Citigroup Reports Record Core Income for the Fourth Quarter and for 1999

Business Wire, Jan 18, 2000

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 18, 2000

Fourth Quarter Core Income Up 86% to $2.61 Billion

Diluted Core EPS $0.75 From $0.40, Up 88%

1999 Earnings Approach $10 Billion

Full Year Diluted Core EPS $2.85 From $1.77, Up 61%

Revenues Up 16% in 1999

Citigroup Inc. (NYSE:C) today reported core income of $2.61 billion for the fourth quarter ended December 31, 1999. For the full year, core income was $9.95 billion, a 57% increase over the prior year.

- Core income per diluted share for the quarter, at $0.75,

reflected an 88% increase from the comparable 1998 period, on the

strength of broad-based revenue growth, continued progress on

expense controls and stable credit quality.

- Record earnings in the Global Consumer business and robust growth

from the integrated Global Corporate and Investment Bank

contributed to the strong performance in the quarter and the

year.

- The Company generated a return on equity of 22.3% in the quarter,

and 22.7% for the year.

- Citigroup achieved its stated target of $2 billion in annualized

expense reductions and expects to make further progress on

expenses in 2000.

- Citigroup remains among the most well-capitalized financial

institutions in the world, with total equity capital and trust

securities reaching $54.6 billion at the end of 1999, up from

$47.0 billion at the end of 1998. The Tier I capital ratio is

9.6%.

- In 1999, Citigroup delivered additional value to shareholders by

repurchasing $4 billion in stock. Earlier this year, Citigroup

also announced a 17% dividend increase and a 3-for-2 stock split.

- Net income was $2.62 billion for the quarter, and $9.87 billion

for the year, up 287% and 70% respectively.

John S. Reed and Sanford I. Weill, Chairmen and Co-Chief Executive Officers of Citigroup, said: "The superior results we achieved in the first full year of our merger underscores our progress in establishing Citigroup as a world-class, global growth company. Each of our businesses reinforced its leadership during the year, creating a strong foundation for future profit growth. Collaborative efforts among our operations are resulting in new ways to serve customer needs and creating powerful opportunities for our businesses. With revenues twice the level of expenses, it is clear that our efficiency efforts are magnifying the impact of revenue gains on the bottom line.

"Our exceptionally strong capital position and the successful integration of our global businesses will enable us to take full advantage of the new financial modernization legislation in the coming year. This legislation opens up new horizons for our Company and will facilitate our expansion in the global financial services arena. Our already impressive geographic and business diversity provides us with several important advantages. It has proven its power during a vibrant global market environment and will be even more critical as a source of stability and opportunity when market conditions are less robust. Our diversity also enhances our position on the Internet, enabling us to deliver to a greater number and range of customers a broader array of quality products and services than virtually any other financial services company. And, with approximately 30% of our earnings generated from outside the U.S. and our recent expansion efforts in Latin America and Japan, we are well-positioned in regions likely to achieve higher growth in the coming year.

"As we continue to forge new ground with our pioneering combination," continued Messrs. Reed and Weill, "we are delighted to be joined in the Office of the Chairman by Bob Rubin, whose expertise and insight are already making positive contributions."

GLOBAL CONSUMER

4th Quarter Core Income: $1.17 billion, up 35% from 1998 Period

1999 Core Income: $4.30 billion, up 38%

The Global Consumer business achieved record results for the quarter, generating an 8% increase in revenues through internal growth and acquisitions, while holding expense growth to only 2%. The business also benefited from stable credit quality in most regions of the world. Recent acquisitions in the cards and consumer finance segments across Argentina, Chile, Mexico, Australia and the U.S. were accretive in 1999. The business also continued to expand its presence in Japan, where the Company now has more than one million customers.

During the quarter, e-Citi continued to develop Citigroup's Internet presence. Leveraging its leading market share in cards in the U.S., the Company introduced ClickCredit, an electronic line of credit designed specifically for purchases on the Internet. In tandem, Citigroup launched CitiPlaza, its on-line shopping portal featuring a variety of merchants and shopping services. The Company expects these initiatives to help expand its existing base of more than three million customers who are now doing business with Citigroup on-line. Furthermore, early cross marketing efforts have yielded positive results and are expected to contribute a greater level of revenues in 2000.