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CONTENTS 2 Corporate Information 32 Directors’ Report 3 Chairman’s Statement 35 Statement by Directors 4 CEO’s Statement 36 Statutory Declaration 9 Board of Directors 37 Shariah Committee‘s Report 10 Board of Directors - Profile 38 Independent Auditors’ Report 14 Statement of Corporate Governance 39 Statements of Financial Position 19 Risk Management 40 Statements of Comprehensive Income 20 Statement of Internal Audit and 41 Statements of Changes in Equity Internal Control 42 Statements of Cash Flows 21 Management Reports 44 Notes to the Financial Statements 22 Shariah Committee 24 Ratings Statement 25 Awards & Accolades 26 Corporate Citizenship at Citi 29 Valuing Our People CORPORATE INFORMATION Registered office 45th Floor Menara Citibank 165 Jalan Ampang 50450 Kuala Lumpur Date of incorporation 22 April 1 994 Auditors KPMG Citibank Berhad l 2011 Annual Report 003 CHAIRMAN’S STATEMENT It is my pleasure to present the Bank's annual report for the In 2012, the Malaysian Government looks set to continue financial year ending 31 December 2011. I would like to thank focusing on domestic demand and spending to maintain the members of the board and staff of Citibank for their economic growth momentum and rebalance risk in response commitment and support as we further strengthen our to an uncertain global economy. position as a leading financial institution in Malaysia. We can look back on 2011 and be proud of a number of achievements. One significant development is Bank Negara Malaysia’s Guidelines on Responsible Financing. The Guidelines came Our parent company Citigroup reported net income of $11.1 into effect on 1 January to promote prudent, responsible and billion for the full year 2011, an increase of 4% over 2010. It transparent retail financing practices, to ensure the credit was a solid full-year performance despite a very challenging market remains resilient, and to curb household debt. fourth quarter due to depressed global market conditions. Measures include pegging loans to people's disposable net (instead of gross) income and limiting the tenure of car loans. In Asia Pacific, our operational model has weathered tough These measures will likely cause the consumer loans sector times to deliver revenues of over $15 billion and net income slowdown to continue as Malaysians adjust their spending of $4 billion for 2011. Our revenue was up by 5% over 2010 habits on big ticket items such as property and cars. and we remained the largest regional contributor to global revenue outside North America. 2012 marks Citi's 200th anniversary. This milestone is our golden opportunity to further build trust and confidence in In Malaysia, we operated under stable economic conditions Citi's proud legacy and core principles that have stood us in as the fourth quarter of 2011 exceeded our expectations good stead through two centuries. We will continue to drive with 5.2% year-on-year GDP growth. Fiscal spending excellence by being the bank that connects better - bringing provided an effective buffer against the export slowdown people the best ideas and resources anywhere in an and external supply disruptions. Government consumption increasingly dynamic world. This means strengthening client growth accelerated to a 12-year high, private consumption relationships, reducing costs while remaining productive and remained buoyant and fixed investments growth continued efficient, and delivering the earnings that contribute to our to accelerate, driven by private sector and non-financial capital strength. public enterprise capital spending. With our world-class team of employees and the right It is with great sadness that I report we lost one of our controls in place to protect our brand and reputation, I am longest-serving directors of Citibank Berhad, Allahyarham confident we will deliver on our goals. YBhg Dato’ Haji Syed Sidi Idid who passed away in February 2012. Allahyarham joined Citibank Berhad in 2000 and was also the chairman of the Audit Committee and a member of the Risk Management and Nominating Committees. Apart from his outstanding work with Citibank Berhad, he also proudly worked in the civil service of Malaysia. On behalf of Citibank Berhad, we express our deepest sympathies and sincere condolences to Jonathan Christian Larsen YBhg Datin Noorashikin Abdullah and her family. Chairman 004 Citibank Berhad l 2011 Annual Report CEO’S STATEMENT Overview capital base as at 31 December 2011. The Bank's net interest In 2011, the Malaysian Government responded to the income was RM1.20 billion in 2011 while non-interest income deteriorating external outlook by supporting domestic demand increased to RM659 million in 2011 from RM573 million in 2010. with fiscal policy, with a renewed focus on consumer spending. Bank Negara Malaysia (BNM) took prudent pre-emptive Business Highlights in 2011 measures to tighten mortgage lending to curb speculative Citibank achieved many business successes in 2011 despite property purchases and risky lending by banks. It also signalled increased competition following the introduction of more BNM’s concerns