---

---

SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-Q

|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended September 30, 2003
|OR                                               
|o                                                 | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from            to     

Commission file number 1-5738

Citicorp(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)                       |  | 06-1515595(I.R.S. Employer
Identification No.)
|-------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|399 Park Avenue, New York, New York 10043(Address of principal executive offices) (Zip Code)
|(212) 559-1000(Registrant's telephone number, including area code)                          

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

Because the Registrant is an indirect wholly-owned subsidiary of Citigroup Inc., none of its outstanding voting stock is held by
nonaffiliates. As of the date hereof, 1,000 shares of the Registrant's Common Stock, $0.01 par value per share, were issued and outstanding.

REDUCED DISCLOSURE FORMAT

The Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and
is therefore filing this form with the reduced disclosure format.

Available on the Web at www.citigroup.com

---

---

---

Citicorp    TABLE OF CONTENTS    Part IFinancial Information

|                          |  |                       |  |                                                                                                                                      |  | Page No.
|------------------------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------ |  | --------
|Item 1.                   |  | Financial Statements: |  |                                                                                                                                     
|                          |  |                       |  | Consolidated Statement of Income (Unaudited)Three and Nine Months Ended September 30, 2003 and 2002                                 |  | 44      
|                          |  |                       |  | Consolidated Statement of Financial PositionSeptember 30, 2003 (Unaudited) and December 31, 2002                                    |  | 45      
|                          |  |                       |  | Consolidated Statement of Changes in Stockholder's Equity(Unaudited)Nine Months Ended September 30, 2003 and 2002                   |  | 46      
|                          |  |                       |  | Consolidated Statement of Cash Flows (Unaudited)Nine Months Ended September 30, 2003 and 2002                                       |  | 47      
|                          |  |                       |  | Consolidated Statement of Financial Position of Citibank, N.A. and SubsidiariesSeptember 30, 2003 (Unaudited) and December 31, 2002 |  | 48      
|                          |  |                       |  | Notes to Consolidated Financial Statements (Unaudited)                                                                               |  | 49      
|Item 2.                   |  |                       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                |  | 243    
|Item 3.                   |  |                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                                           |  | 34      
|                          |  |                       |  |                                                                                                                                      |  | 57      
|Item 4.                   |  |                       |  | Controls and Procedures                                                                                                              |  | 43      
|Part IIOther Information
|Item 1.                   |  |                       |  | Legal Proceedings                                                                                                                    |  | 75      
|Item 6.                   |  |                       |  | Exhibits and Reports on Form 8-K                                                                                                     |  | 76      
|Signatures                |  | 77                   
|Exhibit Index             |  | 78                   

---



THE COMPANY

Citicorp (Citicorp and, together with its subsidiaries, the Company) is a diversified global financial services holding company whose businesses provide a broad
range of financial services to consumer and corporate customers in over 100 countries and territories. Citicorp was incorporated in 1967 under the laws of the State of Delaware. Citicorp is an
indirect, wholly-owned subsidiary of Citigroup Inc. (Citigroup).

The
Company's activities are conducted through the Global Consumer, Global Corporate and Investment Bank (GCIB), Global Investment Management (GIM) and Proprietary Investment Activities
business segments.

The
Company is a bank holding company within the meaning of the U.S. Bank Holding Company Act of 1956 (BHC Act) registered with, and subject to examination by, the Board of Governors of
the Federal Reserve System (FRB). Certain of the Company's subsidiaries are subject to supervision and examination by their respective federal and state authorities. This quarterly report on
Form 10-Q should be read in conjunction with Citicorp's 2002 Annual Report on Form 10-K.

The
principal executive offices of the Company are located at 399 Park Avenue, New York, New York 10043, telephone number 212 559 1000. Additional information about Citicorp is available
on Citigroup's website at http://www.citigroup.com.

Citicorp's
annual report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, and all amendments
to these reports, are available free of charge through Citigroup's website by clicking on the "Investor Relations" page and selecting "SEC Filings." The Securities and Exchange Commission (SEC)
website contains reports, information statements, and other information regarding the Company at http://www.sec.gov.

CITICORP AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  RESULTS OF OPERATIONS

Financial Summary

|                                                 |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|------------------------------------------------ |  | -------------------------------- | ------ | ------------------------------- | -
|
|
|Revenues, net of interest expense(1)             |  | $                                | 13,767 |                                 | $
|Operating expenses                               |  |                                  | 6,633  |                                 |  
|Benefits, claims, and credit losses(1)           |  |                                  | 1,727  |                                 |  
|                                                 |  |                                  |        |                                 |  
|Income before income taxes and minority interest |  |                                  | 5,407  |                                 |  
|Income taxes                                     |  |                                  | 1,579  |                                 |  
|Minority interest, after-tax                     |  |                                  | 162    |                                 |  
|                                                 |  |                                  |        |                                 |  
|Net Income                                       |  | $                                | 3,666  |                                 | $
|                                                 |  |                                  |        |                                 |  
|Return on Average Common Equity                  |  |                                  | 19.0   | %                               |  
|Total Assets(in billions)                        |  | $                                | 786.0  |                                 | $
|Total Equity(in billions)                        |  | $                                | 78.4   |                                 | $
|Tier 1 Capital                                   |  |                                  | 8.88   | %                               |  
|Total Capital Ratio                              |  |                                  | 13.01  | %                               |  
|                                                 |  |                                  |        |                                 |  

---

2

---

Business Focus

The following table shows the net income (loss) for Citicorp's businesses on a product view:

Citicorp Net IncomeProduct View

|                                           |  | Three Months Ended
September 30, |       | Nine Months Ended
September 30, |  
|------------------------------------------ |  | -------------------------------- | ----- | ------------------------------- | -
|
|
|Global Consumer                            |  |                                  |       |                                 |  
|Cards                                      |  | $                                | 985   |                                 | $
|Consumer Finance                           |  |                                  | 467   |                                 |  
|Retail Banking                             |  |                                  | 947   |                                 |  
|Other                                      |  |                                  | (17   | )                               |  
|                                           |  |                                  |       |                                 |  
|Total Global Consumer                      |  |                                  | 2,382 |                                 |  
|                                           |  |                                  |       |                                 |  
|Global Corporate and Investment Bank       |  |                                  |       |                                 |  
|Capital Markets and Banking                |  |                                  | 770   |                                 |  
|Transaction Services                       |  |                                  | 203   |                                 |  
|                                           |  |                                  |       |                                 |  
|Total Global Corporate and Investment Bank |  |                                  | 973   |                                 |  
|                                           |  |                                  |       |                                 |  
|Global Investment Management               |  |                                  |       |                                 |  
|Life Insurance and Annuities               |  |                                  | (73   | )                               |  
|Private Bank                               |  |                                  | 143   |                                 |  
|Asset Management                           |  |                                  | (3    | )                               |  
|                                           |  |                                  |       |                                 |  
|Total Global Investment Management         |  |                                  | 67    |                                 |  
|                                           |  |                                  |       |                                 |  
|Proprietary Investment Activities          |  |                                  | 80    |                                 |  
|Corporate/Other                            |  |                                  | 164   |                                 |  
|                                           |  |                                  |       |                                 |  
|Net Income                                 |  | $                                | 3,666 |                                 | $
|                                           |  |                                  |       |                                 |  

---

3

---

Results of Operations

Income

Citicorp reported net income of $3.666 billion in the 2003 third quarter, up 23% from $2.973 billion in the 2002 third quarter. Return on average
common equity was 19.0% compared to 17.5% a year ago.

Net
income in the 2003 nine months of $10.002 billion was up 18% from $8.477 billion in the 2002 period. Return on average common equity was 17.7% compared to 17.1% a year
ago.

Global
Consumer net income increased $288 million or 14% and $1.1 billion or 19% in the 2003 third quarter and nine months compared to the 2002 periods. Global Corporate
and Investment Bank (GCIB) income increased $184 million or 23% and $313 million or 12% in the 2003 third quarter and nine months compared to the 2002 periods. Global Investment
Management income declined $99 million or 60% and $56 million or 11% from the respective 2002 periods, while Proprietary Investment Activities increased $209 million and
$234 million from the 2002 third quarter and nine-month periods.

See
individual segment and product discussions on pages 1026 for additional discussion and analysis of the Company's results of operations.

Revenues, Net of Interest Expense

Total revenues, net of interest expense, of $13.8 billion and $40.7 billion in the 2003 third quarter and nine months were up $797 million or
6% and $2.5 billion or 6%, respectively, from the 2002 periods. Global Consumer revenues were up $409 million or 4% in the 2003 third quarter to $9.7 billion, and were up
$2.1 billion or 8% in the 2003 nine months to $28.6 billion. Increases inRetail Bankingrevenues of $547 million or 18% and
$1.8 billion or 20% from the 2002 third quarter and nine months, respectively, were driven by the impact of the Golden State acquisition as well as increases in most regions. Compared to the
2002 periods, Cards was down $172 million or 5% in the 2003 third quarter and was up $142 million or 1% in the 2003 nine months, whileConsumer
Financerevenue increased $37 million or 2% in the 2003 third quarter and $219 million or 3% in the 2003 nine months, reflecting growth in North America that was
partially offset by declines in Japan.

Compared
to the 2002 periods, GCIB revenues were down $188 million or 6% to $2.8 billion in the 2003 third quarter and were down $387 million or 4% in the 2003 nine
months, driven byCapital Markets and Banking, down $170 million or 8% and $371 million or 6% in the 2003 third quarter and
nine-month periods.

Global
Investment Management revenues of $732 million in the 2003 third quarter and $2.4 billion in the 2003 nine months were up $37 million or 5% and
$173 million or 8% from the comparable 2002 periods, primarily due to higher portfolio gains, in addition to higher client trading and lending revenue inPrivate
Bank. Revenues in Proprietary Investment Activities increased $510 million and $608 million from the 2002 third quarter and nine months, respectively, primarily
reflecting higher net recognized gains and lower impairment write-downs.

Selected Revenue Items

Net interest revenue rose $601 million or 8% from the 2002 third quarter to $8.4 billion and increased $1.5 billion or 6% from the 2002 nine
months to $24.8 billion, reflecting increases in fixed income trading and investment positions, acquisitions, the impact of a changing rate environment and business volume growth. Total fees
and commissions of $3.1 billion and $8.6 billion were up $530 million or 21% and $331 million or 4% from the 2002 periods, primarily as a result of increases in volumes.

Foreign
exchange revenues of $775 million were up $462 million from the 2002 third quarter and were up $1.0 billion from the 2002 nine months to $2.6 billion,
reflecting continued strong foreign exchange trading in 2003. Trading account revenues of $92 million for the 2003 third quarter were down $687 million from the 2003 third quarter,
reflecting declines in interest rate products. For the nine months trading account revenues of ($221) million decreased $1.9 billion from the same period in 2002. Investment transactions of
$80 million were up $226 million from the 2002 third quarter and $535 million from the 2002 nine months.

Other
revenue of $1.3 billion in the 2003 third quarter decreased $335 million from the year-ago quarter, primarily reflecting the 2002 gain on sale of 399 Park
Avenue, partially offset by higher venture capital activity and higher securitization gains and activity, which in turn was partially offset by increased credit losses on securitized credit card
receivables. Other revenue of $4.6 billion was up $1.0 billion in the 2003 nine months, primarily reflecting higher venture capital activity and higher securitization gains and activity,
partially offset by the sale of 399 Park Avenue.

4

---



Operating Expenses

Operating expenses of $6.6 billion and $19.8 billion in the 2003 third quarter and nine months, respectively, were up
$961 million or 17% in the 2003 third quarter and were up $2.3 billion or 13% in the 2003 nine months, compared to year-ago levels. The increase primarily reflects the
addition of GSB, increased compensation expenses in the GCIB, costs associated with the repositioning of our Latin America business, higher pension and insurance costs and the additional cost of
expensing stock options.

Global
Consumer expenses in the 2003 third quarter and nine months were up 13% and 12%, respectively. GCIB expenses were up 23% in the quarter and were up 13% in the nine months while
Global Investment Management expenses were up 36% and 17% from the year-ago periods.

Benefits, Claims, and Credit Losses

Benefits, claims, and credit losses were $1.7 billion and $6.3 billion in the 2003 third quarter and nine months, down
$1.1 billion and $1.5 billion from the 2002 third quarter and nine months, respectively. Policyholder benefits and claims in the 2003 third quarter decreased 7% from the 2002 third
quarter to $113 million, and were down 2% to $409 million in the 2003 nine months. The provision for credit losses decreased 40% from the 2002 third quarter to $1.6 billion in the
2003 third quarter and decreased 20% from the 2002 nine months to $5.9 billion in the 2003 nine months, reflecting improved credit quality in both consumer and corporate businesses.

Global
Consumer provisions for benefits, claims, and credit losses of $1.6 billion in the 2003 third quarter were down 24% from the 2002 third quarter, reflecting decreases in CardsandRetail Banking, partially offset by increases inConsumer
Finance. Total net credit losses (excluding Commercial Markets) were $1.691 billion and the related loss ratio was 2.31% in the 2003 third quarter, as compared to
$1.745 billion and 2.42% in the preceding quarter and $1.755 billion and 2.75% in the year-ago quarter. The consumer loan delinquency ratio (90 days or more past due)
decreased to 2.28% at September 30, 2003 from 2.41% at June 30, 2003 and 2.47% a year ago. See page 31 for a reconciliation of total consumer credit information.

The
GCIB provision for credit losses of $78 million in the 2003 third quarter decreased $586 million or 88% and the nine-month provision of $492 million
decreased $1.0 billion or 67% from year-ago levels. The decreases reflect this year's improving credit environment contrasted with prior-year provisions for Argentina
and exposures in the telecommunications industry.

Corporate
cash-basis loans at September 30, 2003 and 2002 were $3.772 billion and $3.903 billion, respectively, while the corporate Other Real Estate
Owned (OREO) portfolio totaled $59 million and $81 million,
respectively. The decrease in cash-basis loans from the 2002 third quarter reflects write-offs against previously established reserves, as well as paydowns, offset by increases
to borrowers in the power and energy industry. Corporate cash-basis loans at September 30, 2003 decreased $410 million from June 30, 2003 primarily due to
write-offs taken against previously established reserves and paydowns from borrowers in the power and energy and telecommunications industries as well as corporate borrowers in Argentina,
Brazil and Hong Kong. The decrease in OREO from the 2002 third quarter was primarily due to continued improvements in the North America real estate portfolio.

Income Taxes

The Company's effective tax rate of 29.2% in the 2003 third quarter declined from 33.0% in the 2002 third quarter. The decline primarily
represented benefits for not providing U.S. income taxes on the earnings of certain foreign subsidiaries that are indefinitely invested and a $200 million release of a tax reserve that had been
held at the legacy Associates' businesses and was deemed to be in excess of expected tax liabilities. The Company's effective tax rate was 28.9% in the 2003 second quarter.

5

---

Regulatory Capital

Total capital (Tier 1 and Tier 2) was $73.4 billion or 13.01% of net risk-adjusted assets, and
Tier 1 capital was $50.1 billion or 8.88% at September 30, 2003, compared to $68.7 billion or 12.31% and $45.3 billion or 8.11%, respectively, at December 31,
2002.

EVENTS IN 2002 and 2003

Acquisition of Sears' Credit Card Business

On November 3, 2003, Citigroup acquired the Sears' Credit Card and Financial Products business (the 8th largest portfolio in the U.S.). The
purchase price of $31.8 billion included Sears' private label and bank card credit card receivables of $28.6 billion (prior to any FFIEC and other purchase adjustments) plus a 10%
premium of approximately $2.9 billion and $0.3 billion for other assets, business facilities and employees (approximately 8,000 employees, 6,000 full-time). In addition, the
companies signed a multi-year marketing and servicing agreement across a range of each company's businesses, products and services. The operations of Sears' Credit Card and Financial
Products business will be integrated into the businesses of Citicorp.

Settlement of Certain Legal and Regulatory Matters

On July 28, 2003, Citigroup entered into a final settlement agreement with the Securities and Exchange Commission (SEC) to resolve the SEC's
outstanding investigations into Citigroup transactions with Enron and Dynegy. Pursuant to the settlement, Citigroup has, among other terms, (1) consented to the entry of an administrative cease
and desist order, which bars Citigroup from committing or causing violations of provisions of the federal securities laws, and (2) agreed to pay $120 million ($101.25 million
allocable to Enron and $18.75 million allocable to Dynegy). Citigroup entered into this settlement without admitting or denying any wrongdoing or liability, and the settlement does not
establish wrongdoing or liability for purposes of any other proceeding. Citigroup has made full payment to the SEC. On July 28, 2003, Citibank, N.A. entered into an agreement with the Office of
the Comptroller of the Currency (OCC) and Citigroup entered into an agreement with the Federal Reserve Bank of New York (FED) to resolve their inquiries into certain of Citigroup's transactions with
Enron. Pursuant to the agreements, Citibank and Citigroup have submitted plans to the OCC and FED, respectively, regarding the handling of complex structured finance transactions. Also on
July 28, 2003, Citigroup entered into a settlement agreement with the Manhattan District Attorney's Office to resolve its investigation into certain of Citigroup's transactions with Enron;
pursuant to the settlement, Citigroup has agreed to pay $25.5 million and to abide by its agreements with the SEC, OCC and FED. Citigroup has made full payment to the Manhattan District
Attorney's Office. The Company and certain other Citigroup subsidiaries had previously established reserves for the cost of these settlements.

Impact from Argentina's Economic Changes

Throughout 2002 Argentina experienced significant political and economic changes including severe recessionary conditions, high inflation and
political uncertainty.

During
the full year of 2002, Citicorp recorded a total of $1.704 billion in net pretax charges. Of these charges, Citicorp recorded a total of $531 million in pretax
charges in the 2002 third quarter and $1.5 billion (pretax) in the 2002 nine-month period. In addition, the impact of the devaluation of the peso during 2002 produced foreign
currency translation losses that reduced Citicorp's equity by $595 million, net of tax, during 2002.

The
Argentine Supreme Court determined that the 2002 redenomination of certain bank deposits of the Province of San Luis with Banco de la Nacion Argentina from dollars to pesos
was unconstitutional. The parties to that litigation did not reach an agreement on the timing and manner of the repayment of the referred deposits within the timeframe set forth by the Supreme Court
in its ruling, therefore, the Supreme Court is to decide the terms and conditions of such repayment. In the opinion of the Company's management, the ultimate resolution of the redenomination would not
be likely to have a material adverse effect on the consolidated financial condition of the Company. Following this decision on April 1, 2003, the government issued a regulation providing for a
voluntary election on the part of depositors with reprogrammed/restricted balances to receive their peso deposits, including indexation, from their respective banks, as well as a ten-year
bond issued directly by the government. During the election period, which expired on May 23, 2003, 41% of Citicorp's eligible deposit liabilities in Argentina elected to redeem their deposits.
The redemption of deposits was effected with no significant impact on the Company's net income or liquidity.

In
the 2003 third quarter, Citicorp recorded a total of $95 million in net after-tax charges, as follows: $120 million in write-downs resulting from the
mandatory exchange of Argentine Government Promissory Notes (GPNs) for Argentine government bonds denominated in U.S. dollars; a $42 million write-off of
impaired Deferred Acquisition Costs reflecting changes in underlying cash flow estimates for the business; $20 million of loss related to the restructuring of customer annuity liability
balances; a $62 million after-tax reduction ($100 million pre-tax) in the consumer allowance for credit losses as a result of an improving consumer credit
environment; and a $25 million after-tax reduction ($40 million pre-tax) in reserves for customer deposit liabilities reflecting improving trends in those
settlements.

6

---

Also
in the 2003 third quarter, the Company wrote off $127 million of its compensation instruments against previously established reserves. This action was triggered by, among
other things, the government's disallowance during the quarter of compensation for pesification of certain credit card and overdraft loans. The initial principal payment of approximately
$57 million under certain compensation instruments issued to the Company was paid in August 2003.

On
July 3, 2003, an insurance subsidiary of the Company that issues annuities obtained approval from the Argentine Ministry of Insurance to offer a restructuring plan for its
voluntary annuity holders. The election period will expire on November 30, 2003. As of October 29, 2003, 70% of the voluntary annuity customers have elected to participate in the plan.

The
Company believes it has a sound basis to bring a claim, as a result of various actions of the Argentine government. A recovery on such a claim could serve to reduce the economic loss
of the Company in Argentina.

As
the economic situation, as well as legal and regulatory issues, in Argentina remain fluid, we continue to work with the government and our customers and continue to monitor conditions
closely. In particular, we are watching the potential impact that the continued economic crisis may have on our corporate borrowers and how consumer deposits and our pension and insurance businesses
will be affected by potential government actions. Other items we continue to monitor include the realizability of government obligations such as the compensation instruments held by Corporate and
Consumer businesses and the government obligations held by the insurance subsidiaries, the potential for re-dollarization of pension annuities and further debt restructurings, and the
liquidity and capital needs of the insurance subsidiaries. Additional costs to the Company will depend on future actions by the Argentine government and the Company. Additional losses may be incurred.

The
above paragraphs contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Acquisition of Golden State Bancorp

On November 6, 2002, Citigroup completed its acquisition of 100% of Golden State Bancorp (GSB) in a transaction in which Citigroup paid
approximately $2.3 billion in cash and issued 79.5 million Citigroup common shares. The total transaction value of approximately $5.8 billion was based on the average prices of
Citigroup
shares, as adjusted for the effect of the TPC distribution, for the two trading days before and after May 21, 2002, the date the terms of the acquisition were agreed to and announced. The
operations of GSB were integrated into the businesses of Citicorp.

GSB
was the parent company of California Federal Bank, the second-largest thrift in the U.S. and, through its First Nationwide Mortgage business, the eighth-largest mortgage servicer.

Sale of 399 Park Avenue

During the 2002 third quarter, the Company sold its 399 Park Avenue, New York City Headquarters building. The sale for $1.06 billion
resulted in a pretax gain of $830 million, with $527 million ($323 million after-tax) recognized in the 2002 third quarter and the remainder to be recognized over the
term of Citigroup's lease agreements. Citigroup is currently the lessee of approximately 40% of the building with terms averaging 15 years.

Changes in Credit Card Receivables and Securitizations

During the 2002 third quarter, the Company increased the loan loss reserve by $206 million related to past due interest and late fees on its
on-balance sheet credit card receivables in accordance with recent guidance from the Federal Financial Institutions Examination Council (FFIEC).

Cards
revenues included net gains of $64 million and $279 million in the 2003 third quarter and nine months, respectively, and $239 million in both the 2002 third
quarter and nine months as a result of changes in estimates in the timing of revenue recognition on securitizations. See Note 13 to the Consolidated Financial Statements.

ACCOUNTING CHANGES IN 2003

Stock-Based Compensation

On January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123), prospectively to all awards granted, modified, or settled after January 1, 2003. The prospective method is one of the adoption methods provided for under
SFAS No. 148, "Accounting for Stock-Based CompensationTransition and Disclosure," issued in December 2002. SFAS 123 requires that compensation cost for all stock
awards be calculated and recognized over the service period (generally equal to the vesting period). This compensation cost is determined using option pricing models, intended to estimate the fair
value of the awards at the grant date. Similar to Accounting Principles Board Opinion No. 25,

7

---

"Accounting
for Stock Issued to Employees," the alternative method of accounting, an offsetting increase to stockholders' equity under SFAS 123 is recorded equal to the amount of compensation
expense charged.

Had
the Company applied SFAS 123 in accounting for the Company's stock option plans for all options granted, net income would have been the pro forma amounts indicated below:

|                                                               |  |                       |  | Three Months Ended
September 30, |             | Nine Months Ended
September 30,
|-------------------------------------------------------------- |  | --------------------- |  | -------------------------------- | ----------- | -------------------------------
|
|
|Compensation expense related to stock option plans, net of tax |  | As reported
Pro forma |  | $                                | 19
49       |                                
|Net income                                                     |  | As reported
Pro forma |  | $                                | 3,666
3,636 |                                

Costs Associated with Exit or Disposal Activities

On January 1, 2003, Citicorp adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities"
(SFAS 146). SFAS 146 requires that a liability for costs associated with exit or disposal activities, other than in a business combination, be recognized when the liability is incurred.
Previous generally accepted accounting principles provided for the recognition of such costs at the date of management's commitment to an exit plan. In addition, SFAS 146 requires that the
liability be measured at fair value and be adjusted for changes in estimated cash flows. The provisions of the new standard are effective for exit or disposal activities initiated after
December 31, 2002. The impact of adopting SFAS 146 was not material.

Consolidation of Variable Interest Entities

In January 2003, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" (FIN 46). The provisions of FIN 46 applied immediately to variable interest entities (VIEs) created after January 31, 2003, and to VIEs in which an enterprise obtains an
interest after that date. In October 2003, the FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs
created prior to February 1, 2003. Citicorp elected to adopt the remaining provisions of FIN 46 in the 2003 third quarter, with the exception of the deferral related to certain investment
company subsidiaries. FIN 46 changes the method of determining whether certain entities, including securitization entities, should be included in the Company's Consolidated Financial Statements. An
entity is subject to FIN 46 and is called a VIE if it has (1) equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from
other parties, or (2) equity investors that cannot make significant decisions about the entity's operations, or that do not absorb the expected losses or receive the expected returns of the
entity. All other entities are evaluated for consolidation under SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries." A VIE is consolidated by its primary beneficiary, which is the
party involved with the VIE that absorbs a majority of the expected losses, receives a majority of the expected residual returns, or both.

For
any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities and noncontrolling interest of the VIE are initially
measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an
accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46 first applies may be used to measure the assets, liabilities and noncontrolling interest of the
VIE. The implementation of FIN 46 on July 1, 2003 resulted in the consolidation of VIEs increasing both total assets and total liabilities by approximately $955 million.

The
FASB continues to provide additional guidance on implementing FIN 46 through FASB Staff Positions. In addition, a draft interpretation of FIN 46 has been issued for comment. As this
guidance is finalized, the Company will continue to review the status of VIEs it is involved with. As a result of changes in the guidance, additional VIEs may ultimately be required to be
consolidated. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Guarantees and Indemnifications

On January 1, 2003, the Company adopted the recognition and measurement provisions of FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45), which requires that, for guarantees within the scope of FIN 45
issued or amended after December 31, 2002, a liability for the fair value of the obligation undertaken in issuing the guarantee be recognized. The impact of adopting FIN 45 was not
material.

Derivative Instruments and Hedging Activities

On July 1, 2003, the Company adopted SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" (SFAS 149). SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative

8

---

instruments
embedded in other contracts, and for hedging activities under SFAS 133. In particular, this Statement clarifies under what circumstances a contract with an initial net investment
meets the characteristic of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. This Statement is generally effective for
contracts entered into or modified after June 30, 2003 and did not have a material impact on the Company's financial statements.

Liabilities and Equity

On July 1, 2003, the Company adopted SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" (SFAS 150). SFAS 150 establishes standards for how an issuer measures certain financial instruments with characteristics of both liabilities and equity and
classifies them in its statement of financial position. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) when that
financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective
July 1, 2003, and its adoption did not have a material impact on the Company's financial statements.

ACCOUNTING CHANGES IN 2002

Business Combinations, Goodwill and Other Intangible Assets

Effective July 1, 2001, the Company adopted the provisions of SFAS No. 141, "Business Combinations" (SFAS 141) and certain
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS 142), as required for goodwill and indefinite-lived intangible assets resulting from business combinations
consummated after June 30, 2001. The new rules require that all business combinations consummated after June 30, 2001 be accounted for under the purchase method. The nonamortization
provisions of the new rules affecting goodwill and intangible assets deemed to have indefinite lives are effective for all purchase business combinations completed after June 30, 2001.

On
January 1, 2002, Citicorp adopted the remaining provisions of SFAS No. 142, when the rules became effective for calendar year companies. Under the new rules, effective
January 1, 2002, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to annual impairment tests. Other intangible assets will continue to be
amortized over their useful lives.

Impairment or Disposal of Long-Lived Assets

On January 1, 2002, Citicorp adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
(SFAS 144), when the rule became effective for calendar year companies. SFAS 144 establishes additional criteria as compared to existing generally accepted accounting principles to
determine when a long-lived asset is held-for-sale. It also broadens the definition of "discontinued operations," but does not allow for the accrual of future
operating losses, as was previously permitted. The impact of adopting SFAS 144 was not material.

SIGNIFICANT ACCOUNTING POLICIES

The Company's accounting policies are fundamental to understanding management's discussion and analysis of results of operations and financial
condition. The Company has identified four policies as being significant because they require management to make subjective and/or complex judgments about matters that are inherently uncertain. These
policies relate to Valuations of Financial Instruments, Allowance for Credit Losses, Securitizations and Argentina. These significant accounting policies are further described in the Company's 2002
Annual Report on Form 10-K.

9

---



GLOBAL CONSUMER

|                                                   |  | Three Months Ended
September 30, |       |  |   | Nine Months Ended
September 30, |  |     |  
|-------------------------------------------------- |  | -------------------------------- | ----- |  | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense                  |  | $                                | 9,716 |  | $ | 9,307                           |  | 4   |  
|Operating expenses                                 |  |                                  | 4,513 |  |   | 3,977                           |  | 13  |  
|Provisions for benefits, claims, and credit losses |  |                                  | 1,584 |  |   | 2,074                           |  | (24 | )
|                                                   |  |                                  |       |  |   |                                 |  |     |  
|Income before taxes and minority interest          |  |                                  | 3,619 |  |   | 3,256                           |  | 11  |  
|Income taxes                                       |  |                                  | 1,228 |  |   | 1,154                           |  | 6   |  
|Minority interest, after-tax                       |  |                                  | 9     |  |   | 8                               |  | 13  |  
|                                                   |  |                                  |       |  |   |                                 |  |     |  
|Net income                                         |  | $                                | 2,382 |  | $ | 2,094                           |  | 14  |  
|                                                   |  |                                  |       |  |   |                                 |  |     |  

Global Consumerwhich provides banking, lending, including credit and charge cards, and investment and personal insurance
products and services to customers around the worldreported net income of $2.382 billion and $6.578 billion in the 2003 third quarter and nine months, respectively, up
$288 million or 14% and $1.051 billion or 19% from the comparable 2002 periods, driven by growth inRetail Bankingand Cardsthat was partially
offset by a decline inConsumer Finance.Retail
Bankingnet income increased $209 million or 28% in the 2003 third quarter and $913 million or 51% in the 2003 nine months from the prior-year periods,
reflecting the impact of the Golden State Bancorp (GSB) acquisition, growth in Consumer Assets, EMEA and Asia combined with improvements in Argentina. Cardsnet income increased $136 million or 16%
in the 2003 third quarter and $338 million or 16% in the 2003 nine months from the 2002
periods, reflecting growth in Citi Cards, Mexico and Asia, the addition of the Home Depot private-label portfolio, combined with improvements in credit quality in Argentina. Consumer Financenet income
of $467 million and $1.460 billion in the 2003 third quarter and nine months declined $72 million or 13%
and $177 million or 11% from the comparable 2002 periods, as continued weakness in Japan was partially offset by growth in North America, including the acquisition of GSB, and EMEA.

