Citicorp fourth quarter net income increased 9% to $987 million on 14% revenue gain; earnings per common share rose 15% to $1.97; return on common equity remains above 20%

Business Wire, Jan 21, 1997

NEW YORK--(BUSINESS WIRE)--Jan. 21, 1997--Citicorp fourth quarter net income increased 9% to $987 million on 14% revenue gain; earnings per common share rose 15% to $1.97; return on common equity remains above 20% -0-

Fourth Quarter (Dollars in Millions,         1996      1995    Change
  except EPS)

Adjusted Revenue                           $5,747    $5,047       14%
Net Income                                    987       905        9%
Earnings Per Share (Fully Diluted)          $1.97     $1.72       15%
Return on Common Equity (%)                  20.6      20.5         -
Return on Total Assets (%)                   1.42      1.35         -
Average Shares Outstanding (Fully           480.9     505.7         -
  Diluted)

Full Year

Adjusted Revenue                          $21,542   $19,618       10%
Net Income                                  3,788     3,464        9%
Earnings Per Share (Fully Diluted)          $7.42     $6.48       15%
Return on Common Equity (%)                  20.4      20.8         -
Return on Total Assets (%)                   1.40      1.29         -
Average Shares Outstanding (Fully           490.0     511.5         -
  Diluted)
-0-

Cards revenue of $1.8 billion in the quarter improved $199 million or 13% from the 1995 fourth quarter. U.S. bankcards revenue in the fourth quarter grew 12% over the year-ago quarter, reflecting growth in managed receivables, which were up $2.1 billion or 5% from a year ago to $47.0 billion at December 31, 1996, and spread improvement. Managed receivables also grew $3.0 billion or 7% from the 1996 third quarter, primarily reflecting seasonal trends. Charge volumes in the U.S. bankcards business increased from the year-ago quarter by $2.5 billion or 10% to $26.7 billion. Receivables volume growth continued to be affected by competitive pressures, credit tightening on the part of Citicorp, and moderating increases in consumer personal debt levels. Cards revenue of $6.7 billion in the year increased $684 million or 11% from 1995, and U.S. bankcards revenue also increased 11%.

Fourth quarter revenue in the emerging markets Cards businesses was 27% higher than the year earlier quarter, reflecting continued growth in the Asia Pacific and Middle East businesses, as well as improvements in Latin America, including Credicard, a Brazilian affiliate. Emerging markets Cards revenue in the year increased 24% from 1995.

The number of cards in force worldwide, including those issued by affiliates, reached 61 million at the end of the quarter, an increase of three million from a year ago. In North America, the number of cards was 41 million; in Latin America, the number reached nine million cards; in Asia, the number reached seven million cards; and in Europe, the number exceeds three million cards.

Expense in worldwide Cards of $628 million in the quarter increased $70 million or 13% from the 1995 fourth quarter. Expense levels in U.S. bankcards in the quarter were up 11%, reflecting investment spending associated with enhanced cardmember database and analytical tools, marketing expenses, and increased collection efforts. Expense in the emerging markets Cards businesses increased 28% in the quarter in support of higher loan volumes, as well as continued investment spending. Expense in worldwide Cards of $2.5 billion in the year increased $119 million or 5% from 1995, principally reflecting 25% higher emerging markets expense, while U.S. bankcard expense levels remained essentially unchanged.

Credit costs in U.S. bankcards continued to increase, rising in the quarter to $608 million or 5.45% of average managed loans, compared with $550 million or 5.11% in the 1996 third quarter and $414 million or 3.89% (adjusted for the sale of certain bankrupt accounts) in the 1995 fourth quarter. Bankruptcies represented 38.0% of gross U.S. bankcard write-offs in the quarter, compared with 37.5% in the preceding quarter and 35.6% in the year-ago quarter. Citicorp continues to write off bankrupt accounts upon notice of bankruptcy filing. Credit costs in U.S. bankcards increased in the year to $2.1 billion or 4.99% of average managed loans, up $660 million from $1.5 billion or 3.73% in 1995 (adjusted for the sale of certain bankrupt accounts). Managed U.S. bankcard loans delinquent 90 days or more were 1.90% of the portfolio at the end of the quarter, compared with 1.86% at the end of the preceding quarter and 1.66% a year ago.

Credit costs in Cards portfolios other than U.S. bankcards, which primarily include bankcards throughout the emerging markets and in the developed markets of Europe and Japan, as well as worldwide Diners Club, were $77 million or 3.58% of average loans in the quarter, down from $89 million or 4.35% in the preceding 1996 quarter and $82 million or 4.59% from the 1995 fourth quarter. The decrease principally reflected the continued improvement in Latin America. Credit costs in the year were $335 million or 4.23% of average loans, compared with $256 million or 3.88% in 1995. Loans delinquent 90 days or more were unchanged at 2.13% of the portfolio compared with the preceding quarter and up from 1.93% at year-end 1995.