2017 Investor Day Global Consumer Banking
Stephen Bird, CEO, Global Consumer Banking
Jud Linville, CEO, Global Cards and Consumer Services
July 25, 2017 Global Consumer Banking Our Franchise Contribution to Citi ($B, LTM’17) • Global business with presence in 19 markets GCB ICG Corp / Other
• Business model designed to meet the full financial needs of attractive client segments in high growth markets $1,864 $959 $71 $15 5% 3% 5% • Leading positions in Cards & Wealth Management across U.S., Asia and Mexico 30% 22% 32% ‒ #1 credit card issuer globally by loans 45% ‒ Strong position in retail in U.S. wealth markets ‒ Top 3 wealth manager in Asia, #1 NPS in key markets(1) ‒ Leading franchise in Mexico, #1 in deposits + AUMs 73% • Light physical presence with high digital capability 65% 70% 49% • Unique commercial banking solutions leveraging ICG network
• Source of stable, low-cost funding
• Strong track record of expense and credit discipline, pivoting to (2) (2) revenue growth Assets Deposits Revenues Net Income
GCB: $419 $309 $32 $5
Note: Throughout this presentation, LTM is defined as last twelve months ended June 30th and totals may not sum due to rounding. GCB: Global Consumer Banking; ICG: Institutional Clients Group. 1 (1) #1 Citigold Net Promoter Score (NPS) in 9 of 14 markets where survey results are available; #1 Citi Priority NPS in 7 of 9 markets where survey results are available. (2) End of period as of 2Q’17. Poised for Sustainable Growth and Improved Returns
• A streamlined, diversified franchise and business model with significant opportunities for global leverage
Strong franchise • Common, segment-driven model focused on affluent and emerging affluent target clients in growing with world-class value propositions for each segment markets… • Light physical footprint and leading global capabilities and partnerships that differentiate us from peers • Disciplined risk management framework
• Executing on important investments across the business in areas like Branded Cards, U.S. wealth management and Mexico
…driving client- • Able to rapidly deploy new digital capabilities across markets led growth and • Optimizing how we engage with clients to improve client experience, deepen client improved returns penetration and also lower cost to serve • Clear path to longer-term RoTCE of over 20% reflecting client-led growth and the benefit of higher interest rates, along with continued expense and credit discipline
2 A Diversified Global Business With Leading Market Positions
U.S. Asia Mexico
Net Income Net Income Net Income
Retail Banking* 17% Branded Branded Branded Retail Retail Cards Cards Cards Revenue: $20B Banking Revenue: $7B Banking Revenue: $5B * 37% * 41% Retail 46% Net Income: $3B 63% Net Income: $1B 59% Net Income: $0.6B Services 37%
• 72MM clients • 16MM clients • 21MM clients • ~700 branches • ~400 branches • ~1,500 branches • #1 deposits per branch in core • Leading wealth management • #1 client share(3) (1) markets franchise • #1 in bank brand recognition • #2 credit card issuer by loans • Citigold NPS: #1 in key markets(2) (Citibanamex)(4) • Iconic card partnerships: American • Strong cards and loans business • #1 bank in total deposits and AUMs(5) Airlines, Costco, The Home Depot • #2 credit card issuer by loans
Note: *Shaded portion within Retail Banking represents Commercial Banking. Totals may not sum due to rounding. Revenue and net income represents LTM’17 results. Throughout this presentation, Asia GCB includes the results of operations of GCB activities in certain EMEA countries for all periods presented. (1) Source: FDIC as of June 2016. National Average across Top 15 deposit institutions. (2) #1 Citigold NPS in 9 of 14 markets where survey results are available. (3) PRM Base study on banking market in Mexico 2016. 3 (4) Source: Brand Finance Mexico 50 2017 report. (5) Source: CNBV and competitive analysis. Our Business Model Creates Opportunities for Global Leverage & Scale
Our Global Operating Model Benefits of Global Leverage
Delivered Globally Managed Locally Value Propositions
• Brand & Marketing • Client Service
• Segmentation Design • Sales & Advisory Partnerships & Suppliers • Value Proposition • Product & Pricing
• Network Playbook • Distribution
• Process & Platform • Mobile Execution ATMs
• Partnerships • Merchants & Suppliers Success Transfer Across Markets • Risk & Control Framework • Underwriting Mobile Banking / Agile Development Next Generation Digital Capabilities Formats and Partnerships
4 Our Client-Led Growth Model is Supported by Unique Global Capabilities
Our Clients Segment Definition(1) Retail & Wealth Management Cards/Payments
$200K+ in DM / Affluent $100K+ in EM
Emerging $50K+ in DM / Affluent $25K+ in EM
<$50K in DM / Mass Market <$25K in EM
Borrow Pay Save Invest Protect Fulfilling Client Needs Across Life Stages
Our Capabilities
Class-Leading Value Propositions & Partnerships Retail & Wealth Management | Cards
Network Digital Innovation Risk, Data & Analytics Distinctive Brand
Talent & Culture
5 Note: DM: Developed Markets; EM: Emerging Markets. (1) Balance requirements for each segment refer to total deposits and assets under management. Agenda
