Resolution Plan for Citigroup Inc. & Citibank, N.A
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citi citibank Resolution Plan for Citigroup Inc. & Citibank, N.A. Section 1: Publ c Secti on June 29, 2012 Citi §165(d) & 101 Resolution Plan Public Section: Table of Contents LTable SUMMARY of Contents: OF RESOLUTION PLaN page 3 C.B.A. SummaryDescriptionThe Names Financial of MaterialCore InformationBusiness Entities Lines pageRegarding page 8 9 Assets, E.DLiabilities, DescriptionMemberships Capital of inDerivative andMaterial Major andPayment, Funding Hedging ClearingSources Activities pageand Settlementpage 12 16 Systems page 17 H.G.F. DescriptionPrincipalMaterial SupervisoryOfficers of Foreign page Authorities Operations 25 page page 24 20 K.J.I. ResolutionDescription High-Level Planning of Description Material Corporate Management of Resolution Governance Information Strategy Structure page Systems 30and Processes page 28 page 26 [THIS PAGE INTENTIONALLY LEFT BLANK] Summary of Resolution Plan This year marks Citi's 200th anniversary. Few institutions of any kind reach such a milestone, and we are proud and protective of this unique legacy. Since our founding in New York in 1812, Citi's role has always been to connect our clients to the world and to connect the world for our clients. We were the first major American bank to expand abroad and today are the world's most global financial institution. That expansion has always been driven by one imperative: to serve our clients' needs. In the years prior to the financial crisis, Citi (Footnote 1. For purposes of this document. "Citi" refers to the entirety of the corporate entity. End footnote.) expanded its business lines and became overly product- centered and had substantial losses when U.S. housing prices dropped precipitously. The U.S. government intervened to stabilize the entire financial sector, providing direct support for Citi and others, including making sizable investments via the Troubled Asset Relief Program (TARP). Citi remains extremely grateful to American taxpayers for their support and pleased that we were able to generate a $12 billion return op their investment in our company Citi is today a fundamentally different institution than it was before the crisis: smaller, leaner, safei, sounder, and completely focused on our core mission. In fact, Citi is the only large American bank that has meaningfully shrunk since the crisis. Citi's strategy is based on the premise that size is dictated only by the needs and expectations of our clients. Our size and reach offer scale and efficiencies that our clients want. Our business lines, asset base, liquidity, reserves, head count and country presence are appropriately scaled to meet the financial services needs of large multinational clients and of retail, private banking, commercial, public-sector and institutional clients in the U.S. and around the world. We at Citi have been strong proponents of financial reform—centered on three core principles of capital requirements, liquidity standards and resolution authority—to protect the safety and soundness of the financial system as a whole while eliminating "Too Big To Fail". We also support other principles, such as the central clearing of third-party derivatives, moving most derivatives to exchanges, and instituting greater transparency. And we have already put into practice these and other principles in our own operations, where practicable. Since the crisis, we have increased our financial strength and liquidity and it is unlikeiy that the resolution of Citi will ever be required. This steady build of resources will allow us to continue to operate and serve our clients through extreme stress scenarios without taxpayer support. At the same time, these increased resources also expand the range of options for the resolution of Citi if it ever were to become necessary, offering regulators great flexibility in choosing a resolution strategy that minimizes the adverse impact of Citi's failure on customers and U.S. financial stability. For example, Citi's strong capital and liquidity positions give regulators the opportunity to require the recapitalization of Citi's banking entities without government capital support, permitting them to serve their clients and customers without systemic disruption, under new management and ownership, even in a stress scenario involving a severe loss These capital and liquidity levels are also sufficient to wind-down portions of our business or in the event of an extremely unlikely economic catastrophe, the entire firm without causing systemic disruption *** There are four core components to Citi's transformation: » Financial: We have moved aggressively to strengthen our capital base We have raised more tnan $140 billion in capital since year-end 2007 Today, Citi's capital