Citigroup Inc.

16. LOANSCitigroup loans are reported in two categories—Consumer and Corporate.These categories are classified according to the segment and sub-segmentthat manages the loans.Consumer LoansConsumer loans represent loans and leases managed primarily by theRegional Consumer Banking and Local Consumer Lending businesses.The following table provides information by loan type:In millions of dollars at year end 2010 2009Consumer loansIn U.S. officesMortgage and real estate (1) $151,469 $183,842Installment, revolving credit, and other 28,291 58,099Cards (2) 122,384 28,951Commercial and industrial 5,021 5,640Lease financing 2 11$307,167 $276,543In offices outside the U.S.Mortgage and real estate (1) $ 52,175 $ 47,297Installment, revolving credit, and other 38,024 42,805Cards 40,948 41,493Commercial and industrial 18,584 14,780Lease financing 665 331$150,396 $146,706Total Consumer loans $457,563 $423,249Net unearned income 69 808Consumer loans, net of unearned income $457,632 $424,057Credit quality indicators that are actively monitored include:Delinquency StatusDelinquency status is carefully monitored and considered a key indicator ofcredit quality. Substantially all of the U.S. first mortgage loans use the MBAmethod of reporting delinquencies, which considers a loan delinquent if amonthly payment has not been received by the end of the day immediatelypreceding the loan’s next due date. All other loans use the OTS method ofreporting delinquencies, which considers a loan delinquent if a monthlypayment has not been received by the close of business on the loan’s nextdue date. As a general rule, first and second mortgages and installment loansare classified as non-accrual when loan payments are 90 days contractuallypast due. Credit cards and unsecured revolving loans generally accrueinterest until payments are 180 days past due. Commercial market loans areplaced on a cash (non-accrual) basis when it is determined, based on actualexperience and a forward-looking assessment of the collectability of the loanin full, that the payment of interest or principal is doubtful or when interestor principal is 90 days past due.(1) Loans secured primarily by real estate.(2) 2010 includes the impact of consolidating entities in connection with Citi’s adoption of SFAS 167.Citigroup has a comprehensive risk management process to monitor,evaluate and manage the principal risks associated with its Consumer loanportfolio. Included in the loan table above are lending products whose termsmay give rise to additional credit issues. Credit cards with below-marketintroductory interest rates and interest-only loans are examples of suchproducts. However, these products are not material to Citigroup’s financialposition and are closely managed via credit controls that mitigate theiradditional inherent risk.215