) **Current (2024):** EOPloans(1)90+ days past due(2)30-89 days past due(2)December 31,December 31,December 31,In millions of dollars, except EOP loan amounts in billions2023202320222021202320222021USPB(3)(4)Total$209.1 $2,635 $1,578 $1,069 $2,563 $1,720 $1,130 Ratio1.26 %0.84 %0.64 %1.23 %0.92 %0.68 %Cards(4)Total164.7 2,461 1,415 871 2,293 1,511 947 Ratio1.49 %0.94 %0.65 %1.39 %1.00 %0.71 %Branded Cards111.1 1,194 629 389 1,143 693 408 Ratio1.07 %0.63 %0.44 %1.03 %0.69 %0.46 %Retail Services53.6 1,267 786 482 1,150 818 539 Ratio2.36 %1.56 %1.05 %2.15 %1.62 %1.17 %Retail Banking(3)44.4 174 163 198 270 209 183 Ratio0.40 %0.45 %0.62 %0.62 %0.57 %0.57 %Wealth delinquency-managed loans(5)$105.3 $191 $186 $281 $312 $317 $323 Ratio0.18 %0.19 %0.31 %0.30 %0.32 %0.35 %Wealth classifiably managed loans(6)$46.2 N/AN/AN/AN/AN/AN/AAll OtherTotal$28.6 $407 $389 $613 $384 $335 $546 Ratio1.43 %1.26 %1.06 %1.35 %1.09 %0.94 %Mexico Consumer18.7 252 190 183 252 186 173 Ratio1.35 %1.28 %1.38 %1.35 %1.26 %1.30 %Asia Consumer(7)(8)7.4 51 49 209 59 70 285 Ratio0.69 %0.37 %0.51 %0.80 %0.53 %0.69 %Legacy Holdings Assets (consumer)(9)2.5 104 150 221 73 79 88 Ratio4.52 %5.56 %6.31 %3.17 %2.93 %2.51 %Total Citigroup consumer$389.2 $3,233 $2,153 $1,963 $3,259 $2,372 $1,999 Ratio0.94 %0.68 %0.62 %0.95 %0.75 %0.63 % EOP loans(1) --- ## Modified: Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR) **Key changes:** - Reworded sentence: "31, 2022HQLA$560.5 $569.3 $575.2 Net outflows482.7 485.3 489.0 LCR116 %117 %118 %HQLA in excess of net outflows$77.8 $84.0 $86.2 Note: The amounts are presented on an average basis." - Reworded sentence: "For the quarter ended December 31, 2023, Citigroup's consolidated NSFR was compliant with the rule." - Reworded sentence: "For the quarter ended December 31, 2023, Citigroup's consolidated NSFR was compliant with the rule." **Prior (2023):** In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR. The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%. The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated: In billions of dollarsDec. 31, 2022Sept. 30, 2022Dec. 31, 2021HQLA$575.2 $557.1 $554.5 Net outflows489.0 477.0 482.9 LCR118 %117 %115 %HQLA in excess of net outflows$86.2 $80.1 $71.6 Note: The amounts are presented on an average basis. As of December 31, 2022, Citigroup's average LCR increased, primarily driven by wholesale unsecured debt issuances. 86 86 86 Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. The rule became effective beginning July 1, 2021, while public disclosure requirements to report the ratio will occur on a semiannual basis beginning June 30, 2023. Citi was in compliance with the rule as of December 31, 2022.LoansAs part of its funding and liquidity objectives, Citi seeks to fund its existing asset base appropriately as well as maintain sufficient liquidity to grow its PBWM and ICG businesses, including its loan portfolio. Citi maintains a diversified portfolio of loans to its consumer and institutional clients. The table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated:In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Retail banking$37 $36 $34 U.S. Cards143 138 128 Global Wealth150 151 150 Total$330 $325 $312 Institutional Clients GroupServices$79 $82 $77 Banking194 197 195 Markets12 12 17 Total$285 $291 $289 Total Legacy Franchises(1)$38 $39 $66 Total Citigroup loans (AVG)$653 $655 $667 Total Citigroup loans (EOP)$657 $646 $668 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above.End-of-period loans decreased 2% year-over-year, largely driven by lower balances in Legacy Franchises and the impact of foreign exchange translation. End-of-period loans increased 2% sequentially.On an average basis, loans declined 2% year-over-year and were largely unchanged sequentially. The year-over-year decline was primarily due to the impact of foreign exchange translation and lower balances in Legacy Franchises, which more than offset growth in PBWM. The decline in Legacy Franchises primarily reflected the reclassification of loans to Other assets to reflect held-for-sale accounting as a result of the signing of sale agreements for consumer franchises, as well as the impact of the ongoing Korea and Russia wind-downs. Average PBWM loans as of the fourth quarter of 2022 increased 6% year-over-year, primarily driven by Branded cards and Retail services. Average ICG loans as of the fourth quarter of 2022 decreased 1% year-over-year, primarily driven by RWA optimization efforts within Banking, which more than offset growth in Services from trade finance in TTS. DepositsThe table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated:In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Personal Banking$111 $115 $114 Global Wealth320 313 323 Total$431 $428 $437 Institutional Clients GroupTTS $694 $664 $689 Securities services129 131 140 Markets and Banking25 22 23 Total$848 $817 $852 Legacy Franchises(1)$50 $50 $74 Corporate/Other$32 $21 $7 Total Citigroup deposits (AVG)$1,361 $1,316 $1,370 Total Citigroup deposits (EOP)$1,366 $1,306 $1,317 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above.End-of-period deposits increased 4% year-over-year, largely driven by Treasury and trade solutions in ICG, partially offset by the impact of foreign exchange translation. End-of-period deposits increased 5% sequentially.On an average basis, deposits declined 1% year-over-year and increased 3% sequentially. The year-over-year decline primarily reflected the impact of foreign exchange translation and a decline in Legacy Franchises, partially offset by growth in Corporate/Other. The decline in Legacy Franchises was due to the impact of held-for-sale accounting as a result of the signing of sale agreements for consumer franchises, as well as the ongoing Korea and Russia wind-downs. ICG average deposits were largely unchanged year-over-year. PBWM average deposits decreased 1% year-over-year, driven by modest decreases in both U.S. Personal Banking and Global Wealth. Corporate/Other average deposits increased $25 billion year-over-year, due to the issuance of institutional certificates of deposit as Citi continues to diversify its funding profile. Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. The rule became effective beginning July 1, 2021, while public disclosure requirements to report the ratio will occur on a semiannual basis beginning June 30, 2023. Citi was in compliance with the rule as of December 31, 2022.LoansAs part of its funding and liquidity objectives, Citi seeks to fund its existing asset base appropriately as well as maintain sufficient liquidity to grow its PBWM and ICG businesses, including its loan portfolio. Citi maintains a diversified portfolio of loans to its consumer and institutional clients. The table below details the average loans, by business and/or segment, and the total Citigroup end-of-period loans for each of the periods indicated:In billions of dollars4Q223Q224Q21Personal Banking and Wealth ManagementU.S. Retail banking$37 $36 $34 U.S. Cards143 138 128 Global Wealth150 151 150 Total$330 $325 $312 Institutional Clients GroupServices$79 $82 $77 Banking194 197 195 Markets12 12 17 Total$285 $291 $289 Total Legacy Franchises(1)$38 $39 $66 Total Citigroup loans (AVG)$653 $655 $667 Total Citigroup loans (EOP)$657 $646 $668 (1)See footnote 2 to the table in "Credit Risk - Consumer Credit - Consumer Credit Portfolio" above.End-of-period loans decreased 2% year-over-year, largely driven by lower balances in Legacy Franchises and the impact of foreign exchange translation. End-of-period loans increased 2% sequentially.On an average basis, loans declined 2% year-over-year and were largely unchanged sequentially. The year-over-year decline was primarily due to the impact of foreign exchange translation and lower balances in Legacy Franchises, which more than offset growth in PBWM. The decline in Legacy Franchises primarily reflected the reclassification of loans to Other assets to reflect held-for-sale accounting as a result of **Current (2024):** In addition to internal 30-day liquidity stress testing performed for Citi's major entities, operating subsidiaries and countries, Citi also monitors its liquidity by reference to the LCR. The LCR is calculated by dividing HQLA by estimated net outflows assuming a stressed 30-day period, with the net outflows determined by standardized stress outflow and inflow rates prescribed in the LCR rule. The outflows are partially offset by contractual inflows from assets maturing within 30 days. Similar to outflows, the inflows are calculated based on prescribed factors to various asset categories, such as retail loans as well as unsecured and secured wholesale lending. The minimum LCR requirement is 100%. The table below details the components of Citi's LCR calculation and HQLA in excess of net outflows for the periods indicated: In billions of dollarsDec. 31, 2023Sept. 30, 2023Dec. 31, 2022HQLA$560.5 $569.3 $575.2 Net outflows482.7 485.3 489.0 LCR116 %117 %118 %HQLA in excess of net outflows$77.8 $84.0 $86.2 Note: The amounts are presented on an average basis. As of December 31, 2023, Citigroup's average LCR decreased from the quarter ended September 30, 2023. The decrease was primarily driven by the reduction in average HQLA. In addition, considering Citi's total available liquidity resources at quarter end of $965 billion, Citi maintained approximately $482 billion of excess liquidity above the stressed average net outflow of approximately $483 billion, shown in the LCR table above. 92 92 92 Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. For the quarter ended December 31, 2023, Citigroup's consolidated NSFR was compliant with the rule. Refer to Citi's U.S. NSFR Disclosure report covering December 31, 2023 and September 30, 2023 on its website for additional information. Select Balance Sheet ItemsThis section provides details of select liquidity-related assets and liabilities reported on Citigroup's Consolidated Balance Sheet on an average and end-of-period basis.Cash and InvestmentsThe table below details average and end-of-period Cash and due from banks, Deposits with banks (collectively cash) and Investment securities. Citi's investment portfolio consists largely of highly liquid U.S. Treasury, U.S. agency and other sovereign bonds, with an aggregate duration of less than three years. At December 31, 2023, Citi's EOP cash and Investment securities comprised approximately 32% of Citigroup's total assets:In billions of dollars4Q233Q234Q22Cash and due from banks$27 $27 $30 Deposits with banks252 260 306 Investment securities516 509 519 Total Citigroup cash and investment securities (AVG)$795 $796 $855 Total Citigroup cash and investment securities (EOP)$780 $763 $869 Deposits The table below details the average deposits, by business and/or segment, and the total Citigroup end-of-period deposits for each of the periods indicated:In billions of dollars4Q233Q234Q22Services$802 $796 $825 TTS 680 676 694 Securities Services122 120 131 Markets and Banking24 25 23 USPB105 110 111 Wealth312 311 320 All Other - Legacy Franchises49 52 50 All Other - Corporate/Other28 21 32 Total Citigroup deposits (AVG)$1,320 $1,315 $1,361 Total Citigroup deposits (EOP)$1,309 $1,274 $1,366 End-of-period deposits decreased 4% year-over-year, largely due to a reduction in Services reflecting quantitative tightening, and a reduction in USPB and Wealth reflecting a shift of deposits to higher-yielding products. End-of-period deposits increased 3% sequentially. On an average basis, deposits declined 3% year-over-year and were largely unchanged sequentially. As of the fourth quarter of 2023, average deposits for: •Services decreased 3% year-over-year, while TTS and Securities Services decreased 2% and 7%, respectively. These declines reflected the impact of quantitative tightening that more than offset deposits from new client acquisitions and deepening of relationships with existing clients. •USPB decreased 5% year-over-year, driven by the transfer of relationships and the associated deposits to Wealth. •Wealth decreased 3% year-over-year, reflecting the continued mix shift of deposits to higher-yielding investments on Citi's platform, partially offset by the benefits of the transfer of certain relationships and the associated deposit balances from USPB. Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) As previously disclosed, the U.S. banking agencies adopted a rule to assess the availability of a bank's stable funding against a required level. In general, a bank's available stable funding includes portions of equity, deposits and long-term debt, while its required stable funding will be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings are required to be applied to the various asset and liability classes. The ratio of available stable funding to required stable funding is required to be greater than 100%. For the quarter ended December 31, 2023, Citigroup's consolidated NSFR was compliant with the rule. Refer to Citi's U.S. NSFR Disclosure report covering December 31, 2023 and September 30, 2023 on its website for additional information. Select Balance Sheet ItemsThis section provides details of select liquidity-related assets and liabilities reported on Citigroup's Consolidated Balance Sheet on an average and end-of-period basis.Cash and InvestmentsThe table below details average and end-of-period Cash and due from banks, Deposits with banks (collectively cash) and Investment securities. Citi's investment portfolio consists largely of highly liquid U.S. Treasury, U.S. agency and other sovereign bonds, with an aggregate duration of less than three years. At December 31, 2023, Citi's EOP cash and Investment securities comprised approximately 32% of Citigroup's total assets:In billions of dollars4Q233Q234Q22Cash and due from banks$27 $27 $30 Deposits with banks252 260 306 Investment securities516 509 519 Total Citigroup cash and investment securities (AVG)$795 $796 $855 Total Citigroup cash and investment securities (EOP)$780 $763 $869 --- ## Modified: Rating of Hedged Exposure **Key changes:** - Reworded sentence: "December 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 % 74 74 74" **Prior (2023):** December 31,2022September 30,2022December 31,2021AAA/AA/A39 %38 %35 %BBB45 45 49 BB/B12 13 13 CCC or below4 4 3 Total100 %100 %100 % 67 67 67 **Current (2024):** December 31,2023September 30,2023December 31,2022AAA/AA/A45 %45 %39 %BBB44 43 45 BB/B10 10 12 CCC or below1 2 4 Total100 %100 %100 % 74 74 74 --- ## Modified: Branded Cards **Key changes:** - Reworded sentence: "31, 2022> 76046 %46 %48 %680-76038 39 38 < 68016 15 14 Total100 %100 %100 %" **Prior (2023):** U.