Mike Corbat - CEO John Gerspach - CFO Susan Kendall - IR

Glenn Schorr – Nomura John McDonald - Sanford Bernstein Jim Mitchell – Buckingham Research Matt O'Connor - Deutsche Bank Brennan Hawken - UBS Betsy Graseck - Morgan Stanley Erika Penala - Bank of America Mike Mayo – CLSA Gerard Cassidy - RBC Marty Mosby – Guggenheim Vivek Juneja - JPMorgan Eric Wasserstrom – SunTrust Andrew Marquardt - Evercore Partners

Hello and welcome to Citi’s Fourth Quarter 2012 Earnings Review with Chief Executive Officer Mike Corbat and Chief Financial Officer John Gerspach. Today’s call will be hosted by Susan Kendall, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question-and-answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Kendall, you may begin.

Thank you, operator. Good morning and thank you all for joining us. On our call today, our CEO, Mike Corbat, will speak first. Then John Gerspach, our CFO, will take you through the earnings presentation, which is available for download on our website citigroup.com. Afterwards, we’ll be happy to take questions. Before we get started, I would like to remind you that today’s presentation may contain forward-looking statements which are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results in capital and other financial condition may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our discussion today and those included in our SEC filings, including, without limitation, the Risk Factors section of our 2011 Form 10-K. With that said, let me turn it over to Mike.

Susan, thank you and good morning everyone, and welcome. As you know, we reported earnings of $1.2 billion for the fourth quarter of 2012. Excluding DVA and our repositioning charge, net income was $2.2 billion, or $0.69 per share. These earnings were below expectations, reflecting the high level of legacy costs, most notably in legal and related expenses. We also had a reserve release which was significantly smaller than in previous quarters as our credit trends are normalizing and we’ve not yet begun to release mortgage reserves. To be clear, we’re not satisfied with these bottom line earnings, and our focus is not only on putting the drag of legacy issues behind us, but also on optimizing the efficiency and returns of our business as a whole. Despite the disappointing bottom line, our businesses generally performed well during the quarter. Investment banking increased its wallet share, loans grew in our core businesses, such as Latin American consumer, where we saw double digit growth. In addition, we decreased Citi Holdings assets by 9% during the quarter for a 31% reduction for the year. Our capital strength improved during the quarter, with the tier 1 common ratio increasing to an estimated 8.7% on a Basel III basis. Although the environment has shown signs of improvement, we believe it’s likely to remain challenging, with continued spread compression, the introduction and implementation of new or evolving regulation, as well as the costs associated with putting legacy issues behind us. This puts even greater importance on getting our operating efficiency to a level we’re satisfied with, and on allocating our resources to opportunities with the greatest risk-adjusted return. Regardless of the environment, Citi needs to be recognized globally as an indisputably strong and stable bank. We believe the proper essentials are the combination of a strong balance sheet, made up of high-quality assets, supported by the appropriate levels of capital and liquidity. Along with our risk profile, our necessary levels of capital and liquidity are a function of the consistency of the quantity and quality of our earnings, and as a company, we need to deliver on our commitments. When I became CEO in October, I stated three main objectives to accomplish by early in the New Year. First, conduct business reviews and prepare the 2013 budget, which drove our repositioning charge in the fourth quarter. Second was to structure my management team, which was announced on January 7, and third was to finalize and submit our CCAR, which was submitted on the same day.