over the country’s high household debt. New liberalisation measures in the financial industry in 2010 . credit card rules also came into effect for lower-income earners. We continued our relentless drive to implement major The local banking sector demonstrated continued profitability, innovation and campaigns across our different product lines high levels of capitalisation and healthy growth in the loans and financial services that cemented our position as one of sector. Overall, the industry remained relatively unscathed the leading foreign banks in the country. by the global financial crisis and widespread recession due to the strong fundamentals already in place. Citi acted as the joint book runner for the multiple award winning Wakala Global Sukuk issued by Government of The Year in Review Malaysia. With a total issuance size of USD 2.0 billion in two Citibank registered a positive performance in 2011. The Bank’s separate tranches, the Wakala Global Sukuk is the largest strong performance was contributed by high levels of sovereign Sukuk ever issued. capital, liquidity and operating cash flows. Citibank went live on the Malaysian Electronic Payment System For the financial year ended 31 December 2011, the Bank Sdn Bhd (MEPS) network for the first time in February. In registered a pre-tax profit of RM855 million, compared with addition to 1.9 million Citibank and Visa ATMs in over 200 RM834 million achieved the previous year. We focused our countries, customers now enjoy added convenience through initiatives mainly on investing in infrastructure, growing talent access to over 11,000 ATMs nationwide through 20 MEPS and building our brand. member banks covering 2,000 locations nationwide. This completed the process started in 2005 when Citibank Total net income was RM1.89 billion in 2011, a marginal increase became the first foreign bank in Malaysia to gain complete from 2010. The Bank's return on equity before tax decreased to access to the MEPS Interbank GIRO. 22.4% for the financial period ended 31 December 2011 compared with 24.2% in 2010. Our liquidity continues to be We continued to strengthen the Citibank brand reputation exceptionally strong, with cash and short-term funds and for innovation in customer service with the launch of our placements with financial institutions in excess of RM13.5 billion. first state-of-the-art Smart Banking branch, underlining our commitment to customers and its continued investments in The bank's risk weighted capital adequacy ratio stood at a Malaysia. The Citibank Smart Banking branch in Malaysia is comfortable 15.3% (before dividend), based on its audited also Citi’s largest smart banking branch in the region. Citibank Berhad l 2011 Annual Report 005 CEO’S STATEMENT For more than 50 years, we have retained our position as one of 10 pairs of flight tickets with Premium Flatbeds to Korea. the leading foreign banks in Malaysia by engaging and listening Another 10 members won Sen Heng vouchers worth a total to our customers and bringing unparalleled value to our of RM2,000 while another 10 card members were given Malaysian clients. As a franchise, we strategically leverage on 300,000 AirAsia-Citibank Rewards Points. our global reach, expertise and capabilities to adapt, innovate and provide best-in-class financial solutions and services. We kept the benefits our customers expect as part of the Citibank lifestyle coming, starting with giving a pair of exclusive We retained our leadership positions in credit cards, FX backstage passes each to 4 winners of the Citibank “Meet Options, Government Bond Trading, Securities Clearing & Maroon 5 Backstage” contest. In Johor Baru, 2 customers won Settlement, and Cash Management. We are also amongst the a pair of tickets each to Seoul, Korea as part of the “Citibank top three in the Wealth Management segment. Credit Card JB City Square Shopping Campaign Contest”. We partnered with MPH Group Malaysia to offer exclusive deals to Consumer Banking our customers at the MPH 2011 Carnival. We also collaborated with group-discount website, “I Love Discounts” on the Credit Cards three-month “Big Deals Thursday” campaign aimed at our Citibank Credit Cards maintained its leadership position in customers and Facebook fans. cards usage by enhancing its value proposition in two ways: Launched in conjunction with the year-end holidays and introducing new products in line with the impact of the festivities, Citi’s “Year End Rewards” campaign marked the economic realities on our customers, and improving existing first time Citibank was concurrently present in 9 of the products to help them get more out of their credit card. country’s biggest shopping malls in one campaign. Treats included premium gifts; instant redemption of gifts at Based on customers’ expectations and needs, we increased Citibank booths with discounts of up to 55% at KLCC Suria our value proposition with the introduction of two timely and Queensbay Mall; and shopping, dining and entertainment and relevant market leading products: the Shell Citibank offers at over 1,360 outlets nationwide.

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