7.3 billion - Citigroup

1Q12 vs. 1Q11Net income of $1.2 billion decreased 28%, primarily due tonegative $1.4 billion of CVA/DVA in the current quarter (seetable below). Excluding CVA/DVA, net income increased 13%,primarily driven by an increase in revenues. The decline inexpenses year-over-year was more than offset by higherprovisions.Revenues of $5.3 billion decreased 12% from the prior yeardue to the negative CVA/DVA. Excluding CVA/DVA, S&Brevenues increased 6%, reflecting better results in fixed incomemarkets, private bank, and a slight increase in investmentbanking, partially offset by lower revenues in equity marketsand lending.Fixed income markets revenues increased 19% excludingCVA/DVA. The results primarily reflected strong performancein rates and currencies across all products and regions, as overallmarket conditions improved in the first quarter of 2012 andclient activity increased. While a return of liquidity and twowayflows in the credit markets in the first quarter of 2012resulted in strong performance from credit and securitizedproducts, revenues declined in these areas relative to the prioryearperiod, largely reflecting lower risk levels in the business.Equity markets revenues decreased 18% excludingCVA/DVA, driven by lower industry volumes, particularly incash equities.Investment banking revenues increased 2%, as growth indebt underwriting revenues offset declines in advisory andequity underwriting revenues. The growth in debt underwritingwas due to volume growth in certain products and gains inmarket share, while the lower results in advisory and equityunderwriting revenues reflected market wide declines in activitylevels.Lending revenues decreased 78%, mainly as a result oflosses on credit default swap hedges as credit spreads narrowedduring the quarter (see the table below). Excluding the impact ofthese hedging losses, lending revenues increased 24%, primarilydriven by increased volumes in the Corporate loan portfolio.Private bank revenues increased 11% excluding CVA/DVAdue to higher loan and deposit balances, spread improvement,and stronger capital markets activity.Expenses decreased 2%, driven by efficiency savings fromongoing reengineering programs.Provisions increased by $245 million to a positive $58million, primarily due to reserve builds as a result of portfoliogrowth compared to releases in the prior-year period, partiallyoffset by a specific recovery in the first quarter of 2012 whichresulted in net credit recoveries for the quarter.In millions of dollarsMarch 31,2012March 31,2011S&B CVA/DVAFixed Income Markets $(1,087) $(190)Equity Markets (283) (34)Private Bank (6) (5)Total S&B CVA/DVA $(1,376) $(229)Total S&B Lending Hedge gain (loss) $ (504) $(197)20CITIGROUP – 2012 FIRST QUARTER 10-Q