Year over year, about half of the decline in the reserve release was driven by Citicorp, mostly in North America cards, and about half was driven by Citi Holdings, reflecting declining loan and reserve balances versus last year. In Citi Holdings, we recorded a net reserve build in the fourth quarter as a significantly lower net reserve release was more than offset by the impact of losses on loan sales. This compared to a reserve release of $663 million last year. On slide five, we show total Citigroup results for the quarter. Revenues of $18.7 billion were up 8% from last year, while operating expenses of $12.8 billion were roughly flat as higher legal and related costs were offset by a 3% decline in core operating expenses. Credit costs of $3.2 billion increased 11% versus last year. Net credit losses of $3.1 billion declined by 25%. However, as I just discussed, the net reserve release of $86 million was down significantly from $1.5 billion last year. We earned $2.2 billion of net income in the fourth quarter, or $0.69 per share, up from $0.41 per share last year on a comparable basis. This was driven by loan growth, lower core operating expenses, and lower net credit losses, partially offset by the increase in legal and related expenses and a lower net loan loss reserve release. Citigroup end of period loans grew 1% year over year to $655 billion, as loan growth in Citicorp continued to outpace the wind-down of Citi Holdings and deposits grew 7% to $931 billion. We saw an expected decline in deposits during the fourth quarter, reflecting the runoff of episodic deposits which came in at the end of the third quarter, as well as the expiration of the transaction account guarantee, or TAG program. This decline was partially offset by continued growth in core operating account balances. On slide six, we show full year results, including the split between Citicorp and Citi Holdings. Throughout today’s earnings presentation, I will be discussing Citicorp results including our operating businesses: Global Consumer Banking, Securities and Banking, and Transaction Services, as well as the Corporate Other segment. Full year 2012 revenues for Citigroup were $77 billion, up slightly from 2011, with less than 5% of revenues coming from Citi Holdings. Operating expenses were down 2% and credit costs also declined as a significant reduction in net credit losses was offset by a smaller loan loss reserve release in 2012 versus the prior year. For the full year, Citigroup earned nearly $12 billion in net income, up 18% from last year. On slide 7, we show quarterly results for Citicorp and Citi Holdings. Citicorp generated fourth quarter revenues of $17.6 billion and net income of $3.2 billion. Year over year, revenues grew 9% and expenses were up 3% as higher legal and related costs were partially offset by a 2% decline in core operating expenses. And, for the eighth consecutive quarter, we grew loans year over year in every business in Citicorp. Total Citicorp loans grew 7%, with consumer loans up 3% and corporate loans up 11%. Citi Holdings had revenues of $1 billion, and a net loss of $1 billion. Citi Holdings ended the quarter with $156 billion of assets, down 15% during the quarter and $69 billion, or 31%, year over year. At quarter end, Citi Holdings accounted for 8% of total Citigroup assets. On slide eight, we show a nine-quarter trend for Citicorp’s results. As I noted, Citicorp’s revenues of $17.6 billion were 9% higher year over year, and down 4% sequentially, mostly reflecting seasonally lower capital markets revenues. Expenses of $11.3 billion were up 3% from last year and 2% sequentially due to the higher legal and related costs.Citicorp’s net credit losses of $2.1 billion continued to decline in the fourth quarter, down 19% from last year, driven by improvement in North America cards and the net loan loss reserve release in Citicorp was $137 million, down significantly from the prior quarter and prior year, mostly reflecting a decline in the net reserve release in North America cards. Year-over-year, we grew Citicorp’s earnings in every quarter of 2012.On Slide 9, we show Citicorp’s pre-tax earnings by business excluding the impact of loan loss reserves. For the full year 2012, earnings grew to just over $20 billion, up 40% from 2011, driven by consumer banking and securities and banking.Slide 10 shows the results for North America consumer banking. Total revenues of $5.3 billion in the fourth quarter were up 3% year-over-year, largely driven by higher gains on sales of mortgage loans, partially offset by a decline in cards revenues. Total card revenues were down 3% from last year as lower average loans were partially offset by an improvement in spreads.Lower retail services revenues also reflected improving credit and its impact on contractual partner payments. Total operating expenses of $2.6 billion were down 3% year-over-year primarily due to efficiency savings.On a sequential basis, the increase in expenses was primarily driven by higher legal and related costs. Credit costs of $1.1 billion increased 10% year-over-year and were up 25% sequentially.Net credit losses declined by 27% year-over-year to $1.3 billion driven by improvement in cars. However, the net loan loss reserve release was significantly lower than prior periods at $215 million this quarter compared to $784 million in the prior year and $518 million last quarter.Looking ahead to 2013, assuming a continuation of the current economic environment here in the US, we expect the average quarterly net reserve releases in cards to roughly approximately the fourth quarter level.Earnings before tax, excluding the impact of loan loss reserves, nearly doubled from last year to $1.5 billion. Overall, we continue to see progress in our North America consumer franchise. Average deposits grew for the seventh consecutive quarter, up 9% year-over-year, including double-digit growth in checking account balances.In branded cards, accounts also grew for the seventh consecutive quarter, up 3% year-over-year and for both card portfolios, net credit margins continued to expand year-over-year.On Slide 11, we show results for international consumer banking in constant dollars. On this basis, both revenues and expenses grew 4% year-over-year. In Latin America, both revenues and expenses grew 7% from last year and in