10-KPeriod: FY2014

CITIGROUP INC Annual Report, Year Ended Dec 31, 2014

Filed February 25, 2015For Securities:CC-PNC-PR

Summary

Citigroup Inc. filed its 2014 10-K on February 24, 2015, detailing a year marked by "steady progress on execution priorities despite a continued challenging operating environment." Key challenges highlighted include macroeconomic uncertainty, significant legal settlement costs (notably a $3.8 billion mortgage settlement), uneven global economic growth, and a low interest rate environment. Despite these headwinds, Citigroup made progress in efficiently allocating resources, disciplined expense management, and continuing the wind-down of Citi Holdings, reducing its assets by $19 billion. Financially, the company reported net income of $7.3 billion ($2.20 per diluted share) in 2014, a decrease from $13.7 billion ($4.35 per diluted share) in 2013. This decline was primarily attributed to higher legal and related expenses and repositioning costs. Excluding these items and other specific charges, adjusted net income was $11.5 billion. Revenues, net of interest expense, saw a slight increase of 1% to $76.9 billion. The company maintained strong regulatory capital ratios, with Basel III Common Equity Tier 1 Capital at 10.6% and Tier 1 Capital at 11.5% as of December 31, 2014.

Financial Highlights

37 data points
Beta

Revenue

$77.22B

Net Income

$7.31B

9.5% Net Margin

EPS (Diluted)

$2.20

Total Assets

$1.84T

Free Cash Flow

$42.96B

Financial Statements
Beta
Revenue$77.22B
Operating Expenses$55.05B
Operating Income$7.31B
Interest Expense$13.69B
Net Income$7.31B
EPS (Basic)$2.21
EPS (Diluted)$2.20
Shares Outstanding (Basic)3.03B
Shares Outstanding (Diluted)3.04B

Key Highlights

  • 1Net income for 2014 was $7.3 billion, a significant decrease from $13.7 billion in 2013, largely due to substantial legal settlement costs and higher operating expenses.
  • 2Citigroup incurred a $3.8 billion charge related to a mortgage settlement announced in July 2014.
  • 3Revenues, net of interest expense, increased slightly by 1% to $76.9 billion, driven by growth in Citi Holdings, partially offset by a decline in Citicorp.
  • 4Operating expenses increased by 14% to $55.1 billion, primarily due to higher legal and related expenses and repositioning costs.
  • 5Citigroup continued to wind down Citi Holdings, reducing its assets by $19 billion, or 16%, from year-end 2013.
  • 6Basel III Common Equity Tier 1 Capital ratio remained strong at 10.6% as of December 31, 2014.
  • 7Citigroup announced strategic actions to exit consumer businesses in 11 markets and certain businesses in the Institutional Clients Group (ICG) to focus on core franchises.

Frequently Asked Questions

Citigroup reported net income of $7.3 billion ($2.20 per diluted share) in 2014, compared to $13.7 billion ($4.35 per diluted share) in 2013. The decrease was primarily driven by higher legal and related expenses, including a $3.8 billion charge related to a mortgage settlement, and increased repositioning costs, which impacted operational expenses.

Citigroup's revenues, net of interest expense, increased by 1% to $76.9 billion in 2014. This increase was largely driven by a 28% rise in revenues from Citi Holdings, which offset a 1% decline in Citicorp. Net interest revenues grew 3% due to lower funding costs.

Citigroup continued to wind down Citi Holdings, reducing its assets by $19 billion (16%) from year-end 2013. The company also announced strategic actions to exit consumer businesses in 11 markets and certain businesses in the Institutional Clients Group (ICG) to focus on core businesses with greater scale and growth potential. These exited businesses will be reported under Citi Holdings starting in the first quarter of 2015.

Citigroup maintained strong capital ratios under the Basel III framework. As of December 31, 2014, its Common Equity Tier 1 Capital ratio was 10.6%, Tier 1 Capital ratio was 11.5%, and Total Capital ratio was 12.8%. The estimated Supplementary Leverage ratio was 6.0%. These ratios were in excess of the stated minimum requirements and positioned the company as 'well capitalized' under regulatory definitions.