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization.Retail ServicesU.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential.As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels.The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14.Retail Banking U.S. Personal Banking's Branded cards portfolio includes proprietary and co-branded cards. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Branded cards increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting ongoing normalization from historically low levels. The 90+ days past due delinquency rate increased quarter-over-quarter and year-over year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. **Current (2024):** USPB's Branded Cards portfolio includes proprietary and co-branded cards. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Branded Cards increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. --- ## Modified: Loan Maturities and Fixed/Variable Pricing of Corporate Loans **Key changes:** - Reworded sentence: "In millions of dollars at December 31, 2023Due within1 yearOver 1 yearbut within5 yearsOver 5 yearsbut within15 yearsOver 15 yearsTotalCorporate loansIn North America offices(1)Commercial and industrial loans$25,045 $34,304 $1,602 $57 $61,008 Financial institutions17,435 21,388 424 146 39,393 Mortgage and real estate(2)7,908 4,185 4,736 984 17,813 Installment and other9,461 12,947 775 152 23,335 Lease financing - 227 - - 227 Total$59,849 $73,051 $7,537 $1,339 $141,776 In offices outside North America(1)Commercial and industrial loans$69,811 $18,128 $5,425 $38 $93,402 Financial institutions18,449 6,577 907 210 26,143 Mortgage and real estate(2)2,639 3,600 888 70 7,197 Installment and other16,081 7,960 1,337 2,529 27,907 Lease financing6 26 16 - 48 Governments and official institutions632 670 1,630 667 3,599 Total$107,618 $36,961 $10,203 $3,514 $158,296 Corporate loans, net of unearned income(3)(4)$167,467 $110,012 $17,740 $4,853 $300,072 Loans at fixed interest rates(5)Commercial and industrial loans$6,636 $883 $17 Financial institutions3,363 62 12 Mortgage and real estate(2)1,311 4,531 846 Other(6)4,792 170 7 Lease financing240 - - Total $16,342 $5,646 $882 Loans at floating or adjustable interest rates(4)Commercial and industrial loans$45,796 $6,144 $78 Financial institutions24,602 1,269 344 Mortgage and real estate(2)6,474 1,093 208 Other(6)16,785 3,572 3,341 Lease financing13 16 - Total$93,670 $12,094 $3,971 Total fixed/variable pricing of corporate loans with maturities due after one year, net of unearned income(3)(4)$110,012 $17,740 $4,853 In millions of dollars at December 31, 2023" **Prior (2023):** In millions of dollars at December 31, 2022Due within1 yearOver 1 yearbut within5 yearsOver 5 yearsbut within15 yearsOver 15 yearsTotalCorporate loansIn North America offices(1)Commercial and industrial loans$23,636 $31,116 $1,328 $96 $56,176 Financial institutions21,619 21,600 168 12 43,399 Mortgage and real estate(2)7,028 5,074 4,348 1,379 17,829 Installment and other9,605 12,747 1,287 128 23,767 Lease financing86 188 34 - 308 Total$61,974 $70,725 $7,165 $1,615 $141,479 In offices outside North America(1)Commercial and industrial loans$70,210 $19,376 $4,300 $81 $93,967 Financial institutions15,888 5,201 607 235 21,931 Mortgage and real estate(2)1,946 1,592 566 75 4,179 Installment and other12,386 7,109 1,256 2,596 23,347 Lease financing6 40 - - 46 Governments and official institutions2,535 428 798 444 4,205 Total$102,971 $33,746 $7,527 $3,431 $147,675 Corporate loans, net of unearned income(3)$164,945 $104,471 $14,692 $5,046 $289,154 Loans at fixed interest rates(4)Commercial and industrial loans$3,885 $1,045 $48 Financial institutions3,924 61 12 Mortgage and real estate(2)1,238 3,643 977 Other(5)4,148 261 6 Lease financing165 - - Total $13,360 $5,010 $1,043 Loans at floating or adjustable interest rates(4)Commercial and industrial loans$46,607 $4,583 $129 Financial institutions22,877 714 235 Mortgage and real estate(2)5,428 1,271 477 Other(5)16,136 3,080 3,162 Lease financing63 34 - Total$91,111 $9,682 $4,003 Total fixed/variable pricing of corporate loans with maturities due after one year, net of unearned income(3)$104,471 $14,692 $5,046 In millions of dollars at December 31, 2022 **Current (2024):** In millions of dollars at December 31, 2023Due within1 yearOver 1 yearbut within5 yearsOver 5 yearsbut within15 yearsOver 15 yearsTotalCorporate loansIn North America offices(1)Commercial and industrial loans$25,045 $34,304 $1,602 $57 $61,008 Financial institutions17,435 21,388 424 146 39,393 Mortgage and real estate(2)7,908 4,185 4,736 984 17,813 Installment and other9,461 12,947 775 152 23,335 Lease financing - 227 - - 227 Total$59,849 $73,051 $7,537 $1,339 $141,776 In offices outside North America(1)Commercial and industrial loans$69,811 $18,128 $5,425 $38 $93,402 Financial institutions18,449 6,577 907 210 26,143 Mortgage and real estate(2)2,639 3,600 888 70 7,197 Installment and other16,081 7,960 1,337 2,529 27,907 Lease financing6 26 16 - 48 Governments and official institutions632 670 1,630 667 3,599 Total$107,618 $36,961 $10,203 $3,514 $158,296 Corporate loans, net of unearned income(3)(4)$167,467 $110,012 $17,740 $4,853 $300,072 Loans at fixed interest rates(5)Commercial and industrial loans$6,636 $883 $17 Financial institutions3,363 62 12 Mortgage and real estate(2)1,311 4,531 846 Other(6)4,792 170 7 Lease financing240 - - Total $16,342 $5,646 $882 Loans at floating or adjustable interest rates(4)Commercial and industrial loans$45,796 $6,144 $78 Financial institutions24,602 1,269 344 Mortgage and real estate(2)6,474 1,093 208 Other(6)16,785 3,572 3,341 Lease financing13 16 - Total$93,670 $12,094 $3,971 Total fixed/variable pricing of corporate loans with maturities due after one year, net of unearned income(3)(4)$110,012 $17,740 $4,853 In millions of dollars at December 31, 2023 --- ## Modified: Consumer non-accrual loans(1) **Key changes:** - Reworded sentence: "Asia Consumer(5) Legacy Holdings Assets (consumer) (1)Corporate loans are placed on non-accrual status based on a review by Citigroup's risk officers." - Reworded sentence: "(2)Approximately 50%, 50%, 56%, 64% and 44% of Citi's corporate non-accrual loans remain current on interest and principal payments at December 31, 2023, 2022, 2021, 2020 and 2019, respectively." **Prior (2023):** Asia Consumer(3) Mexico Consumer Legacy Holdings Assets - Consumer (1)Corporate loans are placed on non-accrual status based upon a review by Citigroup's risk officers. Corporate non-accrual loans may still be current on interest payments. With limited exceptions, the following practices are applied for consumer loans: consumer loans, excluding credit cards and mortgages, are placed on non-accrual status at 90 days past due and are charged off at 120 days past due; residential mortgage loans are placed on non-accrual status at 90 days past due and written down to net realizable value at 180 days past due. Consistent with industry