Strong Foundation For Growth
Path to Achieving Our Targets
Our Businesses
Key Takeaways
6 Strong Foundation for Growth Efforts to streamline franchise and enhance global capabilities are now delivering results
• Reduced presence to 19 markets with large, growing revenue pools Market Focus • Concentrated branch presence in urban locations
• Completed common platform in U.S. to enable holistic client view and segmentation strategy Value Propositions • Rationalized card products and continued roll-out of global products and rewards
• Renewed all key co-brand card and Retail Services relationships through 2020+ Partnerships • Established important digital partnerships to support eCommerce and client acquisition
• Continued to reduce branches and optimize formats (e.g., wealth centers) Network • Rapidly migrated transaction activity from tellers / call centers to self-service channels
• Radically accelerated time to market with new digital capabilities Innovation • Enhanced risk analytics and client acquisitions using big data
7 Value Propositions & Partnerships: Retail & Wealth Management
Segment-driven Business Model(1) Citigold Value Proposition Accelerating Growth
Segments Client Footings Rev. / Client Citigold Clients In-depth research on markets, Insight trends and opportunities from 12% Citi Institutional Research Citigold >$230B >25x
Custom “always on” end-to-end Access Wealth Management solutions 2Q'16 2Q'17
Citi Priority ~$70B >6x Citi Priority Clients Dedicated Citi Relationship Your Team Manager and team of experts 7%
Exclusive, curated lifestyle and Citibank >$90B 1x Privileges banking privileges, preferred pricing and service 2Q'16 2Q'17
Note: 8 (1) Clients by segment, qualified by maintaining deposits & investments balances above local currency thresholds. (Asia clients qualify based on deposit & investments and insurance balances). Client footings includes deposits, investments and loan balances. Footings and rev. / client across retail banking and cards, for 2Q’17. Value Propositions & Partnerships: Cards Proprietary Global Products & Platforms(1) Iconic Partners(2) Accelerating Growth (Constant $B) Branded Cards Retail Services Costco Home Improvement ex Costco #1 Retailer LTM Purchase Sales $478 80 $342 $364 #1 No fee product 80 103 80 3 #1 Cash back (U.S.) World’s Largest #1 Airline 281 295 #1 General purpose reward card program 262
2Q'15 2Q'16 2Q'17 Warehouse EOP Loans $155 #1Club $144 $130 45 43 43
Consumer 110 #1 Electronics Retailer 87 100 Digital Rewards Entertainment #1 Platform #1 Platform 2Q'15 2Q'16 2Q'17
Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. (1) Simplicity rank based on number of countries where no late fee card offered; Double Cash rank based on NPS as measured by JDPower; Reward cards rank based on number of markets where general purpose rewards cards offered (excluding charge and commercial cards); Rewards Platform based on number of markets where online redemption offered; Entertainment Platform based on Private Pass ticket 9 sales and events including those offered through our Live Nation partnership. (2) Source: Forbes (THD, AA) and Market Realist (COST, BBY) based on total sales volume relative to overall industry. Network: Light Physical Footprint with Leading Digital Capabilities
Client-Centric Ecosystem
Relationship Next Generation Managers & ATMs Mobile Banking Digital Partnerships Formats Financial Advisors
(21)% 15% 57% 42% 50+ Branch Count Banker Expansion in U.S. Global ATMs Mobile Users Digital Partnerships (2013 to 2Q’17) (2Q’16 to 2Q’17) (2Q’16 to 2Q’17) (May’16 to May’17)
10 Digital Innovation: Engaging Clients Through Digital & Mobile Channels
Increased Acquisitions Improvements in NPS (Cards Example) Accounts Acquired through Digital Channels since YoY %r Mobile App NPS tracking 15% +800bps
2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 May'16 May'17 Increased Adoption Digital / Mobile Users YoY %r Digital NPS 42% +1,650bps Mobile
27% Digital
2Q'12 2Q'13 2Q'14 2Q'15 2Q'16 2Q'17 May'16 May'17 Increased Engagement Industry Recognition Digital Usage (90 day) / Mobile Usage (30 day) YoY %r World’s Best 17% Mobile Digital Bank
Digital 5%
11 May'16 May'17 Risk, Data & Analytics: Building Next Generation Targeting Capabilities
Moving To Advanced Analytics in a Big Data Environment … … With Great Potential to Deliver Greater Value
• Over 160 use cases identified for leveraging Big Data
Targeting Channels Analytic Models Data Type • Successful tests (Global Cards):
2011 • Direct Mail • ~10 • Internal + Spend models limited 3rd Segments Retention 1X 5X party Without Big Data With Big Data
• Direct Mail • 550+ • Internal data + 2016 • Above the models spend Individuals Line behavior with • Digital competitors Balance 1X 3.5X Retention
Without Big Data With Big Data 2017+ • Omni- • 1,000+ • Internal data + rd Individuals Channel models 3 party data Real-Time On $110B Branded Cards portfolio, ~$2B balance retention opportunity