Cards

|                                          |  | Three Months Ended
September 30, |       |   |   | Nine Months Ended
September 30, |   |     |  
|----------------------------------------- |  | -------------------------------- | ----- | - | - | ------------------------------- | - | --- | -
|
|
|Revenues, net of interest expense         |  | $                                | 3,542 |   | $ | 3,714                           |   | (5  | )
|Operating expenses                        |  |                                  | 1,508 |   |   | 1,418                           |   | 6   |  
|Provision for credit losses               |  |                                  | 540   |   |   | 978                             |   | (45 | )
|                                          |  |                                  |       |   |   |                                 |   |     |  
|Income before taxes and minority interest |  |                                  | 1,494 |   |   | 1,318                           |   | 13  |  
|Income taxes                              |  |                                  | 508   |   |   | 469                             |   | 8   |  
|Minority interest, after-tax              |  |                                  | 1     |   |   |                                |   |    |  
|                                          |  |                                  |       |   |   |                                 |   |     |  
|Net income                                |  | $                                | 985   |   | $ | 849                             |   | 16  |  
|                                          |  |                                  |       |   |   |                                 |   |     |  
|Average assets(in billions of dollars)    |  | $                                | 64    |   | $ | 66                              |   |     |  
|Return on assets                          |  |                                  | 6.11  | % |   | 5.10                            | % |     |  
|                                          |  |                                  |       |   |   |                                 |   |     |  

Cardswhich includes bankcards, private-label cards and charge cards in 47 countries around the worldreported net
income of $985 million and $2.488 billion in the 2003 third quarter and nine months, respectively, up $136 million or 16% and $338 million or 16% from the 2002 periods.
North America Cards reported net income of $819 million and $2.113 billion for the 2003 third quarter and nine months, respectively, up $91 million or 13% and $223 million
or 12% from the 2002 periods, reflecting increased spreads, improved credit costs and the addition of the Home Depot private-label portfolio. International Cards income increased $45 million or
37% compared to the prior-year quarter and increased $115 million or 44% compared to the 2002 nine months, both reflecting the impact of changes in the allowance for credit losses
related to Argentina, as well as growth in Asia.

During
the 2003 third quarter, Citigroup completed the acquisition of the Home Depot private-label portfolio, adding $6 billion in receivables and 12 million accounts. On
July 29, 2003, Citigroup completed the acquisition of a majority stake in Diners Club Europe adding approximately 1 million accounts, bringing Citigroup's ownership to 100%. The
acquisition included the Diners Club franchises in the U.K., Ireland, Belgium, Luxembourg, the Netherlands, Italy, France, Germany and Switzerland. The operations of the Home Depot private-label
portfolio and Diners Club Europe businesses will be integrated into the businesses of Citicorp.

As
shown in the following table, average managed loans grew 4% and 5% in the 2003 third quarter and nine months, respectively, reflecting growth of 2% and 5% in North America and 18% and
14% in International Cards. Growth in North America was led by Citi Cards, where the addition of the Home Depot private-label portfolio was partially offset by a decline in introductory promotional
rate balances that was driven by a change in acquisition marketing strategies, as well as the sale of $1.7 billion of non-strategic portfolios. Growth in International Cards
reflected increases in EMEA and Asia. The growth in International Cards also included the benefit of

10

---

strengthening
currencies and was partially offset by a decline in Latin America, which experienced lower loan volumes across the region. Sales in North America were flat to the 2002 third quarter,
reflecting the change in acquisition marketing strategies offset by the addition of Home Depot and improved purchase sales. International Cards sales grew 18% from the prior-year quarter,
reflecting growth in EMEA, Asia and Japan as well as the addition of Diners Club Europe.

|                                         |                  | Three Months Ended
September 30, |       |       |   | Nine Months Ended
September 30, |       |     |   
|---------------------------------------- | ---------------- | -------------------------------- | ----- | ----- | - | ------------------------------- | ----- | --- | --
|
|
|Sales                                    |                  |                                  |       |       |   |                                 |       |     |   
|                                         | North America    |                                  | $     | 62.3  |   | $                               | 62.4  |     |  
|                                         | International    |                                  |       | 10.3  |   |                                 | 8.7   |     | 18
|                                         |                  |                                  |       |       |   |                                 |       |     |   
|Total Sales                              |                  | $                                | 72.6  |       | $ | 71.1                            |       | 2   |   
|Average managed loans                    |                  |                                  |       |       |   |                                 |       |     |   
|                                         | North America(1) |                                  | $     | 113.7 |   | $                               | 111.1 |     | 2 
|                                         | International    |                                  |       | 12.7  |   |                                 | 10.8  |     | 18
|                                         |                  |                                  |       |       |   |                                 |       |     |   
|Total average managed loans(1)           |                  | $                                | 126.4 |       | $ | 121.9                           |       | 4   |   
|Securitized receivables                  |                  |                                  | (72.1 | )     |   | (64.6                           | )     | 12  |   
|Credit card receivables held-for-sale(2) |                  |                                  | (4.1  | )     |   | (6.5                            | )     | (37 | ) 
|                                         |                  |                                  |       |       |   |                                 |       |     |   
|On-balance sheet loans                   |                  | $                                | 50.2  |       | $ | 50.8                            |       | (1  | ) 
|                                         |                  |                                  |       |       |   |                                 |       |     |   

---

Revenues,
net of interest expense, of $3.542 billion for the 2003 third quarter declined by $172 million or 5% from 2002, reflecting a decline of $271 million or 9%
in North America that was partially offset by growth of $99 million or 17% in the international markets. Revenues in North America included net gains of $64 million and
$239 million in the 2003 and 2002 third quarters, respectively, as a result of changes in estimates related to the timing of revenue recognition on securitizations. Excluding these items, the
decline in North America was primarily due to increased credit losses on securitized receivables (which are recorded as a contra-revenue item after receivables are securitized) that was partially
offset by the addition of the Home Depot portfolio, net interest margin expansion and the benefit of increased purchase sales and cardholder services fees. Revenue growth in International Cards was
mainly driven by receivable and sales increases in Asia and EMEA, the addition of Diners Club Europe as well as the benefit of foreign currency translation. Revenues, net of interest expense, for the
2003 nine-month period of $10.184 billion rose $142 million or 1% as growth in EMEA and Asia was partially offset by a decline in North America. Revenue in North America
included net gains of $279 million and $239 million in the 2003 and 2002 nine-month periods, respectively, as a result of changes in estimates related to the timing of
revenue recognition on securitizations. Revenues in the 2003 nine months also included gains from the sale of $1.7 billion in non-strategic portfolios. Revenues in the 2002 nine
months also included $128 million resulting from an increase in the amortization period for certain direct loan origination costs.

Operating
expenses of $1.508 billion and $4.417 billion in the 2003 third quarter and nine months, respectively, increased $90 million or 6% and $291 million
or 7% from the prior-year periods. In North America, expenses increased 3% in the third quarter and 6% in the nine-month comparisons. The increase in the third quarter
comparison was driven by the addition of the Home Depot portfolio, which was partially offset by lower advertising and marketing expenditures. In the nine-month comparison, expense growth
reflected the addition of the Home Depot portfolio and increased advertising and marketing expenditures combined with the absence of a $19 million restructuring reserve release in the prior
year. In International Cards, expenses increased 20% compared
to the prior-year quarter and 10% compared to the 2002 nine months, driven by the addition of Diners Club Europe and the impact of foreign currency translation.

The
provision for credit losses in the 2003 third quarter and nine months was $540 million and $1.992 billion, respectively, compared to $978 million and
$2.604 billion in the 2002 periods. The 2003 third quarter provision for credit losses included a $44 million reduction in the allowance for credit losses due to improvement in credit
experience and lower portfolio volumes in Argentina. In the prior year, the provision for credit losses included a $206 million addition to the allowance for credit losses established in
accordance with FFIEC guidance related to past due interest and late fees on the on-balance sheet credit card receivables in Citi Cards and, in the nine-month period, a
$70 million net addition to the allowance resulting from deteriorating credit in Argentina. Excluding the prior-year amounts related to FFIEC guidance and Argentina, the decline in
the provision for credit losses reflected credit improvement in North America and in the international markets overall and an increase in the level of securitized receivables, partially offset by the
impact of higher loss rates in the U.K. and Korea. Net credit losses in the 2003 third quarter were $579 million with a related loss ratio of 4.58%, compared to $679 million and 5.41%
for the 2003 second quarter and $804 million and 6.28% in the prior-year quarter. Loans delinquent 90 days or more were $819 million or 1.57% of loans at
September 30, 2003, compared to $870 million or 1.80% at June 30, 2003 and $917 million or 1.74% at September 30, 2002.

11

---

The
securitization of credit card receivables is limited to the Citi Cards business within North America. At September 30, 2003, securitized credit card receivables were
$73.6 billion, compared to $64.6 billion at September 30, 2002. Credit card receivables held-for-sale were $3.0 billion at September 30,
2003, compared to $6.5 billion a year ago. Because securitization changes Citicorp's role from that of a lender to that of a loan servicer, it removes the receivables from Citicorp's balance
sheet and affects the amount of revenue and the manner in which revenue and the provision for credit losses are classified in the income statement. For securitized receivables and receivables
held-for-sale, gains are recognized upon sale and amounts that would otherwise be reported as net interest revenue, fee and commission revenue, and credit losses on loans are
instead reported as fee and commission revenue (for servicing fees) and other revenue (for the remaining revenue, net of credit losses and the amortization of previously recognized securitization
gains). Because credit losses are a component of these cash flows, revenues over the terms of these transactions may vary depending upon the credit performance of the securitized receivables. For a
further discussion of the securitization of credit card receivables, see page 58.

Including
securitized receivables and receivables held-for-sale, managed net credit losses in the 2003 third quarter were $1.789 billion with a related
loss ratio of 5.62%, compared to $1.887 billion and 6.08% in the 2003 second quarter and $1.764 billion and 5.74% in the 2002 third quarter. The decrease in the ratio from the second
quarter of 2003 was primarily due to improvements in North America and in the international markets. Contributing to the improvement in North America was the addition of the Home Depot portfolio which
at acquisition was recorded at fair market value, and represented $4.2 billion of average loans in the net credit loss ratio calculation for the 2003 third quarter. Excluding the Home Depot
portfolio acquisition the loss ratio for the 2003 third quarter would have been 5.81%. The decline in the ratio from the prior-year quarter was primarily driven by improvements in the
international markets, particularly in Hong Kong, Taiwan, and Argentina. Loans delinquent 90 days or more on a managed basis were $2.353 billion or 1.83% at September 30, 2003,
compared to $2.313 billion or 1.88% at June 30, 2003 and $2.309 billion or 1.86% at September 30, 2002.

Consumer Finance

|                                                   |  | Three Months Ended
September 30, |       |   |   | Nine Months Ended
September 30, |   |     |  
|-------------------------------------------------- |  | -------------------------------- | ----- | - | - | ------------------------------- | - | --- | -
|
|
|Revenues, net of interest expense                  |  | $                                | 2,499 |   | $ | 2,462                           |   | 2   |  
|Operating expenses                                 |  |                                  | 867   |   |   | 776                             |   | 12  |  
|Provisions for benefits, claims, and credit losses |  |                                  | 925   |   |   | 844                             |   | 10  |  
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Income before taxes                                |  |                                  | 707   |   |   | 842                             |   | (16 | )
|Income taxes                                       |  |                                  | 240   |   |   | 303                             |   | (21 | )
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Net income                                         |  | $                                | 467   |   | $ | 539                             |   | (13 | )
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Average assets(in billions of dollars)             |  | $                                | 104   |   | $ | 98                              |   | 6   |  
|Return on assets                                   |  |                                  | 1.78  | % |   | 2.18                            | % |     |  
|                                                   |  |                                  |       |   |   |                                 |   |     |  

Consumer Financewhich provides community-based lending services through branch networks, regional sales offices and
cross-selling initiatives with other Citigroup businessesreported net income of $467 million and $1.460 billion in the 2003 third quarter and nine months, respectively, down
$72 million or 13% and $177 million or 11%, respectively, from the comparable 2002 periods, principally reflecting a decline in International Consumer Finance resulting from continued
weakness in Japan, which was partially offset by growth in North America, which also benefited from the acquisition of GSB, and EMEA. International results in the 2003 nine months included a
$94 million release of a tax reserve related to a settlement with tax authorities, which increased income in Japan.

|                          |  | Three Months Ended
September 30, |      |  |   | Nine Months Ended
September 30, |  |   
|------------------------- |  | -------------------------------- | ---- |  | - | ------------------------------- |  | --
|
|
|Average loans             |  |                                  |      |  |   |                                 |  |   
|Real estate-secured loans |  | $                                | 52.2 |  | $ | 48.2                            |  | 8 
|Personal                  |  |                                  | 22.1 |  |   | 22.7                            |  | (3
|Auto                      |  |                                  | 11.2 |  |   | 8.4                             |  | 33
|Sales finance and other   |  |                                  | 5.3  |  |   | 4.1                             |  | 29
|                          |  |                                  |      |  |   |                                 |  |   
|Total average loans       |  | $                                | 90.8 |  | $ | 83.4                            |  | 9 
|                          |  |                                  |      |  |   |                                 |  |   

As
shown in the preceding table, average loans grew 9% compared to the 2002 third quarter resulting from acquisitions, growth in real-estate secured loans, the impact of
funding auto loan volumes internally and strengthening currencies in the international markets. Growth in real estate-secured loans mainly reflected the continued cross-selling of products through
Primerica as well as portfolio acquisitions in North America and growth in the U.K. Average auto loans for the 2003 third quarter increased $2.8 billion or 33% from 2002, primarily resulting
from the addition of $2.0 billion through the acquisition of GSB, as well as a shift in funding policy to fund business volumes internally. In Japan, average loans in the 2003 third quarter
declined 11% from the prior-year quarter, as the benefit of foreign currency translation was more than offset by the impact of charge-offs, reduced loan demand and higher
pay-downs.

12

---

Average
loans in Japan are expected to continue to decline from the 2003 third quarter levels. This statement is a forward-looking statement within the meaning of the Private Securities Litigation
Reform Act. See "Forward-Looking Statements" on page 27.

As
shown in the following table, the average net interest margin of 9.96% in the 2003 third quarter declined 66 basis points from the 2002 third quarter, reflecting compression in the
international markets, particularly in Japan. In North America, the average net interest margin was 8.34% in the 2003 third quarter, increasing 5 basis points from the prior-year quarter
as the benefit of lower cost of funds was partially offset by lower yields, reflecting the lower interest rate environment and the continued shift to higher-quality credits. The average net interest
margin for International Consumer Finance was 15.53% in the 2003 third quarter, declining 200 basis points from the prior-year quarter, primarily driven by Japan. The compression of net
interest margin in Japan reflected a decline in higher-yielding personal loans combined with a change in the treatment of adjustments and refunds of interest and continued high levels of
non-performing loans. Beginning in the second quarter of 2003, adjustments and refunds of interest charged to customer accounts are accounted for as a reduction of net interest margin
whereas, in prior periods, such amounts were treated as credit costs. The net interest margin decline in Japan was offset, in part, by margin expansion in Europe, which was driven by lower cost of
funds and the benefit of growth in higher-yielding personal loans.

|                            |  | Three Months Ended
September 30, |   |      
|--------------------------- |  | -------------------------------- | - | -----
|
|
|Average Net Interest Margin |  |                                  |   |      
|North America               |  | 8.34                             | % | 8.29 
|International               |  | 15.53                            | % | 17.53
|Total                       |  | 9.96                             | % | 10.62
|                            |  |                                  |   |      

Revenues,
net of interest expense, of $2.499 billion and $7.462 billion in the 2003 third quarter and nine months, respectively, increased $37 million or 2% from the
prior-year quarter and $219 million or 3% from the prior-year nine months. Revenue in North America increased 11% from the third quarter of 2002 and 9% from the first
nine months of 2002 and was primarily driven by growth in receivables that included the addition of the GSB auto portfolio and the absence of prior-year realized insurance investment
portfolio losses, partially offset by declines in insurance premium revenue. Revenue in International Consumer Finance declined $133 million or 14% and $167 million or 6% from the 2002
periods mainly due to lower volumes and spreads in Japan, partially offset by growth in EMEA and Asia, the benefit of foreign currency translation and, in the nine-month comparison, the
impact of acquisitions in Japan.

Operating
expenses of $867 million and $2.567 billion in the 2003 third quarter and nine months, respectively, increased $91 million or 12% and $247 million
or 11% from the prior-year periods. Operating expenses in North America increased $61 million or 13% and $159 million or 11%, respectively, from the prior-year
periods, primarily due to increased volumes and the addition of the GSB auto portfolio, as well as increased staffing costs and collection and compliance expenses. Operating expenses for International
Consumer Finance increased 10% from both the prior-year quarter and nine months. These increases reflected the impact of foreign currency translation, additional costs in Japan
attributable to actions taken to restructure the business in response to the continued challenging business environment and, in the nine-month comparison, the addition of Taihei and
Marufuku, partially offset by expense savings from branch closings and headcount reductions in Japan.

The
provisions for benefits, claims, and credit losses were $925 million in the 2003 third quarter, down from $957 million in the 2003 second quarter and up from
$844 million in the prior-year third quarter. The decline from the second quarter of 2003 primarily reflected improved credit conditions. The increase from the
prior-year third quarter primarily reflected increases in the provision for credit losses in Japan, due to deteriorating credit conditions, and in North America, where the addition of GSB
and growth in the portfolio were partially offset by a decline in policyholder benefits and claims. Net credit losses and the related loss ratio were $898 million and 3.92% in the 2003 third
quarter, compared to $897 million and 4.01% in the 2003 second quarter and $779 million and 3.71% in the 2002 third quarter. In North America, the net credit loss ratio of 2.93% in the
2003 third quarter was down from 2.98% in the 2003 second quarter and up from 2.79% in the 2002 third quarter. The net credit loss ratio for International Consumer Finance was 7.34% in the 2003 third
quarter, down from 7.43% in the 2003 second quarter and up from 6.42% in the 2002 third quarter. The increase in the ratio from the prior-year quarter was due to higher credit losses and
lower loan balances in Japan, while the improvement from the prior quarter was mainly due to a decline in losses in EMEA and Japan which experienced a decline in bankruptcy losses during the quarter.
The net credit loss ratio
for International Consumer Finance in the 2003 second and third quarters was reduced by 62 and 66 basis points, respectively, as a result of the change in treatment of adjustments and refunds as
discussed above. Net credit losses in the 2002 third quarter included $25 million for changes in loss recognition criteria in Japan that accelerated the timing of contractual
write-offs in the personal loan portfolio. Loans delinquent 90 days or more were $2.127 billion or 2.30% of loans at September 30, 2003, compared to
$2.182 billion or 2.41% at June 30, 2003 and $2.179 billion or 2.60% a year ago. The decrease in the delinquency ratio versus the prior year and prior quarter was mainly due to
improvements in North America.

In
Japan, net credit losses and the related loss ratio may increase from the 2003 third quarter as a result of economic conditions, credit performance of the unsecured loan portfolio,
including increased bankruptcy filings, and the impact of regulatory changes. This

13

---

statement
is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Retail Banking

|                                                   |  | Three Months Ended
September 30, |       |   |   | Nine Months Ended
September 30, |   |     |  
|-------------------------------------------------- |  | -------------------------------- | ----- | - | - | ------------------------------- | - | --- | -
|
|
|Revenues, net of interest expense                  |  | $                                | 3,600 |   | $ | 3,053                           |   | 18  |  
|Operating expenses                                 |  |                                  | 2,038 |   |   | 1,653                           |   | 23  |  
|Provisions for benefits, claims, and credit losses |  |                                  | 119   |   |   | 252                             |   | (53 | )
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Income before taxes and minority interest          |  |                                  | 1,443 |   |   | 1,148                           |   | 26  |  
|Income taxes                                       |  |                                  | 488   |   |   | 402                             |   | 21  |  
|Minority interest, after-tax                       |  |                                  | 8     |   |   | 8                               |   |    |  
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Net income                                         |  | $                                | 947   |   | $ | 738                             |   | 28  |  
|                                                   |  |                                  |       |   |   |                                 |   |     |  
|Average assets(in billions of dollars)             |  | $                                | 225   |   | $ | 175                             |   | 29  |  
|Return on assets                                   |  |                                  | 1.67  | % |   | 1.67                            | % |     |  
|                                                   |  |                                  |       |   |   |                                 |   |     |  

Retail Bankingwhich delivers banking, lending, investment and insurance services to customers through retail branches and
electronic delivery systemsreported net income of $947 million and $2.694 billion in the 2003 third quarter and nine months, respectively, up $209 million or 28% and
$913 million or 51% from the 2002 periods. The increase inRetail Bankingwas driven by growth in North America of $120 million or 27% and
$651 million or 60% in the 2003 third quarter and nine months, respectively, primarily due to the acquisition of GSB and strong growth in mortgage originations and deposit volumes, partially
offset by a decline in Mexico. Net income in International Retail Banking increased $89 million or 30% and $262 million or 38% in the 2003 third quarter and nine months, respectively, as
improvements in Argentina combined with growth in EMEA and Asia more than offset the prior-year gain on sale of the mortgage portfolio in Japan.

As
shown in the following table,Retail Bankinggrew average loans and customer deposits compared to 2002. The growth in North America
primarily reflected the acquisition of GSB, partially offset by the negative impact of foreign currency translation in Mexico. North America also experienced organic growth in customer deposits in
Citibanking North America and in average loans in Consumer Assets, primarily due to increased mortgages. Average loan growth in North America was negatively impacted by a decline in CitiCapital
resulting from the run-off of non-core portfolios. At the end of the 2003 third quarter, CitiCapital's non-core portfolios were also reduced by approximately
$1.2 billion resulting from the sale of CitiCapital Fleet Services. In the international markets, average customer deposits grew 9% from the prior-year quarter driven by the impact
of foreign currency translation and growth in Asia, EMEA and Japan. International Retail Banking average loans increased 2% from the prior-year quarter as the impact of foreign currency
translation and growth in installment loans in Germany were partially offset by the 2002 third quarter sale of the mortgage portfolio in Japan. Growth in both loans and customer deposits was
negatively impacted by volume declines in Latin America, reflecting declines across the region.

|                                |               | Three Months Ended
September 30, |       |       |   | Nine Months Ended
September 30, |      |   
|------------------------------- | ------------- | -------------------------------- | ----- | ----- | - | ------------------------------- | ---- | --
|
|
|Average customer deposits       |               |                                  |       |       |   |                                 |      |   
|                                | North America |                                  | $     | 113.3 |   | $                               | 84.7 |   
|                                | International |                                  |       | 87.0  |   |                                 | 79.5 |   
|                                |               |                                  |       |       |   |                                 |      |   
|Total average customer deposits |               | $                                | 200.3 |       | $ | 164.2                           |      | 22
|Average loans                   |               |                                  |       |       |   |                                 |      |   
|                                | North America |                                  | $     | 121.3 |   | $                               | 93.1 |   
|                                | International |                                  |       | 35.8  |   |                                 | 35.2 |   
|                                |               |                                  |       |       |   |                                 |      |   
|Total average loans             |               | $                                | 157.1 |       | $ | 128.3                           |      | 22
|                                |               |                                  |       |       |   |                                 |      |   

Revenues,
net of interest expense, of $3.600 billion and $10.758 billion in the 2003 third quarter and nine months, respectively, increased $547 million or 18% and
$1.805 billion or 20% from the 2002 periods. Revenues in North America increased $354 million or 19% and $1.257 billion or 22% in the 2003 third quarter and nine months,
respectively, driven by the acquisition of GSB and growth in Consumer Assets. Excluding the acquisition of GSB, growth in North America, excluding Mexico, was driven by the benefit of increased loan
and deposit volumes and higher mortgage servicing and securitization income, which was partially offset by lower net funding and positioning spreads in Citibanking North America and the impact of
run-off of non-core portfolios in CitiCapital. Revenues in Mexico declined $122 million or 25% and $84 million or 6% in the 2003 third quarter and nine months,
respectively, primarily reflecting the write-down of an investment security and the negative effect of foreign currency translation which were partially offset by improved spreads and
volumes. International Retail Banking revenues increased $193 million or 17% and $548 million or 17% in the 2003 third quarter and nine months, respectively, reflecting the impact of
strengthening currencies,

14

---

improvements
in Latin America and growth in EMEA and Asia. Excluding the impact of foreign currency translation, increased loan volumes, mainly in Germany, drove growth in EMEA, while Asia benefited
from strong investment and insurance products sales. The increase in Latin America reflected improvements in Argentina resulting from lower losses and the release of reserves related to customer
deposit liabilities and a decline in government-mandated inflation indexed interest accruals. These improvements were partially offset in the nine-month comparison by a benefit in the
prior year resulting from a change in the allocation of re-denomination losses among products based on the pesification decree issued by the Argentine government in February 2002.
International Retail Banking revenue growth was negatively impacted by a decline in Japan resulting from a $55 million gain on sale of the $2.0 billion mortgage portfolio in the prior
year.

Operating
expenses in the 2003 third quarter and nine months increased $385 million or 23% and $879 million or 17% from the comparable 2002 periods. In North America,
growth of $313 million or 30% and $647 million or 19% from the 2002 third quarter and nine months, respectively, was primarily due to the addition of GSB and volume-related increases in
Consumer Assets, partially offset by the impact of foreign currency translation in Mexico. International Retail Banking operating expenses increased $72 million or 12% and $232 million
or 13% from the 2002 third quarter and nine months, respectively, mainly reflecting the impact of foreign currency translation, volume-related increases, higher advertising and marketing costs, and,
in the nine-month comparison, costs (including severance) attributable to business repositioning in Latin America and the consolidation of certain back office operations in Europe.

The
provisions for benefits, claims, and credit losses were $119 million and $702 million in the 2003 third quarter and nine months, respectively, down from
$252 million and $1.009 billion in the prior-year periods, reflecting a lower
provision for credit losses. The decline in the provision for credit losses from the prior-year periods primarily reflected lower credit costs in Mexico, which includes a credit recovery
of $64 million, and in CitiCapital, a $56 million reduction in the allowance for credit losses due to improvement in credit experience and lower portfolio volumes in Argentina, and was
partially offset by the impact of foreign currency translation and additions to the allowance for credit losses in Germany. The nine-month comparison also reflected a $101 million
addition to the allowance for credit losses in the first quarter of 2002 related to Argentina. Net credit losses (excluding commercial markets) were $210 million and the related loss ratio was
0.72% in the 2003 third quarter, compared to $165 million and 0.58% in the 2003 second quarter and $166 million and 0.74% in the prior-year quarter. The increase in credit
losses (excluding commercial markets) in the 2003 third quarter was primarily driven by an $87 million write-down of the Argentina compensation note (which was written down against
previously established reserves), and was partially offset by improvements in all product lines in North America. Commercial Markets net credit losses were $50 million and the related loss
ratio was 0.47% in the 2003 third quarter, compared to $139 million and 1.30% in the 2003 second quarter and $147 million and 1.50% in the prior-year quarter. The decline in
Commercial Markets net credit losses in the 2003 third quarter was mainly due to a recovery in Mexico, and improvements in CitiCapital.

Loans
delinquent 90 days or more (excluding Commercial Markets) were $3.707 billion or 3.19% of loans at September 30, 2003, compared to $3.706 billion or
3.29% at June 30, 2003, and $2.969 billion or 3.39% a year ago. Compared to a year ago, the increase in delinquent loans was primarily due to increases in Consumer Assets and Germany,
including the impact of foreign currency translation, and was partially offset by declines in Taiwan, Argentina and Mexico. The increase in Consumer Assets was mainly due to the addition of GSB and a
higher level of buy backs from GNMA pools where credit risk is maintained by government agencies.

Cash-basis
loans in Commercial Markets were $1.283 billion at September 30, 2003, $1.165 billion at June 30, 2003, and $1.234 billion at
September 30, 2002. The increase in cash-basis loans from the prior year and prior quarter mainly reflected increases in the vehicle leasing and transportation portfolios in
CitiCapital and was partially offset by improvements in Mexico and Citibanking North America.

Average
assets of $225 billion and $222 billion in the 2003 third quarter and nine months, respectively, increased $50 billion from both comparable 2002 periods. The
increase in average assets primarily reflected the acquisition of GSB, growth in mortgages and loans held for sale in Consumer Assets, and the impact of foreign currency translation in the
international markets.

15

---

Other Consumer

|                                  |  | Three Months Ended
September 30, |     | Nine Months Ended
September 30, |  
|--------------------------------- |  | -------------------------------- | --- | ------------------------------- | -
|
|
|Revenues, net of interest expense |  | $                                | 75  |                                 | $
|Operating expenses                |  |                                  | 100 |                                 |  
|                                  |  |                                  |     |                                 |  
|Loss before tax benefits          |  |                                  | (25 | )                               |  
|Income tax benefits               |  |                                  | (8  | )                               |  
|                                  |  |                                  |     |                                 |  
|Net (loss)                        |  | $                                | (17 | )                               | $
|                                  |  |                                  |     |                                 |  

Other Consumerwhich includes certain treasury and other unallocated staff functions, global marketing and other
programsreported losses of $17 million and $64 million for the 2003 third quarter and nine months, respectively, compared to losses of $32 million and
$41 million in the 2002 third quarter and nine months, respectively. The reduction in losses in the quarterly comparison was mainly due to lower global marketing costs while the increase in
losses in the nine-month comparison was driven by a $40 million pre-tax release of a reserve related to unused travelers checks in a non-core business in the
prior year.

16

---



GLOBAL CORPORATE AND INVESTMENT BANK

|                                          |  | Three Months Ended
September 30, |       |  |   | Nine Months Ended
September 30, |  |     |  
|----------------------------------------- |  | -------------------------------- | ----- |  | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense         |  | $                                | 2,764 |  | $ | 2,952                           |  | (6  | )
|Operating expenses                        |  |                                  | 1,357 |  |   | 1,102                           |  | 23  |  
|Provision for credit losses               |  |                                  | 78    |  |   | 664                             |  | (88 | )
|                                          |  |                                  |       |  |   |                                 |  |     |  
|Income before taxes and minority interest |  |                                  | 1,329 |  |   | 1,186                           |  | 12  |  
|Income taxes                              |  |                                  | 352   |  |   | 393                             |  | (10 | )
|Minority interest, after-tax              |  |                                  | 4     |  |   | 4                               |  |    |  
|                                          |  |                                  |       |  |   |                                 |  |     |  
|Net income                                |  | $                                | 973   |  | $ | 789                             |  | 23  |  
|                                          |  |                                  |       |  |   |                                 |  |     |  

Global Corporate and Investment Bank (GCIB)serves corporations, financial institutions,
governments, investors and other participants in capital markets throughout the world and consists ofCapital Markets and Bankingand Transaction Services.
The primary businesses inCapital Markets and Bankinginclude Fixed Income,
Sales & Trading (which mainly operates in Asia, Latin America, EMEA and Mexico) and Lending.

GCIB
net income of $973 million and $2.831 billion in the 2003 third quarter and nine months was up $184 million or 23% from the 2002 third quarter and up
$313 million or 12% from the 2002 nine months, respectively. The 2003 third quarter reflects net income growth from the comparable 2002 quarter of $110 million or 17% in Capital Markets and Bankingand $74 million or 57% inTransaction Services. The 2003 nine months
reflects income growth of $160 million or 8% inCapital Markets and Bankingand $153 million or 35% inTransaction
Services.

The
increase inCapital Markets and Bankingnet income in the 2003 periods primarily reflects a lower provision for credit losses and
increases in the Fixed Income business, partially offset by mark-to-market losses in credit derivatives (which serve as an economic hedge for the loan portfolio) as credit
spreads tightened. The increase in the 2003 nine months also reflects the absence of prior-year redenomination losses in Argentina. The increase inTransaction
Servicesnet income in the 2003 third quarter is due to a lower provision for credit losses, lower taxes related to a benefit on the sale of an investment and lower expenses
resulting from expense control initiatives. Net income in the 2003 nine months increased primarily due to a lower provision for credit losses.