conventions, Citigroup generally accrues interest on credit card loans until such loans are charged off, which typically occurs at 180 days contractual delinquency. As such, the non-accrual loan disclosures do not include credit card loans. The balances above represent non-accrual loans within Corporate loans and Consumer loans on the Consolidated Balance Sheet. (2)The December 31, 2022 total corporate non-accrual loans represented 0.39% of total corporate loans. (3) Asia Consumer includes balances in certain EMEA countries for all periods presented. The changes in Citigroup's non-accrual loans were as follows: Year endedYear endedDecember 31, 2022December 31, 2021In millions of dollarsCorporateConsumerTotalCorporateConsumerTotalNon-accrual loans at beginning of year$1,553 $1,826 $3,379 $3,046 $2,622 $5,668 Additions2,123 1,374 3,497 1,466 2,260 3,726 Sales and transfers to HFS(21)(240)(261)(524)(310)(834)Returned to performing(378)(408)(786)(219)(723)(942)Paydowns/settlements(1,814)(585)(2,399)(1,721)(780)(2,501)Charge-offs(260)(598)(858)(472)(1,202)(1,674)Other(81)(52)(133)(23)(41)(64)Ending balance$1,122 $1,317 $2,439 $1,553 $1,826 $3,379 82 82 82 The table below summarizes Citigroup's other real estate owned (OREO) assets. OREO is recorded on the Consolidated Balance Sheet within Other assets. This represents the carrying value of all real estate property acquired by foreclosure or other legal proceedings when Citi has taken possession of the collateral: December 31,In millions of dollars20222021202020192018OREONorth America$10 $15 $19 $39 $64 EMEA - - - 1 1 Latin America4 8 7 14 12 Asia1 4 17 7 22 Total OREO$15 $27 $43 $61 $99 Non-accrual assetsCorporate non-accrual loans$1,122 $1,553 $3,046 $2,024 $1,310 Consumer non-accrual loans1,317 1,826 2,622 1,980 2,227 Non-accrual loans (NAL)$2,439 $3,379 $5,668 $4,004 $3,537 OREO$15 $27 $43 $61 $99 Non-accrual assets (NAA)$2,454 $3,406 $5,711 $4,065 $3,636 NAL as a percentage of total loans0.37 %0.51 %0.84 %0.57 %0.52 %NAA as a percentage of total assets0.10 0.15 0.25 0.21 0.19 ACLL as a percentage of NAL(1)696 487 440 319 348 ACLL as a percentage of NAL(1) (1)The ACLL includes the allowance for Citi's credit card portfolios and purchased credit-deteriorated loans, while the non-accrual loans exclude credit card balances (with the exception of certain international portfolios) and, prior to 2020, include purchased credit-deteriorated loans as these continue to accrue interest until charge-off. 83 83 83 Renegotiated LoansThe following table presents Citi's loans modified in TDRs:In millions of dollarsDec. 31, 2022Dec. 31, 2021Corporate renegotiated loans(1) In U.S. offices Commercial and industrial(2)$35 $103 Mortgage and real estate2 2 Financial institutions - - Other11 20 Total$48 $125 In offices outside the U.S.Commercial and industrial(2)$50 $133 Mortgage and real estate11 18 Financial institutions - - Other1 8 Total$62 $159 Total corporate renegotiated loans$110 $284 Consumer renegotiated loans(3)In U.S. officesMortgage and real estate$1,407 $1,485 Cards1,180 1,269 Personal, small business and other19 26 Total$2,606 $2,780 In offices outside the U.S.Mortgage and real estate$152 $227 Cards75 313 Personal, small business and other88 428 Total$315 $968 Total consumer renegotiated loans$2,921 $3,748 (1)Includes $108 million and $284 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest.(2)In addition to modifications reflected as TDRs at December 31, 2022 and 2021, Citi may have modifications that were not considered TDRs because the modifications did not involve a concession or because they qualified for exemptions from TDR accounting provided by the CARES Act or the interagency guidance. (3)Includes $566 million and $664 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest.Forgone Interest Revenue on Loans(1) In millions of dollarsIn U.S.officesIn non-U.S.offices2022totalInterest revenue that would have been accrued at original contractual rates(2)$331 $189 $520 Amount recognized as interest revenue(2)158 121 279 Forgone interest revenue$173 $68 $241 (1) Relates to corporate non-accrual loans, renegotiated loans and consumer loans on which accrual of interest has been suspended. (2) Interest revenue in offices outside the U.S. may reflect prevailing local interest rates, including the effects of inflation and monetary correction in certain countries. Renegotiated LoansThe following table presents Citi's loans modified in TDRs:In millions of dollarsDec. 31, 2022Dec. 31, 2021Corporate renegotiated loans(1) In U.S. offices Commercial and industrial(2)$35 $103 Mortgage and real estate2 2 Financial institutions - - Other11 20 Total$48 $125 In offices outside the U.S.Commercial and industrial(2)$50 $133 Mortgage and real estate11 18 Financial institutions - - Other1 8 Total$62 $159 Total corporate renegotiated loans$110 $284 Consumer renegotiated loans(3)In U.S. officesMortgage and real estate$1,407 $1,485 Cards1,180 1,269 Personal, small business and other19 26 Total$2,606 $2,780 In offices outside the U.S.Mortgage and real estate$152 $227 Cards75 313 Personal, small business and other88 428 Total$315 $968 Total consumer renegotiated loans$2,921 $3,748 (1)Includes $108 million and $284 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest.(2)In addition to modifications reflected as TDRs at December 31, 2022 and 2021, Citi may have modifications that were not considered TDRs because the modifications did not involve a concession or because they qualified for exemptions from TDR accounting provided by the CARES Act or the interagency guidance. (3)Includes $566 million and $664 million of non-accrual loans included in the non-accrual loans table above at December 31, 2022 and 2021, respectively. The remaining loans were accruing interest. **Current (2024):** Asia Consumer(5) Legacy Holdings Assets (consumer) (1)Corporate loans are placed on non-accrual status based on a review by Citigroup's risk officers. Corporate non-accrual loans may still be current on interest payments. With limited exceptions, the following practices are applied for consumer loans: consumer loans, excluding credit cards and mortgages, are placed on non-accrual status at 90 days past due and are charged off at 120 days past due; residential mortgage loans are placed on non-accrual status at 90 days past due and written down to net realizable value at 180 days past due. Consistent with industry conventions, Citigroup generally accrues interest on credit card loans until such loans are charged off, which typically occurs at 180 days contractual delinquency. As such, the non-accrual loan disclosures do not include credit card loans. The balances above represent non-accrual loans within Corporate loans and Consumer loans on the Consolidated Balance Sheet. (2)Approximately 50%, 50%, 56%, 64% and 44% of Citi's corporate non-accrual loans remain current on interest and principal payments at December 31, 2023, 2022, 2021, 2020 and 2019, respectively. (3)The December 31, 2023 total corporate non-accrual loans represented 0.63% of total corporate loans. (4)The increase at December 31, 2023 was primarily related to two commercial real estate loans. (5) Asia Consumer includes balances in Poland and Russia for all