12 Our Strategy is Driving Improved Client Engagement (Constant $B) LTM Purchase Sales EOP Loans EOP Deposits Branded Cards ex Costco Costco Cards Mortgage Retail Banking Commercial Banking Retail Services YoY Commercial Personal / Other YoY YoY %r %r %r $478 31% $309 3% $299 4% $301 $286 $295 80 0% 39 (1)% $269 27 (2)% 39 28 43 $364 28 35 6% $342 33 103 32 80 80 81 (1)% 3 82 79
270 3% 251 262 5% 295 (ex 262 281 Costco) 155 8% 130 144
2Q'15 2Q'16 2Q'17 2Q'15 2Q'16 2Q'17 2Q'15 2Q'16 2Q'17
13 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. Resulting in a Return to Revenue Growth Business growth accelerating as investments mature and headwinds moderate
(Constant $B) From Flat Revenue Trend… … to Growth Over Last Twelve Months
YoY: 4.0%
CAGR: (0.2)% $0.7 $32.0 $(0.1) $0.9 $(0.3) $0.3 $30.9 $0.2 $30.8 $30.8 $(0.2) $(0.3) Underlying Growth: Underlying Growth: U.S. 0% U.S. 2% Asia 0% Asia 4% Mexico 2% Mexico 6% Total 0% Total 3%
LTM'14 Business Investments Regulatory Exits LTM'16 LTM'16 Business Investments Regulatory Exits LTM'17 Revenue Growth Revenue Revenue Growth Revenue
14 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. Agenda
Strong Foundation For Growth
Path to Achieving Our Targets
Our Businesses
Key Takeaways
15 We Are On Path to Deliver Meaningful Earnings Growth & Achieve Target Returns Sustainable revenue growth with continued expense discipline to drive stronger EBT and RoTCE
(Constant $B) 1 2 3 Illustrative Revenue Expenses Balance Sheet Path to Growth ~300 bps
~350 bps
~(400) bps ~100 bps 20%+ ~200 bps ~19% ~450 bps ~(200) bps ~(100) bps
12.8%
~$5.5B
LTM'17 U.S. Asia Mexico Efficiency Investments Cost Capital 2020 Business Longer-Term (1) RoTCE Savings & Growth of Credit Supporting RoTCE Performance Target Growth & Mix RoTCE LTM’17: CAGR(2): $32.0B Revenue 5%+/- 55.3% Operating Efficiency <50% $7.2B EBT 13 – 15% Note: Totals may not sum due to rounding. Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. 16 (1) For additional information on this measure, please refer to Slide 55. (2) Illustrative results through 2020. 1 Accelerating Revenue Growth (Constant $) CAGR Growth ($B) 2017-2020 Growth Drivers LTM Growth(1) LTM’17 – 2020(2) LTM’17 – 2020(2) U.S. • Deepen Citigold and Citi Priority client penetration • Continued Commercial Banking growth (3) Retail ex 6% ~10% ~$1.5 • Drive digital acquisition and engagement Mortgage (4% ex U.S. Rates) (~5% ex U.S. Rates) (50% from U.S. Rates) • Benefit from expected U.S. rate increases • Organic growth with key merchants Retail • Inorganic growth through new partner opportunities Services 1% ~1% ~$0 • Partially offset by higher partner payments
• Deliver differentiated client experiences and value Branded 1% Cards • Build balanced portfolio and grow full rate balances ~3% ~$1 (organic) • Transform digital client experience
• Extend leadership in wealth management • Grow unsecured lending – cards and personal loans Asia • Expand digital partnerships with regional players 3% ~4% ~$1 • Regulatory headwinds continue to abate
• Deepen Citigold and Citi Priority client penetration • Grow Cards by leveraging global proprietary products and Mexico rewards program 6% ~10% ~$2 • Modernize infrastructure, branch network and transform digital client experience CAGR: 5%+/- ~$5.5 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. (1) LTM growth defined as last twelve months ending June 30, 2017 versus last twelve months ending June 30, 2016. Variances exclude ~$160MM gain in constant dollars ($180MM as reported) related to the sale of Citi’s merchant acquiring business in Mexico in 3Q’15, as well as gains related to portfolio sales in Retail Services in 1Q’16 and are non-GAAP financial measures. 17 (2) Illustrative results through 2020. (3) U.S. Retail ex Mortgage growth shown for 1H’17 versus 1H’16 to reflect results since the launch of the enhanced Citigold value proposition in November 2016. 1 Volume Growth Expected to Drive Sustainable Revenue Growth (Constant $B)
CAGR(1): 5%+/- ~$5.5B
~100 bps ~$38 ~400 bps ~100 bps <(100) bps $32.0 Fee Revenue Assumed loan growth: ~5% CAGR(1) 36.1 37.1 37.7 Net Interest 32.0 Revenue
LTM'17 Net Interest Net Interest Fee Revenue Other(2) 2020 Revenue Revenue - Volume Revenue - Interest Revenue Rate & Mix
Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. 18 (1) Illustrative results through 2020. (2) Includes impact of contractual partner payments in Retail Services and exit of U.S. mortgage servicing operations. 2 We Have a Strong Track Record of Expense Discipline Leveraged efficiency savings to reinvest in our business – keeping expenses flat (ex Costco)
Reinvesting Efficiency Savings (Constant $B) CAGR: 1.3% CAGR ex Costco: 0.3%
$1.7 $17.7 $17.0 $0.7
$(1.7)
LTM'14 Efficiency Savings Investments Volume Growth LTM'17 Expenses Expenses
19 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. 2 Network Transformation Driving Lower Cost to Serve Branches Operating Expenses per Account (Constant $, ex Costco) U.S. Asia Mexico (7)% (16)% ~$23 ~$21 3,047 2,570
2Q'14 2Q'17 LTM'14 LTM'17 Headcount Reducing Paper Transactions (000’s, ex Costco) (#B, ex Costco) U.S. Asia Mexico Paper Statements Paper Payments (12)% (24)% 126 ~1.2 111 ~0.9
2Q'14 2Q'17 LTM'14 LTM'17 20 2 Driving Efficiency to Continue to Reinvest in Our Franchise Revenue growth of 5%+/- with continued expense discipline to drive <50% efficiency ratio by 2020(1)