AMEA, we generated positive operating leverage with revenue growth of 11% and expense growth of 5% year-over-year.In Asia, revenues were down 2% from last year while expenses were up 1%. However, on a sequential basis, revenues were flat as we began to move past the headwinds in both Korea and Japan. I’ll talk more about Asia in a minute.Most drivers for international consumer banking continued to grow in the fourth quarter. Total average loans grew 5% from last year. Card purchase sales were up 10% and investment sales grew 36% year-over-year.Credit costs of $869 million in the fourth quarter were up 12% from last year, driven by a 12% growth in net credit losses due mostly to loan growth as well as some specific commercial loan charge-offs in Latin American.On Slide 12, we show our Asian consumer results in a bit more detail. Total revenues remained under pressure in the fourth quarter due to the continued low rate environment and the impact of regulatory headwinds in certain markets, most notably, Korea.Our underlying business volumes, however, reflected continued franchise strength and importantly, credit performance remained very good, reflecting the high quality of our portfolio. We also maintained expense discipline across the region, while still investing in important markets such as China. Looking first at the cards business, revenues grew 2% year over year with significant growth in card purchases. In total, purchase sales grew 8% from last year and, excluding Korea, purchase sales were up 9% versus prior periods. Investment sales revenue showed strong performance, up 14% year over year and down moderately from a particularly good third quarter, as retail investor sentiment improved, and we continued to attract high-quality customers. Revenue pressure was most evident in our retail lending and deposit businesses, down 10% year over year as spread compression offset volume growth. Volumes were muted in Korea in particular. Excluding this market, average retail loans grew 8% year over year. Our overall outlook for Asia remains positive, and we continue to believe we can grow 2013 revenues at an annual rate of 4-6% from current levels. We also believe that longer-term, as customers become less risk-averse and interest rates normalize, revenue growth in Asia will converge with the existing driver growth and that should feed through the earnings, given our efficiency, portfolio quality, and strong market position. Slide 13 shows our international consumer credit trends. Credit quality in our international consumer portfolio remains strong in the fourth quarter. For total international consumer banking, the NCL rate increased 17 basis points from last quarter to 215 basis points, driven by Latin America, while 90-plus day delinquencies were fairly stable at just above 90 basis points. In Latin America, the increase in the NCL rate reflected a $50 million sequential increase in retail net credit losses. Roughly a third of this increase was related to two specific commercial loan charge offs in Mexico and the remainder primarily reflected seasoning of the portfolio, mainly personal loans in Mexico, Colombia, and Brazil. In Latin America, we expect retail banking NCL rates should normalize in the range of 2.5% by the second half of 2013. The card NCL rate in Latin America remains stable in the fourth quarter at 7.7%. However, we would expect this portfolio to normalize to a level of around 8.5% in 2013 as the portfolio seasons. On a combined basis, therefore, we expect the NCL rate in Latin America to normalize in the range of 4.5% by the second half of 2013, based on what we see today. In Asia, both the NCL and delinquency rates remained fairly stable at 1% and 50 basis points, respectively. Slide 14 shows our Securities and Banking business. Revenues of $4.8 billion grew 47% from last year, and were down 14% from the prior quarter, on seasonally lower capital markets revenues. Investment banking revenues of $996 million grew 56% from the prior year and 8% sequentially, with higher revenues in all major products. Overall, our wallet share in investment banking improved this year in most products and regions. Equity market revenues of $455 million nearly doubled from last year, driven by improved derivatives performance as well as the absence of the prior period’s proprietary trading losses. However, sequentially, equity market revenues were down 11% on lower derivatives revenues. Fixed income market revenues of $2.7 billion grew 58% from last year, driven by significant improvement in credit and securitized products as well as higher revenues in rates and currencies. Sequentially, fixed income revenues declined 27% from a strong third quarter. Lending revenues, excluding the impact of gains and losses on hedges related to accrual loans, were $397 million in the fourth quarter, up 17% from last year, on higher loan balances and improved spreads, and down 11% sequentially on loan sale activity. Total operating expenses of of $3.4 billion were down 2% from last year driven by efficiency savings.Credit costs were $78 million in the fourth quarter and net income grew substantially year-over-year to $1.1 billion.Moving now to transaction services on Slide 15, revenues of $2.6 billion were up 1% from last year. Treasury and trade solutions was up 1% year-over-year driven by continued growth in deposits and trade loans partially offset by ongoing spread compression and securities and fund services revenues were flat to last year as growth in fee revenues was also offset by continued spread compression.The drivers for transaction services continued to show strong momentum. End of period trade loans were up 24% from the prior year. Average deposits were up 16% and assets under custody grew by 10%.Expenses of $1.5 billion were up 2% from last year due mostly to higher legal and related costs as well as certain episodic items, which also drove part of the increase from the prior quarter.We experienced negative operating leverage in transaction services in the fourth quarter, reflecting both spread compression in revenues and the increase in expenses. While we currently expect client volumes to continue to grow, revenue pressure from spread compression is likely to persist in the near term.Quarterly expenses, however, should be somewhat lower than fourth quarter 2012 levels