periods presented and in Bahrain for December 31, 2021, 2020 and 2019. Modified Loans to Borrowers Experiencing Financial DifficultyOn January 1, 2023, Citi adopted ASU 2022-02, which eliminated the accounting and disclosure requirements for TDRs (see Note 1). See Note 15 for information on loan modifications during the year ended December 31, 2023. Modified Loans to Borrowers Experiencing Financial DifficultyOn January 1, 2023, Citi adopted ASU 2022-02, which eliminated the accounting and disclosure requirements for TDRs (see Note 1). See Note 15 for information on loan modifications during the year ended December 31, 2023. --- ## Modified: Managing Global Risk Table of Contents **Key changes:** - Reworded sentence: "MANAGING GLOBAL RISK65Overview65CREDIT RISK(1)69Overview69Loans72Corporate Credit70Consumer Credit76Additional Consumer and Corporate Credit Details83Loans Outstanding83Details of Credit Loss Experience 84Allowance for Credit Losses on Loans (ACLL)89Non-Accrual Loans and Assets88LIQUIDITY RISK91Overview91Liquidity Monitoring and Measurement 91High-Quality Liquid Assets (HQLA)95Deposits96Long-Term Debt97Secured Funding Transactions and Short-Term Borrowings100Credit Ratings101MARKET RISK(1) 100Overview100Market Risk of Non-Trading Portfolios100Banking Book Interest Rate Risk 100Interest Rate Risk of Investment Portfolios - Impact on AOCI 104Changes in Foreign Exchange Rates - Impacts on AOCI and Capital106Interest Income/Expense and Net Interest Margin (NIM)104Additional Interest Rate Details110Market Risk of Trading Portfolios111Factor Sensitivities115Value at Risk (VAR)115Stress Testing118OPERATIONAL RISK115Overview115Cybersecurity Risk115COMPLIANCE RISK118REPUTATION RISK119STRATEGIC RISK119Climate Risk119OTHER RISKS120LIBOR Transition Risk120Country Risk121Top 25 Country Exposures121Russia122Ukraine124Argentina124FFIEC - Cross-Border Claims on Third Parties and Local Country Assets125 65 65" **Prior (2023):** MANAGING GLOBAL RISK59Overview59CREDIT RISK(1)62Overview62Corporate Credit63Consumer Credit69Additional Consumer and Corporate Credit Details76Loans Outstanding76Details of Credit Loss Experience 77Allowance for Credit Losses on Loans (ACLL)80Non-Accrual Loans and Assets and Renegotiated Loans81Forgone Interest Revenue on Loans85LIQUIDITY RISK85Overview85Liquidity Monitoring and Measurement 85High-Quality Liquid Assets (HQLA)87Loans88Deposits88Long-Term Debt89Secured Funding Transactions and Short-Term Borrowings92Credit Ratings93MARKET RISK(1) 94Overview94Market Risk of Non-Trading Portfolios94Banking Book Interest Rate Risk 94Interest Rate Risk of Investment Portfolios - Impact on AOCI 96Changes in Foreign Exchange Rates - Impacts on AOCI and Capital98Interest Revenue/Expense and Net Interest Margin (NIM)98Additional Interest Rate Details102Market Risk of Trading Portfolios105Factor Sensitivities107Value at Risk (VAR)107Stress Testing110OPERATIONAL RISK110Overview110Cybersecurity Risk110COMPLIANCE RISK111REPUTATION RISK112STRATEGIC RISK112Climate Risk112OTHER RISKS114LIBOR Transition Risk114Country Risk115Top 25 Country Exposures115Russia116Ukraine119Argentina119FFIEC - Cross-Border Claims on Third Parties and Local Country Assets119 59 59 **Current (2024):** MANAGING GLOBAL RISK65Overview65CREDIT RISK(1)69Overview69Loans72Corporate Credit70Consumer Credit76Additional Consumer and Corporate Credit Details83Loans Outstanding83Details of Credit Loss Experience 84Allowance for Credit Losses on Loans (ACLL)89Non-Accrual Loans and Assets88LIQUIDITY RISK91Overview91Liquidity Monitoring and Measurement 91High-Quality Liquid Assets (HQLA)95Deposits96Long-Term Debt97Secured Funding Transactions and Short-Term Borrowings100Credit Ratings101MARKET RISK(1) 100Overview100Market Risk of Non-Trading Portfolios100Banking Book Interest Rate Risk 100Interest Rate Risk of Investment Portfolios - Impact on AOCI 104Changes in Foreign Exchange Rates - Impacts on AOCI and Capital106Interest Income/Expense and Net Interest Margin (NIM)104Additional Interest Rate Details110Market Risk of Trading Portfolios111Factor Sensitivities115Value at Risk (VAR)115Stress Testing118OPERATIONAL RISK115Overview115Cybersecurity Risk115COMPLIANCE RISK118REPUTATION RISK119STRATEGIC RISK119Climate Risk119OTHER RISKS120LIBOR Transition Risk120Country Risk121Top 25 Country Exposures121Russia122Ukraine124Argentina124FFIEC - Cross-Border Claims on Third Parties and Local Country Assets125 65 65 --- ## Modified: Sustainable Finance **Key changes:** - Reworded sentence: "Citi's Sustainable Finance Goal, as previously disclosed, supports a combination of environmental and social finance activities." **Prior (2023):** Citi's Sustainable Progress Strategy is summarized in its Environmental and Social Policy Framework. The three pillars of the strategy each have climate-related elements and serve as the foundation for Citi's climate commitments: 54 54 54 •The first pillar, "Low-Carbon Transition," focuses on financing and facilitating environmental and social finance, including low-carbon solutions, and supporting Citi's clients in their decarbonization and transition strategies. •The second pillar, "Climate Risk," focuses on Citi's efforts to measure, manage and reduce the climate risk and impact of its client portfolio. Areas of activity include portfolio analysis and stakeholder engagement as well as enhancing TCFD implementation and disclosure. •The third pillar, "Sustainable Operations," focuses on Citi's efforts to reduce the environmental footprint of its facilities and strengthen its sustainability culture. This includes minimizing the impact of its global operations through operational footprint goals and further integrates sustainable practices across the countries in which Citi operates.Net Zero Emissions by 2050Citi is a member of several initiatives that enhance its understanding of climate-related issues, improve its access to data and promote a common understanding and terminology across various climate efforts. These initiatives include the Partnership for Carbon Accounting Financials, the Glasgow Financial Alliance for Net Zero and the Net Zero Banking Alliance. As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint. Citi made this commitment as part of its ongoing work to reduce its climate risk and impact, grow its business in the clean energy transition and help address the challenges that climate change poses to the global economy and broader society. Citi's net zero commitment demonstrates how identifying, assessing and managing climate-related risks and opportunities remains a top business priority for Citi.While many financial institutions, including Citi, face increasing public pressure to divest from carbon-intensive sectors, Citi believes it has an important role to play in advising and financing the transition to net zero, and it plans to work closely with clients in this effort. Citi recognizes that large-scale, rapid divestment could result in an abrupt and disorderly transition to a low-carbon economy, creating both economic and social upheaval. Citi believes that an orderly, responsible and equitable transition, which accounts for the immediate economic needs of communities and workers, continued access to