Efficiency Savings Investments
• Branch network optimization Network Client • Automation and self-service expansion Growth
New Digital • Transaction migration • Headcount optimization Products Initiatives • Agile development and cloud technology
~$1.5B Digital ~$0.8B Marketing • Acquisitions effectiveness Initiatives • Campaign optimization Efficiencies • Salesforce productivity Leverage • Economies from global partnerships and Big Data Analytics Economies of suppliers Scale
Mortgage • Outsourcing of U.S. mortgage servicing Regulatory Safety Transformation • Resizing the infrastructure & Soundness
21 Note: (1) Illustrative results through 2020. 3 Maintaining Strong Risk Discipline
Loans by Markets Net Credit Losses $B 2Q'17 EOP Loans $299 Global U.S. Asia Mexico Mexico 9% Korea 6% Singapore 4% Australia 4% Asia Hong Kong 4% Medium-Term 29% Taiwan 3% 4.78% Cards – 70% U.S. 4.58% Outlook India 2% 4.44% Retail – 30% 62% 4.30% 4.36% Malaysia 1% 4.18% 4.20% 4.30% – 4.60% China 1% All others 3% 29%
Loans by Product 2.63% 2.58% 2.42% (As of 2Q’17) 2.26% 2.32% 2.34% 2.50% – 2.80% 2.07% Personal Retail 2.20% – 2.40% Loans 2.24% Services 2.10% 2.20% 9% 2.05% 2.04% 2.02% 15% 1.87% Mortgage 27% 0.85% 0.76% 0.76% 0.78% 0.79% 0.78% 0.74% 0.90% – 1.00% Branded Cards 37% Commercial 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 12%
22 Balanced Earnings Contribution by Business (Constant $B) Illustrative Path to Growth U.S.: ~400 bps ~200 bps ~19% ~100 bps Impact of Higher ~(100) bps ~150 bps Interest Rates ~210 bps ~40 bps
12.8%
LTM'17 U.S. Retail Retail U.S. Branded Asia(2) Mexico(2) Capital 2020 (1) RoTCE Banking(2) Services Cards Supporting RoTCE Growth
Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. 23 (1) For additional information on this measure, please refer to Slide 55. (2) Includes Commercial Banking. Agenda
Strong Foundation For Growth
Path to Achieving Our Targets
Our Businesses
Key Takeaways
24 U.S. Retail Banking: Capitalizing on Citigold and Citi Priority Launch
Execution Priorities Revenues • Illustrative revenue CAGR of ~10% through 2020 ($B) Retail Banking ex Mortgage(1) Mortgage (~5% ex U.S. rates) • Capitalize on Citigold and Citi Priority launch by leveraging Asia (2)% wealth management playbook 3.0 $2.6 $2.5 • Drive digital acquisition and engagement 2.5 (32)% 2.0
• Build next generation network, including digitally enabled wealth 1.5
management centers 1.0 6% • Continued Commercial Banking growth 0.5 0.0 • Benefit from expected U.S. rate increases 1H'16 1H'17
Average Loans Average Deposits ($B) ($B) Retail Banking ex Mortgage(1) Mortgage $200K+ Other Retail Banking 2% 3%
200 $185 70 $181 180 60 $54 $55 160 50 8% 140 120 (1)% 40 100
30 80
60 20 2% 40 10 8% 20
0 0 1H'16 1H'17 1H'16 1H'17 25 Note: (1) Retail Banking ex Mortgage includes Commercial, Personal / Other and HELOCs which are originated through the retail bank network. U.S. Retail Banking: Network Transformation Building next generation network, including digitally enabled wealth management centers
Reduced & Upgraded Branch Footprint Maintaining Deposit Leadership ($MM) Average Deposits per Branch, Top 6 Markets(1)
(29)% 1.6x $223 983 $180 $179 780 695 $143 $137 $100 ~25% in $72 next gen formats
2013 2015 2Q'17 Citi BAC WFC JPM National STI PNC Average Transactions Migrating to Lower Cost Channels Delivering EBT Growth (#MM) (Retail Banking ex Mortgage $MM) Digital / Mobile / Self-Service Teller / Call Center $581
51% (30)% 4.3x
$135
2013 LTM'17 2013 LTM'17 2013 LTM'17 Note: 26 (1) Source: FDIC as of June 2016. National Average across Top 15 deposit institutions. U.S. Retail Banking: Deepening Citigold Penetration
Underpenetrated Client Base(1) Growth in Affluent Client Households(2) Deepening Relationships $200K+ <$200K (#) ($B) Net Citigold Portfolio Growth(3)
9% $2.9
56% $2.1
80%
~12% with $1.0 $200K+ 44% Deposits & Investments at Citi 20%
U.S. Average Citi Household 2Q'16 2Q'17 1H'15 1H'16 1H'17 Profile Note: ~40% Investment (1) Source: Equifax IXI (June 2016), total household deposits & investments held at financial institutions. Penetration Among (2) Number of U.S. client households with combined deposits & investment balances greater than $200K at Citi. Citigold Clients(4) 27 (3) Increase in balances held by Citigold clients with Relationship Managers (includes net new money and market impact). (4) Citigold client households with investment products at Citi. U.S. Retail Banking: Focused Roll-Out in Manhattan
Citigold Playbook Next Generation Network ATMs Manhattan Results
Citigold Clients, YoY %r
Checking +16% Deposits
Increased Manhattan ATM Revamped Value Proposition Opened 3 Citigold Centers presence by ~50% in 1H’17 +18% AUMs Digital Adoption Salesforce Perceptual Scale Managed
Personal & +35% Home Equity Loans
Rolled out new Mobile App Added 70+ Relationship Launched “Stay Gold” Campaign, Managers / Financial Advisors +7pps Awareness(1)
