Citigroup Inc.

2009 vs. 2008Revenues, net of interest expense were fairly flat as higher credit lossesin the securitization trusts were offset by higher net interest margin incards, higher volumes in retail banking, and higher gains from loan salesin mortgages.Net interest revenue was up 20% driven by the impact of pricing actionsrelating to the CARD Act and lower funding costs in Citi-branded cards, andby higher deposit and loan volumes in retail banking, with average depositsup 12% and average loans up 11%.Non-interest revenue declined 21%, driven by higher credit lossesflowing through the securitization trusts and by the absence of a$349 million gain on the sale of Visa shares and a $170 million gain froma cards portfolio sale in 2008. This decline was partially offset by highergains from loan sales in mortgages.Operating expenses declined 34%. Excluding a 2008 goodwillimpairment charge of $2.3 billion, expenses were down 12% reflecting thebenefits from re-engineering efforts, lower marketing costs, and the absenceof $217 million of repositioning charges in 2008 offset by the absence of a$159 million Visa litigation reserve release in 2008.Provisions for credit losses and for benefits and claims increased$642 million, or 59%, primarily due to rising net credit losses in both cardsand retail banking. The continued weakening of leading credit indicators andtrends in the macroeconomic environment during the period, including risingunemployment and higher bankruptcy filings, drove higher credit costs. Thecards managed net credit loss ratio increased 376 basis points to 9.41%, whilethe retail banking net credit loss ratio increased 44 basis points to 0.90%.35