The
businesses of GCIB are significantly affected by the levels of activity in the global capital markets which, in turn, are influenced by macro-economic and political policies and
developments, among other factors, in over 100 countries in which the businesses operate. Global economic and market events can have both positive and negative effects on the revenue performance of
the businesses and can affect credit performance. Losses on corporate lending activities and the level of cash-basis loans can vary widely with respect to timing and amount, particularly
within any narrowly defined business or loan type. Credit costs are expected to continue to improve compared to 2002 levels as the global economy strengthens. This paragraph contains
forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Capital Markets and Banking

|                                          |  | Three Months Ended
September 30, |       |  |   | Nine Months Ended
September 30, |  |     |  
|----------------------------------------- |  | -------------------------------- | ----- |  | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense         |  | $                                | 1,871 |  | $ | 2,041                           |  | (8  | )
|Operating expenses                        |  |                                  | 739   |  |   | 469                             |  | 58  |  
|Provision for credit losses               |  |                                  | 75    |  |   | 576                             |  | (87 | )
|                                          |  |                                  |       |  |   |                                 |  |     |  
|Income before taxes and minority interest |  |                                  | 1,057 |  |   | 996                             |  | 6   |  
|Income taxes                              |  |                                  | 283   |  |   | 331                             |  | (15 | )
|Minority interest, after-tax              |  |                                  | 4     |  |   | 5                               |  | (20 | )
|                                          |  |                                  |       |  |   |                                 |  |     |  
|Net income                                |  | $                                | 770   |  | $ | 660                             |  | 17  |  
|                                          |  |                                  |       |  |   |                                 |  |     |  

Capital Markets and Bankingdelivers a full range of global financial services and products
including foreign exchange, structured products, derivatives and lending.

Capital Markets and Bankingnet income of $770 million in the 2003 third quarter and $2.244 billion in the 2003 nine months
increased $110 million or 17% and $160 million or 8%, respectively, from the 2002 periods primarily due to a lower provision for credit losses, partially offset by losses in credit
derivatives as credit spreads tightened. The increase in the 2003 nine months also reflects the absence of prior-year redenomination losses in Argentina.

17

---

Revenues,
net of interest expense, of $1.871 billion and $5.905 billion in the 2003 third quarter and nine months decreased $170 million or 8% from the 2002 third
quarter and $371 million or 6% from the 2002 nine months, respectively. Revenue declines in the 2003 periods were driven by mark-to-market losses in credit derivatives
as credit spreads tightened, partially offset by increases in Fixed Income and the absence of a prior-year write-down of Argentine sovereign securities.

Operating
expenses of $739 million and $2.400 billion in the 2003 third quarter and nine months increased $270 million or 58% from the 2002 third quarter and
$535 million or 29% from the 2002 nine months, respectively, driven by increased Compensation and Benefits expense. The increase in the 2003 nine months also reflects costs associated with the
repositioning of the Company's business in Latin America (primarily severance-related and higher legal fees).

The
provision for credit losses of $75 million in the 2003 third quarter is composed of net credit losses of $332 million offset by net reserve releases of
$257 million. Net releases include $196 million of writeoffs against specific borrowers as well as additional reserve reductions of $35 million in Mexico, $32.5 million in
North America, $16.25 million in Asia and $16.25 million in Latin America, reflecting improving credit trends, offset in part by new reserves of $39 million for specific
borrowers. The provision for credit losses of $75 million in the 2003 third quarter and $468 million in the nine months decreased $501 million and $869 million,
respectively, primarily due to the absence of prior-year provisions for Argentina and exposures in the telecommunications industry as well as reserve reductions, reflecting improved credit
trends.

Cash-basis
loans were $3.571 billion at September 30, 2003, $3.669 billion at June 30, 2003, $3.394 billion at December 31, 2002 and
$3.394 billion at September 30, 2002. Cash-basis loans net of write-offs increased $177 million from September 30, 2002, primarily due to increases
to borrowers in the power and energy industry, as well as the transfer of loans from Transactions Services ($248 million) offset by decreases due to charge-offs against reserves as
well as paydowns. Cash-basis loans decreased $98 million from June 30, 2003, primarily due to charge-offs taken against reserves and paydowns from borrowers in
the power and energy and telecommunications industries as well as corporate borrowers in Argentina, Brazil and Hong Kong, offset by increases in Mexico resulting from the transfer of loans from
Transaction Services.

Transaction Services

|                                          |  | Three Months Ended
September 30, |     |  |   | Nine Months Ended
September 30, |   |     |  
|----------------------------------------- |  | -------------------------------- | --- |  | - | ------------------------------- | - | --- | -
|
|
|Revenues, net of interest expense         |  | $                                | 893 |  | $ | 911                             |   | (2  | )
|Operating expenses                        |  |                                  | 618 |  |   | 633                             |   | (2  | )
|Provision for credit losses               |  |                                  | 3   |  |   | 88                              |   | (97 | )
|                                          |  |                                  |     |  |   |                                 |   |     |  
|Income before taxes and minority interest |  |                                  | 272 |  |   | 190                             |   | 43  |  
|Income taxes                              |  |                                  | 69  |  |   | 62                              |   | 11  |  
|Minority interest, after-tax              |  |                                  |    |  |   | (1                              | ) | 100 |  
|                                          |  |                                  |     |  |   |                                 |   |     |  
|Net income                                |  | $                                | 203 |  | $ | 129                             |   | 57  |  
|                                          |  |                                  |     |  |   |                                 |   |     |  

Transaction Serviceswhich provides cash management, trade finance, custody and
clearing services globallyreported net income of $203 million in the 2003 third quarter, up $74 million or 57% from the 2002 third quarter. The increase in the 2003 third
quarter is due primarily to a lower provision for credit losses, lower effective tax rates related to a benefit on the sale of an investment and lower expenses resulting from expense control
initiatives. Net income in the 2003 nine months increased $153 million or 35% from 2002, primarily due to a lower provision for credit losses and a lower effective tax rate.

18

---

As
shown in the following table, average liability balances of $101 billion grew 17% compared to the 2002 third quarter primarily due to increases in Europe and Asia. Assets under
custody reached $5.7 trillion, an increase of $0.4 trillion or 8% compared to the prior year.

|                                         |  | Three Months Ended
September 30,
2003 |     | Three Months Ended
September 30,
2002 |   | %
Change
|---------------------------------------- |  | ------------------------------------- | --- | ------------------------------------- | - | --------
|Liability balances (average in billions) |  | $                                     | 101 |                                       | $ | 86      
|Assets under custody (EOP in trillions)  |  |                                       | 5.7 |                                       |   | 5.3     
|                                         |  |                                       |     |                                       |   |         

Revenues,
net of interest expense, of $893 million in the 2003 third quarter decreased $18 million or 2% from the 2002 third quarter, primarily reflecting an unfavorable
interest rate environment compared to 2002. Revenues, net of interest expense, of $2.714 billion in the 2003 nine months, decreased $16 million or 1%, primarily due to lower interest
rates, and
overall market weakness. These were partially offset by increased business volumes reflected by higher liability balances, gains on the early termination of intracompany deposits (which were offset in Capital Markets and
Banking) and a benefit from foreign exchange currency translation.

Operating
expenses of $618 million in the 2003 third quarter decreased $15 million or 2%, primarily reflecting staff related reduction. Operating expenses of
$1.877 billion in the 2003 nine months decreased $39 million or 2% primarily reflecting expense control initiatives, partially offset by costs associated with the repositioning of the
Company's business in Latin America, primarily severance-related.

The
provision for credit losses of $3 million in the 2003 third quarter decreased by $85 million from the 2002 third quarter, primarily due to higher trade finance
write-offs in Argentina in the prior-year quarter. The provision for credit losses of $24 million in the 2003 nine months decreased by $136 million from the 2002
nine months, primarily reflecting prior-year write-offs in Argentina, partially offset by 2003 provisions for selected borrowers in Brazil.

Cash-basis
loans, which in theTransaction Servicesbusiness are primarily trade finance receivables, were $201 million
at September 30, 2003, $513 million at June 30, 2003, $572 million at December 31, 2002 and $509 million at September 30, 2002. Cash-basis
loans were down $312 million from June 30, 2003 and $308 million from September 30, 2002, primarily due to a reclassification of cash-basis loans
($248 million) in Mexico fromTransaction ServicestoCapital Markets and Banking, along with
charge-offs in Poland and Argentina.

19

---

GLOBAL INVESTMENT MANAGEMENT

|                                                  |  | Three Months Ended
September 30, |     |  |   | Nine Months Ended
September 30, |  |     |  
|------------------------------------------------- |  | -------------------------------- | --- |  | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense                 |  | $                                | 732 |  | $ | 695                             |  | 5   |  
|Operating expenses                                |  |                                  | 539 |  |   | 397                             |  | 36  |  
|Provisions for benefits, claims and credit losses |  |                                  | 67  |  |   | 68                              |  | (1  | )
|                                                  |  |                                  |     |  |   |                                 |  |     |  
|Income before taxes                               |  |                                  | 126 |  |   | 230                             |  | (45 | )
|Income taxes                                      |  |                                  | 59  |  |   | 64                              |  | (8  | )
|                                                  |  |                                  |     |  |   |                                 |  |     |  
|Net income                                        |  | $                                | 67  |  | $ | 166                             |  | (60 | )

Global Investment Managementis comprised ofLife Insurance and Annuities,
Private Bank and Asset Management. These businesses offer a broad range of life insurance, annuity, asset management and personalized wealth management products and services
distributed to institutional, high-net-worth and retail clients.

Global
Investment Management net income of $67 million in the 2003 third quarter and $448 million in the 2003 nine months decreased $99 million or 60% and
$56 million or 11% from the comparable 2002 periods.Life Insurance and Annuitiesnet loss of $73 million in the 2003 third quarter and
$31 million in the 2003 nine months represents a decrease in income of $89 million and $107 million from the comparable 2002 periods. The decrease in income of $89 million
in the 2003 third quarter resulted from lower International Insurance Manufacturing (IIM) results of $90 million, primarily driven by impairments of Argentina Government Promissory Notes (GPNs)
of $111 million and the impact of certain liability restructuring actions taken in the Argentina voluntary annuity business of $20 million. The decrease inLife
Insurance and Annuitiesincome of $107 million in the 2003 nine-month period reflects lower IIM results of $110 million partially offset by higher
Citi Insurance Group results of $3 million. The IIM decline was driven by the Argentina actions of $131 million recorded in the 2003 third quarter, partially offset by an
$18 million benefit from lower taxes in Asia due to the application of APB 23's indefinite investment criteria, as well as higher business volumes and lower tax rates in Mexico.

Private Banknet income was $143 million in the 2003 third quarter and $406 million in the 2003 nine months, up
$26 million or 22% and $65 million or 19% from the comparable 2002 periods, primarily reflecting increased client trading and lending activity, partially offset by higher
employee-related expenses and a higher cost of funds.

Asset Managementnet loss of $3 million in the 2003 third quarter and net income of $73 million in the 2003 nine months
represents a decrease in income of $36 million and $14 million from the comparable 2002 periods. The 2003 third quarter income decline primarily reflects the impact of a
$42 million impairment of a Deferred Acquisition Cost (DAC) asset relating to a Retirement Services business in Argentina, a $9 million impairment of Argentina GPNs and reduced fee
revenues, partially offset by the impact of continued expense management. The decline in the nine-month period was the result of the 2003 third quarter impairments in Argentina and reduced
fee revenues, partially offset by lower expenses, including the absence of prior-year charges related to Argentina.

Life Insurance and Annuities

|                                  |  | Three Months Ended
September 30, |     |   |   | Nine Months Ended
September 30, |  |     |  
|--------------------------------- |  | -------------------------------- | --- | - | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense |  | $                                | 60  |   | $ | 118                             |  | (49 | )
|Provision for benefits and claims |  |                                  | 65  |   |   | 63                              |  | 3   |  
|Operating expenses                |  |                                  | 80  |   |   | 33                              |  | NM  |  
|                                  |  |                                  |     |   |   |                                 |  |     |  
|Income before taxes               |  |                                  | (85 | ) |   | 22                              |  | NM  |  
|Income taxes (benefits)           |  |                                  | (12 | ) |   | 6                               |  | NM  |  
|                                  |  |                                  |     |   |   |                                 |  |     |  
|Net income (loss)                 |  | ($                               | 73  | ) | $ | 16                              |  | NM  |  
|                                  |  |                                  |     |   |   |                                 |  |     |  

---

Life Insurance and Annuitiescomprises International Insurance Manufacturing (IIM) and Citi
Insurance Group (CIG). These businesses provide annuities, credit, life, health, disability and other insurance products internationally, leveraging the existing distribution channels of the Consumer Finance,Retail BankingandAsset Management(retirement services) businesses. IIM primarily has operations in Mexico, EMEA, Latin America, Asia and Japan.

Net
losses of $73 million and $31 million in the 2003 third quarter and nine months reflect a decrease in income of $89 million and $107 million from the
respective 2002 periods. The $89 million decrease in the 2003 third quarter reflects lower IIM results of $90

20

---

million,
partially offset by higher CIG results of $1 million. The $107 million decrease in the 2003 nine-month period reflects lower IIM results of $110 million,
partially offset by higher CIG results of $3 million.

IIM's
net loss of $77 million in the 2003 third quarter was a decline in income of $90 million and primarily resulted from impairments of GPNs of $111 million and
the impact of certain liability restructuring actions taken in the Argentina voluntary annuity business of $20 million. The GPN impairment was the result of an Argentine government decree,
which required the mandatory exchange (the Exchange) of existing GPNs to Argentine government bonds denominated in U.S. dollars. Upon the Exchange, the assets were considered impaired and written down
to fair market value based on prevailing market prices on the decree date. Certain GPNs, which were held in general accounts, were considered impaired through recognition as an insurance investment
portfolio loss ($53 million). See Impact from Argentina's Economic Changes on page 6 for a further discussion of these actions. Other income items which offset the Argentina actions were an
$18 million benefit of lower taxes due to the application of APB 23 indefinite investment criteria in Asia, higher investment income due to timing of $13 million, and higher business
volumes and the impact of a lower tax rate in Mexico. IIM's net loss of $45 million in the 2003 nine-month period was a decline in income of $110 million and was driven by
the Argentina actions of $131 million, partially offset by the application of APB 23 in Asia and higher business volumes and lower taxes in Mexico.

During
the 2003 third quarter and nine-month periods,Life Insurance and Annuitiesoperating expenses of $80 million
and $204 million increased $47 million and $111 million, from the respective 2002 periods. IIM's expenses increased $45 million and $106 million from the respective
2002 periods, driven by a change in the presentation of certain fee-sharing arrangements with various Global Consumer businesses. This change in presentation increased both revenues and
expenses by $22 million and $73 million in the 2003 third quarter and nine-month periods, respectively. The remaining expense increase in IIM in both the 2003 third quarter
and nine-month periods was primarily the result of higher business volumes.

Private Bank

|                                                                 |  | Three Months Ended
September 30, |      |   |   | Nine Months Ended
September 30, |   |    
|---------------------------------------------------------------- |  | -------------------------------- | ---- | - | - | ------------------------------- | - | ---
|
|
|Revenues, net of interest expense                                |  | $                                | 510  |   | $ | 414                             |   | 23 
|Operating expenses                                               |  |                                  | 298  |   |   | 237                             |   | 26 
|Provision for credit losses                                      |  |                                  | 2    |   |   | 5                               |   | (60
|                                                                 |  |                                  |      |   |   |                                 |   |    
|Income before taxes                                              |  |                                  | 210  |   |   | 172                             |   | 22 
|Income taxes                                                     |  |                                  | 67   |   |   | 55                              |   | 22 
|                                                                 |  |                                  |      |   |   |                                 |   |    
|Net income                                                       |  | $                                | 143  |   | $ | 117                             |   | 22 
|                                                                 |  |                                  |      |   |   |                                 |   |    
|Average assets(in billions of dollars)                           |  | $                                | 39   |   | $ | 29                              |   | 34 
|Return on assets                                                 |  |                                  | 1.45 | % |   | 1.60                            | % |    
|                                                                 |  |                                  |      |   |   |                                 |   |    
|Client business volumes under management(in billions of dollars) |  | $                                | 186  |   | $ | 163                             |   | 14 
|                                                                 |  |                                  |      |   |   |                                 |   |    

Private Bankprovides personalized wealth management services for
high-net-worth clients around the world.Private Banknet income was $143 million in the 2003 third quarter and
$406 million in the 2003 nine months, up $26 million or 22% and $65 million or 19% from the 2002 periods, primarily reflecting increased client trading and lending activity,
partially offset by higher incentive compensation expense associated with higher revenues, higher other employee related costs and the impact of a narrowing of Treasury spreads.

Client
business volumes under management, which include custody accounts, assets under fee-based management, deposits and loans, were $186 billion at the end of the
2003 third quarter, up $23 billion or 14% from $163 billion at the end of the 2002 third quarter. The increase primarily reflects growth of $9 billion in other (principally
custody) accounts, $6 billion in loans, $6 billion in banking and fiduciary deposits and $2 billion in assets under fee based management.

Revenues,
net of interest expense, were $510 million in the 2003 third quarter and $1.49 billion in the 2003 nine months, up $96 million or 23% and
$225 million or 18% from the respective 2002 periods. The increases reflect higher client trading, lending and banking activity in both the three- and nine-month periods, partially
offset by the impact of a narrowing of Treasury spreads. The three-month period was additionally impacted by higher placement, management and performance fees. In the 2003 third quarter and nine
months, the increased revenues reflect continued favorable trends in North America (including Mexico), up $24 million or 13% and $84 million or 15%, respectively, from the comparable
2002 periods, primarily in lending and client trading activity. International revenues increased $72 million or 32% from the 2002 third quarter and $141 million or 20% from the 2002 nine
months, primarily due to growth in Japan of $29 million or 64% and $56 million or 38%, respectively (client trading), in Asia of $28 million or 37% and $66 million or 28%,
respectively (client trading), and in Latin America of $11 million or 24% and $20 million or 14%, respectively (client trading).

Operating
expenses of $298 million and $884 million in the 2003 third quarter and nine months were up $61 million or 26% and $129 million or 17% from the
respective 2002 periods, primarily reflecting increased incentive compensation associated with higher

21

---

revenues,
and higher other employee related costs including severance and increased salary and benefits costs due to a change in employee mix of front end sales staff. In the 2003 third quarter and
nine months, the increased expenses reflect the increase in revenues in North America (including Mexico), with expenses up $12 million or 15% and $36 million or 15%, respectively, from
the comparable 2002 periods, driven by higher incentive compensation and the impact of the inclusion of Banamex intoPrivate Bank'sresults beginning in
August 2002. International expenses increased $49 million or 31% from the 2002 third quarter and $93 million or 18% from the 2002 nine months, primarily due to higher employee-
related costs, including incentive compensation in Asia and Japan, and higher severance costs in EMEA. In the 2003 third quarter and nine months, Asia increased $17 million or 40% and
$42 million or 32%, respectively; Japan increased $14 million or 52% and $29 million or 35%, respectively; and EMEA increased $13 million or 24% and $17 million or
9%, respectively.

The
provision for credit losses was $2 million and $12 million in the 2003 third quarter and nine months, a decrease of $3 million from the 2002 third quarter and an
increase of $1 million from the 2002 nine-month period. Net credit losses in the 2003 third quarter remained at a nominal level of 0.05% of average loans outstanding. Loans
90 days or more past due as of September 30, 2003 were $124 million or 0.36% of total loans outstanding, compared with $201 million or 0.70% as of September 30,
2002. The decline of $77 million primarily reflects decreases in EMEA and North America (excluding Mexico).

Average
assets of $39 billion in the 2003 third quarter increased $10 billion or 34% from $29 billion in the 2002 third quarter. The increase from the
prior-year period primarily related to increased lending activity (higher mortgage financing and re-financing activity, tailored loans and margin lending) and the consolidation
of a previously unconsolidated entity due to changes in the contractual relationship with this entity.

Asset Management

|                                                   |  | Three Months Ended
September 30, |     |   |   | Nine Months Ended
September 30, |  |     |  
|-------------------------------------------------- |  | -------------------------------- | --- | - | - | ------------------------------- |  | --- | -
|
|
|Revenues, net of interest expense                  |  | $                                | 162 |   | $ | 163                             |  | (1  | )
|Operating expenses                                 |  |                                  | 161 |   |   | 127                             |  | 27  |  
|                                                   |  |                                  |     |   |   |                                 |  |     |  
|Income before taxes                                |  |                                  | 1   |   |   | 36                              |  | (97 | )
|Income taxes                                       |  |                                  | 4   |   |   | 3                               |  | 33  |  
|                                                   |  |                                  |     |   |   |                                 |  |     |  
|Net income (loss)                                  |  | ($                               | 3   | ) |   | 33                              |  | NM  |  
|                                                   |  |                                  |     |   |   |                                 |  |     |  
|Assets under management(in billions of dollars)(1) |  | $                                | 171 |   | $ | 155                             |  | 10  |  
|                                                   |  |                                  |     |   |   |                                 |  |     |  

---

Asset Managementoffers institutional, high net worth, and retail clients a broad range of
investment alternatives from investment centers located around the world and includes the businesses of Citibank Global Asset Management, Banamex asset management and retirement services businesses,
other retirement services businesses in Latin America and an alternative investments business. Products and services offered include mutual funds, separately managed accounts, alternative investments
(including hedge funds, private equity and credit structures) and pension administration services.

Net
loss of $3 million in the 2003 third quarter and net income of $73 million in the 2003 nine months represented a decline of $36 million and $14 million
from the comparable 2002 periods, primarily reflecting impairments of DAC asset relating to the Retirement Services business in Argentina of $42 million and of GPNs of $9 million. The
GPN impairment was the result of an Argentine government decree, which required the Exchange (the Exchange) of existing GPNs to Argentine government bonds denominated in U.S. dollars. Upon the
Exchange, the asset was considered impaired and written down to fair market value based on prevailing market prices on the decree date. See Impact from Argentina's Economic Changes on page 6 for a
further discussion of these actions. Excluding the 2003 third-quarter Argentina actions, income in the 2003 third quarter and nine-months increased $15 million and
$37 million from the comparable 2002 periods. The increase in the 2003 third quarter benefited from higher revenues and the impact of continued expense management. The increase in the 2003
nine-month period reflected lower expenses, including the absence of prior-year charges in Argentina, partially offset by lower revenues.

Assets
under management for the 2003 third quarter rose 10% from the 2002 third quarter to $171 billion, driven by increases in Institutional managed accounts of
$12 billion, Banamex of $2 billion and CAI of $2 billion. The net increase of $12 billion in Institutional managed accounts reflects a transfer of certain managed accounts
to a non-Citicorp entity of $3 billion during the quarter.

Revenues,
net of interest expense, of $162 million and $459 million in the 2003 third quarter and nine months decreased $1 million or 1% and $35 million or 7%
from the respective 2002 periods. The $1 million decline in the 2003 third quarter primarily resulted from the impact of reduced fee revenues due to changes in product mix and the GPN
impairments in Argentina of $9 million. The $35 million decline in the 2003 nine-month period primarily resulted from reduced fee revenues, the impact of weakness in global
equity markets over prior year, the impact of increased insurance costs on fees earned in the Retirement Services business in Argentina and

22

---

foreign
currency translation in Argentina and Mexico, partially offset by the absence of a prior-year pesofication loss in Argentina and significant peso devaluations in Argentina in the
2002 first quarter.

Operating
expenses of $161 million in the 2003 third quarter increased $34 million or 27% from the prior-year period, primarily reflecting the DAC impairment in
Argentina of $42 million partially offset by the continued impact of expense management. Operating expenses of $383 million in the 2003 nine-month period decreased
$21 million or 5% from the comparable 2002 period driven by the impact of continued expense management, including a decline in incentive compensation, and the absence of 2002 first quarter
restructuring charges in the Retirement Services business in Argentina, partially offset by the DAC impairment and the impact of foreign currency translation in Mexico.

23

---



PROPRIETARY INVESTMENT ACTIVITIES

|                                                 |  | Three Months Ended September 30, |     | Nine Months Ended
September 30, |  
|------------------------------------------------ |  | -------------------------------- | --- | ------------------------------- | -
|
|
|Revenues, net of interest expense                |  | $                                | 412 |                                 | $
|Operating expenses                               |  |                                  | 59  |                                 |  
|Provision for credit losses                      |  |                                  |    |                                 |  
|                                                 |  |                                  |     |                                 |  
|Income (loss) before taxes and minority interest |  |                                  | 353 |                                 |  
|Income taxes (benefits)                          |  |                                  | 128 |                                 |  
|Minority interest, after-tax                     |  |                                  | 145 |                                 |  
|                                                 |  |                                  |     |                                 |  
|Net income (loss)                                |  | $                                | 80  |                                 | $
|                                                 |  |                                  |     |                                 |  

Proprietary Investment Activitiesis comprised of Citicorp's proprietary Private Equity investments, including venture
capital activities and Other Investment Activities which includes Citicorp's proprietary investments in hedge funds and real estate investments, investments in countries that refinanced debt under the
1989 Brady Plan or plans of a similar nature and Citicorp's Alternative Investments (CAI) business, for which the net profits on products distributed through Citicorp'sAsset
ManagementandPrivate Bankbusinesses are reflected in the respective distributors' income statement through net revenues.

Revenues,
net of interest expense, in the 2003 third quarter of $412 million increased $510 million from the 2002 third quarter, reflecting higher Private Equity revenues
of $1.053 billion, primarily from higher net mark-to-market revenues on public investments, higher net impairment/valuation revenues and higher dividend/fee revenues,
partially offset by lower Other Investment Activities revenues of $543 million. The decline in Other Investment Activities was driven by the absence of the 2002 third quarter gain on the sale
of 399 Park Avenue of $527 million related to the portion of the building that the Company did not occupy. Operating expenses of $59 million in the 2003 third quarter was flat
from the 2002 third quarter. Minority interest, after-tax, of $145 million in the 2003 third quarter increased $131 million from the prior-year period primarily
due to the impact of dividends and a mark-to-market valuation on the recapitalization of an investment held within the Citigroup Venture Capital (CVC) Equity Partners Fund, a
majority-owned private equity fund.

For
the 2003 nine months, revenues, net of interest expense, of $565 million increased $608 million from the 2002 nine-month period, primarily reflecting higher
Private Equity revenues of $1.145 billion, driven by higher net mark-to-market revenues on public investments, higher net impairment/valuation revenues and higher
dividend/fee revenues, offset by lower Other Investment Activities revenues of $537 million, resulting from the absence of the prior-year gain on the sale of 399 Park Avenue.
Operating expenses of $173 million in the 2003 nine-month period increased $22 million from the 2002 nine-month period primarily reflecting increased expenses in
CAI of $12 million and in Private Equity of $14 million, primarily relating to higher variable costs associated with increased transaction volumes. Minority interest,
after-tax, of $170 million in the 2003 nine-month period increased $148 million from the comparable 2002 period primarily due to the 2003 third-quarter impact of
dividends and a mark-to-market valuation on the recapitalization of an investment held within the CVC Equity Partners Fund.

See
Note 5 to the Consolidated Financial Statements for additional information on investments in fixed maturity and equity securities.

The
following sections contain information concerning revenues, net of interest expense, for the two main investment classifications of Proprietary Investment Activities:

Private Equityincludes equity and mezzanine debt financing on both a direct and indirect basis, including investments made by CVC Equity
Partners Fund, to companies primarily located in the United States and Western Europe, investments in companies located in developing economies with a private equity focus, the investment portfolio
related to the Banamex acquisition in August 2001 and CVC/Opportunity Equity Partners, LP (Opportunity). Opportunity is a third-party managed fund through which Citicorp co-invests
in companies that were privatized by the government of Brazil in the mid-1990s.

As
of September 30, 2003 and September 30, 2002, Private Equity included assets of $5.964 billion and $6.171 billion, respectively, with the portfolio
primarily invested in industrial, consumer goods, communication and technology companies.

24

---

Revenues
for Private Equity, net of interest expense, are comprised of the following:

|                                  |  | Three Months Ended
September 30, |     | Nine Months Ended
September 30, |  
|--------------------------------- |  | -------------------------------- | --- | ------------------------------- | -
|
|
|Net realized gains/(losses)(1)    |  | $                                | 87  |                                 | $
|Public mark-to-market             |  |                                  | 90  |                                 |  
|Net impairments/valuations(2)     |  |                                  | 8   |                                 |  
|Other(3)                          |  |                                  | 207 |                                 |  
|                                  |  |                                  |     |                                 |  
|Revenues, net of interest expense |  | $                                | 392 |                                 | $
|                                  |  |                                  |     |                                 |  

---

Revenues,
net of interest expense, of $392 million in the 2003 third quarter increased $1.053 billion from the 2002 third quarter primarily relating
to higher net mark-to-market gains on public securities of $518 million, higher net impairment/valuation revenues of $243 million, higher net realized gains on
sales of investments of $61 million and higher other revenues of $231 million. The higher net mark-to-market gains on public securities primarily resulted from
the absence of prior-year mark-to-market losses due to the existing equity market conditions in the 2002 third quarter. The higher net impairment/valuation revenues
largely represent the absence of 2002 third quarter impairments on emerging markets investments (including Argentina) of $141 million. The increase in other revenues primarily related to
dividends in the current quarter through an investment in the CVC Equity Partners Fund, from a private equity investment that was recapitalized and from an investment that had an initial public
offering.

For
the 2003 nine months, revenues, net of interest expense, of $472 million increased $1.145 billion from the 2002 nine-month period primarily relating to
higher net mark-to-market gains on public securities of $527 million due to the prior-year market conditions, higher net impairment/valuation revenues of
$239 million primarily due to the absence of 2002 impairments on emerging markets investments, and higher other revenues of $297 million due to the 2003 third quarter dividends received
in the CVC Equity Partners Fund.

Other Investment Activitiesincludes CAI, various proprietary investments, certain hedge fund investments and the LDC Debt/Refinancing
portfolios. The LDC Debt/Refinancing portfolios include investments in certain countries that refinanced debt under the 1989 Brady Plan or plans of a similar nature and earnings are generally derived
from interest and restructuring gains/(losses).

As
of September 30, 2003, Other Investment Activities included assets of $1.445 billion, $927 million in hedge funds, the majority of which represents money managed
for TPC, $409 million in the LDC Debt/Refinancing portfolios and $109 million in other assets. As of September 30, 2002, total assets of Other Investment Activities were
$1.762 billion, $922 million in hedge funds, $621 million in the LDC Debt/Refinancing portfolios and $219 million in other assets.

The
major components of Other Investment Activities revenues, net of interest expense are as follows:

|                                  |  | Three Months Ended
September 30, |    | Nine Months Ended
September 30,
|--------------------------------- |  | -------------------------------- | -- | -------------------------------
|
|
|LDC Debt/Refinancing portfolios   |  | $                                | 2  |                                
|Hedge fund investments            |  |                                  | 8  |                                
|Other                             |  |                                  | 10 |                                
|                                  |  |                                  |    |                                
|Revenues, net of interest expense |  | $                                | 20 |                                
|                                  |  |                                  |    |                                

Revenues,
net of interest expense, in the 2003 third quarter of $20 million, decreased $543 million from the 2002 third quarter, primarily resulting from
the absence of the prior-year gain of $527 million on the sale of 399 Park Avenue and lower hedge fund results of $12 million.

For
the 2003 nine months, revenues, net of interest expense, of $93 million decreased $537 million from the 2002 nine-month period, primarily resulting from the
absence of the prior-year gain on the sale of 399 Park Avenue and lower CAI results of $18 million, partially offset by a $10 million increase from improved hedge fund
results.