28 Note: RM: Relationship Manager; FA: Financial Advisor. (1) Among affluent segment customers in Manhattan, Nov’16 to June’17. U.S. Retail Services: ~98% of Asset Base Secured Through 2020+ Our Execution Priorities Revenues(1) ($B) • Illustrative revenue CAGR of ~1% through 2020 $6.7 • Organic growth with key merchants by driving higher partner 1% $6.5 $6.4 sales, increased credit penetration and out-of-store spend $6.3 $6.3 • Inorganic growth through new partner opportunities $6.1 • Expand digital capability and customer engagement $5.9
• Grow EBT by ~2-3% annually $5.7 • Maintain ROA of ~250bps and operating efficiency in the mid-30% LTM'16 LTM'17
Leading Retail Partner Card Issuer(2) YoY Loan Growth (ANR, $B) (ANR) $74 6.0% 5.0% 4.2% $45 4.0% 3.0% 3.0% 1.8% $16 2.0% 1.2% 1.0% 0.2%
0.0% SYF Citi ADS 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17
Note: SYF: Synchrony Financial; ADS: Alliance Data. 29 (1) LTM revenues excludes the impact of gains related to portfolio sales in Retail Services in 1Q’16. (2) Source: Company reports as of 1Q’17. U.S. Retail Services: Credit Trends and Portfolio Quality
Credit Trends Portfolio Transformation(1) Acquiring higher quality accounts De-risking the portfolio 90+ DPD as % of EOP Loans % of New Accounts ERS >760 Citi EOP Loans by ERS Score
1.56% 1.61% 1.66% 1.44% 1.53% 1.43% 1.51% 1.53% 48% 1.31% 24% 26% >760 41%
31% Citi 36% 35% 680-760 24% 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 40% 39% <680 Peers
2012 2013 2014 2015 2016 2012 2016
NCL as % of Average Loans % of New Accounts ERS <680 Peer EOP Loans by ERS Score 49% 4.66% 4.79% 17% >760 4.30% 4.14% 4.16% 4.28% 19% 3.69% 3.76% 3.90% 40% Peers 33% 29% 680-760
25% 20% 47% 54% <680 Citi 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17
2012 2013 2014 2015 2016 2012 2016
Note: 30 (1) Source: Equifax Monthly Key Trends Report: ERS Equifax Risk Score (ERS) is a proprietary credit scoring model created by Equifax that is comparable to industry leading credit scores. Peers represent specific group that most closely resemble the Retail Services business. U.S. Branded Cards: Driving Sustained Growth Execution Priorities Revenues ($B) • Illustrative revenue CAGR of ~3% through 2020 • Deliver differentiated client experiences and value 13%
• Capitalize on recent investments to build balanced portfolio 9.0 $8.6 8.5 8.0 $7.6 • Grow full rate balances 7.5 7.0 6.5 • Transform digital client experience 6.0 5.5 5.0 • Evolve risk and analytic capabilities 4.5 4.0 • Operate at or above 215bps ROA over time and with operating LTM'16 LTM'17 efficiency in the mid-40%
Market Share Growth (2015-2016)(1) Loan Growth (bps) (EOP, $B) 10% 253 $86 90 $77 80 18 11 9 70 60
50 (70) 40 30 (221) 20 10 Citi COF JPM DFS BAC AXP 0 2Q'16 2Q'17
31 Note: (1) Market share based on EOP loans, source: Company quarterly earnings disclosures. U.S. Branded Cards: New Products Are Breaking Through With Consumers Breakthrough Products Customer Response Higher Customer Engagement(2)
Balance per Account In replacing competitors to Travel + Leisure Magazine: #1 become customers’ primary card(1) “Citi Prestige offers one of the best credit card perks in 85% existence ” 80% 79%
61% 59% 57% 55% Citi AXP BAC JPM COF DFS Money Magazine: Spend per Account “With no annual fee and an industry-leading cash-back rate, Double Cash sets the standard for flat-rate cards.” Citi DFS COF JPM AXP WFC BAC 24% used to be with Chase Barron’s Magazine: AXP Citi JPM BAC COF DFS 16% used to be with Capital One “Citigroup's new Costco 14% used to be with American Express Wholesale rewards card [is] Revenue per Account ‘significantly more appealing’ than the one American Express #1 62% of new Citi customers do not used to offer, and a lesson to consider searching for any other American Express on how to cards(1) ‘step it up’” #1 50% of new Citi customers cancelled or stopped using their old cards(1) AXP Citi BAC JPM COF DFS
Note: (1) Source: Lightspeed FSG New Card Acquisition Study, March 2-27, 2017. Metric Definition: Out of new customers who are using their newly acquired credit card as their primary credit card, the % of customers who used to use a card issued by a competing issuer as their primary card. 32 (2) Peer Group: Chase (Card Services), Discover Credit Card, American Express (U.S. Consumer Services, including Charge card business and Travel & Lifestyle revenue), Bank of America U.S. Cards, Capital One Domestic Card; Sources: External disclosure, Nilson Report Issue 1104, Citi internal estimates; Data as of Dec 2016 or for FY 2016. U.S. Branded Cards: Building a Balanced Portfolio Higher return, more lend centric proprietary business drives 2/3 of revenue
Proprietary Products Costco (2016 YoY) % Acquisitions Spend ANR NPS Revolvers Since conversion as of 2Q’17: 9% 40% 21% 60% 68% • 1.6MM new accounts • $106B purchase sales • ~$7B of loan growth 26% 6% 6% 47% 87% • 73% spend out of warehouse, 400bps+ Non-core 11% 11% Products(1) Acquisitions Acquisition Mix Acquisitions EOP Loans Non 44% Rewards Rewards 33% 30%
Simplicity / Simplicity/ Value Cash Value Cash Back Back
Rewards 2014 2016 Business Case 2Q'17 Business Case 2Q'17