as we go forward. As such, we expect to return to positive operating leverage in transaction services on a full-year basis in 2013.Slide 16 shows the results for corporate other. Revenues of negative $76 million were down from the prior year driven by the absence of last year’s hedging gains and lower investment yields.Expenses of $805 million were significantly higher versus last year, mainly due to higher legal and related expenses. Assets of $249 billion included approximately $46 billion of cash and cash equivalents and $144 billion of liquid available for sale securities.Slide 17 shows Citi Holdings’ assets. We ended the quarter with assets of $156 billion in Citi Holdings or roughly 8% of total Citigroup assets. The $15 billion reduction in the fourth quarter reflected $4 billion of asset sales, $10 billion of net paydowns and roughly $1 billion of cost of credit.On Slide 18, we show Citi Holdings’ financial results for the quarter. Total revenues of $1 billion were down 2% year-over-year, as declines in local consumer lending were largely offset by higher revenues in the special asset pool reflecting an improvement in asset marks.Citi Holdings’ expenses were down 15% year-over-year to $1.5 billion mostly due to the reduction in assets and on a sequential basis the increase mostly reflects the $305 million charge related to the foreclosure review settlement.Credit costs increased 14% year-over-year to $1.2 billion. Total net credit losses of $972 million were down 36% year-over-year. However, we recorded a net loan loss reserve build in the fourth quarter as a significantly lower net reserve release was more than offset by the impact of losses on loans sets. This compared to a net reserve release of $663 million last year.Looking at the past five quarters of Citi Holdings’ results on Slide 19, rep and warranty reserve builds, legal and related costs and repositioning charges continued to weigh on Citi Holdings in the fourth quarter.On an operating basis, however, excluding these items, we maintained a modest positive operating margin again in the fourth quarter and our goal is to continue to generate positive margins, although there may be quarter-to-quarter fluctuations arising from periodic gains or losses as we continue to wind down the assets.Credit trends remain favorable this quarter with North America mortgages comprising 75% of total net credit losses. We ended the quarter with $8.4 billion of loan loss reserves allocated to North America mortgage loans in Citi Holdings, or 33 months of loss coverage. On slide 20, we show mortgage loan and adjusted net credit loss trends over the past two years. Since the fourth quarter of 2010, we have reduced the North America mortgage loans in Citi Holdings by 27%, driven by $19 billion of paydowns, $6 billion of asset sales, and $9 billion of net losses. In the recent fourth quarter, we sold nearly $600 million of delinquent loans. We have also significantly reduced the quarterly net credit losses on the portfolio, down 40% since the fourth quarter of 2010 to $762 million, even while roughly $60 million of losses were accelerated into the recent quarter as a result of the continued actions we are taking to fulfill our commitments under the National Mortgage Settlement, or NMS. We currently expect NMS to continue to have an impact on net credit losses through the second quarter of 2013. Delinquency trends improved as well through the fourth quarter, in both residential first mortgages and home equity loans. Assuming the continuation of the current economic environment here in the U.S., the net credit losses on these portfolios should generally decline over time, as the portfolio continues to shrink. On slide 21, we show our net interest margin and revenue trends. Our net interest margin expanded in the fourth quarter by 7 basis points to 2.93%, with about half of the improvement driven by our trading book and the remainder reflecting lower funding costs, partially offset by lower loan yields. Net interest revenue also increased from last quarter, as growth in Citicorp net interest revenue offset the ongoing wind-down of Citi Holdings. On a full year basis, our net interest margin remained relatively stable versus last year at 288 basis points. And, we currently believe we can maintain our net interest margin at roughly this level for 2013, with some quarterly fluctuations. Turning to total Citigroup expenses, on slide 22, while reported operating expenses of $13.8 billion in the fourth quarter were 5% higher than last year, core operating expenses, excluding legal and related costs and repositioning charges, declined 3% in constant dollars to $11.5 billion. We currently believe $11.5 billion is an indicative base for quarterly operating expenses going into 2013. From this level, Citi Holdings expenses should decline over time with the ongoing reduction in assets. We will continue to pursue ongoing reengineering opportunities and we continue to expect to achieve $900 million of expense savings in 2013, related to our announced repositioning actions, with full year expense savings of $1.2 billion beginning in 2014. These total expense savings will likely be offset in part by volume-related costs, particularly as we seek to grow client volumes in the low interest rate environment. Overall, however, we expect core operating expenses in 2013 to be lower than full year 2012. Of course, legal and related costs will likely continue to be elevated and somewhat volatile, although we would not expect our fourth quarter levels to be the new norm. On slide 23, we show our key capital metrics through the fourth quarter. Under Basel III, our estimated tier 1 common ratio increased to 8.7% versus 8.6% in the third quarter. And, our Basel I tier 1 common ratio remained flat at 12.7%. Adjusting for the final market risk rules that became effective this month, our Basel I tier 1 common ratio would have been approximately 11.2%. In summary, our results in the fourth quarter reflected the challenging operating environment as we faced elevated legal and related costs and continued spread compression, particularly in the U.S. and Asia. In consumer banking, we continued to see strong loan growth in Latin America, and in Asia we began to move past some of the regulatory headwinds which slowed volumes in the second half of the year.