Proprietary
Investment Activities results may fluctuate in the future as a result of market and asset-specific factors. This statement is a forward-looking statement within the
meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

25

---

CORPORATE/OTHER

|                                                   |  | Three Months Ended
September 30, |      | Nine Months Ended
September 30, |  
|-------------------------------------------------- |  | -------------------------------- | ---- | ------------------------------- | -
|
|
|Revenues, net of interest expense                  |  | $                                | 143  |                                 | $
|Operating expenses                                 |  |                                  | 165  |                                 |  
|Provisions for benefits, claims, and credit losses |  |                                  | (2   | )                               |  
|                                                   |  |                                  |      |                                 |  
|Income (loss) before taxes and minority interest   |  |                                  | (20  | )                               |  
|Income tax benefits                                |  |                                  | (188 | )                               |  
|Minority interest, after-tax                       |  |                                  | 4    |                                 |  
|                                                   |  |                                  |      |                                 |  
|Net Income                                         |  | $                                | 164  |                                 | $
|                                                   |  |                                  |      |                                 |  

Corporate/Otherincludes net corporate treasury results, corporate expenses, certain intersegment eliminations and taxes
not allocated to the individual businesses.

Revenues,
net of interest expense, of $143 million and $457 million in the 2003 third quarter and nine months increased $29 million and decreased $50 million,
respectively, from the 2002 periods. The three-month increase was driven primarily by higher intersegment eliminations. The decrease in the nine-month period was driven by lower net
treasury results, reflecting increased funding costs not allocated to the individual businesses.

Operating
expenses of $165 million and $563 million in the 2003 third quarter and nine months increased $28 million and $111 million, respectively, from the
2002 periods. The increase in expenses in both the 2003 third quarter and nine-month periods reflect increases in net unallocated corporate costs, including employee-related expenses, and
a $24 million expense for the contribution of appreciated venture capital securities to the Citigroup Foundation. The Citigroup Foundation contribution had minimal impact on Citicorp's earnings
after related tax benefits. The nine-month period increase also reflects higher intersegment eliminations. The provisions for benefits, claims, and credit losses in both the 2003 third
quarter and nine-month periods are the result of intersegment eliminations.

Income
tax benefits of $188 million and $192 million in the 2003 third quarter and nine-month periods include the impact of a tax reserve release of
$200 million that had been held at the legacy Associates' businesses and was deemed to be in excess of expected tax liabilities. Income tax benefits of $78 million and $35 million
in the 2002 third quarter and nine months, respectively, includes the tax benefit resulting from the loss incurred on the sale of the Associates property and casualty operations to TPC, which was
spun-off in the 2002 third quarter.

26

---

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act. The Company's actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as
"believe," "expect," "anticipate," "intend," "estimate," "may increase," "may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," and "could." These
forward-looking statements involve risks and uncertainties including, but not limited to: signs of strengthening in the global economy; sovereign or regulatory actions; levels of activity in the
global capital markets; macro-economic factors and political policies and developments in the countries in which the Company's businesses operate; the level of interest rates, bankruptcy filings and
unemployment rates around the world; the continued economic crisis in Argentina; future actions or decisions by the Argentine government or judiciary; the ultimate resolution of the redenomination
issue in Argentina; the impact of the restructuring
plan for voluntary annuity holders in Argentina; the realizability of government obligations in Argentina; the effect of applying FIN 46; current economic conditions in Japan, including rising
bankruptcy filings and unemployment rates; the credit performance of the portfolios, portfolio growth and seasonal factors; subsidiaries' dividending capabilities; the effect of banking and financial
services reforms; possible amendments to, and interpretations of, risk-based capital guidelines and reporting instructions; and the resolution of legal proceedings and related matters.

MANAGING GLOBAL RISK

The Company's Global Risk Management process is consolidated within Citigroup's Global Risk Management process as summarized below and as described in more detail
in Citigroup's 2002 Annual Report on Form 10-K under the section titled "Managing Global Risk."

The
Citigroup Risk Management framework recognizes the wide range and diversity of global business activities by balancing strong corporate oversight with defined independent risk
management functions at the business level.

The
risk management framework is grounded on the following seven principles, which apply universally across all businesses and all risk types:

Integration of Business and Risk ManagementRisk management is integrated within the business plan and strategy.

Risk OwnershipAll risks and resulting returns are owned and managed by an accountable business unit.

Independent OversightRisk limits are approved by both business management and independent risk management.

PoliciesAll risk management policies are clearly and formally documented.

Risk Identification and MeasurementAll risks are measured using defined methodologies, including stress testing.

Limits and MetricsAll risks are managed within a limit framework.

Risk ReportingAll risks are comprehensively reported across the organization.

The
following sections summarize the processes for managing credit, market, operational and country risks within Citigroup's major businesses.

CREDIT RISK MANAGEMENT PROCESS

Credit risk is the potential for financial loss resulting from the failure of a borrower or counterparty to honor its financial or contractual obligation. Credit
risk arises in many of the Company's business activities including lending activities, sales and trading activities, derivatives activities, and securities transactions settlement activities, and when
the Company acts as an intermediary on behalf of its clients and other third parties. The credit risk management process at Citigroup relies on corporate-wide standards to ensure
consistency and integrity, with business-specific policies and practices to ensure applicability and ownership.

27

---

Details of Credit Loss Experience

|In millions of dollars                                                       |  | 3rd Qtr.
2003 |        | 2nd Qtr.
2003 |   | 1st Qtr.
2003 |   | 4th Qtr.
2002 |        | 3rd Qtr.
2002 |  
|---------------------------------------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------- | - | ------------- | ------ | ------------- | -
|Allowance for credit losses at beginning of period                           |  | $             | 11,567 |               | $ | 11,449        |   | $             | 11,501 |               | $
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Provision for credit losses                                                  |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                                     |  |               | 1,538  |               |   | 1,888         |   |               | 1,939  |               |  
|Corporate                                                                    |  |               | 76     |               |   | 296           |   |               | 113    |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|                                                                             |  |               | 1,614  |               |   | 2,184         |   |               | 2,052  |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Gross credit losses:                                                         |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                                     |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                              |  |               | 1,264  |               |   | 1,383         |   |               | 1,496  |               |  
|In offices outside the U.S.                                                  |  |               | 891    |               |   | 832           |   |               | 726    |               |  
|Corporate                                                                    |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                              |  |               | 111    |               |   | 157           |   |               | 56     |               |  
|In offices outside the U.S.                                                  |  |               | 302    |               |   | 174           |   |               | 173    |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|                                                                             |  |               | 2,568  |               |   | 2,546         |   |               | 2,451  |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Credit recoveries:                                                           |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                                     |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                              |  |               | 186    |               |   | 173           |   |               | 192    |               |  
|In offices outside the U.S.                                                  |  |               | 228    |               |   | 158           |   |               | 144    |               |  
|Corporate(1)                                                                 |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                              |  |               | 3      |               |   | 19            |   |               |       |               |  
|In offices outside the U.S.                                                  |  |               | 78     |               |   | 57            |   |               | 31     |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|                                                                             |  |               | 495    |               |   | 407           |   |               | 367    |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Net credit losses                                                            |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                              |  |               | 1,186  |               |   | 1,348         |   |               | 1,360  |               |  
|In offices outside the U.S.                                                  |  |               | 887    |               |   | 791           |   |               | 724    |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|                                                                             |  |               | 2,073  |               |   | 2,139         |   |               | 2,084  |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Othernet(2)                                                                 |  |               | 135    |               |   | 73            |   |               | (20    | )             |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Allowance for credit losses at end of period                                 |  | $             | 11,243 |               | $ | 11,567        |   | $             | 11,449 |               | $
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Allowance for credit losses on letters of credit(3)                          |  |               | 126    |               |   | 167           |   |               | 167    |               |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Total allowance for loans, leases, lending commitments and letters of credit |  | $             | 11,369 |               | $ | 11,734        |   | $             | 11,616 |               | $
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Net consumer credit losses                                                   |  | $             | 1,741  |               | $ | 1,884         |   | $             | 1,886  |               | $
|As a percentage of average consumer loans                                    |  |               | 2.08   | %             |   | 2.28          | % |               | 2.29   | %             |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  
|Net corporate credit losses                                                  |  | $             | 332    |               | $ | 255           |   | $             | 198    |               | $
|As a percentage of average corporate loans                                   |  |               | 1.30   | %             |   | 0.98          | % |               | 0.78   | %             |  
|                                                                             |  |               |        |               |   |               |   |               |        |               |  

---

28

---

Cash-Basis, Renegotiated, and Past Due Loans

|In millions of dollars                                               |  | Sept. 30,
2003 |       | June 30,
2003 |   | Mar. 31,
2003 |  | Dec. 31,
2002 |       | Sept. 30,
2002
|-------------------------------------------------------------------- |  | -------------- | ----- | ------------- | - | ------------- |  | ------------- | ----- | --------------
|Corporate cash-basis loans(1)                                        |  |                |       |               |   |               |  |               |       |               
|In U.S. offices                                                      |  | $              | 839   |               | $ | 955           |  | $             | 699   |               
|In offices outside the U.S.                                          |  |                | 2,933 |               |   | 3,227         |  |               | 3,360 |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Total                                                                |  | $              | 3,772 |               | $ | 4,182         |  | $             | 4,059 |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Renegotiated loans (includes Corporate and Commercial Markets Loans) |  |                |       |               |   |               |  |               |       |               
|In U.S. offices                                                      |  | $              | 110   |               | $ | 126           |  | $             | 105   |               
|In offices outside the U.S.                                          |  |                | 51    |               |   | 52            |  |               | 52    |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Total                                                                |  | $              | 161   |               | $ | 178           |  | $             | 157   |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Consumer loans on which accrual of interest has been suspended       |  |                |       |               |   |               |  |               |       |               
|In U.S. offices                                                      |  | $              | 3,086 |               | $ | 2,966         |  | $             | 3,077 |               
|In offices outside the U.S.                                          |  |                | 2,690 |               |   | 2,800         |  |               | 2,883 |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Total                                                                |  | $              | 5,776 |               | $ | 5,766         |  | $             | 5,960 |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Accruing loans 90 or more days delinquent(2)                         |  |                |       |               |   |               |  |               |       |               
|In U.S. offices                                                      |  | $              | 2,322 |               | $ | 2,493         |  | $             | 2,488 |               
|In offices outside the U.S.                                          |  |                | 490   |               |   | 436           |  |               | 353   |               
|                                                                     |  |                |       |               |   |               |  |               |       |               
|Total                                                                |  | $              | 2,812 |               | $ | 2,929         |  | $             | 2,841 |               
|                                                                     |  |                |       |               |   |               |  |               |       |               

---

Other Real Estate Owned and Other Repossessed Assets

|In millions of dollars        |  | Sept. 30,
2003 |     | June 30,
2003 |   | Mar. 31,
2003 |  | Dec. 31,
2002 |     | Sept. 30,
2002
|----------------------------- |  | -------------- | --- | ------------- | - | ------------- |  | ------------- | --- | --------------
|Other real estate owned(1)    |  |                |     |               |   |               |  |               |     |               
|Consumer                      |  | $              | 460 |               | $ | 479           |  | $             | 509 |               
|Corporate                     |  |                | 59  |               |   | 60            |  |               | 59  |               
|                              |  |                |     |               |   |               |  |               |     |               
|Total other real estate owned |  | $              | 519 |               | $ | 539           |  |               | 568 |               
|                              |  |                |     |               |   |               |  |               |     |               
|Other repossessed assets(2)   |  | $              | 182 |               | $ | 228           |  | $             | 255 |               
|                              |  |                |     |               |   |               |  |               |     |               

---

29

---

CONSUMER PORTFOLIO REVIEW

In the consumer portfolio, credit loss experience is often expressed in terms of annualized net credit losses as a percentage of average loans. Pricing and credit
policies reflect the loss experience of each particular product and country. Consumer loans are generally written off no later than a predetermined number of days past due on a contractual basis, or
earlier in the event of bankruptcy. The specific write-off criteria is set according to loan product and country.

Commercial
Markets, which is included withinRetail Banking, includes loans and leases made principally to small and middle market
businesses. Commercial Markets loans are placed on a nonaccrual basis when it is determined that the payment of interest or principal is doubtful of collection or when interest or principal is past
due for 90 days or more, except when the loan is well-secured and in the process of collection. Commercial Markets non-accrual loans are not strictly determined on a
delinquency basis, therefore they have been presented as a separate component in the consumer credit disclosures.

The
following table summarizes delinquency and net credit loss experience in both the managed and on-balance sheet loan portfolios in terms of loans 90 days or more
past due, net credit losses, and as a percentage of related loans. The table also summarizes the accrual status of Commercial Markets loans as a percentage of related loans. The managed loan portfolio
includes credit card receivables held-for-sale and securitized and the table reconciles to a held basis, the comparable GAAP measure. Only North America Cards from a product
view, and North America from a regional view, are impacted. Although a managed basis presentation is not in conformity with GAAP, the Company believes it provides a representation of performance and
key indicators of the credit
card business that is consistent with the way management reviews operating performance and allocates resources. Furthermore, investors utilize information about the credit quality of the entire
managed portfolio as the results of both the held and securitized portfolios impact the overall performance of the Cards business. For a further discussion of managed basis reporting see the Cards
business on Page 10 and Note 10 to the Consolidated Financial Statements.

30

---

Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios

|                                                         |       | Total
Loans                  |       | 90 Days or More
Past Due(1) |                  | Average
Loans |      |       |        |                      |       |        |     
|-------------------------------------------------------- | ----- | ---------------------------- | ----- | --------------------------- | ---------------- | ------------- | ---- | ----- | ------ | -------------------- | ----- | ------ | ----
|
|
|
|Product View:                                            |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Cards                                                    |       | $                            | 128.7 |                             | $                | 2,353         |      | $     | 2,313  |                      | $     | 2,309  |     
|                                                         | Ratio |                              |       |                             |                  |               | 1.83 | %     |        | 1.88                 | %     |        | 1.86
|                                                         |       | North America                |       |                             | 115.1            |               |      | 2,098 |        |                      | 2,066 |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 1.82   | %                    |       | 1.86   | %   
|                                                         |       | International                |       |                             | 13.6             |               |      | 255   |        |                      | 247   |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 1.88   | %                    |       | 2.04   | %   
|Consumer Finance                                         |       |                              | 92.6  |                             |                  | 2,127         |      |       | 2,182  |                      |       | 2,179  |     
|                                                         | Ratio |                              |       |                             |                  |               | 2.30 | %     |        | 2.41                 | %     |        | 2.60
|                                                         |       | North America                |       |                             | 71.7             |               |      | 1,642 |        |                      | 1,681 |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 2.29   | %                    |       | 2.40   | %   
|                                                         |       | International                |       |                             | 20.9             |               |      | 485   |        |                      | 501   |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 2.32   | %                    |       | 2.45   | %   
|Retail Banking                                           |       |                              | 116.3 |                             |                  | 3,707         |      |       | 3,706  |                      |       | 2,969  |     
|                                                         | Ratio |                              |       |                             |                  |               | 3.19 | %     |        | 3.29                 | %     |        | 3.39
|                                                         |       | North America                |       |                             | 82.9             |               |      | 2,318 |        |                      | 2,385 |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 2.80   | %                    |       | 3.00   | %   
|                                                         |       | International                |       |                             | 33.4             |               |      | 1,389 |        |                      | 1,321 |        |     
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 4.16   | %                    |       | 3.99   | %   
|Private Bank(2)                                          |       |                              | 34.6  |                             |                  | 124           |      |       | 140    |                      |       | 201    |     
|                                                         | Ratio |                              |       |                             |                  |               | 0.36 | %     |        | 0.42                 | %     |        | 0.70
|Other Consumer                                           |       |                              | 1.1   |                             |                  |              |      |       |       |                      |       |       |     
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Managed loans
(excluding Commercial Markets)(3)          |       | $                            | 373.3 |                             | $                | 8,311         |      | $     | 8,341  |                      | $     | 7,658  |     
|Ratio                                                    |       |                              |       |                             |                  | 2.23          | %    |       | 2.31   | %                    |       | 2.36   | %   
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Securitized receivables (all in North America Cards)     |       |                              | (73.6 | )                           |                  | (1,414        | )    |       | (1,385 | )                    |       | (1,256 | )   
|Credit card receivables held-for-sale(4)                 |       |                              | (3.0  | )                           |                  | (120          | )    |       | (58    | )                    |       | (135   | )   
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|On-balance sheet loans
(excluding Commercial Markets)(5) |       | $                            | 296.7 |                             | $                | 6,777         |      | $     | 6,898  |                      | $     | 6,267  |     
|Ratio                                                    |       |                              |       |                             |                  | 2.28          | %    |       | 2.41   | %                    |       | 2.47   | %   
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|                                                         |       |                              |       |                             | Cash-Basis Loans |               |      |       |        | Net Credit Losses(1) |      
|                                                         |       | Commercial Markets Groups(6) |       | $                           | 40.4             |               | $    | 1,283 |        | $                    | 1,165 |        | $   
|                                                         |       |                              | Ratio |                             |                  |               |      |       | 3.17   | %                    |       | 2.76   | %   
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Total Consumer Loans                                     |       | $                            | 337.1 |                             |                  |               |      |       |        |                      |       |        |     
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Regional View:                                           |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|North America (excluding Mexico)                         |       | $                            | 284.0 |                             | $                | 5,752         |      | $     | 5,860  |                      | $     | 5,447  |     
|                                                         | Ratio |                              |       |                             |                  |               | 2.02 | %     |        | 2.14                 | %     |        | 2.23
|Mexico                                                   |       |                              | 6.5   |                             |                  | 374           |      |       | 358    |                      |       | 387    |     
|                                                         | Ratio |                              |       |                             |                  |               | 5.77 | %     |        | 5.39                 | %     |        | 6.16
|EMEA                                                     |       |                              | 31.0  |                             |                  | 1,489         |      |       | 1,412  |                      |       | 1,130  |     
|                                                         | Ratio |                              |       |                             |                  |               | 4.80 | %     |        | 4.67                 | %     |        | 4.34
|Japan                                                    |       |                              | 17.0  |                             |                  | 343           |      |       | 333    |                      |       | 260    |     
|                                                         | Ratio |                              |       |                             |                  |               | 2.02 | %     |        | 2.10                 | %     |        | 1.51
|Asia (excluding Japan)                                   |       |                              | 31.8  |                             |                  | 307           |      |       | 325    |                      |       | 340    |     
|                                                         | Ratio |                              |       |                             |                  |               | 0.96 | %     |        | 1.06                 | %     |        | 1.22
|Latin America                                            |       |                              | 3.0   |                             |                  | 46            |      |       | 53     |                      |       | 94     |     
|                                                         | Ratio |                              |       |                             |                  |               | 1.56 | %     |        | 1.80                 | %     |        | 3.00
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     
|Managed loans
(excluding Commercial Markets)(3)          |       | $                            | 373.3 |                             | $                | 8,311         |      | $     | 8,341  |                      | $     | 7,658  |     
|Ratio                                                    |       |                              |       |                             |                  | 2.23          | %    |       | 2.31   | %                    |       | 2.36   | %   
|                                                         |       |                              |       |                             |                  |               |      |       |        |                      |       |        |     

---

31

---

Consumer Loan Balances, Net of Unearned Income

|                                                     |  | End of Period |       | Average |  
|---------------------------------------------------- |  | ------------- | ----- | ------- | -
|
|Total managed(1)(including Commercial Markets)       |  | $             | 413.7 |         | $
|Securitized receivables (all in North America Cards) |  |               | (73.6 | )       |  
|Credit card receivables held-for-sale(2)             |  |               | (3.0  | )       |  
|                                                     |  |               |       |         |  
|On-balance sheet(3)(including Commercial Markets)    |  | $             | 337.1 |         | $
|                                                     |  |               |       |         |  

---

Total
delinquencies 90 days or more past due (excluding Commercial Markets) in the managed portfolio were $8.311 billion or 2.23% of loans at September 30, 2003,
compared to $8.341 billion or 2.31% of loans at June 30, 2003 and $7.658 billion or 2.36% at September 30, 2002. Total cash-basis loans in Commercial Markets
were $1.283 billion or 3.17% of loans at September 30, 2003, compared to $1.165 billion or 2.76% of loans at June 30, 2003 and $1.234 billion or 3.23% of loans at
September 30, 2002. Total managed net credit losses (excluding Commercial Markets) in the 2003 third quarter were $2.901 billion and the related loss ratio was 3.14%, compared to
$2.953 billion and 3.26% in the 2003 second quarter and $2.715 billion and 3.32% in the 2002 third quarter. In Commercial Markets, total net credit losses were $50 million and the
related loss ratio was 0.47% in the 2003 third quarter, compared to $139 million and 1.30% in the 2003 second quarter and $147 million and 1.50% in the 2002 third quarter. For a
discussion of trends by business, see business discussions on pages 10 - 16 and page 21.

Citicorp's
allowance for credit losses of $11.243 billion is available to absorb probable credit losses inherent in the entire portfolio. For analytical purposes only, the portion
of Citicorp's allowance for credit losses attributed to the consumer portfolio was $7.038 billion at September 30, 2003, $7.136 billion at June 30, 2003 and
$6.476 billion at September 30, 2002. The increase in the allowance for credit losses from a year ago was primarily due to additions of $452 million and $85 million
associated with the acquisitions of GSB and Diners Club Europe, respectively, as well as the impact of foreign currency translation, partially offset by the write-off of Argentine
compensation notes. The level of the consumer allowance also reflected improved credit conditions in Latin America, mainly in Argentina, and North America that were partially offset by deteriorating
credit conditions in Japan and Germany.

On
balance sheet consumer loans of $337.1 billion increased $45.1 billion or 15% from September 30, 2002. The increase from a year ago was primarily driven by the
additions of the GSB and Home Depot portfolios, combined with growth in mortgage and real estate-secured loans in Consumer Assets, Consumer Finance and the Private Bank and the impact of strengthening
currencies. These increases were partially offset by declines in North America Cards, CitiCapital and Japan. On-balance sheet loans in North America Cards declined $3.3 billion or
8% as increased securitization levels and the 2003 second quarter sale of $1.7 billion of non-strategic portfolios were partially offset by the addition of the Home Depot
private-label portfolio. Loans in CitiCapital declined reflecting the continued liquidation of non-core portfolios including a decline of approximately $1.2 billion resulting from
the 2003 third quarter sale of CitiCapital Fleet Services. The decline in Japan reflected continued contraction in the Consumer Finance portfolio.

Net
credit losses, delinquencies and the related ratios are affected by the credit performance of the portfolios, including bankruptcies, unemployment, global economic conditions,
portfolio growth and seasonal factors, as well as macro-economic and regulatory policies. In Japan, net credit losses and the related loss ratio may increase from the 2003 third quarter as a result of
current economic conditions, including rising bankruptcy filings and unemployment rates, and the impact of statutory changes. This paragraph contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

32

---



CORPORATE PORTFOLIO REVIEW

Corporate loans are identified as impaired and placed on a nonaccrual basis when it is determined that the payment of interest or principal is doubtful of
collection or when interest or principal is past due for 90 days or more. Impaired corporate loans are written down to the extent that principal is judged to be uncollectible. Impaired
collateral-dependent loans are written down to the lower of cost or collateral value.

The
following table summarizes corporate cash-basis loans and net credit losses:

|In millions of dollars                                                                 |  | Sept. 30, 2003 |       | June 30, 2003 |   | Dec. 31, 2002 |   | Sept. 30, 2002 |      
|-------------------------------------------------------------------------------------- |  | -------------- | ----- | ------------- | - | ------------- | - | -------------- | -----
|Corporate Cash-Basis Loans(1)                                                          |  |                |       |               |   |               |   |                |      
|Capital Markets and Banking                                                            |  | $              | 3,571 |               | $ | 3,669         |   | $              | 3,394
|Transaction Services                                                                   |  |                | 201   |               |   | 513           |   |                | 572  
|                                                                                       |  |                |       |               |   |               |   |                |      
|Total Corporate Cash-Basis Loans                                                       |  | $              | 3,772 |               | $ | 4,182         |   | $              | 3,966
|                                                                                       |  |                |       |               |   |               |   |                |      
|Net Credit Losses                                                                      |  |                |       |               |   |               |   |                |      
|Capital Markets and Banking                                                            |  | $              | 332   |               | $ | 254           |   | $              | 470  
|                                                                                       |  |                |       |               |   |               |   |                |      
|Transaction Services                                                                   |  |                |      |               |   | 1             |   |                | 5    
|Other                                                                                  |  |                |      |               |   |              |   |                | 19   
|                                                                                       |  |                |       |               |   |               |   |                |      
|Total Net Credit Losses                                                                |  | $              | 332   |               | $ | 255           |   | $              | 494  
|                                                                                       |  |                |       |               |   |               |   |                |      
|Corporate Allowance for Credit Losses                                                  |  | $              | 4,205 |               | $ | 4,431         |   | $              | 4,480
|Corporate Allowance for Credit Losses on Letters of Credit(2)                          |  |                | 126   |               |   | 167           |   |                | 167  
|                                                                                       |  |                |       |               |   |               |   |                |      
|Total Corporate Allowance for Loans, Leases, Lending Commitments and Letters of Credit |  | $              | 4,331 |               | $ | 4,598         |   | $              | 4,647
|                                                                                       |  |                |       |               |   |               |   |                |      
|Corporate Allowance As a Percentage of Total Corporate Loans(3)                        |  |                | 4.04  | %             |   | 4.07          | % |                | 4.17 
|                                                                                       |  |                |       |               |   |               |   |                |      

---

Corporate
cash-basis loans were $3.772 billion, $4.182 billion, $3.966 billion and $3.903 billion at September 30, 2003, June 30,
2003, December 31, 2002 and September 30, 2002, respectively. Corporate cash-basis loans decreased $410 million and $131 million from June 30, 2003 and
September 30, 2002, respectively. The decrease inCapital Markets and Bankingfrom June 30, 2003 to September 30, 2003
($98 million) was the result of charge-offs taken against reserves and paydowns from borrowers in the power and energy and telecommunications industries as well as corporate
borrowers in Argentina, Brazil and Hong Kong offset by increases in Mexico resulting from the transfer of loans fromTransaction Services. The increase
inCapital Markets and Bankingfrom September 30, 2002 to September 30, 2003 ($177 million) was due to borrowers in the power and
energy industry as well as the transfer of loans fromTransaction Services($248 million) offset by decreases due to charge-offs
against reserves as well as paydowns.Transaction Servicescash-basis loans as of September 30, 2003 decreased for the periods noted
principally from the transfer of loans toCapital Markets and Bankingreferenced above along with charge-offs in Poland and Argentina.

Total
corporate Other Real Estate Owned (OREO) was $59 million, $60 million, $53 million and $81 million at September 30, 2003, June 30, 2003,
December 31, 2002 and September 30, 2002, respectively. The $22 million decrease from September 30, 2002 is primarily due to continued improvements in the North America
real estate portfolio.

Total
corporate loans outstanding at September 30, 2003 were $104 billion as compared to $109 billion at June 30, 2003, $107 billion at
December 31, 2002 and $109 billion at September 30, 2002.

Total
corporate net credit losses of $332 million in the 2003 third quarter decreased $129 million compared to the 2002 third quarter, primarily due to an
$88 million decrease inTransaction Servicesreflecting prior-year trade finance write-offs in Argentina. Net credit
losses increased $77 million compared to the 2003 second quarter, primarily due to a $78 million increase inCapital Markets and Bankingdriven by higher write-offs in the power and energy industry.

The
allowance for credit losses is established by management based upon estimates of probable losses inherent in the portfolio. This evaluative process includes the utilization of
statistical models to analyze such factors as default rates, both historic and projected, geographic and industry concentrations and environmental factors. Larger non-homogeneous credits
are evaluated on an individual loan basis examining such factors as the borrower's financial strength, payment history, the financial stability of any guarantors and for secured loans, the realizable
value of any collateral. Additional reserves are established to provide for imprecision caused by the use of historical and projected loss data.

33

---

Citicorp's
allowance for credit losses for loans, leases, lending commitments and letters of credit of $11.369 billion is available to absorb probable credit losses inherent in
the entire portfolio. For analytical purposes only, the portion of Citicorp's allowance for credit losses for loans, leases, lending commitments and letters of credit attributed to the corporate
portfolio was $4.331 billion at September 30, 2003, compared to $4.598 billion at June 30, 2003, $4.647 billion at December 31, 2002 and $4.354 billion
at September 30, 2002. Included in the $4.331 billion of reserves at September 30, 2003, $297 million is held for unfunded commitments and $126 million for letters
of credit. The allowance attributed to corporate loans, leases and lending commitments as a percentage of corporate loans was 4.04% at September 30, 2003, as compared to 4.07%, 4.17%, and
3.91%, at June 30, 2003, December 31, 2002 and September 30, 2002, respectively. The $267 million decrease in total corporate reserves from June 30, 2003 primarily
reflects write-offs against previously established reserves in the power and energy industry and Argentina and a $100 million reserve release. The $100 million release was
geographically attributed to Mexico ($35 million), North America ($32.5 million), Asia, excluding Japan ($16.25 million), and Latin America ($16.25 million). The
$100 million reserve release was primarily due to an improving credit environment as evidenced by a decline in the estimates of probable losses inherent in the portfolio and declines in
classified and cash-basis loans. Losses on corporate lending activities and the level of cash-basis loans can vary widely with respect to timing and amount, particularly within
any narrowly defined business or loan type. Corporate net credit losses and cash-basis loans are expected to continue to improve compared to 2002 levels as the global economy strengthens,
offset by potential sovereign or regulatory actions, and other factors. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See
"Forward-Looking Statements" on page 27.

MARKET RISK MANAGEMENT PROCESS

Market risk at Citicorplike credit riskis managed through corporate-wide standards and business policies and procedures.
Market risks are measured in accordance with established standards to ensure consistency across businesses and the ability to aggregate like risks at the Citigroup level. Each business is required to
establish, and have approved by independent market risk management, a market risk limit framework, including risk measures, limits and controls, that clearly defines approved risk profiles and is
within the parameters of Citigroup's overall risk appetite.

Additional
information on market risk can be found in Citicorp's 2002 Annual Report on Form 10-K.

OPERATIONAL RISK MANAGEMENT PROCESS

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems or from external events. It includes reputation and
franchise risks associated with business practices or market conduct that the Company may undertake with respect to activities as principal, as well as agent, or through a special purpose vehicle.

The
Citigroup Operational Risk Policy codifies the core governing principles for operational risk management and provides the framework to identify, control, monitor, measure, and report
operational risks in a consistent manner across the Company.

COUNTRY AND CROSS-BORDER RISK MANAGEMENT PROCESS

Country Risk

The Citigroup Country Risk Committee is chaired by senior international business management, and includes as its members business managers and independent risk
managers from around the world. The committee's primary objective is to strengthen the management of country risk, defined as the total risk to the Company of an event that impacts a country. The
committee regularly reviews all risk exposures within a country, makes recommendations as to actions, and follows up to ensure appropriate accountability.

Cross-Border Risk

The Company's cross-border outstandings reflect various economic and political risks, including those arising from restrictions on the transfer of funds as well
as the inability to obtain payment from customers on their contractual obligations as a result of actions taken by foreign governments such as exchange controls, debt moratorium and restrictions on
the remittance of funds.