33 Note: (1) Non-core products refer to products no longer marketed for new customer acquisition. Non-core represents <15% of total loan portfolio. U.S. Branded Cards: Investments Driving Full Rate Balance Growth Significantly more new Each new vintage generating significantly Each maturing vintage driving acquisitions in second half of 2016 more loan volume more full rate volume as result Average loans by vintage over first 8 months Full rate balance at time of maturity
68%
1Q'17 2H'16 3.0x 1H'16 2H'15 1H'15 2.3x 1H'15 2H'15 1H'16 2H'16
Driving significant increase in new loan volumes(1)
$5B 1.0x
2Q'15 2Q'17 0 2 4 6 8 2H'14 1H'15 2H'15 Months on book Vintage
34 Note: (1) Loans on accounts originated in last 24 months, data as of 2Q’17. U.S. Branded Cards: Maturing of Investments Driving Sustained Revenue Growth Revenue growth driven by revolving balances offsetting impact of promotions and non-core attrition
ANR Composition
Costco LTM’17-2020 Acquisition CAGR(1)
5%-6%
Core Full Rate Revolve
(9)%
Non-core
1%-2% Promo & Transactor
2014 2015 2016 2017 2018 2019 2020 Pre-Investment Invest for Growth Sustained Revenue Growth(1) Revenue (6)% 1% organic ~3% CAGR Growth
35 Note: (1) Illustrative results through 2020. U.S. Branded Cards: We Are Building a Digital, Mobile First Business
Digital Focus – Changing Model Drives Lower Costs and Higher Engaged Customers(1) Cost to Acquire Sales Active Rate(2)
(44)% 27%
Sales Service Engagement Customer Spend & Acquisition Lending
Digital Acquisitions Example Non-Digitally Digitally Non-Digitally Digitally Digital Acquisition Acquired Acquired Acquired Acquired New Account Volume • Proprietary digital targeting tools • 27 terabytes of data each month Operating Expenses per Account Balances
~2x • 10,000+ variables evaluated (18)% 22%
• 550+ models utilized
• 20+ billion P&Ls calculated
• Offers optimized and presented within 200 milliseconds in digital channels Non-Digitally Digitally Non-Digital Digital Active 2013 2016 Enrolled Enrolled Active
Doubled digital acquisitions through advanced analytic capabilities Driving lower cost and higher engagement
Note: 36 (1) Based on U.S. Branded Cards results as of 4Q’16. (2) Sales active is accounts with purchase activity as a percentage of total open accounts for the quarter. U.S. Branded Cards: Credit Trends Remain Stable, Driven by Portfolio Quality Evolving Our Risk Capabilities Portfolio Transformation(1) Acquiring higher quality accounts De-risking the portfolio Approach % of New Accounts FICO >760 Citi EOP Loans by FICO Score
40% 31% 39% 38% >760 Risk Risk, Reward 35% Citi Based & Volatility 29% 48% 43% 680-760 Underwriting Peers
21% 18% <680 2012 2013 2014 2015 2016 2012 2016 Rules Model & Machine Based Learning Driven % of New Accounts FICO <680 Peer EOP Loans by FICO Score
Line Assignment 36% 29% 31% >760
Peers 27% 43% 43% 680-760 23% 23% Segments Individuals Citi FICO & Income Multivariate 28% 26% <680 500 Decisions 3.8MM Decisions 2012 2013 2014 2015 2016 2012 2016
Note: 37 (1) FICO distribution different from regulatory filings in order to benchmark to industry. Source: Argus and internal Citi analysis; Full year new Account Mix by FICO; EOP Loans as of December 2012 and 2016. U.S. Branded Cards: Investments, Expense Discipline and Credit Drive EBT Growth Business poised to generate sustained revenue and earnings growth
($B) Illustrative 1 2 3 Path to Growth Revenue Expenses NCL % ~3% CAGR ~0% CAGR 3.0% - 3.25%
~$3
$2.2
LTM'17 Client Growth / Wallet Share Non-core Run Digitization & Volume Driven Cost of Credit 2020 EBT Investments Gains Off / Impact of Efficiency Expenses EBT (1) Rates Savings
38 Note: (1) Illustrative results through 2020. Cards: Using Our Playbook to Drive Opportunity Outside U.S. Global Proprietary Assets Presence in Faster Growing, Under Penetrated Markets Portfolio(1) % of Population with a Credit Card Class Leading Value Propositions 0% 20% 40% 60% 80% 100% • Citi Prestige – 14 markets Loans $5B Mexico • Citi Rewards – 14 markets Mexico NCM 19.1% • Citi Simplicity – 7 markets, 10 by year end ROA 4.2%
Hong Kong Single Rewards Platform Australia • Consolidated 11 platforms to 1 Korea • Covers 90% of card revenue base Taiwan UAE Singapore Single Entertainment Platform Bahrain • Unique partnership with Live Nation Loans $18B Russia • 6,500 events hosted in US (2016) Asia NCM 12.6% Malaysia ROA 2.1% • Expanded to Hong Kong, Macau, Poland Singapore, Taiwan and Thailand in 2017 China Thailand Differentiated Lending Programs India • Easy Payment Plans Philippines • Loan on Phone Vietnam Indonesia U.S.: 60%
Note: 39 (1) EOP Loans, Net Credit Margin (NCM) and ROA shown on FY 2016 basis. Cards: Using Our Proprietary Assets to Drive Growth In Mexico, consolidated 6 legacy products and reward schemes to global platforms
From To Results(1)
New Account 108% Acquisition
# Accounts 14%
Spend 11%
Rewards 60% Redemptions
Points Redeemed 24%
% Redemptions Digital 31% 52%
Improvement in all metrics since new products introduced
40 Note: (1) Data compares first 12 months of new products (May 2016-2017) compared to prior 12 months under the old products (May 2015-April 2016). Cards: Innovating to Grow Both Spend and Lend Spend Lend Any Purchase – Pay with Convert any purchase Asia Card Based Shop With Points Points to installment Installment Sales U.S.