Glenn Schorr – Nomura:

Glenn Schorr - Nomura:

Glenn Schorr - Nomura:

Glenn Schorr - Nomura:

Glenn Schorr - Nomura:

Glenn Schorr - Nomura:

Assuming that we continue to reduce the risk in the portfolio, and if there’s an improving environment that is the way the model should work. Glenn Schorr - Nomura:

No, no. The reductions that you see in Basel III primarily reflect, again, movement in the actual books themselves. Glenn Schorr - Nomura:

We don’t go into detail on specific reserving actions unless it’s in connection with a settlement that we’re announcing. But look, many different aspects of U.S. consumer-related products and offerings are the focus of reviews across the industry, including by several of our regulators. I don’t think it’s any secret that the CFPB has been reviewing various consumer products, and in fact they’re currently reviewing us. But I’m really not going to say anything more about individual regulator discussions.

And your next question comes from the line of John McDonald with Sanford Bernstein. John McDonald - Sanford Bernstein: Hi, John, a couple of clarifying questions about your outlook comments. You indicated that you hope to keep the net interest margin stable. Would that imply that you expect to have some expansion of net interest income dollars given that the balance sheet is growing?

The answer to that is it somewhat depends. I’m going to have fudge this a little bit, only because of the impact of the trading book, and how that impacts net interest. So when you look at our core banking operation, we should have some improvement in net interest revenue. The difficult thing to project, always though, is the exact movements of net interest revenue, and therefore NIM, on the trading book. In this quarter, for instance, I mentioned roughly half, 4 basis points, of the 7 basis point improvement came about as a result of the trading portfolio. John McDonald - Sanford Bernstein: Okay, that’s fair enough. And then on the expense outlook, you said core operating expenses should be trending at the $11.5 billion per quarter? Right?

I said that that’s a good base on which to start to think about it. John McDonald - Sanford Bernstein: Okay. And for the year, you expect that core operating expense to be lower in 2013 versus ’12. What’s the amount in ’12 you are looking at when you say it will be below that?

Take a look at the full year reported operating expenses for Citigroup. John McDonald - Sanford Bernstein: Do you have the number that you’re looking at?

I think there’s a slide in the appendix. How about 29? So it’s 46.3. John McDonald - Sanford Bernstein: So you expect the core operating expense to come in below that in ’13. That’s what you’re shooting foreign. And that’s before the $900 million in repositioning saves?

I rolled it all together. I’m trying to stay away from giving you a specific number. But think in terms of the 11.5, as I said, as being an indicative base for moving forward. Off that 11.5 base, we’re going to deliver the $900 million of expense saves coming off of the repositioning. We’re going to drive down expenses in Citi Holdings. We’re going to have to spend some amount of money off of those two reductions in order to fuel volume growth that we’ll see in the business, but we’re also anticipating continuing our reengineering program and therefore driving up more expenses on top of the $900 million. John McDonald - Sanford Bernstein:

John McDonald - Sanford Bernstein:

John McDonald - Sanford Bernstein:

Jim Mitchell – Buckingham Research:

Jim Mitchell – Buckingham Research:

Jim Mitchell – Buckingham Research:

Jim Mitchell – Buckingham Research:

Your next question comes from the line of Matt O’Connor with Deutsche Bank. Matt O'Connor - Deutsche Bank: It sounds like you’re not ready to comment on future cost saves, although there was a comment earlier that some additional efficiencies should be coming. So I do want to just prod a little bit there. As we think about the $1 billion or so of savings that you disclosed last month, is that kind of a downpayment on something that’s going to be pretty big? Or is this a pretty big chunk of what the overall pie might be?

Matt, I think that what you described as the downpayment was as I described the results of our budget process, and I think as we went through the budget, we came to some conclusions that we had expenses, people, businesses in places that we didn’t think we were going to be able to earn the requisite returns on those businesses over the intermediate period, and chose and made decisions to exit, downsize, rescale those activities. I think as an institution, and you heard me mention it, that from an operating efficiency perspective our businesses and geographies need to be focused, really BAU, on the way they think about and run their businesses. And so we’re trying to drive, as we come out of this budget process, a mentality that rather than having one-off events or annual events around repositioning charges, people need to have specific metrics by which they’re going to be held accountable for delivering against their businesses and that they need to make real-time decisions in terms of how they choose to make that happen. Matt O'Connor - Deutsche Bank: And in terms of the timing of some of the metrics that you’ll provide us and I guess just kind of the overall strategy review -- I can appreciate you’re a couple of, or a few, months into this -- what’s the timing of that in terms of when you’ll communicate to investors and the Street?

You know, we’re working through it, and I think over the next coming months we’re going to come out with that. Matt O'Connor - Deutsche Bank: And I realize it’s still being formed, but as we think about which metrics are important to you, I’m not going to pin you to the level, but in terms of whether it’s the ROA, the ROE, the efficiency, or all of them, are there a couple of key ratios that you think about?