energy, environmental justice considerations and broader economic development concerns, is essential for the retention of political and social support to move to a low-carbon economy.The 2050 net zero commitment includes the following framework, delineating the key areas required to achieve its targets: •Calculate Emissions: Calculate baseline financed emissions for each carbon-intensive sector•Transition Pathway: Identify the appropriate climate scenario transition pathway •Target Setting: Establish emissions reduction targets for 2030 and beyond•Implementation Strategy: Engage with and assess clients to determine transition opportunities •External Engagement: Solicit feedback from clients, investors and other stakeholders, as the work continues to evolve and the parties collectively define net zero for the banking sectorCiti's Net Zero plan includes:•Net Zero Metrics and Target Setting: Assess targets for carbon-intensive sectors and explore methodologies for calculating financed emissions beyond lending portfolios •Client Engagement and Assessment: Seek to understand clients' GHG emissions and work with them to develop their transition plans and advise on capacity building•Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management•Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance, via debt and equity underwriting •Portfolio Management: Active portfolio management to align with net zero targets, including considerations of transition measures taken by clients•Public Policy and Regulatory Engagement: Support enabling public policy and regulation in the U.S. and other countries where relevantIn 2022, Citi took the following steps to operationalize its Net Zero plan:•In addition to the energy and power targets established last year, Citi has set 2030 emissions reduction targets for four additional loan portfolio sectors: automotive manufacturing, commercial real estate, steel and thermal coal mining.•Citi has begun piloting a Net Zero Review Template for its energy and power clients to better understand their transition plans. •Citi worked with RMI to help develop and launch the Sustainable STEEL Principles, a solution for measuring and disclosing the alignment of steel lending portfolios with 1.5°C climate targets.Financial Inclusion and Racial Equity Building on Citi's longstanding focus on advancing financial inclusion and economic opportunity for communities of color, in September 2020, Citi and the Citi Foundation announced Action for Racial Equity (ARE), a set of strategic initiatives to help close the racial wealth gap and increase economic mobility in the U.S. As part of ARE, Citi and the Citi Foundation have invested more than $1 billion in strategic initiatives to provide greater access to banking and credit in communities of color, increase investment in Black-owned businesses, expand access to affordable housing and •The first pillar, "Low-Carbon Transition," focuses on financing and facilitating environmental and social finance, including low-carbon solutions, and supporting Citi's clients in their decarbonization and transition strategies. •The second pillar, "Climate Risk," focuses on Citi's efforts to measure, manage and reduce the climate risk and impact of its client portfolio. Areas of activity include portfolio analysis and stakeholder engagement as well as enhancing TCFD implementation and disclosure. •The third pillar, "Sustainable Operations," focuses on Citi's efforts to reduce the environmental footprint of its facilities and strengthen its sustainability culture. This includes minimizing the impact of its global operations through operational footprint goals and further integrates sustainable practices across the countries in which Citi operates.Net Zero Emissions by 2050Citi is a member of several initiatives that enhance its understanding of climate-related issues, improve its access to data and promote a common understanding and terminology across various climate efforts. These initiatives include the Partnership for Carbon Accounting Financials, the Glasgow Financial Alliance for Net Zero and the Net Zero Banking Alliance. As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint. Citi made this commitment as part of its ongoing work to reduce its climate risk and impact, grow its business in the clean energy transition and help address the challenges that climate change poses to the global economy and broader society. Citi's net zero commitment demonstrates how identifying, assessing and managing climate-related risks and opportunities remains a top business priority for Citi.While many financial institutions, including Citi, face increasing public pressure to divest from carbon-intensive sectors, Citi believes it has an important role to play in advising and financing the transition to net zero, and it plans to work closely with clients in this effort. Citi recognizes that large-scale, rapid divestment could result in an abrupt and disorderly transition to a low-carbon economy, creating both economic and social upheaval. Citi believes that an orderly, responsible and equitable transition, which accounts for the immediate economic needs of communities and workers, continued access to energy, environmental justice considerations and broader economic development concerns, is essential for the retention of political and social support to move to a low-carbon economy.The 2050 net zero commitment includes the following framework, delineating the key areas required to achieve its targets: •Calculate Emissions: Calculate baseline financed emissions for each carbon-intensive sector•Transition Pathway: Identify the appropriate climate scenario transition pathway •The first pillar, "Low-Carbon Transition," focuses on financing and facilitating environmental and social finance, including low-carbon solutions, and supporting Citi's clients in their decarbonization and transition strategies. •The second pillar, "Climate Risk," focuses on Citi's efforts to measure, manage and reduce the climate risk and impact of its client portfolio. Areas of activity include portfolio analysis and stakeholder engagement as well as enhancing TCFD implementation and disclosure. •The third pillar, "Sustainable Operations," focuses on Citi's efforts to reduce the environmental footprint of its facilities and strengthen its sustainability culture. This includes minimizing the impact of its global operations through operational footprint goals and further integrates sustainable practices across the countries in which Citi operates. **Current (2024):** Citi's Sustainable Finance Goal, as previously disclosed, supports a combination of environmental and social finance activities. Delivering on the sustainable finance goal is an integrated effort across the organization with products and service offerings across multiple lines of business. Net Zero Emissions by 2050As previously disclosed, Citi has committed to achieving net zero greenhouse gas (GHG) emissions associated with its financing by 2050, and net zero GHG emissions for its own operations by 2030; both are significant targets given the size and breadth of Citi's lending portfolios, businesses and operational footprint.Citi's Net Zero plan includes:•Net Zero Metrics