6%
Asia
40,000
58,240
S$210.00
Mexico
2014 2015 2016
$50MM+ year in savings in reward costs 6% growth in new originations with 20% reduction and call center volumes in direct sales headcount and cost
41 Cards: Capturing Growth in e-Commerce Focus on eCommerce – ~25% of consumer spending and fastest growing spend category globally
Digital Wallets Our Digital Wallet Strategy
Operating System / Devices Build Centrally Deploy Locally Go to market approach varies based on local market needs Wallet Solutions Citi Credit Card Authentication Commerce Platforms Tokenization
Provisioning Citi Debit Card Replacement Network Solutions
Origination
Build one platform with capability Learn fast and be where our clients to support multiple solutions and and partners need us to be geographies
42 Cards: Global View
Our Client-Led Strategy Global Cards (Constant $B)
~$21+ $19.0
Retail CAGR: ~1%
Services Our Clients Our
Class-Leading Value Propositions & Partnerships
Global Branded CAGR: ~4% Cards
Digital Risk, Data Distinctive Network Innovation & Analytics Brand LTM'17 2020 (1)
Our Capabilities Our Revenue Revenue Talent & Culture Revenue growth will come from sustained investing in client growth, wallet share gains and optimizing portfolio mix
43 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. (1) Illustrative results through 2020. Asia: Extending Our Leading Wealth Position and Growing Unsecured Lending
Execution Priorities Revenues (Constant $B) • Illustrative revenue CAGR of ~4% through 2020 Retail Banking Cards • Extend leadership in wealth management 3%
• Grow Cards and personal unsecured lending with digital / 8.0 $6.8 $7.0 7.0 mobile capabilities 6.0 5.0 6% • Expand digital partnerships with regional players 4.0 3.0 2.0 1% • Regulatory headwinds continue, albeit moderating 1.0
0.0 LTM'16 LTM'17 Operating 68% 66% Efficiency Average Loans Average Deposits (Constant $ YoY %r) (Constant $B) Retail ex Mortgage(1) Cards Mortgage Total 6.2% 5% 7.0%
5.0% 3.0% 100 $92 3.0% 1.1% 1.6% 5.6% $88 0.1% 90 1.0% 3.0% 80 70 (1.0)% (0.8)% (0.2)% 60 (0.0)% 50 (3.0)% (0.7)% (2.2)% (2.8)% 40 (5.0)% (3.3)% 30 20
(7.0)% (4.6)% (5.1)% (4.6)% 10 (5.7)% 0 (9.0)% (7.7)% (6.5)% 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 LTM'16 LTM'17
44 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. (1) Retail ex mortgage does not include non-core personal loan portfolio of $1.6B as of 2Q’17. Asia: Continued Leadership in Wealth Management
Leading Position with Affluent Clients Network Optimization & Wealth Hubs Net New Money Citigold Client Growth (%) Branch count (Wealth Hubs shown in dark blue) (Constant $B) 13% (21)% 9% $20 482 $18 10% 5% $16 401 379 5% $12 $14 0% $10 $12 $10 454 $10 334 311 -5% $8 -10% $6 $4 28 67 68 -15% $2 -20% $0 2015 2016 2Q'17 % RMs LTM'15 LTM'16 LTM'17 46% 83% 83% in Hubs
Relationship Manager Productivity Revenue per Relationship Manager(1) (Constant $000’s) Citigold Center 10% $708 $641 $682
Digital Wealth Advisory
2015 2016 LTM'17 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. 45 (1) Average revenue per Citigold Relationship Manager. Includes investment products, FX, premium accounts, and non-credit insurance. LTM’17 represents YTD 2017 annualized average revenue per Citigold Relationship Manager. Asia: Driving Growth in Unsecured Lending $30B Growing Unsecured Lending Portfolio Digital Origination Platform and Partnerships (Constant $B) Partners & Aggregators
Unsecured Personal Loans(1) $11.7B YoY: +5%
Cards Loans I wish to apply for Citi card $18.8B YoY: +6%
Accelerating New Customer Growth Shifting Acquisitions to Digital Card Acquisitions (% digital) Cards Salesforce (000’s) 60% 17% 5.2 6.0 400 5.0 350 3.9 3.9 45% 4.0 300 250 31% 3.0 30% 200 22% 2.0 150 15% 1.0 100 15% - 50 (1.0) - 0% (2.0) 2Q'16 2Q'17 2015 2016 1H'17
46 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. (1) Reported in Asia Retail Banking; Does not include margin lending and other non-core run-off portfolios totaling $7.1 billion as of 2Q’17. Mexico: Leading Positions in Deposits, Lending and Cards
Execution Priorities Revenues(1) (Constant $B) • Illustrative revenue CAGR of ~10% through 2020 Retail Banking Cards • Deepen Citigold and Citi Priority client penetration leveraging 6% global segmentation strategy $4.6 $4.9 5.0
• Drive continued Citi Business growth 4.0 (4)% • Grow Cards by leveraging global products and rewards program 3.0 2.0 10% • Invest $1B through 2020 including infrastructure to modernize 1.0 core banking platform and branch network, as well as transform 0.0 digital client experience LTM'16 LTM'17 Operating 61% 57% Efficiency Average Loans Average Deposits (Constant $B) (Constant $B) Retail Banking Commercial Banking Commercial Personal / Other Mortgage Cards
7% 11% $24 30 $26 25 $22 $23 25
20 20
15 15
10 10
5 5
0 0 LTM'16 LTM'17 LTM'16 LTM'17
47 Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. For a reconciliation of constant dollars to reported results, please refer to Slide 55. (1) YoY variance excludes ~$160MM one-time gain in constant dollars ($180MM as reported), related to the 3Q’15 sale of Citi’s merchant acquiring business in Mexico. Mexico: Strong Franchise in a Growing Market GCB Market Revenue Pool(1) Market Leading Franchise(2) (Constant $B) Market Share #1 Top of Mind 38% ~9% 45 $39 #1 AUM + Deposits 18% 40 ~7% $33 35 #2 Personal Loans 21% 30 $28 25 $18 #2 Cards 28% 20 15 #2 ATMs 17% 10 5 #3 Branches 12% 0 2010 2016 2018 2020 Leading Share of Banking Relationships(3) Leading Share of Client Acquisition(3) Avg. Banks 35% 32% 35% 30% Per Client: 30% 26% 30% 24% 25% 1.5 25% 20% 20% 20% 13% 15% 15% 15% 9% 8% 10% 10% 7%