Yeah, in my opening remarks I mentioned a few that I think are critical and my guess is as we refine this we’ll speak to… In no particular order, I’ve mentioned operating efficiency. I think ROA is one of those things I think that return on tangible common equity is a ratio that we should probably be out speaking and measuring ourselves to. Matt O'Connor - Deutsche Bank: And then just lastly, maybe a question for John. If we look at some of the capital markets revenues and I guess specifically [thick], I think last quarter you had a very good quarter and maybe the first three quarters you gained a lot of share. And it seems like at least so far, as we have seen report this quarter, you might have given back a little bit this quarter. Is there something different in your mix, because it’s more global, or just a product set, that maybe explains some of the relative weakness in 4Q?

I wouldn’t call it a weakness in the fourth quarter at all. I actually think we had a very good fourth quarter in our [thick] business. And I think that for the full year, you’ve got [thick] revenues up 28%. That’s good performance. And I think that that ongoing performance, you know, reflects a lot of the repositioning that we did in the business in 2011. So, relatively speaking, we probably had more of an outperformer in the third quarter and therefore it makes the fourth quarter -- you know, when you’re doing quarterly sequential comparisons -- look a little small therefore. But I think that if you judge the year in its entirety, that’s really the way to look at the business. And I think the business had an excellent 2012.

And your next question comes from the line of Brennan Hawken with UBS. Brennan Hawken - UBS: Just wanted to follow up first on something Glenn hit on, the reserves and holdings. And I just want to make really clear, there’s nothing that you’re seeing there in the data -- given your comments, John, I wouldn’t assume so, but just want to make sure here -- that would be preventing you from releasing any reserves there?

Brennan Hawken - UBS:

Brennan Hawken - UBS:

Brennan Hawken - UBS:

Brennan Hawken - UBS:

Brennan Hawken - UBS:

Betsy Graseck – Morgan Stanley:

Betsy Graseck - Morgan Stanley: Okay, and then on the comments around investing to get the revenue share that you’re looking for, how do you think through the timing? Just as you go throughout the year in 2013, you generate the expense saves and the $900 million that you discussed, and then you’re investing that along the way or are you needing to see some revenue improvement first to have business units self-invest?

I think when we talk about operating efficiency, Betsy, it’s the want to have the balance between a strong focus on expenses but understanding that you can’t cut yourself to where you need to be, and that we have businesses we need to make investments in, but understanding that expenses are the things that you can control. So we’re going to be looking across the company in terms of where and how we make those investments, and we’re going to have a set of parameters and an understanding around those investments as they come for people to make them. But we need to be in a position to be able to make those on a regular basis and drive that in a BAU way.

Your next question comes from the line of Erika Penala with Bank of America. Erika Penala - Bank of America: My first question is actually a follow up to Matt and Betsy’s questions. Mike, specifically regarding GCB in Asia and Lat-Am, we appreciated John’s comments with regards to revenue growth potentially starting to converge into earnings growth in Asia. And now we have a public comparable in terms of looking at credit growth trends in Mexico now that Santander is public. I guess I’m wondering, have you gotten a chance to evaluate whether or not the infrastructure in those two regions are right-sized to potentially reap the revenue acceleration? Or is it still sort of unwieldy relative to the secular changes of retail banking generally? And tell me if you need clarity on the last part of the question.

I think if I understand your question right, I think Erika it’s important to understand the way we think about, and the way we’ve asked Manuel to drive our consumer business, and that is that we operate a consumer business in roughly 40 countries around the world, and that we recognize that aside from a few individual countries, our scale is not going to come from any one particular country, that our scale has got to be driven on a global basis. So as we think about our lending platforms, our card platforms, the mundane things of account openings, we’ve got to make sure that the systems and the way we approach things allows us to recognize that scale on a global basis. So I don’t think of our consumer business as being constrained in the intermediate term in terms of any individual geographies but it’s making sure that we have this drive to come in on our platform so that that can occur. I’m not sure if that answers your question. Erika Penala - Bank of America: I guess, just to be clear, there are not any additional investments that you would have to make in specific countries in those regions. I know you’re focusing on China, but in Mexico, for example, to reap sort of the credit growth and the revenue growth, if the Mexican economy is picking up as much as folks down there are saying. There’s no additional reinvestment coming?

We’ve been making investments. You know, we started making reasonable investments into Asia last year, and around the world -- Asia, Mexico, and other places. We’ve continued to invest and I expect we’ll continue to invest in some of those higher-growth areas into the future. Erika Penala - Bank of America: Okay. And just a quick one that’s not on Holdings reserves. If I look at the provision levels in GCB North America, it was up quarter over quarter, but flattish year over year. Is the bump up just simply seasonal as the volume spend is higher in the fourth quarter, and could potentially come down on a dollar level in the first quarter?

You’re talking about the overall provision, or just the NCL rate, I just want to make sure…? Erika Penala - Bank of America: The overall provision in GCB North America.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo – CLSA: I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo - CLSA: I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo - CLSA: I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo - CLSA: I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo - CLSA: I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus.

