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Citigroup's revenues are projected to reach $18.0 billion, reflecting a 6% year-over-year growth, while operating expenses are expected to decrease to $13.0 billion, a 4% drop. The cost of credit is anticipated to rise to $1.8 billion due to increased loan growth and macroeconomic factors, leading to a net income decrease to $2.5 billion, a 21% decline year-over-year. Overall, the financial forecast indicates a mixed performance with revenue growth offset by rising credit costs and lower net income.

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Deepak Chandra
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38 views3 pages

Task 1

Citigroup's revenues are projected to reach $18.0 billion, reflecting a 6% year-over-year growth, while operating expenses are expected to decrease to $13.0 billion, a 4% drop. The cost of credit is anticipated to rise to $1.8 billion due to increased loan growth and macroeconomic factors, leading to a net income decrease to $2.5 billion, a 21% decline year-over-year. Overall, the financial forecast indicates a mixed performance with revenue growth offset by rising credit costs and lower net income.

Uploaded by

Deepak Chandra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Annual Operating Plan

Citi Finance
April 6, 2023
Financial Forecast to 31 Dec ’22

Citigroup’s revenues are expected to increase to $18.0 billion i.e., a 6% YoY growth. Excluding the
divestiture-related impacts, primarily driven by the gain on the sale of the Thailand consumer business,
revenues are expected to be up by 5%, as the impacts of higher interest rates across businesses and the
strong loan growth in U.S. Personal Banking were partially offset by the decline in Investment Banking and the
lower investment product revenues in Global Wealth Management as well as impacts from the closed exit
markets.

Citigroup’s operating expenses are expected to decrease to $13.0 billion, representing a 4% YoY drop,
primarily driven by the absence of divestiture-related costs related to the Korea VERP in the prior-year period.
Operating expenses included approximately $58 million of divestiture-related costs in Q4’22, compared to
approximately $1.2 billion in the prior-year period. Excluding these costs in both periods, expenses increased
by 5%, largely driven by transformation investments, business-led investments, and volume-related expenses,
partially offset by the benefit of productivity savings and expense reduction of the market exits.
Financial Forecast to 31 Dec ’22 (cont.)

(a) Includes credit reserve build / (release) for loans and provision for
credit losses on unfunded lending commitments.
(b) Includes provisions for policyholder benefits and claims, HTM debt
securities and other assets.

Citigroup’s cost of credit is expected to increase to $1.8 billion, compared to $(0.5) billion in the prior-year
period, reflecting a net build in the allowance for credit losses (ACL) for loans and unfunded commitments of
$640 million, primarily due to the loan growth in PBWM and the deterioration in macroeconomic assumptions,
compared to a net ACL release of $(1.4) billion in the prior-year period. The higher cost of credit also reflected
higher net credit losses, primarily driven by ongoing normalization in cards, particularly in Retail Services.

Citigroup’s net income is expected to decrease to $2.5 billion, representing a YoY drop of 21%, primarily
driven by the higher cost of credit, partially offset by the higher revenues and lower expenses.

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