5% 5%
0% 0% Citibanamex BBVA Banorte Santander HSBC Citibanamex BBVA Banorte Santander HSBC Note: (1) McKinsey Global Banking Pool, local franchise estimates and Citi Velocity. Growth rates are compounded annually. 48 (2) Source: GFK Mexico. Publicity tracking to measure brand perception for Citibanamex based on 2,200 monthly surveys made; CNBV and competitive analysis. (3) PRM Base study on banking market in Mexico 2016. Mexico: Achieving Measurable Results Citi Priority Strong Revenue and Driver Growth Citi Business Outperforming Competitors’ Growth(1) (Constant $ YoY %r as of 1Q’17) (Constant $ YoY Loan growth as of 4Q’16)
37% 30% 37% 32% 32%
27% 25% 27%
22% 20% 22% 19% 17% 17% 12% 12% 12% 7% 7% 7%
2% 2%
-3% -3% Revenue Loans Deposits & Citibanamex BBVA Santander Investments Cards Building Growth Momentum Increased Branch Productivity and Lower Cost to Serve (Constant $ YoY %r) Transaction activity(2) in refurbished branches Purchase Sales Loans Revolving Balances 79% 80% 10% 9% 9% 60% 7% 7% 8% 5% 40% 27% 3% 2% 20% 2% 6% 6% (1)% 5% 0%
(5)% (3)% (20)% (3)% (5)% 0% (40)% (3)% (3)% (2)% (31)% (6)% (60)% (8)% (7)% (7)% (9)% Teller Applications per ATM 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 Transactions Sales Executive Transactions
Note: Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. 49 (1) Source: CNBV. Total wallet size. (2) Change in branches from previous format to 6 months into transformation. Commercial Banking: ICG and GCB Partnership Execution Priorities LTM Revenues • Reported in Retail Banking in U.S., Asia and Mexico (Constant $B) GCB ICG
• Leverage ICG global network including cash management 11% services, lending and FX capabilities $2.3 $2.1 • Focus on clients / segments that value Citi’s network and form part of the global supply chain for target industries • Transform digital client experience • Leverage client data insights to drive solutions and deepen client relationships 2Q'16 2Q'17 Loan Volumes Deposits (Constant $B) (Constant $B) GCB ICG GCB ICG 5% 6% $62 $66 $29 $31
2Q'16 2Q'17 2Q'16 2Q'17
50 Note: GCB component excludes Small Business Lending. Constant dollar excludes the impact of foreign exchange translation into U.S. dollars for reporting purposes. Agenda
Strong Foundation For Growth
Path to Achieving Our Targets
Our Businesses
Key Takeaways
51 Key Takeaways
1 Global consumer franchise in attractive growth markets and segments
2 High quality, affluent-oriented client base
3 Disciplined expense and credit management
4 Transforming towards a digital and agile model that is less reliant on costly physical infrastructure, yet serves our clients with distinction
5 On a path to growth and positioned to deliver ~19% RoTCE by 2020 and 20%+ longer-term
52 Certain statements in this presentation are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Such statements may be identified by words such as believe, expect, anticipate, intend, estimate, may increase, may fluctuate, target, illustrative and similar expressions or future or conditional verbs such as will, should, would and could. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors, including, among others, the efficacy of Citi’s business strategies and execution of those strategies, such as those relating to its key investment, efficiency and capital optimization initiatives, governmental or regulatory actions or approvals, macroeconomic challenges and conditions, such as the level of interest rates, the precautionary statements included in this presentation and those contained in Citigroup’s filings with the SEC, including without limitation the “Risk Factors” section of Citigroup’s 2016 Form 10-K. Any forward- looking statements made by or on behalf of Citigroup speak only as to the date they are made, and Citi does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.
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Reconciliations ($MM, except balance sheet items in $B)
Global Consumer Banking LTM'17 LTM'16 LTM'15 LTM'14 Latam GCB LTM'17 LTM'16 Reported Revenues $31,983 $31,273 $33,767 $33,694 Reported Revenues $4,898 $5,347 Impact of FX Translation - (521) (2,002) (2,819) Impact of FX Translation - (568) Adjusted Revenues $31,983 $30,752 $31,765 $30,875 Adjusted Revenues $4,898 $4,779 Reported Average Loans $24 $25 Global Consumer Banking LTM'17 LTM'14 Impact of FX Translation - (2) Reported Expenses $17,697 $18,543 Average Loans in Constant Dollar $24 $22 Impact of FX Translation - (1,514) Adjusted Expenses $17,697 $17,029 Reported Average Deposits $26 $26 Impact of FX Translation - (2) Global Consumer Banking 2Q'17 2Q'16 2Q'15 Average Deposits in Constant Dollar $26 $23 Reported EOP Loans $299 $285 $274 Impact of FX Translation - 1 (5) Asia GCB LTM'17 LTM'16 EOP Loans in Constant Dollar $299 $286 $269 Reported Revenues $6,977 $6,728 Impact of FX Translation - 44 Reported EOP Deposits $309 $300 $299 Adjusted Revenues $6,977 $6,772 Impact of FX Translation - 1 (5) Reported Average Deposits $92 $87 EOP Deposits in Constant Dollar $309 $301 $295 Impact of FX Translation - 0 Global Consumer Banking LTM'17 LTM'16 LTM'15 Average Deposits in Constant Dollar $92 $88 Reported Purchase Sales ($B) $478 $365 $352 Impact of FX Translation - (1) (10) Adjusted Purchase Sales ($B) $478 $364 $342 Global Consumer Banking LTM'17 Reported Net Income $4,598 Average Allocated TCE $36 Return on Tangible Common Equity 12.8%
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