Management
oversight of cross-border risk is performed through a formal country risk review process that includes setting of cross-border limits, at least annually, in each country in
which Citigroup has cross-border exposure, monitoring of economic conditions globally and within individual countries with proactive action as warranted, and the establishment of internal risk
management policies. Under FFIEC guidelines, total cross-border outstandings include cross-border claims on third parties as well as investments in and funding of local franchises. Cross-border claims
on third parties (trade, short-term, and medium- and long-term claims) include cross-border loans, securities, deposits with banks, investments in affiliates, and other
monetary assets, as well as net revaluation gains on foreign exchange and derivative products.

34

---

The
cross-border outstandings are reported by assigning externally guaranteed outstandings to the country of the guarantor and outstandings for which tangible, liquid collateral is held
outside of the obligor's country to the country in which the collateral is held. For securities received as collateral, outstandings are assigned to the domicile of the issuer of the securities.

Investments
in and funding of local franchises represents the excess of local country assets over local country liabilities. Local country assets are claims on local residents recorded
by branches and majority-owned subsidiaries of Citicorp domiciled in the country, adjusted for externally guaranteed outstandings and certain collateral. Local country liabilities are obligations of
branches and majority-owned subsidiaries of Citicorp domiciled in the country, for which no cross-border guarantee is issued by Citigroup offices outside the country.

The
table below shows all countries where total FFIEC cross-border outstandings exceed 0.75% of total Citicorp assets:

|        |  | September 30, 2003 |     | December 31, 2002
|------- |  | ------------------ | --- | -----------------
|
|
|
|Germany |  | $                  | 4.8 |                  
|Italy   |  |                    | 0.4 |                  
|Mexico  |  |                    |    |                  
|Canada  |  |                    | 1.1 |                  
|Brazil  |  |                    | 0.5 |                  
|        |  |                    |     |                  

---

LIQUIDITY AND CAPITAL RESOURCES

Citicorp's primary source of incremental capital resources is its net earnings. Other sources include proceeds from the issuance of senior debt, subordinated debt
and commercial paper. Citicorp can also generate funds by securitizing various financial assets including credit card receivables and other receivables generally secured by collateral such as
single-family residences.

A
diversity of funding sources, currencies, and maturities is used to gain a broad access to the investor base. Citicorp's deposits, which represent 59% and 60% of total funding at
September 30, 2003 and December 31, 2002, respectively, are broadly diversified by both geography and customer segments.

Stockholder's
equity, which grew $4.9 billion during the first nine months of 2003 to $78.4 billion at September 30, 2003, continues to be an important component of
the overall funding structure. In addition, long-term debt is issued by Citicorp and its subsidiaries. Total Citicorp long-term debt outstanding at the end of the third quarter
was $92.9 billion, compared with $78.4 billion at year-end 2002.

Asset
securitization programs remain an important source of liquidity. Loans securitized and sold during the first nine months of 2003 included $12.0 billion of U.S. credit cards
and $47.9 billion of U.S. consumer mortgages. As credit card securitization transactions amortize, newly originated receivables are recorded on Citicorp's balance sheet and become available for
asset securitization. In the 2003 third quarter, the scheduled amortization of certain credit card securitization transactions made available $4.4 billion of new receivables. In addition, at
least $5.9 billion of credit card securitization transactions are scheduled to amortize during 2003.

Citicorp
uses these capital resources to pay dividends to its parent to support organic growth, to make acquisitions and to service its debt obligations.

As
a financial holding company, substantially all of Citicorp's net earnings are generated within its operating subsidiaries including Citibank and CitiFinancial. Each of these
subsidiaries makes these funds available to Citicorp in the form of dividends. The subsidiaries' dividend paying abilities are limited by certain covenant restrictions in credit agreements and/or by
regulatory requirements. Certain of these subsidiaries are also subject to rating agency requirements that also impact their capitalization levels.

During
2003, it is not anticipated that any restrictions on the subsidiaries' dividending capability will restrict Citicorp's ability to meet its obligations as and when they become due.
This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Citicorp
and certain subsidiaries issue commercial paper directly to investors. Citicorp, a bank holding company, maintains combined liquidity reserves of cash, securities and unused
bank lines of credit to support its combined outstanding commercial paper.

35

---

Associates
First Capital Corporation (Associates), a subsidiary of Citicorp, had a combination of unutilized credit facilities of $0.7 billion as of September 30, 2003
which have maturities within 2003. All of these facilities are guaranteed by Citicorp. In connection with the facilities, Citicorp is required to maintain a certain level of consolidated stockholder's
equity (as defined in the agreements). At September 30, 2003, this requirement was exceeded by approximately $60.4 billion. Citicorp has also guaranteed various debt obligations of
Associates and CitiFinancial Credit Company (CCC), indirect subsidiaries of Citicorp.

Borrowings
under bank lines of credit may be at interest rates based on LIBOR, CD rates, the prime rate, or bids submitted by the banks. Each company pays its banks facility fees for its
lines of credit.

Citicorp
and some of its nonbank subsidiaries have credit facilities with Citicorp's subsidiary banks, including Citibank, N.A. Borrowings under these facilities must be secured in
accordance with Section 23A of the Federal Reserve Act.

Management of Liquidity

Citicorp's liquidity risk management process is consolidated within Citigroup's liquidity risk management process as described below. Management of liquidity at
Citigroup is the responsibility of the Citigroup Corporate Treasurer. A uniform liquidity risk management policy exists for Citigroup and its major operating subsidiaries. Under this policy, there is
a single set of standards for the measurement of liquidity risk in order to ensure consistency across businesses, stability in methodologies and transparency of risk. Management of liquidity at each
operating subsidiary and/or country is performed on a daily basis and is monitored by Corporate Treasury.

A
primary tenet of Citigroup's liquidity management is strong decentralized liquidity management at each of its principal operating subsidiaries and in each of its countries, combined
with an active corporate oversight function. Along with the role of the Corporate Treasurer, the Global Asset and Liability Committee (ALCO) undertakes this oversight responsibility. The Global ALCO
functions as an oversight forum comprised of Citigroup's Chief Financial Officer, Chief Risk Officer, Corporate Treasurer, independent Senior Treasury Risk Officer, Head of Risk Architecture and the
senior corporate and business treasurers and business chief financial officers. One objective of the Global ALCO is to monitor and review the overall liquidity and balance sheet position of Citigroup
and its principal subsidiaries and to address corporate-wide policies and make recommendations back to senior management and the business units. Similarly, ALCOs are also established for
each country and/or major line of business.

Each
major operating subsidiary and/or country must prepare an annual funding and liquidity plan for review by the Corporate Treasurer and approval by the independent Senior Treasury
Risk Officer. The funding and liquidity plan includes analysis of the balance sheet as well as the economic and business conditions impacting the liquidity of the major operating subsidiary and/or
country. As part of the funding and liquidity plan, liquidity limits, liquidity ratios, market triggers, and assumptions for periodic stress tests are established and approved.

Liquidity
limits establish boundaries for potential market access in business-as-usual conditions and are monitored against the liquidity position on a daily
basis. These limits are established based on the size of the balance sheet, depth of the market, the experience level of local management, the stability of the liabilities, and liquidity of the
assets. Finally, the limits are subject to the evaluation of the entities' stress test results. Generally, limits are established such that in stress scenarios, entities need to be
self-funded or net providers of liquidity.

A
series of standard corporate-wide liquidity ratios have been established to monitor the structural elements of Citicorp's liquidity. For bank entities these include
measures of liquid assets against liquidity gaps, core deposits to loans, long-term assets to long-term liabilities and deposits to loans. In addition, several measures exist
to review potential concentrations of funding by individual name, product, industry, or geography. For the Parent Company, Insurance Entities and the Broker/Dealer, there are ratios established for
liquid assets against short-term obligations. Triggers to elicit management discussion have been established against these ratios. In addition, each individual major operating subsidiary
or country establishes targets against these ratios and may monitor other ratios as approved in its funding and liquidity plan.

Market
triggers are internal or external market or economic factors that may imply a change to market liquidity or Citicorp's access to the markets. Citicorp market triggers are
monitored by the Corporate Treasurer and the independent Senior Treasury Risk Officer and are discussed with the Global ALCO. Appropriate market triggers are also established and monitored for each
major operating subsidiary and/or country as part of the funding and liquidity plans. Local triggers are reviewed with the local country or business ALCO and independent risk management.

Periodic
liquidity stress testing is performed for each major operating subsidiary and/or country. The scenarios include assumptions about significant changes in key funding sources,
credit ratings, contingent uses of funding, and political and economic conditions in certain countries. The results of stress tests of individual countries and operating subsidiaries are reviewed to
ensure that each individual major operating subsidiary or country is self-funded or a net provider of liquidity. In addition, a Contingency Funding Plan is prepared on a periodic basis for
Citigroup. The plan includes detailed policies, procedures, roles and responsibilities, and the results

36

---

of
corporate stress tests. The product of these stress tests is a menu of alternatives that can be utilized by the Corporate Treasurer in a liquidity event.

Citicorp's
funding sources are well-diversified across funding types and geography, a benefit of the strength of the global franchise. Funding for the Parent Company and its
major operating subsidiaries includes a large geographically diverse retail and corporate deposit base, a significant portion of which is expected to be long-term and stable and is
considered core. Other sources of funding include collateralized borrowings, securitizations (primarily credit card and mortgages), long-term debt, and purchased/wholesale funds. This
funding is significantly enhanced by Citicorp's strong capital position. Each of Citicorp's major operating subsidiaries finances its operations on a basis consistent with its capitalization,
regulatory structure and the operating environment in which it operates.

Other
liquidity and capital resource considerations for Citicorp follow.

OFF-BALANCE SHEET ARRANGEMENTS

Citicorp and its subsidiaries are involved with several types of off-balance sheet arrangements, including special purpose entities (SPEs), lines and
letters of credit, and loan commitments. The principal uses of SPEs are to obtain sources of liquidity by securitizing certain of Citicorp's financial assets, to assist our clients in securitizing
their financial assets, and to create other investment products for our clients.

SPEs
may be organized as trusts, partnerships, or corporations. In a securitization, the company transferring assets to an SPE converts those assets into cash before they would have been
realized in the normal course of business. The SPE obtains the cash needed to pay the transferor for the assets received by issuing securities to investors in the form of debt and equity instruments,
certificates, commercial paper, and other notes of indebtedness. Investors usually have recourse to the assets in the SPE and often benefit from other credit enhancements, such as a cash collateral
account or overcollateralization in the form of excess assets in the SPE, or from a liquidity facility, such as a line of credit or asset purchase agreement. Accordingly, the SPE can typically obtain
a more favorable credit rating from rating agencies, such as Standard and Poor's and Moody's Investors Service, than the transferor could obtain for its own debt issuances, resulting in less expensive
financing costs. The transferor can use the cash proceeds from the sale to extend credit to additional customers or for other business purposes. The SPE may also enter into a derivative contract in
order to convert the yield or currency of the underlying assets to match the needs of the SPE's investors or to limit or change the credit risk of the SPE. The Company may be the counterparty to any
such derivative. The securitization process enhances the liquidity of the financial markets, may spread credit risk among several market participants, and makes new funds available to extend credit to
consumers and commercial entities.

Citicorp
also acts as intermediary or agent for its corporate clients, assisting them in obtaining sources of liquidity by selling the clients' trade receivables or other financial
assets to an SPE. The Company also securitizes clients' debt obligations in transactions involving SPEs that issue collateralized debt obligations. In yet other arrangements, the Company packages and
securitizes assets purchased in the financial markets in order to create new security offerings for institutional and private bank clients as well as retail customers. In connection with such
arrangements, Citicorp may purchase, and temporarily hold assets designated for subsequent securitization.

Securitization of Citicorp's Assets

In certain off-balance sheet arrangements, including credit card receivable and mortgage loan securitizations, Citicorp is securitizing assets that
were previously recorded in its Consolidated Statement of Financial Position. Under generally accepted accounting principles, the assets and liabilities of these qualifying SPEs do not appear in
Citicorp's Consolidated Statement of Financial Position. At September 30, 2003 and December 31, 2002 the total amount of loans securitized and outstanding was $202 billion and
$234 billion, respectively. Servicing rights and other retained interests amounted to $2.730 billion and $3.314 billion at September 30, 2003 and December 31, 2002,
respectively.

37

---

The
following tables summarize certain cash flows received from and paid to securitization trusts:

|                                                                  |  | Three Months Ended
|----------------------------------------------------------------- |  | ------------------
|
|
|Proceeds from new securitizations                                 |  | $                 
|Proceeds from collections reinvested in new receivables           |  |                   
|Servicing fees received                                           |  |                   
|Cash flows received on retained interest and other net cash flows |  |                   
|                                                                  |  |                   

|                                                                  |  | Nine Months Ended
|----------------------------------------------------------------- |  | -----------------
|
|
|Proceeds from new securitizations                                 |  | $                
|Proceeds from collections reinvested in new receivables           |  |                  
|Servicing fees received                                           |  |                  
|Cash flows received on retained interest and other net cash flows |  |                  
|                                                                  |  |                  

---

Credit Card Receivables

Credit card receivables are securitized through trusts, which are established to purchase the receivables. Citicorp sells receivables into the trusts on a
non-recourse basis. After securitization of credit card receivables, the Company continues to maintain credit card customer account relationships and provides servicing for receivables
transferred to the SPE trusts. As a result, the Company considers both the securitized and unsecuritized credit card receivables to be part of the business it manages. The documents establishing the
trusts generally require the Company to maintain an ownership interest in the trusts. The Company also arranges for third parties to provide credit enhancement to the trusts, including cash collateral
accounts, subordinated securities, and letters of credit. As specified in certain of the sale agreements, the net revenue with respect to the investors' interest collected by the trusts each month is
accumulated up to a predetermined maximum amount and is available over the remaining term of that transaction to make payments of interest to trust investors, fees, and transaction costs in the event
that net cash flows from the receivables are not sufficient. If the net cash flows are insufficient, Citicorp's loss is limited to its retained interest, consisting of seller's interest and an
interest-only strip that arises from the calculation of gain or loss at the time receivables are sold to the SPE. When the predetermined amount is reached, net revenue with respect to the
investors' interest is passed directly to the Citicorp subsidiary that sold the receivables. Credit card securitizations are revolving securitizations; that is, as customers pay their credit card
balances, the cash proceeds are used to purchase new receivables and replenish the receivables in the trust. Citigroup Global Markets Inc. (CGMI), an affiliate of Citicorp, is one of several
underwriters that distribute securities issued by the trusts to investors.

At
September 30, 2003 and December 31, 2002, total assets in the credit card trusts were $84 billion and $84 billion, respectively. Of that amount at
September 30, 2003 and December 31, 2002, $74 billion and $67 billion, respectively, has been sold to investors via trust-issued securities, and the remaining seller's
interest of $10 billion and $17 billion, respectively, is included in Citicorp's Consolidated Statement of Financial Position as Consumer Loans. Citicorp retains credit risk on its
seller's interests and reserves for credit losses inherent in the portfolio. Amounts receivable from the trusts were $1.34 billion and $1.11 billion, respectively, and amounts due to the
trusts were $983 million and $889 million, respectively, at September 30, 2003 and December 31, 2002. The Company also holds an interest-only strip of
$773 million at September 30, 2003 that arose from the calculation of gain or loss at the time assets were sold to the trusts. The Company recorded gains of $64 million and
$279 million related to the securitization of credit card receivables as a result of changes in estimates in the timing of revenue recognition on securitizations during the third quarter and
first nine months of 2003, respectively, and $239 million during the 2002 third quarter.

Mortgages and Other Assets

The Company provides a wide range of mortgage and other loan products to a diverse customer base. In addition to providing a source of liquidity and less
expensive funding, securitizing these assets also reduces the Company's credit exposure to the borrowers. In connection with the securitization of these loans, the Company may retain servicing rights
which entitle the Company to a future stream of cash flows based on the outstanding principal balances of the loans and the contractual servicing fee. Failure to service the loans in accordance with
contractual servicing obligations may lead to a termination of the servicing contracts and the loss of future servicing fees. In non-recourse servicing, the principal credit risk to the
servicer arises from temporary advances of funds. In

38

---

recourse
servicing, the servicer agrees to share credit risk with the owner of the mortgage loans, such as FNMA, FHLMC, GNMA, or with a private investor, insurer or guarantor. The Company's mortgage
loan securitizations are primarily non-recourse, thereby effectively transferring the risk of future credit losses to the purchasers of the securities issued by the trust. Home equity
loans may be revolving lines of credit under which borrowers have the right to draw on the line of credit up to their maximum amount for a specified number of years. In addition to servicing rights,
the Company also retains a residual interest in its auto loan, student loan and other assets securitizations, consisting of seller's interest and interest-only strips that arise from the
calculation of gain or loss at the time assets are sold to the SPE. The Company recognized gains related to the securitization of mortgages and other assets of $187 million and
$60 million during the three months ended September 30, 2003 and 2002, respectively, and $508 million and $155 million during the first nine months of 2003 and 2002,
respectively.

Securitizations of Client Assets

The Company acts as an intermediary or agent for its corporate clients, assisting them in obtaining sources of liquidity by selling the clients' trade receivables
or other financial assets to an SPE.

The
Company administers several third-party owned, special purpose, multi-seller finance companies that purchase pools of trade receivables, credit cards, and other financial assets from
third-party clients of the Company. As administrator, the Company provides accounting, funding, and operations services to these conduits. The Company has no ownership interest in the conduits. The
sellers continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. The sellers absorb the first losses of the
conduit by providing collateral in the form of excess assets. The Company along with other financial institutions provides liquidity facilities, such as commercial paper backstop lines of credit to
the conduits. The Company also provides loss enhancement in the form of letters of credit and other guarantees. Following certain actions taken to restructure certain multi-seller finance companies,
the Company has determined that they should not be consolidated under FIN 46. All fees are charged on a market basis. At September 30, 2003 and December 31, 2002, total assets in the
conduits were $46 billion and $49 billion, respectively, and liabilities were $46 billion and $49 billion, respectively. In addition, the Company participates in providing
liquidity backstop lines of credit to conduits administered by other financial institutions.

The
FASB continues to provide additional guidance on implementing FIN 46 through FASB Staff Positions. In addition, a draft interpretation of FIN 46 has been issued for comment. As this
guidance is finalized, the Company will continue to review the status of VIEs it is involved with, including the conduits. As a result of changes in the guidance, additional VIEs may ultimately be
required to be consolidated. This paragraph contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Creation of Other Investment and Financing Products

The Company packages and securitizes assets purchased in the financial markets in order to create new security offerings, including hedge funds, mutual funds,
unit investment trusts, and other investment funds, for institutional andPrivate Bankclients as well as retail customers, that match the clients'
investment needs
and preferences. The funds may be credit-enhanced by excess assets in the investment pool or by third-party insurers assuming the risks of the underlying assets, thus reducing the credit risk assumed
by the investors and diversifying investors' risk to a pool of assets as compared with investments in individual assets. For a limited number of mutual funds, the Company provides a guarantee that
investors will recover their principal investments. In certain instances for newly-established funds, the Company may provide seed money until such funds are ready to distribute interests widely to
investors. Where the Company has provided a majority of the initial investment, the fund is consolidated. The Company typically manages the funds for market-rate fees. In addition, the
Company may be one of several liquidity providers to the funds and may place the securities with investors.

39

---



Credit Commitments and Lines of Credit

The table below summarizes Citicorp's credit commitment as of September 30, 2003 and December 31, 2002.

|In millions of dollars                                                         |  | September 30, 2003 |         | December 31, 2002
|------------------------------------------------------------------------------ |  | ------------------ | ------- | -----------------
|Financial standby letters of credit and foreign office guarantees              |  | $                  | 34,435  |                  
|Performance standby letters of credit and foreign office guarantees            |  |                    | 7,527   |                  
|Commercial and similar letters of credit                                       |  |                    | 4,273   |                  
|One- to four-family residential mortgages                                      |  |                    | 6,406   |                  
|Revolving open-end loans secured by one- to four-family residential properties |  |                    | 12,503  |                  
|Commercial real estate, construction and land development                      |  |                    | 1,457   |                  
|Credit card lines(1)                                                           |  |                    | 489,980 |                  
|Commercial and other consumer loan commitments(2)                              |  |                    | 222,822 |                  
|                                                                               |  |                    |         |                  
|Total                                                                          |  | $                  | 779,403 |                  
|                                                                               |  |                    |         |                  

---

See
Note 11 to the Consolidated Financial Statements for additional information.

CAPITAL

Citicorp is subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System (FRB). These guidelines are used
to evaluate capital adequacy based primarily on the perceived credit risk associated with balance sheet assets, as well as certain off-balance sheet exposures such as unused loan
commitments, letters of credit, and derivative and foreign exchange contracts. The risk-based capital guidelines are supplemented by a leverage ratio requirement. To be "well capitalized"
under Federal bank regulatory agency definitions, a bank holding company must have a Tier 1 ratio of at least 6%, a combined Tier 1 and Tier 2 ratio of at least 10%, and a leverage ratio of at least
3%, and not be subject to a directive, order, or written agreement to meet and maintain specific capital levels.

|                                  |  | Sept. 30, 2003 |   | June 30, 2003 |   | Dec. 31, 2002 |  
|--------------------------------- |  | -------------- | - | ------------- | - | ------------- | -
|Tier 1 capital                    |  | 8.88           | % | 8.40          | % | 8.11          | %
|Total capital (Tier 1 and Tier 2) |  | 13.01          | % | 12.61         | % | 12.31         | %
|Leverage(1)                       |  | 6.91           | % | 6.44          | % | 6.82          | %
|Common stockholders' equity       |  | 9.98           | % | 9.97          | % | 10.11         | %
|                                  |  |                |   |               |   |               |  

---

Citicorp
maintained its well-capitalized capital position during the third quarter of 2003. Total capital (Tier 1 and Tier 2) amounted to $73.4 billion at
September 30, 2003, representing 13.01% of risk-adjusted assets. This compares to $69.9 billion and 12.61% at June 30, 2003 and $68.7 billion and 12.31% at
December 31, 2002. Tier 1 capital of $50.1 billion at September 30, 2003 represented 8.88% of risk-adjusted assets, compared to $46.6 billion and 8.40% at
June 30, 2003 and $45.3 billion and 8.11% at December 31, 2002. The Tier 1 capital ratio at September 30, 2003 was above Citicorp's target range of 8.00% to 8.30%.

40

---

Components of Capital Under Regulatory Guidelines

|In millions of dollars                                            |  | Sept. 30, 2003 |         | June 30, 2003 |   | Dec. 31, 2002 |  
|----------------------------------------------------------------- |  | -------------- | ------- | ------------- | - | ------------- | -
|Tier 1 capital                                                    |  |                |         |               |   |               |  
|Common stockholder's equity                                       |  | $              | 78,438  |               | $ | 75,706        |  
|Qualifying mandatorily redeemable securities of subsidiary trusts |  |                | 854     |               |   | 1,103         |  
|Minority interest(1)                                              |  |                | 1,190   |               |   | 802           |  
|Less: Net unrealized gains on securities available-for-sale(2)    |  |                | (1,113  | )             |   | (1,304        | )
|Accumulated net gains on cash flow hedges, net of tax             |  |                | (1,011  | )             |   | (1,471        | )
|Intangible assets:                                                |  |                |         |               |   |               |  
|Goodwill                                                          |  |                | (24,478 | )             |   | (24,682       | )
|Other intangible assets                                           |  |                | (3,538  | )             |   | (3,294        | )
|Other                                                             |  |                | (254    | )             |   | (262          | )
|                                                                  |  |                |         |               |   |               |  
|Total Tier 1 capital                                              |  |                | 50,088  |               |   | 46,598        |  
|                                                                  |  |                |         |               |   |               |  
|Tier 2 capital                                                    |  |                |         |               |   |               |  
|Allowance for credit losses(3)                                    |  |                | 7,218   |               |   | 7,106         |  
|Qualifying debt(4)                                                |  |                | 15,988  |               |   | 16,165        |  
|Unrealized marketable equity securities gains(2)                  |  |                | 61      |               |   | 58            |  
|                                                                  |  |                |         |               |   |               |  
|Total Tier 2 capital                                              |  |                | 23,267  |               |   | 23,329        |  
|                                                                  |  |                |         |               |   |               |  
|Total capital (Tier 1 and Tier 2)                                 |  | $              | 73,355  |               | $ | 69,927        |  
|                                                                  |  |                |         |               |   |               |  
|Risk-adjusted assets(5)                                           |  | $              | 563,854 |               | $ | 554,486       |  
|                                                                  |  |                |         |               |   |               |  

---

Common stockholder's equity increased $4.9 billion during the first nine months of 2003 to $78.4 billion at September 30,
2003, representing 9.98% of assets, compared to $73.5 billion and 10.11% at year-end 2002. The increase in common stockholder's equity during the first nine months of 2003
principally reflected net income of $10.0 billion and $0.2 billion related to the issuance of shares pursuant to employee benefit plans and other activity, partially offset by dividends
declared on common stock of $4.1 billion, and $1.2 billion related to the after-tax change in equity from non-owner sources. The decrease in the common
stockholder's equity ratio during the first nine months of 2003 reflected the above items, and was more than offset by the increase in total assets.

On
October 3, 2003, Citicorp redeemed for cash all of the $225 million Trust Preferred securities of Citicorp Capital III, at the redemption price of $25 per preferred
security plus accrued distributions to but excluding the date of redemption. Because notice for redemption of these securities occurred prior to quarter-end, they did not qualify as Tier 1
Capital at September 30, 2003.

The
total mandatorily redeemable securities of subsidiary trusts (trust securities) which qualify as Tier 1 capital at September 30, 2003 and December 31, 2002 were
$0.854 billion and $1.095 billion, respectively. For the nine months ended September 30, 2003 and 2002, interest expense of the trust securities amounted to $57 million.
The continued consolidation of the Issuer Trusts and the appropriate balance sheet classification of trust preferred securities is currently under review pursuant to FIN 46. Although the FRB has
issued interim guidance that continues to recognize trust preferred securities as a component of Tier 1 capital, it is possible that a change may result in these securities' qualifying for Tier 2
capital rather than Tier 1 capital. If Tier 2 capital treatment had been required at September 30, 2003, Citicorp would remain "well capitalized" under the Federal bank regulatory agencies
definitions.

Citicorp's
subsidiary depository institutions in the United States are subject to the risk-based capital guidelines issued by their respective primary Federal bank regulatory
agencies, which are generally similar to the FRB's guidelines. At September 30, 2003, all of Citicorp's subsidiary depository institutions were "well capitalized" under the Federal bank
regulatory agencies' definitions.

Citicorp
is a legal entity separate and distinct from Citibank, N.A. and its other subsidiaries and affiliates. There are various legal limitations on the extent to which Citicorp's
banking subsidiaries may extend credit, pay dividends or otherwise supply funds to Citicorp. The approval of the Office of the Comptroller of the Currency is required if total dividends declared by a
national bank in any calendar year exceed net profits (as defined) for that year combined with its retained net profits for the preceding two years. In addition, dividends for such a bank may not be
paid in excess of the bank's undivided profits. State-chartered bank subsidiaries are subject to dividend limitations imposed by applicable state law.

41

---

As
of September 30, 2003, Citicorp's national and state-chartered bank subsidiaries could have declared dividends to their respective parent companies, without regulatory
approval, of approximately $7.2 billion. In determining whether and to what extent to pay dividends, each bank subsidiary must also consider the effect of dividend payments on applicable
risk-based capital and leverage ratio requirements as well as policy statements of the Federal regulatory agencies that indicate that banking organizations should generally pay dividends
out of current operating earnings. Consistent with these considerations, Citicorp estimates that, as of September 30, 2003, its bank subsidiaries could have distributed dividends to Citicorp,
directly or through their parent holding company, of approximately $5.7 billion of the available $7.2 billion.

Citicorp
also receives dividends from its nonbank subsidiaries. These nonbank subsidiaries are generally not subject to regulatory restrictions on their payment of dividends except that
the approval of the Office of Thrift Supervision (OTS) may be required if total dividends declared by a savings association in any calendar year exceed amounts specified by that agency's regulations.
Citicorp is subject to risk-based capital and leverage guidelines issued by the FRB.

The
Basel Committee on Banking Supervision, consisting of central banks and bank supervisors from 13 countries, is developing a new set of risk based capital standards, on which it has
received significant input from Citigroup and other major banking organizations. The Basel Committee intends to finalize the capital standards by mid-2004 and implement a new framework by
year-end 2006. The U.S. banking regulators issued an advance notice of proposed rulemaking in August 2003 to address issues in advance of issuing their proposed rules incorporating
the new Basel standards. The final version of these rules will apply to Citigroup and other large U.S. banks and bank holding companies. Citigroup and Citicorp are assessing the impact of the proposed
new capital standards, participating in efforts to refine the standards and monitoring the progress of the Basel initiative.

In
January 2003, the FASB issued accounting guidance in FIN 46 which requires the consolidation of certain types of special purpose vehicles that previously were recorded as
off-balance sheet exposures. Although the FASB deferred the effective date of FIN 46 until periods ending after December 15, 2003, Citicorp has elected to implement the provisions
of FIN 46 as of July 1, 2003, with the exception of the deferral related to certain investment company subsidiaries. The impact of this early implementation was not material to the capital
ratios of Citicorp. On September 12, 2003, the Federal bank regulatory agencies issued an interim final rule and a notice of proposed rulemaking concerning how this new requirement will be
incorporated into the risk-based capital framework. The interim final rule is effective only for
reporting periods ending September 30 and December 31, 2003 and March 31, 2004. A final rule is expected to be published in the first quarter of 2004. The impact of adopting the
interim rule did not have a material impact on the capital ratios of Citicorp.

Additionally,
from time to time, the FRB and the FFIEC propose amendments to, and issue interpretations of, risk-based capital guidelines and reporting instructions. Such
proposals or interpretations could, if implemented in the future, affect reported capital ratios and net risk-adjusted assets. This statement is a forward-looking statement within the
meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 27.

Citibank, N.A. Ratios

|                                  |  | September 30,
2003 |   | June 30,
2003 |   | December 31,
2002 |  
|--------------------------------- |  | ------------------ | - | ------------- | - | ----------------- | -
|Tier 1 capital                    |  | 9.09               | % | 8.41          | % | 8.40              | %
|Total capital (Tier 1 and Tier 2) |  | 13.26              | % | 12.63         | % | 12.58             | %
|Leverage(1)                       |  | 7.02               | % | 6.39          | % | 7.00              | %
|Common stockholder's equity       |  | 7.55               | % | 7.46          | % | 7.89              | %
|                                  |  |                    |   |               |   |                   |  

---

Citibank's
net income for the third quarter of 2003 amounted to $2.0 billion. During the quarter, Citibank paid dividends of $0.3 billion to Citicorp (Citibank's parent company).

Total
subordinated notes issued to Citicorp that were outstanding at September 30, 2003, June 30, 2003 and December 31, 2002 and included in Citibank's Tier 2
Capital amounted to $11.5 billion at each date.

42

---

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by
this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and
procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.

Internal Control Over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.