and Target Setting: Calculate metrics and assess targets for carbon-intensive sectors•Client Engagement and Assessment: Seek to understand client GHG emissions and transition plans and advise on capacity building•Risk Management: Assess climate risk exposure across Citi's lending portfolios and review client carbon reduction progress, with ongoing review and refining of Citi's risk appetite and thresholds and policies related to Climate Risk Management•Clean Technology and Transition Finance: Support existing and, where possible, new technologies to accelerate commercialization and provide transition advisory and finance products and services•Portfolio Management: Active portfolio management of Citi financings to align with net zero targets, including considerations of transition measures taken by clients•Public Policy and Regulatory Engagement: Contribute to an enabling public policy and regulatory environment which is essential to stimulating demand for clean technologies and helping ensure a responsible transitionProgress on Citi's Net Zero plan: •Citi has published interim 2030 emissions targets for six loan portfolios: auto manufacturing, commercial real estate (North America), energy, power, steel and thermal coal mining. •Citi has developed a client transition assessment process to help internal teams better understand the alignment of clients' strategies with transition or decarbonization pathways applicable to their respective sectors. In 2022-2023, Citi completed the initial assessment process for energy and power clients, and in 2023 began the transition assessment process for auto manufacturing and steel clients. The assessment process focuses on clients with material emissions relative to each sector's baseline emission profiles.Operational Footprint GoalsCiti measures progress against operational footprint goals, which include efforts to reduce the environmental impact of its facilities through reductions in emissions, energy, water consumption and waste generation. Citi's efforts to integrate sustainable practices include sustainable building certifications, renewable electricity sourcing, employee engagement and seeking opportunities for efficiency in business travel. In 2023, Citi made progress toward these goals by increasing on-site solar generation, promoting initiatives on waste diversion and recycling, mapping weather- --- ## Modified: Retail Services **Key changes:** - Reworded sentence: "31, 2022> 76027 %26 %27 %680-76041 42 42 < 68032 32 31 Total100 %100 %100 %" **Prior (2023):** U.S. Personal Banking's Retail services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential. As shown in the chart above, the fourth quarter of 2022 net credit loss rate in Retail services increased quarter-over-quarter and year-over-year, driven by an increase in net flow rates, primarily reflecting the ongoing normalization from historically low levels. The 90+ days past due delinquency rate increased quarter-over-quarter and year-over-year, also driven by an increase in net flow rates, primarily reflecting the ongoing normalization. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 14. **Current (2024):** USPB's Retail Services partners directly with more than 20 retailers and dealers to offer private label and co-branded cards. Retail Services' target market focuses on select industry segments such as home improvement, specialty retail, consumer electronics and fuel. Retail Services continually evaluates opportunities to add partners within target industries that have strong loyalty, lending or payment programs and growth potential. As presented in the chart above, the fourth quarter of 2023 net credit loss rate and 90+ days past due delinquency rate in Retail Services increased quarter-over-quarter and year-over-year, largely driven by a continued increase in net flow rates, primarily reflecting normalization to pre-pandemic levels as well as the impact of macroeconomic pressures related to the higher inflationary and interest rate environment. For additional information on cost of credit, loan delinquency and other information for Citi's cards portfolios, see each respective business's results of operations above and Note 15. 77 77 77 Retail BankingUSPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15.As presented in the chart above, the net credit loss rate in Retail Banking for the fourth quarter of 2023 was broadly stable quarter-over-quarter and increased year-over-year, primarily driven by the growth and seasoning of personal loans.The 90+ days past due delinquency rate was broadly stable quarter-over-quarter and decreased year-over-year, primarily driven by lower delinquencies in U.S. mortgages.WealthAs indicated above, Wealth provides consumer mortgages, margin lending, cards and other lending products to customer segments that range from affluent to ultra-high net worth through the Private Bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies and includes loans that are delinquency managed or classifiably managed. The delinquency-managed portfolio consists primarily of mortgages, margin lending and cards. As of December 31, 2023, approximately $46 billion, or 30%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit risk based on their internal risk rating, of which 85% is rated investment grade. While the delinquency rate in the chart above is calculated only for the delinquency-managed portfolio, the net credit loss rate is calculated using net credit losses for both the delinquency and classifiably managed portfolios.As presented in the chart above, the net credit loss rate and 90+ days past due delinquency rate in Wealth for the fourth quarter of 2023 were broadly stable quarter-over-quarter and year-over-year. The low net credit loss and the 90+ days past due delinquency rates continued to reflect the strong credit profiles of the portfolios. Mexico ConsumerMexico Consumer operates in Mexico through Citibanamex and provides credit cards, consumer mortgages and small business and personal loans. Mexico Consumer serves a more mass-market segment in Mexico and focuses on developing multiproduct relationships with customers.As presented in the chart above, the fourth quarter of 2023 net credit loss rate in Mexico Consumer increased quarter-over-quarter and year-over-year, primarily driven by the ongoing normalization of loss rates from post-pandemic lows. The 90+ days past due delinquency rate was relatively stable quarter-over-quarter and year-over-year. For additional information on cost of credit, loan delinquency and other information for Citi's consumer loan portfolios, see each respective business's results of operations above and Note 15. Retail BankingUSPB's Retail Banking portfolio consists primarily of consumer mortgages (including home equity) and unsecured lending products, such as small business loans and personal loans. The portfolio is generally delinquency managed, where Citi evaluates credit risk based on FICO scores, delinquencies and the value of underlying collateral. The consumer mortgages in this portfolio have historically been extended to high credit quality customers, generally with loan-to-value ratios that are less than or equal to 80% on first and second