I wouldn’t call it a secondary focus. We understand why we come to work, and it’s a primary focus. Mike Mayo – CLSA: The reason I ask, I mean as a new CEO, you have so many options of what you could do with the stock price. You could have all the directors take a lot of stock, and you’ve had some CEOs take their personal net worth and buy extra stock, and as investors I think that’s a huge focus. I guess whenever you’ve done your review, perhaps we’d hear more about what you might do along those lines. Is that a safe assumption?

Yes. Mike Mayo – CLSA: Okay. And would you ever consider having a target of where you’d want the stock price to be? In other words, if you’re looking for higher returns on equity, and you get the business mix that you ultimately want, and the efficiency and the capital allocation, would you have a target in mind? Or is that just left up to the stock market to kind of let the valuation fall wherever it will?

I think we need to look at all the metrics that are out there. You talked to one of the challenges of that particular metric in terms of how the market is approaching certain things, but it’s obviously something we need to keep in mind.

Your next question comes from the line of Gerard Cassidy with RBC Capital Markets Gerard Cassidy - RBC: Can you share with us on the sale of the assets out of Citi Holdings the pricing trends that you’re seeing compared to the sales of the delinquent mortgage sales, for example, that you’ve sold in the past? I think through the third quarter it was over $14 billion. Are you seeing better pricing now that the markets have improved a bit?

Pricing did improve slightly in the fourth quarter. I’ll tell you that. I wouldn’t say that it went up by leaps and bounds, but it definitely improved over the levels, certainly, that we saw at the beginning of the third quarter. I’d say the pricing on some of those asset sales improved toward the end of the third, and then held up in the fourth, is the way that I would characterize it. Gerard Cassidy - RBC: Okay, and did you finance any of the sales of the assets in the quarter?

No. Gerard Cassidy - RBC: Would that be a consideration of yours on a go-forward basis, to help accelerate the disposition of some of those assets?

Actually we’ve done that in the past, if you look at some of the deals that we’ve announced. We’ve actually taken on those financings, in certain amounts, in order to make sure that the deals would go. So that is not something that we would shy away from. Again, it’s a matter of being the right deal, the right price. Think in terms of what we always say, economically rational. Gerard Cassidy - RBC: Sure. Shifting away for a moment to the net interest margin, your interest-bearing liability cost in the quarter, when we look at it with and without the FDIC insurance, is higher than some of your competitors. Is there an opportunity to bring those costs down, or is it just because of your global footprint, you just need to pay higher costs in markets outside the U.S.?

I think that we, especially on the international deposits, I still think that we’ve got some opportunity. We’ve probably got some more opportunity on the international deposits to bring some pricing down than we do on the domestic deposits. As long as we stay in low interest rate environments in those countries, I do think that we’ve still got some opportunities. We continue to reposition those books away from time deposits. So if you take a look at what goes on in Asia in particular, or specifically, even what we would consider to be normal checking accounts here in the States, which don’t bear interest, a lot of the checking accounts in foreign countries do bear interest. So as you start to grow those checking balances, you’re going to, even though they’re operating accounts, see an increase in your interest bearing. The trick is to make sure that you’re growing the real operating accounts and shifting the mix away from time deposits, which have much higher rates than just the base checking account. So even within something that gets reported as interest bearing deposits, there’s a mix shift that you can still work on, and we’re certainly in the process of doing that. Gerard Cassidy - RBC: And one last question on the balance sheet. What’s the duration now of the securities portfolio, in years?

Gerard Cassidy - RBC: I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources. Marty Mosby – Guggenheim: I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources. Marty Mosby - Guggenheim: I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources. Marty Mosby - Guggenheim: I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources. Marty Mosby - Guggenheim: I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources.

I think we’re at a point today, after making what I would characterize as good progress against those, whereas we look at business decisions that need to be made and where we want to make investment, and how we’re going to spend those dollars, I think those become not just operations technology, safety, and soundness decisions, but they become more broadly business decisions, and I want Jamie and Manuel thinking about that. So in my earlier comment that Manuel has got to take our consumer business to scale around a drive toward common in our consumer franchise, and that Jamie’s got to continue to wring the synergies of what I call adjacencies amongst our businesses, our client sets, out, and to make sure that we can provide the things we need, we can develop the things we need, but we can do them in an efficient way. And so I think the part of the organization attempts to dictate and drive that. From a geographical perspective, I had the four large region heads reporting to me as well, and when you think about the balance in an organization, you want the balance between your products and your geographies, and obviously the third piece around your clients. And you’re just going to make better decisions. When I can look at what’s going on in the products, and I can measure what’s going on in the geographies, and I can see what our clients, and in particular our global clients, are doing around the world, we can just make better decisions about where we want to be, how we want to be there, and where we want to use our resources. Marty Mosby – Guggenheim: And would you say profitability, as we manage or monitor that, being focused on those two big pieces primarily, meaning consumer and commercial? Or still kind of a matrix approach across all of the different geographies, products, and all that? Or are those two business units really, with what you’re breaking out, going to drive the profitability overall?