43

---



CONSOLIDATED FINANCIAL STATEMENTS

CITICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

|                                                                       |                                     | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|---------------------------------------------------------------------- | ----------------------------------- | -------------------------------- | ------ | ------------------------------- | -
|
|
|Interest revenue                                                       |                                     |                                  |        |                                 |  
|Loans, including fees                                                  |                                     | $                                | 9,066  |                                 | $
|Deposits with banks                                                    |                                     |                                  | 155    |                                 |  
|Federal funds sold and securities purchased under agreements to resell |                                     |                                  | 73     |                                 |  
|Investments, including dividends                                       |                                     |                                  | 1,304  |                                 |  
|Trading account assets                                                 |                                     |                                  | 365    |                                 |  
|Loans held-for-sale                                                    |                                     |                                  | 336    |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  | 11,299 |                                 |  
|                                                                       |                                     |                                  |       
|Interest expense                                                       |                                     |                                  |        |                                 |  
|Deposits                                                               |                                     |                                  | 1,879  |                                 |  
|Trading account liabilities                                            |                                     |                                  | 23     |                                 |  
|Purchased funds and other borrowings                                   |                                     |                                  | 123    |                                 |  
|Long-term debt                                                         |                                     |                                  | 893    |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  | 2,918  |                                 |  
|                                                                       |                                     |                                  |       
|Net interest revenue                                                   |                                     |                                  | 8,381  |                                 |  
|Benefits, claims, and credit losses                                    |                                     |                                  |        |                                 |  
|Policyholder benefits and claims                                       |                                     |                                  | 113    |                                 |  
|Provision for credit losses                                            |                                     |                                  | 1,614  |                                 |  
|                                                                       |                                     |                                  |       
|Total benefits, claims, and credit losses                              |                                     |                                  | 1,727  |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  |        |                                 |  
|Net interest revenue after benefits, claims, and credit losses         |                                     |                                  | 6,654  |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  |        |                                 |  
|Fees, commissions, and other revenue                                   |                                     |                                  |        |                                 |  
|Fees and commissions                                                   |                                     |                                  | 3,105  |                                 |  
|Foreign exchange                                                       |                                     |                                  | 775    |                                 |  
|Trading account                                                        |                                     |                                  | 92     |                                 |  
|Investment transactions                                                |                                     |                                  | 80     |                                 |  
|Other revenue                                                          |                                     |                                  | 1,334  |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  | 5,386  |                                 |  
|                                                                       |                                     |                                  |       
|Operating expense                                                      |                                     |                                  |        |                                 |  
|Salaries                                                               |                                     |                                  | 2,531  |                                 |  
|Employee benefits                                                      |                                     |                                  | 557    |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       | Total employee and related expenses |                                  |        | 3,088                           |  
|Net premises and equipment                                             |                                     |                                  | 894    |                                 |  
|Restructuring-related items                                            |                                     |                                  | (11    | )                               |  
|Other expense                                                          |                                     |                                  | 2,662  |                                 |  
|                                                                       |                                     |                                  |       
|                                                                       |                                     |                                  | 6,633  |                                 |  
|                                                                       |                                     |                                  |       
|Income before income taxes and minority interest                       |                                     |                                  | 5,407  |                                 |  
|                                                                       |                                     |                                  |        |                                 |  
|Income taxes                                                           |                                     |                                  | 1,579  |                                 |  
|Minority interest, net of income taxes                                 |                                     |                                  | 162    |                                 |  
|                                                                       |                                     |                                  |       
|Net income                                                             |                                     | $                                | 3,666  |                                 | $
|                                                                       |                                     |                                  |       

See
Notes to the Unaudited Consolidated Financial Statements.

44

---



CITICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|In millions of dollars                                                                                                              |                                                                                                                                                          | September 30,
2003
(Unaudited) |         | December 31,
2002(1) |  
|----------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------- | -------------------- | -
|Assets                                                                                                                              |                                                                                                                                                          |                                |         |                      |  
|Cash and due from banks                                                                                                             |                                                                                                                                                          | $                              | 20,924  |                      | $
|Deposits at interest with banks                                                                                                     |                                                                                                                                                          |                                | 21,505  |                      |  
|Investments                                                                                                                         |                                                                                                                                                          |                                |         |                      |  
|                                                                                                                                    | Held to maturity                                                                                                                                         |                                |         | 66                   |  
|                                                                                                                                    | Available-for-sale and short-term and other (including $8,879 and $8,663 pledged to creditors at September 30, 2003 and December 31, 2002, respectively) |                                |         | 121,602              |  
|                                                                                                                                    | Venture capital                                                                                                                                          |                                |         | 3,640                |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total investments                                                                                                                   |                                                                                                                                                          |                                | 125,308 |                      |  
|Trading account assets (including $1,755 and $2,514 pledged to creditors at September 30, 2003 and December 31, 2002, respectively) |                                                                                                                                                          |                                | 64,515  |                      |  
|Loans held-for-sale                                                                                                                 |                                                                                                                                                          |                                | 17,776  |                      |  
|Federal funds sold and securities purchased under agreements to resell                                                              |                                                                                                                                                          |                                | 22,680  |                      |  
|Loans, net of unearned income                                                                                                       |                                                                                                                                                          |                                |         |                      |  
|                                                                                                                                    | Consumer                                                                                                                                                 |                                |         | 338,614              |  
|                                                                                                                                    | Corporate                                                                                                                                                |                                |         | 103,979              |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Loans, net of unearned income                                                                                                       |                                                                                                                                                          |                                | 442,593 |                      |  
|                                                                                                                                    | Allowance for credit losses                                                                                                                              |                                |         | (11,243              | )
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total loans, net                                                                                                                    |                                                                                                                                                          |                                | 431,350 |                      |  
|Goodwill                                                                                                                            |                                                                                                                                                          |                                | 24,478  |                      |  
|Intangible assets                                                                                                                   |                                                                                                                                                          |                                | 7,714   |                      |  
|Premises and equipment, net                                                                                                         |                                                                                                                                                          |                                | 6,425   |                      |  
|Interest and fees receivable                                                                                                        |                                                                                                                                                          |                                | 4,954   |                      |  
|Other assets                                                                                                                        |                                                                                                                                                          |                                | 38,406  |                      |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total assets                                                                                                                        |                                                                                                                                                          | $                              | 786,035 |                      | $
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Liabilities                                                                                                                         |                                                                                                                                                          |                                |         |                      |  
|                                                                                                                                    | Non-interest-bearing deposits in U.S. offices                                                                                                            |                                | $       | 27,755               |  
|                                                                                                                                    | Interest-bearing deposits in U.S. offices                                                                                                                |                                |         | 150,522              |  
|                                                                                                                                    | Non-interest-bearing deposits in offices outside the U.S.                                                                                                |                                |         | 22,708               |  
|                                                                                                                                    | Interest-bearing deposits in offices outside the U.S.                                                                                                    |                                |         | 260,701              |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total deposits                                                                                                                      |                                                                                                                                                          |                                | 461,686 |                      |  
|Trading account liabilities                                                                                                         |                                                                                                                                                          |                                | 34,465  |                      |  
|Purchased funds and other borrowings                                                                                                |                                                                                                                                                          |                                | 68,335  |                      |  
|Accrued taxes and other expense                                                                                                     |                                                                                                                                                          |                                | 10,174  |                      |  
|Long-term debt                                                                                                                      |                                                                                                                                                          |                                | 92,943  |                      |  
|Other liabilities                                                                                                                   |                                                                                                                                                          |                                | 39,994  |                      |  
|                                                                                                                                    |                                                                                                                                                          |                                |         |                      |  
|Stockholder's equity                                                                                                                |                                                                                                                                                          |                                |         |                      |  
|Common stock: ($0.01 par value) issued shares: 1,000 in each period                                                                 |                                                                                                                                                          |                                |        |                      |  
|Surplus                                                                                                                             |                                                                                                                                                          |                                | 40,162  |                      |  
|Retained earnings                                                                                                                   |                                                                                                                                                          |                                | 40,552  |                      |  
|Accumulated other changes in equity from nonowner sources                                                                           |                                                                                                                                                          |                                | (2,276  | )                    |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total stockholder's equity                                                                                                          |                                                                                                                                                          |                                | 78,438  |                      |  
|                                                                                                                                    |                                                                                                                                                          |                                |        
|Total liabilities and stockholder's equity                                                                                          |                                                                                                                                                          | $                              | 786,035 |                      | $
|                                                                                                                                    |                                                                                                                                                          |                                |        

---

See Notes to the Unaudited Consolidated Financial Statements.

45

---



CITICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)

|                                                                              |                                               | Nine Months Ended September 30, |       
|----------------------------------------------------------------------------- | --------------------------------------------- | ------------------------------- | ------
|
|Balance at beginning of period                                                |                                               | $                               | 73,540
|Net income                                                                    |                                               |                                 | 10,002
|Net change in unrealized gains and losses on investment securities, after-tax |                                               |                                 | 299   
|Net change in foreign currency translation adjustment, after-tax              |                                               |                                 | (1,039
|Net change for cash flow hedges, after-tax                                    |                                               |                                 | (443  
|                                                                              |                                               |                                 |       
|                                                                              | Total changes in equity from nonowner sources |                                 |       
|Dividends paid                                                                |                                               |                                 | (4,117
|Employee benefit plans and other activity                                     |                                               |                                 | 196   
|                                                                              |                                               |                                 |       
|Balance at end of period                                                      |                                               | $                               | 78,438
|                                                                              |                                               |                                 |       
|Summary of changes in equity from nonowner sources                            |                                               |                                 |       
|Net income                                                                    |                                               | $                               | 10,002
|Other changes in equity from nonowner sources                                 |                                               |                                 | (1,183
|                                                                              |                                               |                                 |       
|Total changes in equity from nonowner sources                                 |                                               | $                               | 8,819 
|                                                                              |                                               |                                 |       

See
Notes to the Unaudited Consolidated Financial Statements.

46

---



CITICORP AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

|                                                                                                   |                                                         | Nine Months Ended September 30, |        
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------- | -------
|
|
|Cash flows from operating activities                                                               |                                                         |                                 |        
|Net income                                                                                         |                                                         | $                               | 10,002 
|Adjustments to reconcile net income to net cash provided by operating activities                   |                                                         |                                 |        
|                                                                                                   | Provision for credit losses                             |                                 |        
|                                                                                                   | Depreciation and amortization of premises and equipment |                                 |        
|                                                                                                   | Amortization of goodwill and acquisition premium costs  |                                 |        
|                                                                                                   | Restructuring-related items                             |                                 |        
|                                                                                                   | Venture capital activity                                |                                 |        
|                                                                                                   | Net (gain) loss on sale of securities                   |                                 |        
|                                                                                                   | Changes in accruals and other, net                      |                                 |        
|                                                                                                   | Net increase in loans held for sale                     |                                 |        
|                                                                                                   | Net increase in trading account assets                  |                                 |        
|                                                                                                   | Net increase in trading account liabilities             |                                 |        
|                                                                                                   |                                                         |                                 |        
|Total adjustments                                                                                  |                                                         |                                 | (2,416 
|                                                                                                   |                                                         |                                 |        
|Net cash provided by operating activities                                                          |                                                         |                                 | 7,586  
|                                                                                                   |                                                         |                                 |        
|Cash flows from investing activities                                                               |                                                         |                                 |        
|Net (increase) decrease in deposits at interest with banks                                         |                                                         |                                 | (5,123 
|Securitiesavailable for sale and short-term and other                                             |                                                         |                                 |        
|                                                                                                   | Purchases                                               |                                 |        
|                                                                                                   | Proceeds from sales                                     |                                 |        
|                                                                                                   | Maturities                                              |                                 |        
|Net increase in federal funds sold and securities purchased under resale agreements                |                                                         |                                 | (17,403
|Net increase in loans                                                                              |                                                         |                                 | (19,112
|Proceeds from sales of loans                                                                       |                                                         |                                 | 15,006 
|Business acquisitions                                                                              |                                                         |                                 |       
|Capital expenditures on premises and equipment                                                     |                                                         |                                 | (1,166 
|Proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets |                                                         |                                 | 956    
|                                                                                                   |                                                         |                                 |        
|Net cash used in investing activities                                                              |                                                         |                                 | (33,611
|                                                                                                   |                                                         |                                 |        
|Cash flows from financing activities                                                               |                                                         |                                 |        
|Net increase in deposits                                                                           |                                                         |                                 | 23,966 
|Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements |                                                         |                                 | (9,449 
|Net increase in commercial paper and funds borrowed                                                |                                                         |                                 | 9,591  
|Proceeds from issuance of long-term debt                                                           |                                                         |                                 | 30,353 
|Repayment of long-term debt                                                                        |                                                         |                                 | (17,430
|Dividends paid                                                                                     |                                                         |                                 | (4,117 
|                                                                                                   |                                                         |                                 |        
|Net cash provided by financing activities                                                          |                                                         |                                 | 32,914 
|                                                                                                   |                                                         |                                 |        
|Effect of exchange rate changes on cash and due from banks                                         |                                                         |                                 | 311    
|                                                                                                   |                                                         |                                 |        
|Net increase (decrease) in cash and due from banks                                                 |                                                         |                                 | 7,200  
|Cash and due from banks at beginning of period                                                     |                                                         |                                 | 13,724 
|                                                                                                   |                                                         |                                 |        
|Cash and due from banks at end of period                                                           |                                                         | $                               | 20,924 
|                                                                                                   |                                                         |                                 |        
|Supplemental disclosure of cash flow information                                                   |                                                         |                                 |        
|Cash paid during the period for:                                                                   |                                                         |                                 |        
|                                                                                                   | Interest                                                |                                 | $      
|                                                                                                   | Income taxes                                            |                                 |        
|                                                                                                   | Non-cash investing activities:                          |                                 |        
|                                                                                                   | Transfers to repossessed assets                         |                                 | $      
|                                                                                                   |                                                         |                                 |        

See
Notes to the Unaudited Consolidated Financial Statements.

47

---



CITIBANK, N.A. AND SUBSIDIARIES    CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|In millions of dollars                                                                                                          |                                                                                                                               | September 30,
2003
(Unaudited) |         | December 31,
2002 |  
|------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------- | ----------------- | -
|Assets                                                                                                                          |                                                                                                                               |                                |         |                   |  
|Cash and due from banks                                                                                                         |                                                                                                                               | $                              | 15,358  |                   | $
|Deposits at interest with banks                                                                                                 |                                                                                                                               |                                | 18,210  |                   |  
|Investments                                                                                                                     |                                                                                                                               |                                |         |                   |  
|                                                                                                                                | Held to maturity                                                                                                              |                                |         | 59                |  
|                                                                                                                                | Available-for-sale (including $1,130 and $871 pledged to creditors at September 30, 2003 and December 31, 2002, respectively) |                                |         | 87,355            |  
|                                                                                                                                | Venture capital                                                                                                               |                                |         | 571               |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total investments                                                                                                               |                                                                                                                               |                                | 87,985  |                   |  
|Trading account assets (including $147 and $203 pledged to creditors at September 30, 2003 and December 31, 2002, respectively) |                                                                                                                               |                                | 61,135  |                   |  
|Loans held-for-sale                                                                                                             |                                                                                                                               |                                | 5,443   |                   |  
|Federal funds sold and securities purchased under agreements to resell                                                          |                                                                                                                               |                                | 26,965  |                   |  
|Loans, net of unearned income                                                                                                   |                                                                                                                               |                                | 298,350 |                   |  
|Allowance for credit losses                                                                                                     |                                                                                                                               |                                | (7,846  | )                 |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total loans, net                                                                                                                |                                                                                                                               |                                | 290,504 |                   |  
|Goodwill                                                                                                                        |                                                                                                                               |                                | 5,773   |                   |  
|Intangible assets                                                                                                               |                                                                                                                               |                                | 4,970   |                   |  
|Premises and equipment, net                                                                                                     |                                                                                                                               |                                | 3,883   |                   |  
|Interest and fees receivable                                                                                                    |                                                                                                                               |                                | 3,656   |                   |  
|Other assets                                                                                                                    |                                                                                                                               |                                | 30,658  |                   |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total assets                                                                                                                    |                                                                                                                               | $                              | 554,540 |                   | $
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Liabilities                                                                                                                     |                                                                                                                               |                                |         |                   |  
|                                                                                                                                | Non-interest-bearing deposits in U.S. offices                                                                                 |                                | $       | 20,945            |  
|                                                                                                                                | Interest-bearing deposits in U.S. offices                                                                                     |                                |         | 92,683            |  
|                                                                                                                                | Non-interest-bearing deposits in offices outside the U.S.                                                                     |                                |         | 18,037            |  
|                                                                                                                                | Interest-bearing deposits in offices outside the U.S.                                                                         |                                |         | 233,298           |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total deposits                                                                                                                  |                                                                                                                               |                                | 364,963 |                   |  
|Trading account liabilities                                                                                                     |                                                                                                                               |                                | 34,532  |                   |  
|Purchased funds and other borrowings                                                                                            |                                                                                                                               |                                | 52,531  |                   |  
|Accrued taxes and other expense                                                                                                 |                                                                                                                               |                                | 6,751   |                   |  
|Long-term debt and subordinated notes                                                                                           |                                                                                                                               |                                | 22,589  |                   |  
|Other liabilities                                                                                                               |                                                                                                                               |                                | 29,348  |                   |  
|Stockholder's equity                                                                                                            |                                                                                                                               |                                |         |                   |  
|Preferred stock ($100 par value)                                                                                                |                                                                                                                               |                                | 1,950   |                   |  
|Capital stock ($20 par value) outstanding shares: 37,534,553 in each period                                                     |                                                                                                                               |                                | 751     |                   |  
|Surplus                                                                                                                         |                                                                                                                               |                                | 23,434  |                   |  
|Retained earnings                                                                                                               |                                                                                                                               |                                | 18,955  |                   |  
|Accumulated other changes in equity from nonowner sources(1)                                                                    |                                                                                                                               |                                | (1,264  | )                 |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total stockholder's equity                                                                                                      |                                                                                                                               |                                | 43,826  |                   |  
|                                                                                                                                |                                                                                                                               |                                |         |                   |  
|Total liabilities and stockholder's equity                                                                                      |                                                                                                                               | $                              | 554,540 |                   | $
|                                                                                                                                |                                                                                                                               |                                |         |                   |  

---

See Notes to the Unaudited Consolidated Financial Statements.

48

---



CITICORP AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     Basis of Presentation

The accompanying unaudited consolidated financial statements as of September 30, 2003 and for the three-and nine-month periods ended
September 30, 2003 include the accounts of Citicorp (Citicorp) and its subsidiaries (collectively, the Company). In the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation have been reflected. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial
statements and related notes included in Citicorp's 2002 Annual Report on Form 10-K.

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of
America, but is not required for interim reporting purposes, has been condensed or omitted.

Certain
reclassifications have been made to the prior period's financial statements to conform to the current period's presentation.

2.     Accounting Changes

Stock-Based Compensation

On January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation,"
(SFAS 123), prospectively to all awards granted, modified, or settled after January 1, 2003. The prospective method is one of the adoption methods provided for under SFAS No. 148,
"Accounting for Stock-Based CompensationTransition and Disclosure," issued in December 2002. SFAS 123 requires that compensation cost for all stock awards be calculated and
recognized over the service period (generally equal to the vesting period). This compensation cost is determined using option pricing models, intended to estimate the fair value of the awards at the
grant date. Similar to Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," the alternative method of accounting, an offsetting increase to stockholders'
equity under SFAS 123 is recorded equal to the amount of compensation expense charged.

Had
the Company applied SFAS 123 in accounting for the Company's stock option plans for all options granted, net income would have been the pro forma amounts indicated below:

|                                                               |  |                       |  | Three Months Ended
September 30, |             | Nine Months Ended
September 30,
|-------------------------------------------------------------- |  | --------------------- |  | -------------------------------- | ----------- | -------------------------------
|
|
|Compensation expense related to stock option plans, net of tax |  | As reported
Pro forma |  | $                                | 19
49       |                                
|Net income                                                     |  | As reported
Pro forma |  | $                                | 3,666
3,636 |                                

Costs Associated with Exit or Disposal Activities

On January 1, 2003, Citicorp adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS 146).
SFAS 146 requires that a liability for costs associated with exit or disposal activities, other than in a business combination, be recognized when the liability is incurred. Previous generally
accepted accounting principles provided for the recognition of such costs at the date of management's commitment to an exit plan. In addition, SFAS 146 requires that the liability be measured
at fair value and be adjusted for changes in estimated cash flows. The provisions of the new standard are effective for exit or disposal activities initiated after December 31, 2002. The impact
of adopting of SFAS 146 was not material.

49

---

Consolidation of Variable Interest Entities

In January 2003, the FASB released FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46). The provisions of FIN 46
applied immediately to variable interest entities (VIEs) created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after that date. In October 2003, the FASB
announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to February 1, 2003. Citicorp elected
to adopt the remaining provisions of FIN 46 in the third quarter of 2003, with the exception of the deferral related to certain investment company subsidiaries. FIN 46 changes the method of
determining whether certain entities, including securitization entities, should be included in the Company's Consolidated Financial Statements. An entity is subject to FIN 46 and is called a VIE if it
has (1) equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) equity investors that
cannot make significant decisions about the entity's operations, or that do not absorb the expected losses or receive the expected returns of the entity. All other entities are evaluated for
consolidation under SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries." A VIE is consolidated by its primary beneficiary, which is the party involved with the VIE that absorbs a
majority of the expected losses, receives a majority of the expected residual returns, or both.

For
any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities and noncontrolling interest of the VIE are initially
measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an
accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46 first applies may be used to measure the assets, liabilities and noncontrolling interest of the
VIE. The implementation of FIN 46 on July 1, 2003 resulted in the consolidation of VIEs increasing both total assets and total liabilities by approximately $955 million.

The
FASB continues to provide additional guidance on implementing FIN 46 through FASB staff positions. In addition, a draft interpretation of FIN 46 has been issued for comment. As this
guidance is finalized, the Company will continue to review the status of VIEs it is involved with. As a result of changes in the guidance, additional VIEs may ultimately be required to be
consolidated.

Guarantees and Indemnifications

On January 1, 2003, the Company adopted the recognition and measurement provisions of FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (FIN 45), which requires that, for guarantees within the scope of FIN 45 issued or amended after
December 31, 2002, a liability for the fair value of the obligation undertaken in issuing the guarantee be recognized. The impact of adopting FIN 45 was not material.

Business Combinations, Goodwill and Other Intangible Assets

Effective July 1, 2001, the Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations"
(SFAS No. 141) and certain provisions of SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142), as required for goodwill and indefinite-lived intangible assets
resulting from business combinations consummated after June 30, 2001. The new rules require that all business combinations consummated after June 30, 2001 be accounted for under the
purchase method. The nonamortization provisions of the new rules affecting goodwill and intangible assets deemed to have indefinite lives are effective for all purchase business combinations completed
after June 30, 2001.

On
January 1, 2002, Citicorp adopted the remaining provisions of SFAS No. 142, when the rules became effective for calendar year companies. Under the new rules, effective
January 1, 2002, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to annual impairment tests. Other intangible assets continue to be
amortized over their useful lives.

Impairment or Disposal of Long-Lived Assets

On January 1, 2002, Citicorp adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144),
when the rule became effective for calendar year companies. SFAS 144 establishes additional criteria as compared to existing generally accepted accounting principles to determine when a
long-lived asset is held-for-sale. It also broadens the definition of "discontinued operations," but does not allow for the accrual of future operating losses, as
was previously permitted. The impact of adopting SFAS 144 was not material.

Derivative Instruments and Hedging Activities

On July 1, 2003, the Company adopted SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (SFAS 149).
SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133. In
particular, this Statement clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative and when a derivative contains a financing component
that warrants special reporting in the statement of cash flows. This Statement is generally effective for contracts entered into or modified after June 30, 2003 and did not have a material
impact on the Company's financial statements.

50

---

Liabilities and Equity

On July 1, 2003, the Company adopted SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity" (SFAS 150). SFAS 150 establishes standards for how an issuer measures certain financial instruments with characteristics of both liabilities and equity and classifies them in its
statement of financial position. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) when that financial instrument
embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective July 1, 2003, and did
not have a material impact on the Company's financial statements.

3.     Business Developments and Combinations

Acquisition of Sears' Credit Card Business

On November 3, 2003, Citigroup acquired the Sears' Credit Card and Financial Products business (the 8th largest portfolio in the U.S.). The purchase price
of $31.8 billion included Sears' private label and bank card credit card receivables of $28.6 billion (prior to any FFIEC and other purchase adjustments) plus a 10% premium of
approximately $2.9 billion and $0.3 billion for other assets, business facilities and employees (approximately 8,000 employees, 6,000 full-time). In addition, the companies
signed a multi-year marketing and servicing agreement across a range of each company's businesses, products and services. The operations of Sears' Credit Card and Financial Products
business will be integrated into the businesses of Citicorp.

Acquisition of Golden State Bancorp

On November 6, 2002, Citigroup completed its acquisition of 100% of Golden State Bancorp (GSB) in a transaction in which Citigroup paid approximately
$2.3 billion in cash and issued 79.5 million Citigroup common shares. The total transaction value of approximately $5.8 billion was based on the average prices of Citigroup
shares, as adjusted for the effect of the TPC distribution, for the two trading days before and after May 21, 2002, the date the terms of the acquisition were agreed to and announced. GSB was
the parent company of California Federal Bank, the second-largest thrift in the U.S. and, through its First Nationwide Mortgage business, the eighth-largest mortgage servicer. The operations of GSB
were integrated into the businesses of Citicorp.

Goodwill and Intangible Assets

During the 2003 third quarter, the Company recorded goodwill of approximately $150 million in connection with the acquisition of a credit card business in
Europe and reduced goodwill by $25 million in connection with the sale of a business in the Consumer segment. The Company also recorded goodwill of $41 million during the 2002 second
quarter and $74 million during the 2002 first quarter in connection with the consumer
finance acquisitions of Marafuku Co., Ltd. and Taihei Co., Ltd., respectively, in Japan. Additionally, in the 2002 first quarter, Banamex completed the purchase of the remaining 48%
interest in Seguros Banamex, a life insurance business, and Afore Banamex, a pension fund management business, from AEGON for $1.24 billion which resulted in additional goodwill of
$1.14 billion in the Global Investment Management segment.

During
the first nine months of 2003, the Company recorded approximately $763 million of mortgage servicing rights, $331 million of purchased credit card relationships and
$300 million of other intangible assets. The mortgage servicing rights acquired will be amortized on an accelerated basis over the contractual life of the underlying serviced loans, adjusted
for actual prepayment activity. The majority of these servicing rights are expected to be amortized within five years. The purchased credit card relationships and the other intangible assets acquired
are to be amortized over eight years. Intangible assets amortization expense was $269 million and $201 million for the three months ended September 30, 2003 and 2002,
respectively, and $841 million and $574 million for the nine months ended September 30, 2003 and 2002, respectively.

51

---

4.     Business Segment Information

The following table presents certain information regarding the Company's operations by industry segments:

|                                     |  | Total Revenues, Net
of Interest Expense |        | Provision (Benefit)
for Income Taxes |   | Income (Loss)(1) |   | Identifiable Assets
|------------------------------------ |  | --------------------------------------- | ------ | ------------------------------------ | - | ---------------- | - | -------------------
|
|
|
|Global Consumer                      |  | $                                       | 9,716  |                                      | $ | 9,307            |   | $                  
|Global Corporate and Investment Bank |  |                                         | 2,764  |                                      |   | 2,952            |   |                    
|Global Investment Management         |  |                                         | 732    |                                      |   | 695              |   |                    
|Proprietary Investment Activities    |  |                                         | 412    |                                      |   | (98              | ) |                    
|Corporate/Other                      |  |                                         | 143    |                                      |   | 114              |   |                    
|                                     |  |                                         |        |                                      |   |                  |   |                    
|Total                                |  | $                                       | 13,767 |                                      | $ | 12,970           |   | $                  
|                                     |  |                                         |        |                                      |   |                  |   |                    

|                                     |  | Total Revenues, Net
of Interest Expense |        | Provision (Benefit)
for Income Taxes |   | Income (Loss)(1) |  
|------------------------------------ |  | --------------------------------------- | ------ | ------------------------------------ | - | ---------------- | -
|
|
|Global Consumer                      |  | $                                       | 28,637 |                                      | $ | 26,500           |  
|Global Corporate and Investment Bank |  |                                         | 8,619  |                                      |   | 9,006            |  
|Global Investment Management         |  |                                         | 2,377  |                                      |   | 2,204            |  
|Proprietary Investment Activities    |  |                                         | 565    |                                      |   | (43              | )
|Corporate/Other                      |  |                                         | 457    |                                      |   | 507              |  
|                                     |  |                                         |        |                                      |   |                  |  
|Total                                |  | $                                       | 40,655 |                                      | $ | 38,174           |  
|                                     |  |                                         |        |                                      |   |                  |  

---

52

---

5.     Investments

|In millions of dollars                                       |  | September 30,
2003 |         | December 31,
2002
|------------------------------------------------------------ |  | ------------------ | ------- | -----------------
|Fixed maturities, primarily available-for-sale at fair value |  | $                  | 116,574 |                  
|Equity securities, primarily at fair value                   |  |                    | 4,747   |                  
|Venture capital, at fair value                               |  |                    | 3,640   |                  
|Short-term and other                                         |  |                    | 347     |                  
|                                                             |  |                    |         |                  
|                                                             |  | $                  | 125,308 |                  
|                                                             |  |                    |         |                  

The
amortized cost and fair value of investments in fixed maturities and equity securities at September 30, 2003 and December 31, 2002 were as follows:

|                                              |  | September 30, 2003 |         | December 31, 2002(1)
|--------------------------------------------- |  | ------------------ | ------- | --------------------
|
|Fixed maturity securities held to maturity(2) |  | $                  | 66      |                     
|                                              |  |                    |         |                     
|Fixed maturity securities available-for-sale  |  |                    |         |                     
|U.S. Treasury and Federal agencies            |  | $                  | 43,377  |                     
|State and municipal                           |  |                    | 7,492   |                     
|Foreign government                            |  |                    | 44,270  |                     
|U.S. corporate                                |  |                    | 6,646   |                     
|Other debt securities                         |  |                    | 13,135  |                     
|                                              |  |                    |         |                     
|                                              |  |                    | 114,920 |                     
|                                              |  |                    |         |                     
|Total fixed maturities                        |  | $                  | 114,986 |                     
|                                              |  |                    |         |                     
|Equity securities(3)                          |  | $                  | 4,612   |                     
|                                              |  |                    |         |                     

---

The
following table presents venture capital investment gains and losses:

|                                           |  | Nine Months
Ended September 30, |     
|------------------------------------------ |  | ------------------------------- | ----
|
|
|Net realized investment gains              |  | $                               | 276 
|Gross unrealized gains                     |  |                                 | 550 
|Gross unrealized (losses)                  |  |                                 | (313
|                                           |  |                                 |     
|Net realized and unrealized gains/(losses) |  | $                               | 513 
|                                           |  |                                 |     

53

---

6.     Trading Account Assets and Liabilities

Trading account assets and liabilities at market value consisted of the following:

|In millions of dollars                             |  | September 30,
2003 |        | December 31,
2002
|-------------------------------------------------- |  | ------------------ | ------ | -----------------
|Trading Account Assets                             |  |                    |        |                  
|U.S. Treasury and Federal agency securities        |  | $                  | 1,344  |                  
|Foreign government, corporate and other securities |  |                    | 29,791 |                  
|Derivative and other contractual commitments(1)    |  |                    | 33,380 |                  
|                                                   |  |                    |        |                  
|                                                   |  | $                  | 64,515 |                  
|                                                   |  |                    |        |                  
|Trading Account Liabilities                        |  |                    |        |                  
|Securities sold, not yet purchased                 |  | $                  | 5,994  |                  
|Derivative and other contractual commitments(1)    |  |                    | 28,471 |                  
|                                                   |  |                    |        |                  
|                                                   |  | $                  | 34,465 |                  
|                                                   |  |                    |        |                  

---

7.     Restructuring-Related Items

|                                      |                     | Restructuring Initiatives |     
|------------------------------------- | ------------------- | ------------------------- | ----
|
|
|Original charges                      |                     | $                         | 65  
|                                      |                     |                           |     
|Acquisitions during:(1)               |                     |                           |     
|                                      | 2002                |                           |     
|                                      | 2001                |                           |     
|                                      |                     |                           |     
|                                      |                     |                           | 186 
|                                      |                     |                           |     
|Utilization during:(2)                |                     |                           |     
|                                      | Third quarter 2003  |                           |     
|                                      | Second quarter 2003 |                           |     
|                                      | First quarter 2003  |                           |     
|                                      | 2002                |                           |     
|                                      | 2001                |                           |     
|                                      |                     |                           |     
|                                      |                     |                           | (213
|                                      |                     |                           |     
|Other                                 |                     |                           | (2  
|                                      |                     |                           |     
|Reserve balance at September 30, 2003 |                     | $                         | 36  
|                                      |                     |                           |     

---

There
were no restructuring charges during the first nine months of 2003. During 2002, Citicorp recorded restructuring charges of $65 million. Of the $65 million,
$42 million was recorded in the first quarter of 2002 related to the downsizing of Global Consumer and GCIB operations in Argentina, and $23 million was recorded in the fourth quarter of
2002 related to the acquisition of GSB and the integration of its operations within the Global Consumer business. In addition, a restructuring reserve of $186 million was recognized in the
fourth quarter of 2002 as a liability in the purchase price allocation of GSB related to the integration of operations and operating platforms. These restructuring initiatives are expected to be
implemented this year. The 2002 reserves included $150 million related to employee severance and $101 million related to exiting leasehold and other contractual obligations.

The
2002 reserves included $108 million of employee severance related to the GSB acquisition reflecting the cost of eliminating approximately 2,700 positions in Citicorp's Global
Consumer business in the United States. The 2002 restructuring reserve utilization of $213 million was related to severance and other costs (of which $115 million was employee severance
and $98 million is legally obligated) which were paid in cash, including $11 million and $145 million in the third quarter and first nine months of 2003, respectively. Through
September 30, 2003, approximately 2,250 gross staff positions have been eliminated in connection with the GSB acquisition, including approximately 830 and 2,150 in the third quarter and first
nine months of 2003, respectively.

During
2001, Citicorp recorded restructuring charges of $315 million, of which $186 million was related to the downsizing of certain functions in the GCIB and Global
Consumer businesses in order to align their cost structures with current market conditions and $129 million related to the acquisition of Banamex and the integration of its operations. In
addition, a restructuring reserve of $112 million was recorded in connection with the acquisition of Banamex and recognized as a liability in the purchase price allocation of Banamex. The total
Banamex reserves of $241 million include costs related to downsizing, the reconfiguration of branch operations

54

---

in
Mexico, and the integration of operations and operating platforms. The reserves included $299 million related to employee severance, $63 million related to exiting leasehold and other
contractual obligations, and $65 million of asset impairment charges.

The
$299 million related to employee severance reflects the cost of eliminating approximately 10,160 positions, including 4,200 in Citicorp's Global Consumer business and 3,600 in
Banamex related to the acquisition, and 1,300 in the Global Consumer business and 1,060 in the GCIB business related to other restructuring initiatives. Approximately 1,220 of these positions were in
the United States.

Through
September 30, 2003, the 2001 restructuring reserve utilization included $65 million of asset impairment charges as well as $310 million of severance and
other costs (of which $242 million of employee severance and $37 million of leasehold and other exit costs were paid in cash and $31 million is legally obligated), together with
translation effects. Utilization of the 2001 restructuring reserve in the 2003 third quarter and nine months were $10 million and $22 million, respectively. Through September 30,
2003, approximately 10,840 gross staff positions have been eliminated under these programs, including approximately 90 and 240 in the third quarter and first nine months of 2003, respectively. The
remaining reserve of $12 million will be utilized in the 2003 fourth quarter.

The
implementation of these restructuring initiatives also caused certain related premises and equipment assets to become redundant. The remaining depreciable lives of these assets were
shortened, and accelerated depreciation charges (in addition to normal scheduled depreciation on those assets) were recognized. There were no accelerated depreciation charges recognized during 2003.
There were no accelerated depreciation charges recognized in the third quarter of 2002, however $7 million was recognized in the first nine months of 2002.

Changes
in estimates are attributable to facts and circumstances arising subsequent to an original restructuring charge. Changes in estimates attributable to lower than anticipated costs
of implementing certain projects and a reduction in the scope of certain initiatives during the third quarter of 2003 resulted in a reduction of the reserve for 2001 restructuring initiatives of
$11 million. Changes in estimates during the second quarter of 2003 resulted in a reduction of the reserve for prior restructuring initiatives of $1 million. Changes in estimates during
the first quarter of 2003 resulted in a reduction of the reserve for 2001 restructuring initiatives of $3 million and a reduction of reserves for prior restructuring initiatives of
$9 million. Changes in estimates during the third quarter of 2002 resulted in a reduction of the reserve for 2001 restructuring initiatives of $21 million and a reduction of reserves for
prior restructuring initiatives of $11 million. Changes in estimates during the second quarter of 2002 resulted in a reduction of the reserve for 2001 restructuring initiatives of
$6 million and a reduction of reserves for prior restructuring initiatives of $37 million.

Additional
information about restructuring-related items, including the business segments affected, can be found in Citicorp's 2002 Annual Report on Form 10-K.

55

---

8.     Changes in Equity from Nonowner Sources

Changes in each component of "Accumulated Other Changes in Equity from Nonowner Sources" for the three- and nine-month periods ended
September 30, 2003 are as follows:

|In millions of dollars                                                           |  | Net Unrealized
Gains (Losses) on
Investment
Securities |       | Foreign Currency
Translation
Adjustment |   | Cash Flow Hedges |   | Accumulated Other
Changes in Equity
from Nonowner
Sources |      
|-------------------------------------------------------------------------------- |  | ------------------------------------------------------ | ----- | --------------------------------------- | - | ---------------- | - | --------------------------------------------------------- | -----
|Balance, December 31, 2002                                                       |  | $                                                      | 814   |                                         | $ | (3,361           | ) | $                                                         | 1,454
|Unrealized gains on investment securities, after-tax                             |  |                                                        |      |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, after-tax    |  |                                                        |      |                                         |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax(1)                            |  |                                                        |      |                                         |   | (845             | ) |                                                           |     
|Cash flow hedges, after-tax                                                      |  |                                                        |      |                                         |   |                 |   |                                                           | (192 
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Period change                                                                    |  |                                                        |      |                                         |   | (845             | ) |                                                           | (192 
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Balance, March 31, 2003                                                          |  |                                                        | 814   |                                         |   | (4,206           | ) |                                                           | 1,262
|Unrealized gains on investment securities, after-tax(2)                          |  |                                                        | 573   |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, after-tax(2) |  |                                                        | (83   | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax(3)                            |  |                                                        |      |                                         |   | 289              |   |                                                           |     
|Cash flow hedges, after-tax                                                      |  |                                                        |      |                                         |   |                 |   |                                                           | 209  
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Period change                                                                    |  |                                                        | 490   |                                         |   | 289              |   |                                                           | 209  
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Balance, June 30, 2003                                                           |  |                                                        | 1,304 |                                         |   | (3,917           | ) |                                                           | 1,471
|Unrealized losses on investment securities, after-tax(4)                         |  |                                                        | (139  | )                                       |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, after-tax(4) |  |                                                        | (52   | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax(5)                            |  |                                                        |      |                                         |   | (483             | ) |                                                           |     
|Cash flow hedges, after-tax                                                      |  |                                                        |      |                                         |   |                 |   |                                                           | (460 
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Current period change                                                            |  |                                                        | (191  | )                                       |   | (483             | ) |                                                           | (460 
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      
|Balance, September 30, 2003                                                      |  | $                                                      | 1,113 |                                         | $ | (4,400           | ) | $                                                         | 1,011
|                                                                                 |  |                                                        |       |                                         |   |                  |   |                                                           |      

---

56

---

9.     Derivatives and Other Activities

A derivative must be highly effective in accomplishing the hedge objective of offsetting either changes in the fair value or cash flows of the hedged item for the
risk being hedged. Any ineffectiveness present in the hedge relationship is recognized in current earnings. The assessment of effectiveness excludes the changes in the value of the hedged item which
are unrelated to the risks being hedged. Similarly, the assessment of effectiveness may exclude changes in the fair value of a derivative related to time value which, if excluded, are recognized in
current earnings.

The
following table summarizes certain information related to the Company's hedging activities for the three- and nine-month periods ended September 30, 2003 and 2002:

|                                                                                                                                     |  | Three Months Ended
September 30, |      | Nine Months Ended
September 30, |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ---- | ------------------------------- | -
|
|
|Fair Value Hedges:                                                                                                                   |  |                                  |      |                                 |  
|Hedge ineffectiveness recognized in earnings                                                                                         |  | $                                | (198 | )                               | $
|Net gain (loss) excluded from assessment of effectiveness                                                                            |  |                                  | (53  | )                               |  
|Cash Flow Hedges:                                                                                                                    |  |                                  |      |                                 |  
|Hedge ineffectiveness recognized in earnings                                                                                         |  |                                  | 1    |                                 |  
|Net gain excluded from assessment of effectiveness                                                                                   |  |                                  |     |                                 |  
|Net Investment Hedges:                                                                                                               |  |                                  |      |                                 |  
|Net gain (loss) included in foreign currency translation adjustment within accumulated other changes in equity from nonowner sources |  | $                                | (482 | )                               | $
|                                                                                                                                     |  |                                  |      |                                 |  

The
accumulated other changes in equity from nonowner sources from cash flow hedges for the nine-months ended September 30, 2003 and 2002 can be summarized as follows
(after-tax):

|In millions of dollars                |  | 2003 |       | 2002 |  
|------------------------------------- |  | ---- | ----- | ---- | -
|Balance at January 1,                 |  | $    | 1,454 |      | $
|Net gain (loss) from cash flow hedges |  |      | (28   | )    |  
|Net amounts reclassified to earnings  |  |      | (164  | )    |  
|                                      |  |      |       |      |  
|Balance at March 31,                  |  | $    | 1,262 |      | $
|Net gain from cash flow hedges        |  |      | 429   |      |  
|Net amounts reclassified to earnings  |  |      | (220  | )    |  
|                                      |  |      |       |      |  
|Balance at June 30,                   |  | $    | 1,471 |      | $
|Net gain (loss) from cash flow hedges |  |      | (280  | )    |  
|Net amounts reclassified to earnings  |  |      | (180  | )    |  
|                                      |  |      |       |      |  
|Balance at September 30,              |  | $    | 1,011 |      | $
|                                      |  |      |       |      |  

57

---

10.   Securitizations and Variable Interest Entities

Securitization Activities

Citicorp and its subsidiaries securitize primarily credit card receivables and mortgages. Other types of assets securitized include auto loans and student loans.

After
securitizations of credit card receivables, the Company continues to maintain credit card customer account relationships and provides servicing for receivables transferred to the
trusts. The Company also arranges for third parties to provide credit enhancement to the trusts, including cash collateral accounts, subordinated securities and letters of credit. As specified in
certain of the sale agreements, the net revenue collected each month is accumulated up to a predetermined maximum amount, and is available over the remaining term of that transaction to make payments
of yield, fees, and transaction costs in the event that net cash flows from the receivables are not sufficient. When the predetermined amount is reached net revenue is passed directly to the Citicorp
subsidiary that sold the receivables.

The
Company provides a wide range of mortgage products to a diverse customer base. In connection with these loans, the Company may retain servicing rights which entitle the Company to a
future stream of cash flows based on the outstanding principal balances of the loans and the contractual servicing fee. Failure to service the loans in accordance with contractual requirements may
lead to a termination of the servicing rights and the loss of future servicing fees. In non-recourse servicing, the principal credit risk to the servicer is the cost of temporary advances
of funds. In recourse servicing, the servicer agrees to share credit losses with the owner of the mortgage loans such as FNMA or FHLMC or with a private investor, insurer or guarantor.

The
Company also originates and sells first mortgage loans in the ordinary course of its mortgage banking activities. The Company sells certain of these loans to the Government National
Mortgage Association (GNMA) with the servicing rights retained. GNMA has the primary recourse obligation on the individual loans; however, GNMA's recourse obligation is capped at a fixed amount per
loan. Any losses above that fixed amount are borne by Citicorp as the seller/servicer.

The
following table summarizes certain cash flows received from and paid to securitization trusts during the three and nine months ended September 30, 2003 and 2002:

|                                                                   |  | Three Months Ended
September 30, 2003 |      | Three Months Ended
September 30, 2002
|------------------------------------------------------------------ |  | ------------------------------------- | ---- | -------------------------------------
|
|Proceeds from new securitizations                                  |  | $                                     | 2.4  |                                      
|Proceeds from collections reinvested in new receivables            |  |                                       | 37.0 |                                      
|Servicing fees received                                            |  |                                       | 0.3  |                                      
|Cash flows received on retained interests and other net cash flows |  |                                       | 1.1  |                                      
|                                                                   |  |                                       |      |                                      

|                                                                   |  | Nine Months Ended
September 30, 2003 |       | Nine Months Ended
September 30, 2002
|------------------------------------------------------------------ |  | ------------------------------------ | ----- | ------------------------------------
|
|Proceeds from new securitizations                                  |  | $                                    | 12.0  |                                     
|Proceeds from collections reinvested in new receivables            |  |                                      | 106.1 |                                     
|Servicing fees received                                            |  |                                      | 1.0   |                                     
|Cash flows received on retained interests and other net cash flows |  |                                      | 3.1   |                                     
|                                                                   |  |                                      |       |                                     

---

The
Company recognized gains on securitizations of mortgages of $187 million and $60 million for the three-month periods ended September 30, 2003 and 2002,
respectively, and $485 million and $115 million during the first nine months of 2003 and 2002, respectively. In the third quarter and first nine months of 2003 the Company recorded gains
of $64 million and $279 million, respectively, and $239 million during the third quarter and first nine months of 2002 related to the securitization of credit card receivables as
a result of changes in estimates in the timing of revenue recognition on securitizations. No gains were recognized on the securitization of other assets during the third quarters of 2003 and 2002.
However, gains of $23 million and $40 million were recognized on the securitization of other assets during the first nine months of 2003 and 2002, respectively.

58

---

Key
assumptions used for credit cards, mortgages and other assets during the three months ended September 30, 2003 in measuring the fair value of retained interests at the date of
sale or securitization follow:

|                              |  | Credit Cards |   | Mortgages |  
|----------------------------- |  | ------------ | - | --------- | -
|Discount rate                 |  | 10.0         | % | 10.8      | %
|Constant prepayment rate      |  | 17.5         | % | 7.8       | %
|Anticipated net credit losses |  | 5.6          | % | 0.01      | %
|                              |  |              |   |           |  

As
required by SFAS No. 140, the effect of two negative changes in each of the key assumptions used to determine the fair value of retained interests must be disclosed. The
negative effect of each change in each assumption must be calculated independently, holding all other assumptions constant. Because the key assumptions may not in fact be independent, the net effect
of simultaneous adverse changes in the key assumptions may be less than the sum of the individual effects shown below.

At
September 30, 2003, the key assumptions used to value retained interests and the sensitivity of the fair value to two adverse changes in each of the key assumptions were as
follows:

|Key assumptions at September 30, 2003: |  | Discount Rate |  | Constant Prepayment
Rate |  | Anticipated Net Credit
Losses
|-------------------------------------- |  | ------------- |  | ------------------------ |  | -----------------------------
|Credit cards                           |  | 10.0%         |  | 14.7% to 17.5%           |  | 4.8% to 5.6%                 
|Mortgages                              |  | 11.3%         |  | 28.9%                    |  | 0.04%                        
|Auto loans                             |  | 15.0%         |  | 19.6% to 23.4%           |  | 10.8% to 13.9%               
|                                       |  |               |  |                          |  |                              

|In millions of dollars               |  | September 30, 2003 |      
|------------------------------------ |  | ------------------ | -----
|Carrying value of retained interests |  | $                  | 2,730
|                                     |  |                    |      
|Discount rate                        |  |                    |      
|+10%                                 |  | $                  | (75  
|+20%                                 |  |                    | (144 
|                                     |  |                    |      
|Constant prepayment rate             |  |                    |      
|+10%                                 |  | $                  | (254 
|+20%                                 |  | $                  | (504 
|                                     |  |                    |      
|Anticipated net credit losses        |  |                    |      
|+10%                                 |  | $                  | (195 
|+20%                                 |  | $                  | (387 
|                                     |  |                    |      

59

---

Managed Loans

After securitization of credit card receivables, the Company continues to maintain credit card customer account relationships and provides servicing for
receivables transferred to the trusts. As a result, the Company considers both the securitized and unsecuritized credit card receivables to be part of the business it manages. The following tables
present a reconciliation between the managed basis and on-balance sheet credit card portfolios and the related delinquencies (loans which are 90 days or more past due) and credit
losses, net of recoveries.

Credit Card Receivables

|In billions of dollars            |  | September 30,
2003 |        | December 31, 2002 |  
|--------------------------------- |  | ------------------ | ------ | ----------------- | -
|Principal amounts, at period end: |  |                    |        |                   |  
|Total managed                     |  | $                  | 128.7  |                   | $
|Securitized amounts               |  |                    | (73.6  | )                 |  
|Loans held-for-sale               |  |                    | (3.0   | )                 |  
|                                  |  |                    |        |                   |  
|On-balance sheet                  |  | $                  | 52.1   |                   | $
|                                  |  |                    |        |                   |  
|In millions of dollars            |  |                    |        |                   |  
|Delinquencies, at period end:     |  |                    |        |                   |  
|Total managed                     |  | $                  | 2,353  |                   | $
|Securitized amounts               |  |                    | (1,414 | )                 |  
|Loans held-for-sale               |  |                    | (120   | )                 |  
|                                  |  |                    |        |                   |  
|On-balance sheet                  |  | $                  | 819    |                   | $
|                                  |  |                    |        |                   |  

|                                  |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|--------------------------------- |  | -------------------------------- | ------ | ------------------------------- | -
|
|
|Credit losses, net of recoveries: |  |                                  |        |                                 |  
|Total managed                     |  | $                                | 1,789  |                                 | $
|Securitized amounts               |  |                                  | (1,127 | )                               |  
|Loans held-for-sale               |  |                                  | (83    | )                               |  
|                                  |  |                                  |        |                                 |  
|On-balance sheet                  |  | $                                | 579    |                                 | $
|                                  |  |                                  |        |                                 |  

Servicing Rights

The fair value of capitalized mortgage loan servicing rights was $1.625 billion and $1.632 billion at September 30, 2003 and
December 31, 2002, respectively. The following table summarizes the changes in net capitalized mortgage servicing rights (MSR):

|                                             |  | Three Months Ended
September 30, |       | Nine Months Ended
September 30, |  
|-------------------------------------------- |  | -------------------------------- | ----- | ------------------------------- | -
|
|
|Balance, beginning of period                 |  | $                                | 1,086 |                                 | $
|Originations                                 |  |                                  | 267   |                                 |  
|Purchases                                    |  |                                  | 165   |                                 |  
|Amortization                                 |  |                                  | (109  | )                               |  
|Gain (loss) on change in MSR value(1)        |  |                                  | 107   |                                 |  
|Recovery of (provision for) impairment(2)(3) |  |                                  | 109   |                                 |  
|                                             |  |                                  |       |                                 |  
|Balance, end of period                       |  | $                                | 1,625 |                                 | $
|                                             |  |                                  |       |                                 |  

---

60

---



Variable Interest Entities

In January 2003, the FASB released FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46). FIN 46 changes the method of
determining whether certain entities, including securitization entities, should be included in the Company's Consolidated Financial Statements. An entity is subject to FIN 46 and is called a VIE if it
has (1) equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) equity investors that
cannot make significant decisions about the entity's operations, or that do not absorb the expected losses or receive the expected returns of the entity. All other entities are evaluated for
consolidation under SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries." A VIE is consolidated by its primary beneficiary, which is the party involved with the VIE that has a
majority of the expected losses or a majority of the expected residual returns or both.

The
provisions of FIN 46 are applied immediately to variable interest entities (VIEs) created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after
that date. In October 2003, the FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to
February 1, 2003. With the exception of the deferral related to certain investment company subsidiaries, Citicorp elected to implement the remaining provisions of FIN 46 in the 2003 third
quarter, resulting in the consolidation of VIEs increasing both total assets and total liabilities by approximately $955 million.

The
implementation of FIN 46 encompassed a review of thousands of entities to determine the impact of adoption and considerable judgment was used in evaluating whether or not a VIE
should be consolidated. The FASB continues to provide additional guidance on implementing FIN 46 through FASB Staff Positions. In addition, a draft interpretation of FIN 46 has been issued for
comment. As this guidance is finalized, the Company will continue to review the status of VIEs it is involved with. As a result of changes in the guidance, additional VIEs may ultimately be required
to be consolidated.

The
following table represents the carrying amounts and classification of consolidated assets that are collateral for VIE obligations, including VIEs that were consolidated prior to the
implementation of FIN 46 under existing guidance and VIEs that the Company became involved with after July 1, 2003:

|In millions of dollars            |  | September 30, 2003
|--------------------------------- |  | ------------------
|Cash                              |  | $                 
|Trading account assets            |  |                   
|Investments                       |  |                   
|Loans                             |  |                   
|Other assets                      |  |                   
|                                  |  |                   
|Total assets of consolidated VIEs |  | $                 
|                                  |  |                   

The
consolidated VIEs included in the table above represent hundreds of separate entities with which the Company is involved and includes $955 million related to VIEs newly
consolidated as a result of adopting FIN 46. Approximately $21 billion of the total assets of consolidated VIEs represents structured transactions where the Company packages and securitizes
assets purchased in the financial markets or from clients in order to create new security offerings and financing opportunities for its clients. Approximately $5 billion of the total assets of
consolidated VIEs represents investment vehicles that were established to provide a return to the investors in the vehicles. Approximately $1 billion of the total assets of consolidated VIEs
represents vehicles that hold lease receivables and equipment as collateral to issue debt securities. The Company uses these vehicles to obtain secured financing at favorable interest rates.

The
Company may, along with other financial institutions, provide liquidity facilities to the VIEs. Furthermore, the Company may be a party to derivative contracts with VIEs, may provide
second loss enhancement in the form of letters of credit and other guarantees to the VIEs, may be the investment manager, and may also have an ownership interest or other investment in certain VIEs.
In general, the investors in the obligations of consolidated VIEs have recourse only to the assets of those VIEs and do not have recourse to the Company except where the Company has provided a
liquidity facility to the VIE, a guarantee to the investors, or is the counterparty to a derivative transaction involving the VIE.

In
addition to the VIEs that are consolidated in accordance with FIN 46, the Company has significant variable interests in certain other VIEs that are not consolidated because the
Company is not the primary beneficiary. These include multi-seller finance companies, structured finance transactions, and various investment funds.

The
Company administers several third-party owned, special purpose, multi-seller finance companies that purchase pools of trade receivables, credit cards, and other financial assets from
third-party clients of the Company. As administrator, the Company provides accounting, funding, and operations services to these conduits. The Company has no ownership interest in the conduits. The
sellers continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. The sellers absorb the first losses of the
conduit by providing collateral in
the form of excess assets. The Company along with other financial institutions provides liquidity facilities, such as commercial paper backstop lines of credit to the conduits. The

61

---

Company
also provides loss enhancement in the form of letters of credit and other guarantees. All fees are charged on a market basis. Following certain actions taken to restructure certain
multi-seller finance companies, the Company has determined that they should not be consolidated under FIN 46. At September 30, 2003 total assets in the conduits were $46 billion.

The
Company packages and securitizes assets purchased in the financial markets or from clients in order to create new security offerings and financing opportunities for institutional and
private bank clients as well as retail customers, including hedge funds, mutual funds, unit investment trusts, and other investment funds that match the clients' investment needs and preferences.
These transactions include leasing structures, capital structuring, trust preferred entities, investment vehicles and other structured transactions. At September 30, 2003, such transactions
involved VIEs with approximately $43 billion in assets.

As
mentioned above, the Company may, along with other financial institutions, provide liquidity facilities, such as commercial paper backstop lines of credit to the VIEs. The Company may
be a party to derivative contracts with VIEs, may provide second loss enhancement in the form of letters of credit and other guarantees to the VIEs, may be the investment manager, and may also have an
ownership interest in certain VIEs. Although actual losses are not expected to be material, the Company's maximum exposure to loss as a result of its involvement with VIEs that are not consolidated
was $45 billion at September 30, 2003. For this purpose, maximum exposure is considered to be the notional amounts of credit lines, guarantees, other credit support, and liquidity
facilities, the notional amounts of credit default swaps and certain total return swaps, and the amount invested where Citicorp has an ownership interest in the VIEs.

11.    Guarantees

The Company provides a variety of guarantees and indemnifications to Citicorp customers to enhance their credit standing and enable them to complete a wide
variety of business transactions. The table below summarizes at September 30, 2003 all of the Company's guarantees and indemnifications, where we believe the guarantees and indemnifications are
related to an asset, liability, or equity security of the guaranteed parties at the inception of the contract. The maximum potential amount of future payments represents the notional amounts that
could be lost under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from
collateral held or pledged. Such amounts bear no relationship to the anticipated losses on these guarantees and indemnifications and greatly exceed anticipated losses.

|In billions of dollars at September 30, 2003       |  | Expire within
1 year |      | Expire after
1 year |   | Total amount
outstanding |  | Maximum
potential amount
of future
payments
|-------------------------------------------------- |  | -------------------- | ---- | ------------------- | - | ------------------------ |  | -------------------------------------------
|Financial standby letters of credit                |  | $                    | 17.5 |                     | $ | 16.9                     |  | $                                          
|Market value guarantees                            |  |                      | 0.1  |                     |   |                         |  |                                            
|Derivative instruments                             |  |                      | 21.2 |                     |   | 75.3                     |  |                                            
|Guarantees of collection of contractual cash flows |  |                      |     |                     |   | 0.2                      |  |                                            
|Performance guarantees                             |  |                      | 4.4  |                     |   | 3.1                      |  |                                            
|Securities lending indemnifications                |  |                      | 48.0 |                     |   |                         |  |                                            
|Other indemnifications                             |  |                      |     |                     |   | 17.5                     |  |                                            
|Loans sold with recourse                           |  |                      | 2.1  |                     |   | 2.2                      |  |                                            
|Other                                              |  |                      |     |                     |   | 0.2                      |  |                                            
|                                                   |  |                      |      |                     |   |                          |  |                                            
|Total                                              |  | $                    | 93.3 |                     | $ | 115.4                    |  | $                                          
|                                                   |  |                      |      |                     |   |                          |  |                                            

Financial
standby letters of credit include guarantees of payment of insurance premiums and reinsurance risks that support industrial revenue bond underwriting and settlement of payment
obligations in clearing houses, and that support options and purchases of securities or in lieu of escrow deposit accounts. Financial standbys also backstop loans, credit facilities, promissory notes
and trade acceptances. Market value guarantees are issued to guarantee return of principal invested to fund investors. Guarantees of collection of contractual cash flows protect investors in credit
card receivables securitization trusts from loss of interest relating to insufficient collections on the underlying receivables in the trusts. Performance guarantees and letters of credit are issued
to guarantee a customer's tender bid on a construction or systems installation project or to guarantee completion of such projects in accordance with contract terms. They are also issued to support a
customer's obligation to supply specified products, commodities, or maintenance or warranty services to a third party. Securities lending indemnifications are issued to guarantee that a security
lending customer will be made whole in the event that the security borrower does not return the security subject to the lending agreement and collateral held is insufficient to cover the market value
of the security. Other indemnifications are issued to guarantee that custody clients will be made whole in the event that a third-party subcustodian fails to safeguard clients' assets. Derivative
instruments include credit default swaps, total return swaps, written foreign exchange options, written put options, and written equity warrants.

At
September 30, 2003, the Company's maximum potential amount of future payments under these guarantees is approximately $208.7 billion. For this purpose, the maximum
potential amount of future payments is considered to be the notional amounts of letters of credit, guarantees, written credit default swaps, written total return swaps, indemnifications, and recourse
provisions of loans sold with recourse; and the fair values of foreign exchange options and other written put options, warrants, caps and floors.

62

---

In
the normal course of business, the Company provides standard representations and warranties to counterparties in contracts in connection with numerous transactions and also provides
indemnifications that protect the counterparties to the contracts in the event that additional taxes are owed due either to a change in the tax law or an adverse interpretation of the tax law.
Counterparties to these transactions provide the Company with comparable indemnifications. While such representations, warranties and tax indemnifications are essential components of many contractual
relationships, they do not represent the underlying business purpose for the transactions. The indemnification clauses are often standard contractual terms related to the Company's own performance
under the terms of a contract and are entered into in the normal course of business based on an assessment that the risk of loss is remote. Often these clauses are intended to ensure that terms of a
contract are met at inception (for example, that loans transferred to a counterparty in a sales transaction did in fact meet the conditions specified in the contract at the transfer date). No
compensation is received for these standard representations and warranties and it is not possible to determine their fair value because they rarely, if ever, result in a payment. In many cases, there
are no stated or notional amounts included in the indemnification clauses and the contingencies potentially triggering the obligation to indemnify have not occurred and are not expected to occur.
There are no amounts reflected on the Consolidated Statement of Financial Position as of September 30, 2003 related to these indemnifications and they are not included in the table above.

In
addition, the Company is a member of or shareholder in hundreds of value transfer networks (VTNs) (payment, clearing and settlement systems as well as securities exchanges) around the
world. As a condition of membership, many of these VTNs require that members stand ready to backstop the net effect on the VTNs of a member's default on its obligations. The Company's potential
obligations as a shareholder or member of VTN associations are excluded from the scope of FIN 45, since the shareholders and members represent subordinated classes of investors in the VTNs.
Accordingly, the Company's participation in VTNs is not reported in the table above and there are no amounts reflected on the Consolidated Statement of Financial Position as of September 30,
2003 for potential obligations that could arise from the Company's involvement with VTN associations.

At
September 30, 2003, the carrying amounts of the liabilities related to the guarantees and indemnifications included in the table above amounted to approximately
$13.777 billion, including $13.742 billion for derivative instruments and $35 million for financial and performance guarantees. The carrying value of derivative instruments is
included in either trading liabilities or other liabilities depending upon whether the derivative was entered into for trading or non-trading purposes. The carrying value of financial and
performance guarantees is included in other liabilities. In addition, other liabilities includes an allowance for credit losses of $126 million relating to unfunded letters of credit at
September 30, 2003. Cash collateral available to the Company to reimburse losses realized under these guarantees and indemnifications amounted to $52.4 billion at September 30,
2003. Securities and other marketable assets held as collateral amounted to $7.3 billion and letters of credit in favor of the Company held as collateral amounted to $1.0 billion at
September 30, 2003. Other property may also be available to the Company to cover losses under certain guarantees and indemnifications; however, the value of such property has not been
determined.

12.    Contingencies

During the third quarter, the Company resolved certain Enron-related investigations that were conducted by the SEC, the bank regulators, and the Manhattan
District Attorney. With regard to Enron, the Company made payments totaling $101.4 million. Those payments are covered by the reserves previously established toward the anticipated cost of
resolving these regulatory inquiries as well as associated litigation matters. These remaining matters continue to be at early stages and therefore reserves may be subject to further revision.

For
a discussion of certain legal proceedings, see Part II, Item 1 of this Form 10-Q. In addition, in the ordinary course of business, Citicorp and its
subsidiaries are defendants or co-defendants or parties in various litigation and regulatory matters incidental to and typical of the businesses in which they are engaged. In the opinion
of the Company's management, the ultimate resolution of these legal and regulatory proceedings would not be likely to have a material adverse effect on the consolidated financial condition of the
Company but, if involving monetary liability, may be material to the Company's operating results for any particular period.

13.    Related Party Balances

The Company has related party balances with Citigroup and certain of its subsidiaries and affiliates. These balances, which are short-term in nature,
include cash accounts, collateralized financing transactions, margin accounts, derivative trading, charges for operational support and the borrowing and lending of funds and are entered into in the
ordinary course of business.

63

---

14.    Condensed Consolidating Financial Statements

CitiFinancial Credit Company (CCC)

On August 4, 1999, CCC, an indirect wholly owned subsidiary of Citigroup, was contributed to and became a subsidiary of Citicorp Banking Corporation (CBC),
a wholly owned subsidiary of Citicorp. Citicorp issued a full and unconditional guarantee of the outstanding long-term debt securities and commercial paper of CCC.

Associates First Capital Corporation (AFCC)

In connection with Citigroup's November 30, 2000 acquisition of AFCC in which AFCC became a wholly owned subsidiary of Citicorp, Citicorp issued a full and
unconditional guarantee of the outstanding long-term debt securities and commercial paper of AFCC and Associates Corporation of North America (ACONA), a subsidiary of AFCC.

Effective
as of August 10, 2001, CBC, the parent company of CCC, transferred 100% of the stock of CCC to AFCC in exchange for convertible preferred stock of AFCC, making CCC a
wholly owned subsidiary of AFCC. The condensed consolidating financial statements account for the transaction in a manner similar to a pooling of interest.

On
October 2, 2001, ACONA merged with and into AFCC at which time, AFCC assumed ACONA's obligations under all debt instruments and agreements. Information included in the
following condensed financial statements under the AFCC column represents AFCC Consolidated which includes ACONA's and CCC's results.

On
July 1, 2002, Citicorp contributed its remaining interest in the stock of AFCC to CBC, making AFCC a wholly owned subsidiary of CBC. Citicorp remains the guarantor of the
outstanding long-term debt, securities and commercial paper of AFCC.

AFCC
has a combination of unutilized credit facilities of $0.7 billion as of September 30, 2003 which have maturities within 2003. All of these facilities are guaranteed by
Citicorp. In connection with the facilities, Citicorp is required to maintain a certain level of consolidated stockholder's equity (as defined in the
agreements). At September 30, 2003, this requirement was exceeded by approximately $60.4 billion. Citicorp also has guaranteed various debt obligations of AFCC and CCC.

64

---

Condensed Consolidating Income Statement (Unaudited)

|                                                                                           |  | Three Months Ended September 30, 2003
|------------------------------------------------------------------------------------------ |  | -------------------------------------
|
|Revenue                                                                                    |  |                                      
|Dividends from subsidiary banks and bank holding companies                                 |  | $                                    
|Interest from subsidiaries                                                                 |  |                                      
|Interest on loans, including feesthird party                                              |  |                                      
|Interest on loans, including feesintercompany                                             |  |                                      
|Other interest revenue                                                                     |  |                                      
|Fees, commissions and other revenuethird party                                            |  |                                      
|Fees, commissions and other revenueintercompany                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|Expense                                                                                    |  |                                      
|Interest on other borrowed fundsthird party                                               |  |                                      
|Interest on other borrowed fundsintercompany                                              |  |                                      
|Interest and fees paid to subsidiaries                                                     |  |                                      
|Interest on long-term debtthird party                                                     |  |                                      
|Interest on long-term debtintercompany                                                    |  |                                      
|Interest on deposits                                                                       |  |                                      
|Benefits, claims and credit losses                                                         |  |                                      
|Other expensethird party                                                                  |  |                                      
|Other expenseintercompany                                                                 |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                                      
|Income tax (benefit)                                                                       |  |                                      
|Minority interest, net of income taxes                                                     |  |                                      
|Equity in undistributed income of subsidiaries                                             |  |                                      
|                                                                                           |  |                                      
|Net income                                                                                 |  | $                                    
|                                                                                           |  |                                      

---

65

---

Condensed Consolidating Income Statement (Unaudited)

|                                                                                           |  | Three Months Ended September 30, 2002
|------------------------------------------------------------------------------------------ |  | -------------------------------------
|
|Revenue                                                                                    |  |                                      
|Dividends from subsidiary banks and bank holding companies                                 |  | $                                    
|Interest from subsidiaries                                                                 |  |                                      
|Interest on loans, including feesthird party                                              |  |                                      
|Interest on loans, including feesintercompany                                             |  |                                      
|Other interest revenue                                                                     |  |                                      
|Fees, commissions and other revenuethird party                                            |  |                                      
|Fees, commissions and other revenueintercompany                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|Expense                                                                                    |  |                                      
|Interest on other borrowed fundsthird party                                               |  |                                      
|Interest on other borrowed fundsintercompany                                              |  |                                      
|Interest and fees paid to subsidiaries                                                     |  |                                      
|Interest on long-term debtthird party                                                     |  |                                      
|Interest on long-term debtintercompany                                                    |  |                                      
|Interest on deposits                                                                       |  |                                      
|Benefits, claims and credit losses                                                         |  |                                      
|Other expensethird party                                                                  |  |                                      
|Other expenseintercompany                                                                 |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|                                                                                           |  |                                      
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                                      
|Income tax (benefit)                                                                       |  |                                      
|Minority interest, net of income taxes                                                     |  |                                      
|Equity in undistributed income of subsidiaries                                             |  |                                      
|                                                                                           |  |                                      
|Net income                                                                                 |  | $                                    
|                                                                                           |  |                                      

---

66

---

Condensed Consolidating Income Statement (Unaudited)

|                                                                                           |  | Nine Months Ended September 30, 2003
|------------------------------------------------------------------------------------------ |  | ------------------------------------
|
|Revenue                                                                                    |  |                                     
|Dividends from subsidiary banks and bank holding companies                                 |  | $                                   
|Interest from subsidiaries                                                                 |  |                                     
|Interest on loans, including feesthird party                                              |  |                                     
|Interest on loans, including feesintercompany                                             |  |                                     
|Other interest revenue                                                                     |  |                                     
|Fees, commissions and other revenuesthird party                                           |  |                                     
|Fees, commissions and other revenuesintercompany                                          |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|Expense                                                                                    |  |                                     
|Interest on other borrowed fundsthird party                                               |  |                                     
|Interest on other borrowed fundsintercompany                                              |  |                                     
|Interest and fees paid to subsidiaries                                                     |  |                                     
|Interest on long-term debtthird party                                                     |  |                                     
|Interest on long-term debtintercompany                                                    |  |                                     
|Interest on deposits                                                                       |  |                                     
|Benefits, claims, and credit losses                                                        |  |                                     
|Other expensethird party                                                                  |  |                                     
|Other expenseintercompany                                                                 |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                                     
|Income tax (benefit)                                                                       |  |                                     
|Minority interest, net of income taxes                                                     |  |                                     
|Equity in undistributed income of subsidiaries                                             |  |                                     
|                                                                                           |  |                                     
|Net income                                                                                 |  | $                                   
|                                                                                           |  |                                     

---

67

---



Condensed Consolidating Income Statement (Unaudited)

|                                                                                           |  | Nine Months Ended September 30, 2002
|------------------------------------------------------------------------------------------ |  | ------------------------------------
|
|Revenue                                                                                    |  |                                     
|Dividends from subsidiary
banks and bank holding companies                                 |  | $                                   
|Interest from subsidiaries                                                                 |  |                                     
|Interest on loans, including feesthird party                                              |  |                                     
|Interest on loans, including feesintercompany                                             |  |                                     
|Other interest revenue                                                                     |  |                                     
|Fees, commissions and other revenuesthird party                                           |  |                                     
|Fees, commissions and other revenuesintercompany                                          |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|Expense                                                                                    |  |                                     
|Interest on other borrowed fundsthird party                                               |  |                                     
|Interest on other borrowed fundsintercompany                                              |  |                                     
|Interest and fees paid to subsidiaries                                                     |  |                                     
|Interest on long-term debtthird party                                                     |  |                                     
|Interest on long-term debtintercompany                                                    |  |                                     
|Interest on deposits                                                                       |  |                                     
|Benefits, claims, and credit losses                                                        |  |                                     
|Other expensethird party                                                                  |  |                                     
|Other expenseintercompany                                                                 |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|                                                                                           |  |                                     
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                                     
|Income tax (benefit)                                                                       |  |                                     
|Minority interest, net of income taxes                                                     |  |                                     
|Equity in undistributed income of subsidiaries                                             |  |                                     
|                                                                                           |  |                                     
|Net income                                                                                 |  | $                                   
|                                                                                           |  |                                     

---

68

---



Condensed Consolidating Statement of Financial Position (Unaudited)

|                                                  |                  | September 30, 2003 |        
|------------------------------------------------- | ---------------- | ------------------ | -------
|
|Assets                                            |                  |                    |        
|Cash and due from banksthird party               |                  | $                  | 3      
|Cash and due from banksintercompany              |                  |                    | 7      
|Deposits at interest with banksthird party       |                  |                    |       
|Deposits at interest with banksintercompany      |                  |                    | 4,080  
|Investments                                       |                  |                    | 90     
|Loans, net of unearned incomethird party         |                  |                    |       
|Loans, net of unearned incomeintercompany        |                  |                    |       
|Allowance for credit losses                       |                  |                    |       
|                                                  |                  |                    |        
|                                                  | Total loans, net |                    |        
|Advances to subsidiaries                          |                  |                    | 45,352 
|Investments in subsidiaries                       |                  |                    | 87,409 
|Other assetsthird party                          |                  |                    | 948    
|Other assetsintercompany                         |                  |                    |       
|                                                  |                  |                    |        
|Total assets                                      |                  | $                  | 137,889
|                                                  |                  |                    |        
|Liabilities and stockholder's equity              |                  |                    |        
|Deposits                                          |                  | $                  |       
|Purchased funds and other borrowingsthird party  |                  |                    | 13,501 
|Purchased funds and other borrowingsintercompany |                  |                    |       
|Long-term debtthird party                        |                  |                    | 42,657 
|Long-term debtintercompany                       |                  |                    |       
|Advances from subsidiaries                        |                  |                    | 2,248  
|Other liabilitiesthird party                     |                  |                    | 888    
|Other liabilitiesintercompany                    |                  |                    | 157    
|Stockholder's equity                              |                  |                    | 78,438 
|                                                  |                  |                    |        
|Total liabilities and stockholder's equity        |                  | $                  | 137,889
|                                                  |                  |                    |        

---

69

---



Condensed Consolidating Statement of Financial Position

|                                                  |                  | December 31, 2002 |        
|------------------------------------------------- | ---------------- | ----------------- | -------
|
|Assets                                            |                  |                   |        
|Cash and due from banksthird party               |                  | $                 | 3      
|Cash and due from banksintercompany              |                  |                   | 19     
|Deposits at interest with banksthird party       |                  |                   | 2      
|Deposits at interest with banksintercompany      |                  |                   | 2,208  
|Investments                                       |                  |                   | 360    
|Loans, net of unearned incomethird party         |                  |                   |       
|Loans, net of unearned incomeintercompany        |                  |                   |       
|Allowance for credit losses                       |                  |                   |       
|                                                  |                  |                   |        
|                                                  | Total loans, net |                   |        
|Advances to subsidiaries                          |                  |                   | 42,540 
|Investments in subsidiaries                       |                  |                   | 81,640 
|Other assetsthird party                          |                  |                   | 345    
|Other assetsintercompany                         |                  |                   |       
|                                                  |                  |                   |        
|Total assets                                      |                  | $                 | 127,117
|                                                  |                  |                   |        
|Liabilities and stockholder's equity              |                  |                   |        
|Deposits                                          |                  | $                 |       
|Purchased funds and other borrowingsthird party  |                  |                   | 14,960 
|Purchased funds and other borrowingsintercompany |                  |                   |       
|Long-term debtthird party                        |                  |                   | 32,861 
|Long-term debtintercompany                       |                  |                   |       
|Advances from subsidiaries                        |                  |                   | 3,746  
|Other liabilitiesthird party                     |                  |                   | 1,902  
|Other liabilitiesintercompany                    |                  |                   | 108    
|Stockholder's equity                              |                  |                   | 73,540 
|                                                  |                  |                   |        
|Total liabilities and stockholder's equity        |                  | $                 | 127,117
|                                                  |                  |                   |        

---

70

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                          |                     | Nine Months Ended September 30, 2003 |       
|------------------------------------------------------------------------- | ------------------- | ------------------------------------ | ------
|
|Net cash provided by operating activities                                 |                     | $                                    | 3,032 
|                                                                          |                     |                                      |       
|Cash flows from investing activities                                      |                     |                                      |       
|Securitiesavailable for sale and short-term and other                    |                     |                                      |       
|                                                                          | Purchases           |                                      |       
|                                                                          | Proceeds from sales |                                      |       
|                                                                          | Maturities          |                                      |       
|Changes in investments and advancesintercompany                          |                     |                                      | (6,036
|Net increase in loans                                                     |                     |                                      |      
|Proceeds from sales of loans                                              |                     |                                      |      
|Other investing activities                                                |                     |                                      |      
|                                                                          |                     |                                      |       
|Net cash used in investing activities                                     |                     |                                      | (5,766
|                                                                          |                     |                                      |       
|Cash flows from financing activities                                      |                     |                                      |       
|Net (decrease) increase in deposits                                       |                     |                                      |      
|Net change in purchased funds and other borrowingsthird party            |                     |                                      | (1,459
|Net change in purchased funds, other borrowings and advancesintercompany |                     |                                      | (1,498
|Proceeds from issuance of long-term debtthird party                      |                     |                                      | 13,090
|Repayment of long-term debtthird party                                   |                     |                                      | (3,294
|Proceeds from issuance of long-term debtintercompany, net                |                     |                                      |      
|Dividends paid                                                            |                     |                                      | (4,117
|Contributions from parent company                                         |                     |                                      |      
|                                                                          |                     |                                      |       
|Net cash provided by financing activities                                 |                     |                                      | 2,722 
|                                                                          |                     |                                      |       
|Effect of exchange rate changes on cash and due from banks                |                     |                                      |      
|                                                                          |                     |                                      |       
|Net (decrease) increase in cash and due from banks                        |                     |                                      | (12   
|Cash and due from banks at beginning of period                            |                     |                                      | 22    
|                                                                          |                     |                                      |       
|Cash and due from banks at end of period                                  |                     | $                                    | 10    
|                                                                          |                     |                                      |       
|Supplemental disclosure of cash flow information                          |                     |                                      |       
|Cash paid during the period for:                                          |                     |                                      |       
|Interest                                                                  |                     | $                                    | 805   
|Income taxes                                                              |                     |                                      | 1,573 
|Non-cash investing activities:                                            |                     |                                      |       
|Transfers to repossessed assets                                           |                     |                                      |      
|Capital contributions to subsidiaries                                     |                     |                                      | 664   
|Non-cash financing activities:                                            |                     |                                      |       
|Dividends                                                                 |                     |                                      | 664   
|                                                                          |                     |                                      |       

---

71

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                          |                     | Nine Months Ended September 30, 2002 |        
|------------------------------------------------------------------------- | ------------------- | ------------------------------------ | -------
|
|Net cash provided by operating activities                                 |                     | $                                    | 7,079  
|                                                                          |                     |                                      |        
|Cash flows from investing activities                                      |                     |                                      |        
|Securitiesavailable for sale and short-term and other
    Purchases      |                     |                                      | (33    
|                                                                          | Proceeds from sales |                                      |        
|                                                                          | Maturities          |                                      |        
|Changes in investments and advancesintercompany                          |                     |                                      | (6,523 
|Net increase in loans                                                     |                     |                                      |       
|Proceeds from sales of loans                                              |                     |                                      |       
|Business acquisitions                                                     |                     |                                      |       
|Other investing activities                                                |                     |                                      | 1,203  
|                                                                          |                     |                                      |        
|Net cash used in investing activities                                     |                     |                                      | (5,243 
|                                                                          |                     |                                      |        
|Cash flows from financing activities                                      |                     |                                      |        
|Net increase in deposits                                                  |                     |                                      |       
|Net change in purchased funds and other borrowingsthird party            |                     |                                      | 1,840  
|Net change in purchased funds, other borrowings and advancesintercompany |                     |                                      | 710    
|Proceeds from issuance of long-term debtthird party                      |                     |                                      | 44,462 
|Repayment of long-term debtthird party                                   |                     |                                      | (44,024
|Proceeds from issuance of long-term debtintercompany, net                |                     |                                      |       
|Dividends paid                                                            |                     |                                      | (4,821 
|                                                                          |                     |                                      |        
|Net cash (used in) provided by financing activities                       |                     |                                      | (1,833 
|                                                                          |                     |                                      |        
|Effect of exchange rate changes on cash and due from banks                |                     |                                      |       
|                                                                          |                     |                                      |        
|Net increase (decrease) in cash and due from banks                        |                     |                                      | 3      
|Cash and due from banks at beginning of period                            |                     |                                      | 18     
|                                                                          |                     |                                      |        
|Cash and due from banks at end of period                                  |                     | $                                    | 21     
|                                                                          |                     |                                      |        
|Supplemental disclosure of cash flow information                          |                     |                                      |        
|Cash paid during the period for:                                          |                     |                                      |        
|Interest                                                                  |                     | $                                    | 769    
|Income taxes                                                              |                     |                                      | 738    
|Non-cash investing activities:                                            |                     |                                      |        
|Transfers to repossessed assets                                           |                     |                                      |       
|                                                                          |                     |                                      |        

---

72

---



FINANCIAL DATA SUPPLEMENT

AVERAGE BALANCES AND INTEREST RATES, Taxable Equivalent BasisQuarterly(1)(2)(3)(4) Citicorp and Subsidiaries

|                                                                            |                                | Average Volume              |         | Interest Revenue/Expense |         | % Average Rate
|--------------------------------------------------------------------------- | ------------------------------ | --------------------------- | ------- | ------------------------ | ------- | --------------
|
|Loans (net of unearned income)(5)                                           |                                |                             |         |                          |         |               
|Consumer loans                                                              |                                |                             |         |                          |         |               
|                                                                            | In U.S. offices                |                             | $       | 237,732                  |         | $             
|                                                                            | In offices outside the U.S.(6) |                             |         | 96,913                   |         |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total consumer loans        |         |                          | 334,645 |               
|                                                                            |                                |                             |         |                          |         |               
|Corporate loans                                                             |                                |                             |         |                          |         |               
|                                                                            | In U.S. offices                |                             |         |                          |         |               
|                                                                            |                                | Commercial and industrial   |         |                          | 18,939  |               
|                                                                            |                                | Lease financing             |         |                          | 2,027   |               
|                                                                            |                                | Mortgage and real estate    |         |                          | 230     |               
|                                                                            | In offices outside the U.S.(6) |                             |         | 80,390                   |         |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total corporate loans       |         |                          | 101,586 |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total loans                 |         |                          | 436,231 |               
|                                                                            |                                |                             |         |                          |         |               
|Federal funds sold and securities purchased under agreements to resell      |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 4,938   |                          |         | 3,803         
|In offices outside the U.S.(6)                                              |                                |                             | 9,443   |                          |         | 6,971         
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 14,381  |               
|                                                                            |                                |                             |         |                          |         |               
|Investments, at fair value                                                  |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             |         |                          |         |               
|                                                                            |                                | Taxable                     |         |                          | 57,062  |               
|                                                                            |                                | Exempt from U.S. income tax |         |                          | 7,442   |               
|In offices outside the U.S.(6)                                              |                                |                             | 61,373  |                          |         | 61,556        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 125,877 |               
|                                                                            |                                |                             |         |                          |         |               
|Trading account assets(7)                                                   |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 11,353  |                          |         | 7,456         
|In offices outside the U.S.(6)                                              |                                |                             | 17,986  |                          |         | 17,417        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 29,339  |               
|                                                                            |                                |                             |         |                          |         |               
|Loans held-for-sale, in U.S. offices                                        |                                |                             | 17,224  |                          |         | 13,345        
|                                                                            |                                |                             |         |                          |         |               
|Deposits at interest with banks(6)                                          |                                |                             | 20,860  |                          |         | 19,463        
|                                                                            |                                |                             |         |                          |         |               
|Total interest-earning assets                                               |                                |                             | 643,912 |                          |         | 634,219       
|                                                                            |                                |                             |         |                          |         |               
|Non-interest-earning assets(7)                                              |                                |                             | 113,257 |                          |         | 122,457       
|                                                                            |                                |                             |         |                          |         |               
|Total assets                                                                |                                | $                           | 757,169 |                          | $       | 756,676       
|                                                                            |                                |                             |         |                          |         |               
|Deposits                                                                    |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             |         |                          |         |               
|                                                                            |                                | Savings deposits(8)         |         | $                        | 119,060 |               
|                                                                            |                                | Other time deposits         |         |                          | 35,716  |               
|In offices outside the U.S.(6)(9)                                           |                                |                             | 254,049 |                          |         | 250,716       
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 408,825 |               
|                                                                            |                                |                             |         |                          |         |               
|Trading account liabilities(7)                                              |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 5,837   |                          |         | 4,010         
|In offices outside the U.S.(6)                                              |                                |                             | 1,409   |                          |         | 939           
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 7,246   |               
|                                                                            |                                |                             |         |                          |         |               
|Purchased funds and other borrowings                                        |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 42,534  |                          |         | 41,000        
|In offices outside the U.S.(6)(9)                                           |                                |                             | 21,847  |                          |         | 21,003        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 64,381  |               
|                                                                            |                                |                             |         |                          |         |               
|Long-term debt                                                              |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 73,678  |                          |         | 73,690        
|In offices outside the U.S.(6)                                              |                                |                             | 7,901   |                          |         | 8,673         
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 81,579  |               
|                                                                            |                                |                             |         |                          |         |               
|Total interest-bearing liabilities                                          |                                |                             | 562,031 |                          |         | 550,493       
|                                                                            |                                |                             |         |                          |         |               
|Demand deposits in U.S. offices                                             |                                |                             | 5,743   |                          |         | 7,442         
|Other non-interest-bearing liabilities(7)                                   |                                |                             | 112,868 |                          |         | 122,368       
|Total stockholder's equity                                                  |                                |                             | 76,527  |                          |         | 76,373        
|                                                                            |                                |                             |         |                          |         |               
|Total liabilities and stockholder's equity                                  |                                | $                           | 757,169 |                          | $       | 756,676       
|                                                                            |                                |                             |         |                          |         |               
|NET INTEREST REVENUE AS A PERCENTAGE OF AVERAGE INTEREST-EARNING ASSETS(10) |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                | $                           | 356,953 |                          | $       | 351,917       
|In offices outside the U.S.                                                 |                                |                             | 286,959 |                          |         | 282,302       
|                                                                            |                                |                             |         |                          |         |               
|Total                                                                       |                                | $                           | 643,912 |                          | $       | 634,219       
|                                                                            |                                |                             |         |                          |         |               

---

73

---



AVERAGE BALANCES AND INTEREST RATES, Taxable Equivalent BasisNine Months(1)(2)(3)(4)

Citicorp and Subsidiaries

|                                                                            |                                | Average Volume              |         | Interest Revenue/Expense |         | % Average Rate
|--------------------------------------------------------------------------- | ------------------------------ | --------------------------- | ------- | ------------------------ | ------- | --------------
|
|Loans (net of unearned income)(5)                                           |                                |                             |         |                          |         |               
|Consumer loans                                                              |                                |                             |         |                          |         |               
|                                                                            | In U.S. offices                |                             | $       | 240,125                  |         | $             
|                                                                            | In offices outside the U.S.(6) |                             |         | 94,217                   |         |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total consumer loans        |         |                          | 334,342 |               
|                                                                            |                                |                             |         |                          |         |               
|Corporate loans                                                             |                                |                             |         |                          |         |               
|                                                                            | In U.S. offices                |                             |         |                          |         |               
|                                                                            |                                | Commercial and industrial   |         |                          | 19,581  |               
|                                                                            |                                | Lease financing             |         |                          | 2,025   |               
|                                                                            |                                | Mortgage and real estate    |         |                          | 280     |               
|                                                                            | In offices outside the U.S.(6) |                             |         | 81,429                   |         |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total corporate loans       |         |                          | 103,315 |               
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total loans                 |         |                          | 437,657 |               
|                                                                            |                                |                             |         |                          |         |               
|Federal funds sold and securities purchased under agreements to resell      |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 4,287   |                          |         | 6,254         
|In offices outside the U.S.(6)                                              |                                |                             | 7,085   |                          |         | 2,681         
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 11,372  |               
|                                                                            |                                |                             |         |                          |         |               
|Investments, at fair value                                                  |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             |         |                          |         |               
|                                                                            |                                | Taxable                     |         |                          | 57,353  |               
|                                                                            |                                | Exempt from U.S. income tax |         |                          | 7,236   |               
|In offices outside the U.S.(6)                                              |                                |                             | 59,801  |                          |         | 52,975        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 124,390 |               
|                                                                            |                                |                             |         |                          |         |               
|Trading account assets(7)                                                   |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 8,448   |                          |         | 6,556         
|In offices outside the U.S.(6)                                              |                                |                             | 17,547  |                          |         | 14,823        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 25,995  |               
|                                                                            |                                |                             |         |                          |         |               
|Loans held-for-sale, in U.S. offices                                        |                                |                             | 15,012  |                          |         | 11,486        
|                                                                            |                                |                             |         |                          |         |               
|Deposits at interest with banks(6)                                          |                                |                             | 19,083  |                          |         | 17,706        
|                                                                            |                                |                             |         |                          |         |               
|Total interest-earning assets                                               |                                |                             | 633,509 |                          |         | 543,180       
|                                                                            |                                |                             |         |                          |         |               
|Non-interest-earning assets(7)                                              |                                |                             | 114,772 |                          |         | 101,178       
|                                                                            |                                |                             |         |                          |         |               
|Total assets                                                                |                                | $                           | 748,281 |                          | $       | 644,358       
|                                                                            |                                |                             |         |                          |         |               
|Deposits                                                                    |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             |         |                          |         |               
|                                                                            |                                | Savings deposits(8)         |         | $                        | 114,997 |               
|                                                                            |                                | Other time deposits         |         |                          | 36,147  |               
|In offices outside the U.S.(6)(9)                                           |                                |                             | 250,190 |                          |         | 226,007       
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 401,334 |               
|                                                                            |                                |                             |         |                          |         |               
|Trading account liabilities(7)                                              |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 4,245   |                          |         | 3,093         
|In offices outside the U.S.(6)                                              |                                |                             | 977     |                          |         | 596           
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 5,222   |               
|                                                                            |                                |                             |         |                          |         |               
|Purchased funds and other borrowings                                        |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 42,434  |                          |         | 37,494        
|In offices outside the U.S.(6)(9)                                           |                                |                             | 19,862  |                          |         | 20,280        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 62,296  |               
|                                                                            |                                |                             |         |                          |         |               
|Long-term debt                                                              |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                |                             | 73,261  |                          |         | 63,503        
|In offices outside the U.S.(6)                                              |                                |                             | 8,411   |                          |         | 10,689        
|                                                                            |                                |                             |         |                          |         |               
|                                                                            |                                | Total                       |         |                          | 81,672  |               
|                                                                            |                                |                             |         |                          |         |               
|Total interest-bearing liabilities                                          |                                |                             | 550,524 |                          |         | 481,492       
|                                                                            |                                |                             |         |                          |         |               
|Demand deposits in U.S. offices                                             |                                |                             | 8,334   |                          |         | 7,445         
|Other non-interest-bearing liabilities(7)                                   |                                |                             | 113,658 |                          |         | 89,192        
|Total stockholder's equity                                                  |                                |                             | 75,765  |                          |         | 66,229        
|                                                                            |                                |                             |         |                          |         |               
|Total liabilities and stockholder's equity                                  |                                | $                           | 748,281 |                          | $       | 644,358       
|                                                                            |                                |                             |         |                          |         |               
|NET INTEREST REVENUE AS A PERCENTAGE OF AVERAGE INTEREST-EARNING ASSETS(10) |                                |                             |         |                          |         |               
|In U.S. offices                                                             |                                | $                           | 354,406 |                          | $       | 280,588       
|In offices outside the U.S.                                                 |                                |                             | 279,103 |                          |         | 262,592       
|                                                                            |                                |                             |         |                          |         |               
|Total                                                                       |                                | $                           | 633,509 |                          | $       | 543,180       
|                                                                            |                                |                             |         |                          |         |               

---

74

---



PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The
following information supplements and amends the discussion set forth under Part I, Item 3 "Legal Proceedings" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002, as updated by our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003.

ENRON

TITTLE,
ET AL. v. ENRON CORP., ET AL.
On September 30, 2003, all of the claims against Citigroup in this litigation were dismissed.

Additional Actions

Several
additional actions, previously identified, have been consolidated or coordinated with the Newby action and are stayed, except with respect to certain discovery, until after the
Court's decision on class certification. In addition, on August 15, 2003, a purported class action was brought by purchasers of Enron stock alleging state law claims of negligent
misrepresentation, fraud, breach of fiduciary duty and aiding and abetting a breach of fiduciary duty. On August 29, 2003, an investment company filed a
lawsuit alleging that Citigroup and several other defendants (including, among others, Enron's auditor, financial institutions, outside law firms and rating agencies) engaged in a conspiracy, which
purportedly caused plaintiff to lose credit (in the form of a commodity sales contract) it extended to an Enron subsidiary in purported reliance on Enron's financial statements. On
September 24, 2003, Enron filed an adversary proceeding in its chapter 11 bankruptcy proceedings to recover alleged preferential payments and fraudulent transfers involving Citigroup and other
entities, and to disallow or to subordinate bankruptcy claims that Citigroup and other entities have filed against Enron.

75

---

Item 6. Exhibits and Reports on Form 8-K.

See
Exhibit Index.

On
July 15, 2003, the Company filed a Current Report on Form 8-K, dated July 15, 2003, reporting under Item 5 thereof the summarized results of its
operations for the quarter ended June 30, 2003.

No
other reports on Form 8-K were filed during the third quarter of 2003; however,

On
October 22, 2003, the Company filed a Current Report on Form 8-K, dated October 21, 2003, reporting under Item 5 thereof the summarized results of its
operations for the quarter ended September 30, 2003.

76

---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized, on the 13th day of November, 2003.

| |  | CITICORP(Registrant)
| |  | --------------------
| |  | By                  
| |  | By                  

77

---



EXHIBIT INDEX

|Exhibit
Number |   | Description of Exhibit                                                                                                                                                                                               
|-------------- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.01           |   | Citicorp's Certificate of Incorporation (incorporated by reference to exhibit 3(i) to Citicorp's Post-Effective Amendment No. 1 to Registration Statement on Form S-3, File No. 333-21143, filed on October 8,
1998).
|3.02           |   | Citicorp's By-Laws (incorporated by reference to Exhibit 3.02 to Citicorp's Annual Report on Form 10-K for the year ended December 31, 2002, File No. 1-5738).                                                       
|12.01          | + | Calculation of Ratio of Income to Fixed Charges.                                                                                                                                                                     
|12.02          | + | Calculation of Ratio of Income to Fixed Charges (including preferred stock dividends).                                                                                                                               
|31.01          | + | Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|31.02          | + | Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|32.01          | + | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                              
|99.01          | + | Residual Value Obligation Certificate.                                                                                                                                                                               

---

The
total amount of securities authorized pursuant to any instrument defining rights of holders of long-term debt of the Company does not exceed 10% of the total assets of the Company and
its consolidated subsidiaries. The Company will furnish copies of any such instrument to the Securities and Exchange Commission upon request.

78

---

QuickLinks