mortgages. For additional information, see "Loan-to-Value (LTV) Ratios" in Note 15.As presented in the chart above, the net credit loss rate in Retail Banking for the fourth quarter of 2023 was broadly stable quarter-over-quarter and increased year-over-year, primarily driven by the growth and seasoning of personal loans.The 90+ days past due delinquency rate was broadly stable quarter-over-quarter and decreased year-over-year, primarily driven by lower delinquencies in U.S. mortgages.WealthAs indicated above, Wealth provides consumer mortgages, margin lending, cards and other lending products to customer segments that range from affluent to ultra-high net worth through the Private Bank, Wealth at Work and Citigold. These customer segments represent a target market that is characterized by historically low default rates and delinquencies and includes loans that are delinquency managed or classifiably managed. The delinquency-managed portfolio consists primarily of mortgages, margin lending and cards. As of December 31, 2023, approximately $46 billion, or 30%, of the portfolio was classifiably managed and primarily consisted of margin lending, commercial real estate, subscription credit finance and other lending programs. These classifiably managed loans are primarily evaluated for credit --- ## Modified: Consumer Loan Net Credit Losses and Ratios **Key changes:** - Reworded sentence: "Averageloans(1)Net credit losses(2)In millions of dollars, except average loan amounts in billions2023202320222021USPBTotal$192.6 $5,234 $2,918 $2,939 Ratio2.72 %1.71 %1.85 %CardsTotal151.5 4,981 2,640 2,828 Ratio3.29 %1.95 %2.28 %Branded Cards101.6 2,664 1,384 1,659 Ratio2.62 %1.54 %2.05 %Retail Services49.9 2,317 1,256 1,169 Ratio4.64 %2.74 %2.71 %Retail Banking41.1 253 278 111 Ratio0.62 %0.79 %0.32 %Wealth$150.1 $98 $103 $122 Ratio0.07 %0.07 %0.08 %All Other - Legacy Franchises (managed basis)(3)Total$29.2 $861 $746 $1,454 Ratio2.95 %2.16 %2.13 %Mexico Consumer17.0 682 476 920 Ratio4.01 %3.50 %6.87 %Asia Consumer (managed basis)(3)(4)(5)9.5 198 316 616 Ratio2.08 %1.82 %1.24 %Legacy Holdings Assets (consumer)2.7 (19)(46)(82)Ratio(0.70)%(1.35)%(1.53)%Reconciling Items(3)$(6)$(156)$(6)Total Citigroup$371.9 $6,187 $3,611 $4,509 Ratio1.66 %1.02 %1.20 % Average loans(1)" **Prior (2023):** Averageloans(1)Net credit losses(2)In millions of dollars, except average loan amounts in billions2022202220212020Personal Banking and Wealth Management(2)Total$321.0 $3,021 $3,061 $5,229 Ratio0.94 %1.00 %1.72 %U.S. Personal BankingTotal$170.7 $2,918 $2,939 $4,990 Ratio1.71 %1.85 %2.95 %CardsTotal135.6 2,640 2,828 4,858 Ratio1.95 %2.28 %3.71 %Branded cards89.8 1,384 1,659 2,708 Ratio1.54 %2.05 %3.20 %Retail services45.8 1,256 1,169 2,150 Ratio2.74 %2.71 %4.62 %Retail banking35.1 278 111 132 Ratio0.79 %0.32 %0.35 %Global Wealth$150.3 $103 $122 $239 Ratio0.07 %0.08 %0.18 %Legacy FranchisesTotal$34.4 $590 $1,448 $1,482 Ratio1.72 %2.12 %1.96 %Asia Consumer(3)(4)17.4 160 610 640 Ratio0.92 %1.23 %1.22 %Mexico Consumer13.6 476 920 866 Ratio3.50 %6.87 %5.97 %Legacy Holdings Assets (consumer)3.4 (46)(82)(24)Ratio(1.35)%(1.53)%(0.27)%Total Citigroup$355.4 $3,611 $4,509 $6,711 Ratio1.02 %1.20 %1.77 % Average loans(1) **Current (2024):** Averageloans(1)Net credit losses(2)In millions of dollars, except average loan amounts in billions2023202320222021USPBTotal$192.6 $5,234 $2,918 $2,939 Ratio2.72 %1.71 %1.85 %CardsTotal151.5 4,981 2,640 2,828 Ratio3.29 %1.95 %2.28 %Branded Cards101.6 2,664 1,384 1,659 Ratio2.62 %1.54 %2.05 %Retail Services49.9 2,317 1,256 1,169 Ratio4.64 %2.74 %2.71 %Retail Banking41.1 253 278 111 Ratio0.62 %0.79 %0.32 %Wealth$150.1 $98 $103 $122 Ratio0.07 %0.07 %0.08 %All Other - Legacy Franchises (managed basis)(3)Total$29.2 $861 $746 $1,454 Ratio2.95 %2.16 %2.13 %Mexico Consumer17.0 682 476 920 Ratio4.01 %3.50 %6.87 %Asia Consumer (managed basis)(3)(4)(5)9.5 198 316 616 Ratio2.08 %1.82 %1.24 %Legacy Holdings Assets (consumer)2.7 (19)(46)(82)Ratio(0.70)%(1.35)%(1.53)%Reconciling Items(3)$(6)$(156)$(6)Total Citigroup$371.9 $6,187 $3,611 $4,509 Ratio1.66 %1.02 %1.20 % Average loans(1) --- ## Modified: Fixed/Variable Pricing **Key changes:** - Reworded sentence: "In millions of dollars at December 31, 2023Due within1 yearGreater than 1 yearbut within5 yearsGreater than 5 years but within 15 yearsGreater than 15 yearsTotalLoans at fixed interest ratesResidential first mortgages$460 $366 $2,620 $70,126 $73,572 Home equity loans5 25 272 85 387 Credit cards(1)50,435 1,206 - - 51,641 Personal, small business and other13,185 8,869 376 366 22,796 Total$64,085 $10,466 $3,268 $70,577 $148,396 Loans at floating or adjustable interest ratesResidential first mortgages$722 $188 $4,470 $56,185 $61,565 Home equity loans - 2 1,247 1,956 3,205 Credit cards(1)127,312 - - - 127,312 Personal, small business and other45,525 2,963 60 171 48,719 Total$173,559 $3,153 $5,777 $58,312 $240,801 Total Consumer$237,644 $13,619 $9,045 $128,889 $389,197 In millions of dollars at December 31, 2023 Credit cards(1) Credit cards(1) (1)Credit card loans with maturities greater than one year represent loan modifications to borrowers experiencing financial difficulty and are at fixed interest rates." **Prior (2023):** In millions of dollars at December 31, 2022Due within1 yearGreater than 1 yearbut within5 yearsGreater than 5 years but within 15 yearsGreater than 15 yearsTotalLoans at fixed interest ratesResidential first mortgages$2,050 $263 $2,691 $59,918 $64,922 Home equity loans5 39 298 147 489 Credit cards(1)41,913 891 - - 42,804 Personal, small business and other9,748 5,380 343 192 15,663 Total$53,716 $6,573 $3,332 $60,257 $123,878 Loans at floating or adjustable interest ratesResidential first mortgages$948 $290 $5,196 $52,797 $59,231 Home equity loans546 3 1,371 2,171 4,091 Credit cards(1)120,794 - - - 120,794 Personal, small business and other53,160 5,744 585 584 60,073 Total$175,448 $6,037 $7,152 $55,552 $244,189 In millions of dollars at December 31, 2022 Credit cards(1) Credit cards(1) (1)Credit card loans with maturities greater than one year represent TDRs and are at fixed interest rates. 75 75 75 **Current (2024):** In millions of dollars at December 31, 2023Due within1 yearGreater than 1 yearbut within5 yearsGreater than 5 years but within 15 yearsGreater than 15 yearsTotalLoans at fixed interest ratesResidential first mortgages$460 $366 $2,620 $70,126 $73,572 Home equity loans5 25 272 85 387 Credit cards(1)50,435 1,206 - - 51,641 Personal, small business and other13,185 8,869 376 366 22,796 Total$64,085 $10,466 $3,268 $70,577 $148,396 Loans at floating or adjustable interest ratesResidential first mortgages$722 $188 $4,470 $56,185 $61,565 Home equity loans - 2 1,247 1,956 3,205 Credit cards(1)127,312 - - - 127,312 Personal, small business and other45,525 2,963 60 171 48,719 Total$173,559 $3,153 $5,777 $58,312 $240,801 Total Consumer$237,644 $13,619 $9,045 $128,889 $389,197 In millions of dollars at December 31, 2023 Credit cards(1) Credit cards(1) (1)Credit card loans with maturities greater than one year represent loan modifications to borrowers experiencing financial difficulty and are at fixed interest rates. 82 82 82 --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*