ratios are well above existing regulatory requirements. Citi's Tier I Capital ratio was approximately 14.3% at the end of 1Q'12—up from 7.1% at the end of 4Q'07, and well above the regulatory requirement of 6%. Citi's Basel I Tier 1 Common Capital ratio stood at 12.5% at the end of 1Q'12, understandingup from 5.0% atof thethe endBasel of III4Q'07 capital Based requirements on our currentlyBoard(Footnote issued reviewing 2. On proposed June the 7,2012, Baselimpact IIIthe the rules, Federal proposals and Reserve we could are 1Q'12,Ihave Common on which these Capital iscapital already ratio ratios abovestood End atproposed footnote.),7.2% at levelsthe our end andTier of 8%well by ahead the endof schedule, of the year. and Furthermore, we expect to Citi's be above Atimprovedoverall March and versus31, structural 2012, levels Citi's liquidity maintained unencumbered are significantly during aggregate the crisis. representapproximatelyliquidity resources nearly 66% 22% of higher ofmore Citi's thanthan total year-end$420 asset billion base. 2008 were and now weshort-termAs awere result, before funding Citi theis now fromcrisis. much the In capitaladdition, less dependent markets based thanonon IIIbelieveour Liquidity understanding we are Coverage already of the compliantRatio proposed ("LCR") with requirements eventhe Basel though we Strategic:the requirement Since doesthe crisis, not come Citi hasinto returned effect until to 2015 fromthisour historiccompany a product-centered roots over and the to past theapproach 200 strategy years. to thatone We builtthat shifted puts enterOurour clientsextensive new markets, at the global center expand network of everything in existinghelps our weones, clients do. and ourwithinearn customers an the increasing emerging pursue share markets. opportunities of the We growing are in also the trade world'shelping flows finance,totop the 150 basics cities.and servingof Our banking, focus clients, practicinghas all been while on responsible gettingaiding back coreofin thethe to economiccrisis our strategy , we recovery.Structural:identified and historic businesses strengths In that the - arethemidst 2009,andremainder, assets, we formally wereapproximately identified reorganized $800for sale. the billion company'sIn January in business management 1Q'12,institutionalstructure approximately into businesses—and Citicorp—our 75% of core Citithe consumer non-coreHoldings. assetsand As of downhoused and in Citinow Holdings represent have less thanbeen 11% sold ofor Citi'swound areourbalance twoorganizational centralsheet. We business alsostructure. streamlined lines—Global Within and Citicorp, Consumer centralized there sevenintoBanking six global regions, and supportthe eachInstitutional andwith control a CEO, Clients functions. and Group—organized supported We have by depositorymorealso consolidated than $200institution billion nine subsidiary, depository of assets into Citibank,institutions our principal N.A. with banks("CBNA"), from reducing12 to 3. Cultural: our number Refocusing of U.S. domesticthe strategy Therequired same restoring culture that and maderenewing this bankCiti's great—client-driven,culture. located—iseconomy,focused on supporting thethe basics,culture the dedicated we communities are striving to serving toin rebuild.which the real we are IsanyResponsibleThe it transaction,inheart the ofclient's thisFinance we transformation interest? ask Before three we questions: enteris what into we call AllIsDoes it three systemically it create answers economic responsible?must be value? "yes" ReducedAs part of our this risk transformation, exposure by reducingwe have: Citi's concentrated withunderwritingexposures, the cumulative re-sizing standards, effectrisk and limits, of building reducing strengthening loan-loss overall consumerfull-year reserves, Holdingsprojectedpeak stress portfoliostress test lossestest by losses by69% 40% in from the since 2008;Citi 2007 and reducing the Enhanced our overaii risk management practices including enterprise-wide stress testing, capital and liquidity contingency planning and overall risk governance; Enhanced our governance and internal controls, with the appointment of 11 (of 12 currently) new Citigroup Board members since mid-2007 the appointment of new management and Board for CBNA, and designating new leadership for the global compliance, internal audit and operational risk functions: Built Common Processes and Platforms and consolidated our Operations & Technology ("O&T") assets into a reduced number of entities, such as Citigroup Technology, Inc. ("CTI"). which was created to house U.S.-based enterprise O&T assets and services, Centralized our operational infrastructure by building upon the foundation of a centralized integrated O&T group to support the enterprise, strengthening and consolidating