No, I think as a company that comes to work in a hundred companies around the world every day, we’ve got to have a balance between geography and product. Our products are global, many of them are world-class. We’ve got to make sure that that gets celebrated and used in the right way. And I’ll go back to the example I’ve used before, that when we think of EMEA, where I came from, we operate in 55 countries, and we come to work very differently in most of those countries. And so if you’re going to make sure you get the most out of your franchise, you’ve got to be mindful of that, and make sure that you’re driving the metrics and holding people accountable for the things that you need to do. If not, what you tend to see is you tend to see style drift, or you tend to see the business start to veer into activities that really aren’t core to its overall mission and principles. And having spent three or four years trying to clean that up, I’m not anxious or willing to go back there. Marty Mosby – Guggenheim: And then lastly, and thanks for your time here, when you look at just the business lines and segments that are reported, do you see any changes related to that in relation to the changes that you made here in management?

I think right now we’re focused on the metrics that really drive these businesses. I think over time, as always, we need to make sure that our reporting structure matches our management structure, and I think today it does. So I’m comfortable with it, but over time we’ll continue to reassess that.

Your next question comes from the line of Vivek Juneja with JPMorgan. Vivek Juneja - JPMorgan: Just on the lines of some of those questions that you’ve been getting, are there significant businesses that you think you would consider exiting? And as you think about savings, do you see them more U.S. or non-U.S. following this down payment that you talk about?

You characterize it as a down payment. I didn’t. I think that we went through an extensive, exhaustive amount of work around the work for the 2013 budget. And again, I think we made a number of decisions in terms of what it was we felt we needed to do, and what were the right choices around those things. Again, I think as we go forward, I don’t want to be in a position, or the company to be in a position, where we do these in one-offs. It’s got to be BAU, we’ve got to continually be assessing how, and where, and with whom, and in what ways we’re using our resources. And that’s got to be driven and compared at the business level, and I think that’s got to be something that’s ongoing rather than either being done on an occasional basis or in a step function basis. Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Vivek Juneja – JPMorgan:

Eric Wasserstrom – SunTrust:

Eric Wasserstrom - SunTrust:

Eric Wasserstrom - SunTrust:

The answer to that is, I’m not going to say in business by business, because spread compression is going to hit you differently in different businesses, and I think we’ve seen that. Certainly in Transaction Services, if you’re not able to offset spread compression, but the volume, you can have the impact of spread compression, you know, it will take away revenues without impacting your level of volume. And so therefore, you’re really running the same stuff through your shop. So your ability to take expense out is then just limited to your ability to generate reengineering savings, which may or may not be enough to offset the impact of the spread compression. So in general, you know, you’re thinking about it the right way, but it is somewhat dependent business by business, and it’s also dependent upon the magnitude of the spread compression that is impacting each business. Eric Wasserstrom - SunTrust:

Well, general economics. If our customers aren’t growing their businesses, if our customers have a change in sentiment as far as how they view the general economy and cut back on either savings or borrowing or any of that, that certainly is a risk factor. Eric Wasserstrom - SunTrust:

Although I probably will be directing you to make sure that you do a thorough reading of every risk factor that we publish in the 400-page 10-K that we’ll be delivering to you at some point in time in the next 45 days or so. Eric Wasserstrom - SunTrust:

Your next question comes from the line of Andrew Marquardt with Evercore Partners. Andrew Marquardt - Evercore Partners: Just following on that line of questioning, on expenses, can you talk about the areas that you’re most focused on investing? You talked about, obviously, cost saves and there’s more to come, it sounds like, after this first cut, but the investment spend that you need to focus on to drive the volume and the revenue, can you talk a little bit about where you’re most focused?

Sure, so we’re focused in a few areas. One is in the operations and technology area in terms of continuing to combine, streamline, develop, and roll out common systems around our global network. I think that would be one significant area where we’ve made investment. We’re going to need the continue to make investment. We’re always investing in our people, in terms of wanting to continue to retain and attract talent, and in particular in our institutional parts of our business, we’ll be continuing to invest in the build-out of our commodities businesses around the world. We’ll continue to be investing in digital and digitization around our consumer banking. I’d say those are probably a few of the more significant investments. Andrew Marquardt - Evercore Partners: And then regionally, if we were just to focus on the global consumer bank, it sounds like you’re turning the corner in terms of revenue in Asia and Lat-Am remains very strong. How should we think about revenue in North America?

Andrew Marquardt - Evercore Partners:

Andrew Marquardt - Evercore Partners: