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 June 30, 2004                 
|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

|                             |  |                                                                                                               |  | Page No.
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | --------
|Part IFinancial Information
|Item 1.                      |  | Financial Statements:                                                                                         |  |         
|                             |  | Consolidated Statement of Income (Unaudited)Three and Six Months Ended June 30, 2004 and 2003                |  | 48      
|                             |  | Consolidated Balance SheetJune 30, 2004 (Unaudited) and December 31, 2003                                    |  | 49      
|                             |  | Consolidated Statement of Changes in Stockholder's Equity (Unaudited)Six Months Ended June 30, 2004 and 2003 |  | 50      
|                             |  | Consolidated Statement of Cash Flows (Unaudited)Six Months Ended June 30, 2004 and 2003                      |  | 51      
|                             |  | Consolidated Balance Sheet of Citibank, N.A. and SubsidiariesJune 30, 2004 (Unaudited) and December 31, 2003 |  | 52      
|                             |  | Notes to Consolidated Financial Statements (Unaudited)                                                        |  | 53      
|Item 2.                      |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                         |  | 5 - 45  
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                    |  | 36, 60  
|Item 4.                      |  | Controls and Procedures                                                                                       |  | 46      
|Part IIOther Information   
|Item 1.                      |  | Legal Proceedings                                                                                             |  | 83      
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                                              |  | 83      
|Signatures                   |  | 84                                                                                                           
|Exhibit Index                |  | 85                                                                                                           

2

---



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 2003 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.

GLOBAL CONSUMER

Global Consumerdelivers a wide array of banking, lending, insurance and investment services through a network of
local branches, offices, electronic delivery systems, including ATMs, Automated Lending Machines (ALMs) and the World Wide Web. The Global Consumer businesses serve individual consumers as well as
small businesses. Global Consumer includesCards,Consumer Finance,Retail
Bankingand Other Consumer.

Cardsprovides MasterCard, VISA and private label credit and charge cards. North America Cards includes the operations of Citi Cards, the
Company's primary brand in North America, and Mexico Cards. International Cards provides credit and charge cards to customers in Europe, the Middle East and Africa (EMEA), Japan, Asia and Latin
America.

Consumer Financeprovides community-based lending services through branch networks, regional sales offices and cross-selling initiatives
with other Citigroup businesses. The business of CitiFinancial is included in North America Consumer Finance. As of June 30, 2004, North America Consumer Finance maintained 2,608 offices,
including 2,446 CitiFinancial offices in the U.S., Canada, and Puerto Rico, while International Consumer Finance maintained 997 offices, including 530 in Japan.Consumer
Financeoffers real-estate-secured loans, unsecured and partially secured personal loans, auto loans and loans to finance consumer-goods purchases. In addition,
CitiFinancial, through certain subsidiaries and third parties, makes available various credit-related and other insurance products to its U.S. customers.

Retail Bankingprovides banking, lending, investment and insurance services to customers through retail branches and electronic delivery
systems. In North America,Retail Bankingincludes the operations of Citibanking North America, Consumer Assets, CitiCapital, and Mexico Retail Banking.
Citibanking North America delivers banking, lending, investment and insurance services through 775 branches in the U.S. and Puerto Rico and through Citibank Online, an Internet banking site on the
World Wide Web. The Consumer Assets business originates and services mortgages and student loans for customers across the U.S. The CitiCapital business provides equipment leasing and financing
products to small-and middle-market businesses. Mexico Retail Banking consists of the branch banking operations of Banamex, which maintained 1,347 branches. International Retail Banking consists of
1,110 branches and provides full-service banking and investment services in EMEA, Japan, Asia, and Latin America. The Commercial Markets Group is included inRetail
Bankingand consists of the operations of CitiCapital, as well as middle-market lending operations in North America and the international regions.

3

---



GLOBAL CORPORATE AND INVESTMENT BANK

Global Corporate and Investment Bank (GCIB)provides corporations, governments, institutions and investors in
approximately 100 countries with a broad range of financial products and services. GCIB includesCapital Markets and Bankingand Transaction Services.

Capital Markets and Bankingoffers a wide array of commercial banking services and products, including foreign exchange, structured
products, derivatives, and lending.

Transaction Servicesis comprised of Cash Management, Trade Services and Global Securities Services (GSS). Cash Management and Trade
Services provide comprehensive cash management and trade finance for corporations and financial institutions worldwide. GSS provides custody and fund services to investors such as insurance companies
and pension funds, clearing services to intermediaries such as broker/dealers and depository and agency/trust services to multinational corporations and governments globally.

GLOBAL INVESTMENT MANAGEMENT

Global Investment Managementoffers 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 includesLife
Insurance and Annuities,Private BankandAsset Management.

Life Insurance and Annuitiescomprises International Insurance Manufacturing (IIM) and Citi Insurance Group (CIG). IIM provides annuities,
credit, life, health, disability and other insurance products internationally, leveraging the existing distribution channels of theConsumer Finance, Retail
BankingandAsset Management(retirement services) businesses. IIM has operations in Mexico,
Asia, EMEA, Latin America and Japan. IIM and CIG include the realized investment gains/losses from sales of certain insurance-related investments.

Private Bankprovides personalized wealth management services for high-net-worth clients through 129 offices in 36
countries and territories. With a global network of Private Bankers and Product Specialists,Private Bankleverages its extensive experience with
clients' needs and its access to Citigroup to provide clients with comprehensive investment management, investment finance and banking services. Investment management services include investment funds
management and capital markets solutions, as well as trust, fiduciary and custody services. Investment finance provides standard and tailored credit services including real estate
financing, commitments and letters of credit, while Banking includes services for deposit, checking and savings accounts, as well as cash management and other traditional banking services.

Asset Managementincludes 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. These businesses offer institutional, high-net-worth and retail clients a broad
range of investment alternatives from investment centers located around the world. Products and services offered include mutual funds, closed-end funds, separately managed accounts,
alternative investments (including hedge funds, private equity and credit structures), and pension administration services.

PROPRIETARY INVESTMENT ACTIVITIES

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 business, for which the net profits on products distributed through Citicorp's Asset Management, andPrivate Bankbusinesses are reflected in the respective distributor's income
statement through net revenues.

CORPORATE/OTHER

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

4

---



CITICORP AND SUBSIDIARIES

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

Financial Summary

|                                          |  | Three Months Ended June 30, |        | Six Months Ended June 30, |  
|----------------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|
|Revenues, net of interest expense(1)      |  | $                           | 16,514 |                           | $
|Operating expenses                        |  |                             | 8,747  |                           |  
|Benefits, claims, and credit losses(1)    |  |                             | 1,707  |                           |  
|                                          |  |                             |        |                           |  
|Income before taxes and minority interest |  |                             | 6,060  |                           |  
|Income taxes                              |  |                             | 1,893  |                           |  
|Minority interest, after-tax              |  |                             | 39     |                           |  
|                                          |  |                             |        |                           |  
|Net Income                                |  | $                           | 4,128  |                           | $
|                                          |  |                             |        |                           |  
|Return on Average Stockholder's Equity    |  |                             | 19.3   | %                         |  
|Total Assets(in billions of dollars)(2)   |  | $                           | 892.2  |                           | $
|Total Equity(in billions of dollars)      |  | $                           | 86.8   |                           | $
|Tier 1 Capital Ratio                      |  |                             | 8.39   | %                         |  
|Total Capital Ratio                       |  |                             | 12.55  | %                         |  
|                                          |  |                             |        |                           |  

---

5

---



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 June 30,

Six Months Ended June 30,In millions of dollars2004

2003(1)

2004

2003(1)Global ConsumerCards

$
1,012

$
758

$
1,992

$
1,475Consumer Finance


594


521


1,161


1,024Retail Banking


1,025


870


2,010


1,669Other(2)


304


(43
)

210


(71
)Total Global Consumer


2,935


2,106


5,373


4,097Global Corporate and Investment BankCapital Markets and Banking(2)(3)


478


655


1,401


1,396Transaction Services


261


180


495


371Total Global Corporate and Investment Bank


739


835


1,896


1,767Global Investment ManagementLife Insurance and Annuities


36


25


73


46Private Bank


152


139


311


264Asset Management


(12
)

16


21


31Total Global Investment Management


176


180


405


341Proprietary Investment Activities


238


43


252


55Corporate/Other


40


55


135


76Net Income

$
4,128

$
3,219

$
8,061

$
6,336


---

6

---



EVENTS IN 2004 and 2003

Charge for Regulatory and Legal Matters

On May 10, 2004, at the time of Citigroup's settlement of the WorldCom class action lawsuit, Citigroup announced that it had reevaluated its reserves and
that it was taking a charge of $4.95 billion after-tax to cover the cost of resolving numerous lawsuits and other legal proceedings
arising out of the transactions and activities that were the subjects of (i) the April 2003 settlement of research and IPO spinning-related inquiries conducted by the Securities and
Exchange Commission, the National Association of Securities Dealers, the New York Stock Exchange and the New York Attorney General, (ii) the July 2003 settlement of the Enron-related
inquiries conducted by the Securities and Exchange Commission, the Federal Reserve Bank of New York, the Office of the Comptroller of the Currency, and the Manhattan District Attorney,
(iii) underwritings for, and research coverage of, WorldCom, and (iv) the allocation of, and aftermarket trading in, securities sold in initial public offerings. The Company is a
defendant in numerous lawsuits and other legal proceedings arising out of the transactions and activities described in (ii) above. As part of the reevaluation of reserves described above,
Citicorp increased its reserve for these transactions and activities by approximately $850 million (after-tax) in the 2004 second quarter (Litigation Reserve Charge).

The
Company believes that its reserve is adequate to meet all of its remaining exposure for these matters. However, in view of the large number of these matters, the uncertainties of the
timing and outcome of this type of litigation, and the significant amounts involved, it is possible that the ultimate costs of these matters may exceed or be below the reserve. The Company will
continue to defend itself vigorously in these cases, and seek to resolve them in the manner management believes is in the best interest of the Company.

Sale of Samba Financial Group

On June 15, 2004, the Company sold for cash its 20 percent stake in The Samba Financial Group (Samba), formerly known as the Saudi American Bank, to
the Public Investment Fund, a Saudi public sector entity. Citicorp recognized an after-tax gain of $756 million ($1.168 billion pretax) on the sale during the 2004 second
quarter. The gain was recognized equally between Global Consumer and GCIB.

Credit Reserve Releases

During the 2004 second quarter, the Company released $562 million of reserves from its Allowance for Credit Losses reflecting the improved worldwide credit
environment, reduced cash-basis loan balances and lower delinquency rates. The releases consisted of $350 million of GCIB general reserves and $212 million in Global Consumer
general and specific reserves.

The
2004 six-month period included $729 million of credit reserve releases, consisting of $500 million in GCIB and $229 million in Global Consumer.

Acquisition of KorAm Bank

On April 30, 2004, Citigroup completed its tender offer to purchase all the outstanding shares of KorAm Bank (KorAm) at a price of KRW 15,500 per share in
cash. In total, Citigroup has acquired 99.3% of KorAm's outstanding shares for a total of KRW 3.07 trillion ($2.73 billion). The results of KorAm are included in the Consolidated Financial
Statements from May 2004 forward.

KorAm
is a leading commercial bank in Korea, with 223 domestic branches and total assets at June 30, 2004 of $37 billion. In the 2004 fourth quarter, Citigroup plans to
merge its Citibank Korea Branch into KorAm. On June 25, 2004, the union employees of KorAm initiated a strike that was settled on July 12, 2004. Approximately 70% of KorAm's workers were
out during that time resulting in the temporary closure of 170 of its branches. The operations of KorAm were integrated into the businesses of Citicorp.

Acquisition of Principal Residential Mortgage, Inc.

On July 1, 2004, Citigroup completed the acquisition of Principal Residential Mortgage, Inc. (PRMI) from Acquire Principal Residential
Mortgage, Inc. for $1.3 billion in cash. PRMI, one of the largest independent mortgage servicers in the United States, originates, purchases, sells and services home loans, consisting
primarily of conventional, conforming, fixed-rate prime mortgages.

The
transaction includes approximately $6.6 billion in assets and also includes $137 million of franchise premium, subject to the finalization of the purchase price
allocation. The operations of PRMI will be integrated into the businesses of Citicorp.

7

---



Divestiture of Citicorp Electronic Financial Services Inc.

During January 2004, the Company completed the sale for cash of Citicorp's Electronic Financial Services Inc. (EFS) for $390 million
(pretax). EFS is a provider of government-issued benefits payments and prepaid stored value cards used by state and federal government agencies, as well as of stored
value services for private institutions. The sale of EFS resulted in an after-tax gain of $180 million in the 2004 first quarter.

Acquisition of Washington Mutual Finance Corporation

On January 9, 2004, Citigroup completed the acquisition of Washington Mutual Finance Corporation (WMF) for $1.25 billion in cash. WMF was the
consumer finance subsidiary of Washington Mutual, Inc. WMF provides direct consumer installment loans and real-estate-secured loans, as well as sales finance and the sale of
insurance. The acquisition includes 427 WMF offices located in 26 states, primarily in the Southeastern and Southwestern United States. WMF has more than 2,300 employees and total assets of
$3.8 billion. Citicorp has guaranteed all outstanding unsecured indebtedness of WMF in connection with this acquisition. The results of WMF are included in the Consolidated Financial Statements
from January 2004 forward. The operations of WMF were integrated into the businesses of Citicorp.

Acquisition of Sears' Credit Card and Financial Products Business

On November 3, 2003, Citigroup acquired the Sears' Credit Card and Financial Products business (Sears). Approximately $28.6 billion of gross
receivables were acquired for a 10% premium of $2.9 billion and annual performance payments over the next 10 years based on new accounts, retail sales volume, and financial product
sales. Approximately $5.8 billion of intangible assets and goodwill have been recorded as a result of this transaction. In addition, the companies signed a multi-year marketing and
servicing agreement across a range of each company's businesses, products, and services. The results of Sears are included in the Consolidated Financial Statements from November 2003 forward.
The operations of Sears were integrated into the businesses of Citicorp.

Acquisition of The Home Depot's Private-Label Portfolio

In July 2003, Citigroup completed the acquisition of The Home Depot's private-label portfolio (Home Depot), which added $6 billion in receivables
and 12 million accounts. The results of Home Depot are included in the Consolidated Financial Statements from July 2003 forward. The operations of Home Depot were integrated into the
businesses of Citicorp.

8

---



Results of Operations

Income

Citicorp reported income of $4.128 billion in the 2004 second quarter, up 28%, from $3.219 billion in the 2003 second quarter.
Return on average common equity was 19.3% compared to 16.9% in the 2003 second quarter. Net income of $8.061 billion for the 2004 six-month period was up 27% from
$6.336 billion in the 2003 six months.

In
the 2004 second quarter, Global Consumer net income increased $829 million or 39% compared to the 2003 second quarter, while the Global Corporate and Investment Bank decreased
$96 million. Global Investment Management decreased $4 million or 2% and Proprietary Investment Activities increased $195 million from the 2003 second quarter. For the
six-month period, Global Consumer net income recorded a $1.3 billion or 31% increase and Global Corporate and Investment Bank recorded a $129 million or 7% increase. Global
Investment Management net income increased $64 million or 19% from the first half of 2003 and Proprietary Investment Activities increased $197 million from the prior year's
six-month period.

See
individual segment and product discussions on pages 12 - 28 for additional discussion and analysis of the Company's results of operations.

Revenues, Net of Interest Expense

Total revenues, net of interest expense, of $16.5 billion and $32.0 billion in the 2004 second quarter and six-month
period, respectively, were up $2.9 billion or 21% and $5.1 billion or 19% from the respective 2003 periods and included $1.2 billion related to the gain on sale of Samba. Global
Consumer revenues were up $2.1 billion or 22% in the 2004 second quarter to $11.5 billion, and were up $3.8 billion or 20% from the 2003 six months to $22.5 billion. The
increase was led by a $1.2 billion or 36% increase inCardsfrom the 2003 second quarter and a $2.5 billion or 37% increase from the 2003
six months, reflecting the results of the acquisitions of the Sears and Home Depot portfolios.Consumer Financerevenues increased $225 million
or 9% and $353 million or 7% from the 2003 second quarter and six months,
respectively, primarily reflecting the integration of the Washington Mutual consumer finance business.Retail Bankingrevenues increased
$178 million or 5% and $493 million or 7% from the 2003 three-and six-month periods, respectively, due primarily to increased international investment product sales and
growth in branch lending.

GCIB
revenues of $3.6 billion and $6.6 billion in the 2004 second quarter and six-month period, respectively, increased $705 million or 24% and
$861 million or 15% from the 2003 second quarter and six months, respectively. There was an increase of $617 million or 31% and $738 million or 19% in Capital Markets and Bankingfrom the
respective 2003 three- and six-month periods. There were also increases in Transaction Servicesof $88 million or 10% from the 2003 second quarter and $123 million or 7% from the 2003
six-month period.

Global
Investment Management revenues were $793 million in the 2004 second quarter and $1.8 billion in the first half of 2004, down $41 million or 5% from the 2003
second quarter and up $166 million or 10% from the prior-year six-month period.Life Insurance and Annuitiesrevenues
increased $13 million or 7% and $60 million or 16% from the 2003 three- and six-month periods, respectively, whileAsset
Managementnoted decreases of $38 million or 32% from the second quarter of 2003, and an increase of $9 million or 4% from the 2003 six-month period. Private Banknoted
a decrease of $16 million or 3% from the second quarter of 2003 but an increase of $97 million or 10% from the 2003
six-month period. Revenues from Proprietary Investment Activities in the 2004 second quarter and six-month period increased $287 million and $330 million,
respectively, from the 2003 periods.

Selected Revenue Items

Net interest revenue of $9.4 billion and $18.9 billion in the 2004 three- and six-month periods, respectively, increased
$1.3 billion or 16% and $2.5 billion or 16% from the respective 2003 periods, primarily reflecting the impact of acquisitions, a changing rate environment and business volume growth in
certain markets. Total fees and commissions of $3.5 billion and $6.7 billion increased by $680 million or 24% and $1.2 billion or 21% compared to the 2003 second quarter
and six-month period, respectively, primarily as a result of an increase in assets under fee-based management.

Foreign
exchange revenues were $438 million and $930 million in the 2004 three- and six-month periods, respectively, down $492 million or 53% and
$907 million or 49% from the respective year-ago periods due primarily to decreased volatility and lower FX trading. Trading account gains were up $683 million from the
second quarter of 2003 to $387 million and up $1.2 billion to $874 million in the 2004 six-month period, primarily due to prior-year weakness in interest
rate products. Investment Transactions of $173 million and $285 million in the three- and six-month periods of 2004, respectively, increased $45 million from both the
2003 periods. Other revenue of $2.6 billion in the 2004 second quarter was up $713 million or 37% from the prior-year quarter and $1.0 billion or 31% from the 2003 six
months, primarily reflecting the $1.2 billion gain on the sale of Samba, partially offset in the quarterly comparison from decreases in revenue earned from securitization activity, and
SFAS 133 hedging activities in the mortgage business.

9

---



Operating Expenses

Total operating expenses were $8.7 billion and $16.0 billion for the 2004 second quarter and six-month period, up $2.1 billion
and $2.8 billion from the comparable 2003 periods. The increases primarily reflected the $1.4 billion Litigation Reserve Charge and the impact of acquisitions.

Expenses
in the GCIB increased $1.5 billion from the 2003 second quarter and $1.4 billion from the six-month period, respectively. Global Consumer expenses were
up 16% and 17% from the 2003 second quarter and six-month period, respectively, driven by acquisitions as well as increased marketing and advertising costs. Global Investment Management
noted a 5% decrease from the prior-year quarter and a 7% increase in expenses from the 2003 six-month period, respectively, and Proprietary Investment Activities noted a 51%
and 30% increase from the three-and six-month periods of 2003.

Benefits, Claims, and Credit Losses

Benefits, claims, and credit losses were $1.7 billion and $4.1 billion in the 2004 second quarter and six-month period, down
$625 million and $459 million from the respective 2003 periods, reflecting the credit reserve releases. Global Consumer provisions for benefits, claims, and credit losses of
$2.0 billion and $4.3 billion were up 2% and 10% from the 2003 second quarter and six months, reflecting the impact of acquisitions, partially offset by an improved credit environment
which resulted in credit reserve releases.

GCIB
provision for credit losses of ($347) million in the 2004 second quarter decreased $645 million from the year-ago level, due to loan loss reserve releases
resulting from the overall improvement in the credit environment.

Corporate
cash-basis loans at June 30, 2004 and 2003 were $2.6 billion and $4.2 billion, respectively, while the corporate Other Real Estate Owned (OREO)
portfolio totaled $26 million and $60 million, respectively. The decrease in corporate cash-basis loans from June 30, 2003 was related to improvements in the overall
credit environment, write-offs, and sales of loans in the portfolio. Corporate cash-basis loans decreased $294 million from March 31, 2004, and
$788 million from December 31, 2003.

Income Taxes

The Company's effective tax rate of 31.2% in the 2004 second quarter reflected the tax benefits for not providing U.S. income taxes on the earnings of certain
foreign subsidiaries that are indefinitely invested.

The
2003 second quarter tax rate was 28.9% and included a $94 million release of a tax reserve in Japan related to a settlement with the authorities and the benefit of
indefinitely invested international earnings.

Regulatory Capital

Total capital (Tier 1 and Tier 2) was $80.5 billion or 12.55% of net risk-adjusted assets, and Tier 1 Capital was $53.8 billion
or 8.39% of net risk-adjusted assets at June 30, 2004, compared to $76.2 billion or 12.68% and $50.7 billion or 8.44%, respectively, at December 31, 2003.

10

---



Accounting Changes and Future Application of Accounting Standards

See Note 2 to the Consolidated Financial Statements for a discussion of Accounting Changes and the Future Application of Accounting Standards.

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 five 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, Argentina and Legal Reserves. The Company has reviewed and approved these significant accounting policies, which
are further described in the Company's 2003 Annual Report on Form 10-K.

---

Certain
amounts in prior periods have been reclassified to conform to the current period's presentation.

---

11

---



GLOBAL CONSUMER

|                                                   |  | Three Months Ended June 30, |        |  |   | Six Months Ended June 30, |  |    | 
|-------------------------------------------------- |  | --------------------------- | ------ |  | - | ------------------------- |  | -- | 
|
|
|Revenues, net of interest expense                  |  | $                           | 11,543 |  | $ | 9,424                     |  | 22 | 
|Operating expenses                                 |  |                             | 5,172  |  |   | 4,440                     |  | 16 | 
|Provisions for benefits, claims, and credit losses |  |                             | 1,980  |  |   | 1,935                     |  | 2  | 
|                                                   |  |                             |        |  |   |                           |  |    | 
|Income before taxes and minority interest          |  |                             | 4,391  |  |   | 3,049                     |  | 44 | 
|Income taxes                                       |  |                             | 1,441  |  |   | 931                       |  | 55 | 
|Minority interest, after-tax                       |  |                             | 15     |  |   | 12                        |  | 25 | 
|                                                   |  |                             |        |  |   |                           |  |    | 
|Net income                                         |  | $                           | 2,935  |  | $ | 2,106                     |  | 39 | 
|                                                   |  |                             |        |  |   |                           |  |    | 

Global Consumerreported net income of $2.935 billion and $5.373 billion in the 2004
second quarter and six months, respectively, up $829 million or 39% and $1.276 billion or 31% from the comparable 2003 periods, driven by double-digit growth across all products,
including the $378 million gain on the sale of Samba.Cardsnet income increased $254 million or 34% in the 2004 second quarter and
$517 million or 35% in the 2004 six-month period from the comparable periods of 2003, mainly reflecting the addition of the Sears, Home Depot and KorAm portfolios, an improved
credit environment, and the impact of a lower effective tax rate.Retail Bankingnet income increased $155 million or 18% in the 2004 second
quarter and $341 million or 20% in the 2004 six months from the comparable periods of 2003, primarily reflecting international growth in all regions driven by increases in wealth management
products and lending, and the KorAm acquisition in Asia, combined with improved credit in North America.Consumer Financenet income increased
$73 million or 14% in the 2004 second quarter and $137 million or 13% in the 2004 six months from prior-year periods, primarily reflecting growth in North America, including
the acquisition of WMF, and strong international growth in all regions, partially offset by the absence of a prior-year $94 million tax release in Japan.

In
the 2004 second quarter, Citigroup completed the acquisition of KorAm, which added $10.0 billion in deposits and $12.6 billion in loans, with $11.5 billion in Retail Bankingand
$1.1 billion inCardsat June 30, 2004. In January 2004,
Citigroup completed the acquisition of WMF, which added $3.8 billion in average loans and 427 loan offices. In November 2003, Citigroup completed the acquisition of Sears, which added
$15.4 billion of private-label card receivables, $13.2 billion of bankcard receivables and 32 million accounts. In July 2003, Citigroup completed the acquisition of the
Home Depot portfolio, which added $6 billion in receivables and 12 million accounts. In July 2003, Citigroup also acquired the remaining stake in Diners Club Europe, adding
1 million accounts and $0.6 billion of receivables. These acquisitions were accounted for as purchases; therefore, their results are included in the Global Consumer results from the
dates of acquisition.

Cards

|                                          |  | Three Months Ended June 30, |       |   |   | Six Months Ended June 30, |   |   
|----------------------------------------- |  | --------------------------- | ----- | - | - | ------------------------- | - | --
|
|
|Revenues, net of interest expense         |  | $                           | 4,467 |   | $ | 3,296                     |   | 36
|Operating expenses                        |  |                             | 1,964 |   |   | 1,463                     |   | 34
|Provision for credit losses               |  |                             | 1,015 |   |   | 678                       |   | 50
|                                          |  |                             |       |   |   |                           |   |   
|Income before taxes and minority interest |  |                             | 1,488 |   |   | 1,155                     |   | 29
|Income taxes                              |  |                             | 475   |   |   | 396                       |   | 20
|Minority interest, after-tax              |  |                             | 1     |   |   | 1                         |   |  
|                                          |  |                             |       |   |   |                           |   |   
|Net income                                |  | $                           | 1,012 |   | $ | 758                       |   | 34
|                                          |  |                             |       |   |   |                           |   |   
|Average assets(in billions of dollars)    |  | $                           | 94    |   | $ | 62                        |   | 52
|Return on assets                          |  |                             | 4.33  | % |   | 4.90                      | % |   
|                                          |  |                             |       |   |   |                           |   |   

Cardsreported net income of $1.012 billion and $1.992 billion in the 2004 second
quarter and six months, respectively, up $254 million or 34% and $517 million or 35% from the 2003 periods. North America cards reported net income of $850 million and
$1.682 billion in the 2004 second quarter and six months, respectively, up $201 million or 31% and $415 million or 33% from the 2003 periods, mainly reflecting the Sears and Home
Depot acquisitions, an improved credit environment including the impact of a $60 million credit reserve release, higher sales, and the benefit of a lower effective tax rate. International cards
net income of $162 million and $310 million in the 2004 second quarter and six months, respectively, increased 49% from both the 2003 second quarter and six-month period,
reflecting receivables growth, improved credit, a lower effective tax rate and the addition of KorAm.

As
shown in the following table, average managed loans grew 22% in both the 2004 second quarter and six months, reflecting growth of 21% in North America in both periods and 31% and 27%,
respectively, in International Cards. In North America, the addition of the Sears and Home Depot portfolios and growth in Mexico were partially offset by a decline in introductory promotional rate
balances that was driven by a change in account acquisition marketing strategies in 2003, as well as the sale of $1.7 billion of non-

12

---



strategic
portfolios in 2003. International Cards growth reflected growth in all regions led by Asia and EMEA, which included the addition of KorAm and Diners Club Europe, respectively, and the
benefit of strengthening currencies.

Total
card sales were $87.0 billion and $166.1 billion in the 2004 second quarter and six months, respectively, up 27% and 24% from the 2003 periods. North America sales
were up 24% and 22% over the prior-year quarter and six months to $74.3 billion and $142.1 billion, respectively, reflecting the impact of acquisitions and higher purchase
sales. International Cards sales grew 41% and 36% over the prior-year quarter and six months to $12.7 billion and $24.0 billion, reflecting broad-based growth led by Asia and
EMEA, again reflecting the addition of KorAm and Diners Club Europe, respectively, and the benefit of strengthening currencies.

|                                     |               | Three Months Ended June 30, |       |       |   | Six Months Ended June 30, |       |    |   
|------------------------------------ | ------------- | --------------------------- | ----- | ----- | - | ------------------------- | ----- | -- | --
|
|
|Sales                                |               |                             |       |       |   |                           |       |    |   
|                                     | North America |                             | $     | 74.3  |   | $                         | 59.7  |    | 24
|                                     | International |                             |       | 12.7  |   |                           | 9.0   |    | 41
|                                     |               |                             |       |       |   |                           |       |    |   
|Total Sales                          |               | $                           | 87.0  |       | $ | 68.7                      |       | 27 |   
|Average managed loans                |               |                             |       |       |   |                           |       |    |   
|                                     | North America |                             | $     | 136.9 |   | $                         | 112.7 |    | 21
|                                     | International |                             |       | 15.4  |   |                           | 11.8  |    | 31
|                                     |               |                             |       |       |   |                           |       |    |   
|Total average managed loans          |               | $                           | 152.3 |       | $ | 124.5                     |       | 22 |   
|Average securitized receivables      |               |                             | (75.6 | )     |   | (71.1                     | )     | (6 | ) 
|Average loans held-for-sale          |               |                             | (2.1  | )     |   | (3.0                      | )     | 30 |   
|                                     |               |                             |       |       |   |                           |       |    |   
|Total on-balance sheet average loans |               | $                           | 74.6  |       | $ | 50.4                      |       | 48 |   
|                                     |               |                             |       |       |   |                           |       |    |   

Revenues, net of interest expense, of $4.467 billion and $9.065 billion in the 2004 second quarter and six months, respectively,
increased $1.171 billion or 36% and $2.463 billion or 37% from the 2003 periods. Revenue growth in North America of $997 million or 37% and $2.149 billion or 40% in the
2004 second quarter and six months was mainly due to the impact of acquisitions, net interest margin expansion, the benefit of increased purchase sales, and increased loans in Mexico. Revenue growth
in North America was partially offset by increased credit losses on securitized receivables (which are recorded as a contra-revenue item after receivables are securitized), the absence of a 2003
second quarter gain from the sale of $1.7 billion in non-strategic portfolios, and the absence of net gains of $69 million and $215 million in the 2003 second quarter
and six months resulting from changes in estimates related to the timing of revenue recognition on securitized portfolios. Revenue growth in International Cards of $174 million or 29% and
$314 million or 26% in the 2004 second quarter and six months was mainly
driven by loan and sales growth in all regions, the additions of Diners Club Europe and KorAm, and the benefit of foreign currency translation.

Operating
expenses in the 2004 second quarter and six months of $1.964 billion and $3.902 billion were $501 million or 34% and $993 million or 34% higher than
the prior-year periods, primarily reflecting the impact of acquisitions and foreign currency translation, combined with increased marketing and advertising costs in both North America and
International Cards.

The
provision for credit losses in the 2004 second quarter and six months was $1.015 billion and $2.243 billion, respectively, compared to $678 million and
$1.452 billion in the prior-year periods. The increase in the provision for credit losses was mainly in North America and reflected the impact of the Sears and Home Depot
acquisitions. These acquisitions more than offset a decline in net credit losses and the release of credit reserves of $69 million resulting from the improved credit environment, as well as the
impact of increased levels of securitized receivables.

The
securitization of credit card receivables is limited to the CitiCards business within North America. At June 30, 2004, securitized credit card receivables were
$76.4 billion, compared to $72.0 billion at June 30, 2003. Credit card receivables held-for-sale were $6.3 billion at June 30, 2004 compared
to $3.0 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, commission and fees revenue, and credit losses on loans are
instead reported as commission and fees 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 term of the transaction may vary depending on the credit performance of the securitized receivables. However,
Citicorp's exposure to credit losses on the securitized receivables is limited to the cash flows from the receivables.

Including
securitized receivables and receivables held-for-sale, managed net credit losses in the 2004 second quarter were $2.373 billion, with a related
loss ratio of 6.27%, compared to $2.554 billion and 6.69% in the 2004 first quarter, and $1.887 billion and 6.08% in the 2003 second quarter. The increase in the ratio from the
prior-year second quarter reflected the addition of the Sears portfolio, which impacted both the bankcard and private label portfolios in North America, as well as the impact of lower
introductory

13

---



promotional
rate balances, and was partially offset by the improved credit environments in North America and the International regions, led by Asia. The decrease in the ratio versus the 2004 first
quarter primarily reflects the improved credit environment.

Loans
delinquent 90 days or more on a managed basis were $2.808 billion or 1.82% of loans at June 30, 2004, compared to $3.152 billion or 2.08% at
March 31, 2004 and $2.313 billion or 1.88% at June 30, 2003. The net impact of acquisitions was more than offset by the improved credit environment in driving the declines versus
both the prior year and the prior quarter.

Consumer Finance

|                                                   |  | Three Months Ended June 30, |       |   |   | Six Months Ended June 30, |   |    |  
|-------------------------------------------------- |  | --------------------------- | ----- | - | - | ------------------------- | - | -- | -
|
|
|Revenues, net of interest expense                  |  | $                           | 2,677 |   | $ | 2,452                     |   | 9  |  
|Operating expenses                                 |  |                             | 873   |   |   | 835                       |   | 5  |  
|Provisions for benefits, claims, and credit losses |  |                             | 894   |   |   | 957                       |   | (7 | )
|                                                   |  |                             |       |   |   |                           |   |    |  
|Income before taxes                                |  |                             | 910   |   |   | 660                       |   | 38 |  
|Income taxes                                       |  |                             | 316   |   |   | 139                       |   | NM |  
|                                                   |  |                             |       |   |   |                           |   |    |  
|Net income                                         |  | $                           | 594   |   | $ | 521                       |   | 14 |  
|                                                   |  |                             |       |   |   |                           |   |    |  
|Average assets(in billions of dollars)             |  | $                           | 110   |   | $ | 105                       |   | 5  |  
|Return on assets                                   |  |                             | 2.17  | % |   | 1.99                      | % |    |  
|                                                   |  |                             |       |   |   |                           |   |    |  

---

Consumer Financereported net income of $594 million and $1.161 billion in the 2004
second quarter and six months, respectively, up $73 million or 14% and $137 million or 13% from the comparable 2003 periods, principally reflecting growth in North America, including the
acquisition of WMF, and strong international growth in all regions, except for a decline in Japan. The decline in Japan resulted from the absence of a $94 million prior-year tax
reserve release related to a settlement with tax authorities.

|                          |  | Three Months Ended June 30, |      |  |   | Six Months Ended June 30, |  |   
|------------------------- |  | --------------------------- | ---- |  | - | ------------------------- |  | --
|
|
|Average loans             |  |                             |      |  |   |                           |  |   
|Real estate-secured loans |  | $                           | 56.7 |  | $ | 51.7                      |  | 10
|Personal                  |  |                             | 24.4 |  |   | 22.2                      |  | 10
|Auto                      |  |                             | 11.5 |  |   | 11.1                      |  | 4 
|Sales finance and other   |  |                             | 5.2  |  |   | 4.8                       |  | 8 
|                          |  |                             |      |  |   |                           |  |   
|Total average loans       |  | $                           | 97.8 |  | $ | 89.8                      |  | 9 
|                          |  |                             |      |  |   |                           |  |   

As shown in the preceding table, average loans grew $8.0 billion or 9% compared to the 2003 second quarter, reflecting growth in North
America of $7.8 billion. North American growth reflected the addition of WMF, which contributed $3.8 billion in average loans, and growth in real estate-secured and auto loans. Growth in
the International markets was driven by real estate-secured and personal loans in both EMEA and Asia, and included the impact of strengthening currencies. In Japan, average loans in both the 2004
second quarter and six-month period declined 5% from the comparable 2003 periods, as the benefit of foreign currency translation was more than offset by the impact of higher
pay-downs, reduced loan demand, and tighter underwriting standards.

As
shown in the following table, the average net interest margin of 10.19% in the 2004 second quarter increased 11 basis points from the 2003 second quarter, reflecting increases in both
North America and International Consumer Finance. In North America, the average net interest margin was 8.52% in the 2004 second quarter, increasing 12 basis points from the prior-year
quarter, as the benefit of lower cost of funds and the addition of WMF was partially offset by lower yields. The decline in yields in North America reflected the lower interest rate environment and
the continued shift to higher-quality credits, particularly in the auto loan business. The average net interest margin for International Consumer Finance was 16.33% in the 2004 second quarter,
increasing 64 basis points from the prior-year quarter, primarily driven by margin expansion in EMEA and Asia due to lower funding costs and improved yields, and improvement in Japan. The
increase in Japan primarily resulted from fewer adjustments and refunds of interest, and lower funding costs.

|                            |  | Three Months Ended June 30, |   |      
|--------------------------- |  | --------------------------- | - | -----
|
|Average Net Interest Margin |  |                             |   |      
|North America               |  | 8.52                        | % | 8.40 
|International               |  | 16.33                       | % | 15.69
|Total                       |  | 10.19                       | % | 10.08

Revenues, net of interest expense, of $2.677 billion and $5.365 billion in the 2004 second quarter and six months, respectively,
increased $225 million or 9% and $353 million or 7% from the prior-year periods. Revenue in North America increased $181 million or 11% and $381 million or 12%
from the 2003 second quarter and six-month period, respectively, primarily driven by the acquisition

14

---



of
WMF and growth in receivables, partially offset by declines in insurance-related revenue. Revenue in International Consumer Finance increased $44 million or 5% from the 2003 second quarter,
mainly due to growth in EMEA and Asia, including the impact of foreign currency translation, partially offset by a decline in Japan due to lower volumes. International Consumer Finance revenue for the
2004 six-month period declined $28 million or 2% from the prior year, mainly driven by lower volumes and spreads in Japan, partially offset by the benefit of foreign currency
translation and growth in EMEA and Asia.

Operating
expenses of $873 million and $1.796 billion in the 2004 second quarter and six months, respectively, increased $38 million or 5% and $96 million or
6% from the prior-year periods. Operating expenses in North America increased $24 million or 5% and $74 million or 7%, respectively, from the prior-year periods
primarily due to the acquisition of WMF. In International Consumer Finance, operating expenses increased $14 million or 4% from the prior-year quarter and $22 million or 3%
from the prior-year six months, reflecting the impact of foreign currency translation, volume growth and front office expansion in Asia and EMEA, partially offset by lower operating
expenses in Japan reflecting expense savings from office closings, headcount reductions and the absence of prior-year repositioning costs.

The
provisions for benefits, claims, and credit losses were $894 million in the 2004 second quarter, down from $916 million in the 2004 first quarter and
$957 million in the 2003 second quarter, as decreases in the provision for credit losses in Japan due to lower bankruptcies, and improved credit conditions in the U.S., were partially offset by
the impact of the WMF acquisition. Net credit losses and the related loss ratio were $857 million and 3.52% in the 2004 second quarter, compared to $870 million and 3.57% in the 2004
first quarter and $897 million and 4.01% in the 2003 second quarter. In North America, the net credit loss ratio of 2.69% in the 2004 second quarter was down from 2.79% in the 2004 first
quarter and 2.98% in the 2003 second quarter, reflecting improvements in the real estate and auto businesses, partially offset by the impact of WMF. The net credit loss ratio for International
Consumer Finance was 6.57% in the 2004 second quarter, up from 6.31% in the 2004 first quarter and down from 7.43% in the 2003 second quarter. The increase from the prior quarter was primarily due to
the impact on the ratio of lower loan volumes in Japan. The decrease in the ratio from the prior-year quarter primarily reflected improved conditions in Japan, where lower bankruptcy
losses were partially offset by the impact on the ratio of lower loan volumes.

Loans
delinquent 90 days or more were $1.948 billion or 1.96% of loans at June 30, 2004, compared to $2.127 billion or 2.15% at March 31, 2004 and
$2.182 billion or 2.41% a year ago. The decrease in the delinquency ratio versus the prior year and prior quarter was mainly due to improvements in North America.

Retail Banking

|                                                   |  | Three Months Ended June 30, |       |   |   | Six Months Ended June 30, |   |     |  
|-------------------------------------------------- |  | --------------------------- | ----- | - | - | ------------------------- | - | --- | -
|
|
|Revenues, net of interest expense                  |  | $                           | 3,842 |   | $ | 3,664                     |   | 5   |  
|Operating expenses                                 |  |                             | 2,256 |   |   | 2,058                     |   | 10  |  
|Provisions for benefits, claims, and credit losses |  |                             | 71    |   |   | 300                       |   | (76 | )
|                                                   |  |                             |       |   |   |                           |   |     |  
|Income before taxes and minority interest          |  |                             | 1,515 |   |   | 1,306                     |   | 16  |  
|Income taxes                                       |  |                             | 476   |   |   | 425                       |   | 12  |  
|Minority interest, after-tax                       |  |                             | 14    |   |   | 11                        |   | 27  |  
|                                                   |  |                             |       |   |   |                           |   |     |  
|Net income                                         |  | $                           | 1,025 |   | $ | 870                       |   | 18  |  
|                                                   |  |                             |       |   |   |                           |   |     |  
|Average assets(in billions of dollars)             |  | $                           | 250   |   | $ | 222                       |   | 13  |  
|Return on assets                                   |  |                             | 1.65  | % |   | 1.57                      | % |     |  
|                                                   |  |                             |       |   |   |                           |   |     |  

Retail Bankingreported net income of $1.025 billion and $2.010 billion in the 2004
second quarter and six months, respectively, up $155 million or 18% and $341 million or 20% from the 2003 periods. The increase inRetail
Bankingwas driven by growth in International Retail Banking of $135 million or 50% and $232 million or 43% in the 2004 second quarter and six months,
respectively, reflecting growth across all regions. Net income in North America increased $20 million or 3% and $109 million or 10% in the 2004 second quarter and six months,
respectively, primarily due to improved credit costs.

15

---



|                                |                  | Three Months Ended June 30, |       |       |   | Six Months Ended June 30, |       |   
|------------------------------- | ---------------- | --------------------------- | ----- | ----- | - | ------------------------- | ----- | --
|
|
|Average customer deposits       |                  |                             |       |       |   |                           |       |   
|                                | North America(1) |                             | $     | 157.4 |   | $                         | 154.1 |   
|                                | International    |                             |       | 102.1 |   |                           | 84.3  |   
|                                |                  |                             |       |       |   |                           |       |   
|Total average customer deposits |                  | $                           | 259.5 |       | $ | 238.4                     |       | 9 
|Average loans                   |                  |                             |       |       |   |                           |       |   
|                                | North America    |                             | $     | 133.7 |   | $                         | 122.1 |   
|                                | International    |                             |       | 45.8  |   |                           | 35.6  |   
|                                |                  |                             |       |       |   |                           |       |   
|Total average loans             |                  | $                           | 179.5 |       | $ | 157.7                     |       | 14
|                                |                  |                             |       |       |   |                           |       |   

---

---

As
shown in the preceding table,Retail Bankinggrew average customer deposits and average loans compared to 2003. Average customer
deposit growth in North America primarily reflected increases in both higher-margin demand and savings deposits partially offset by declines in time and mortgage escrow deposits. Average loan growth
in North America reflected increased mortgages and student loans in Consumer Assets, partially offset by a decline in CitiCapital resulting from the run-off of non-core
portfolios and the sale of the $1.2 billion CitiCapital Fleet Services portfolio in 2003. In the International markets, average customer deposits grew 21% from the prior-year
quarter driven by growth in Asia, EMEA and Japan and the impact of foreign currency translation. The growth in Asia included the impact of the KorAm acquisition, which added $6.7 billion in
average customer deposits, while the growth in EMEA was primarily in Germany. International Retail Banking average loans increased 29% from the prior-year quarter due to growth in Asia and
EMEA, and included the impacts of the KorAm acquisition and foreign currency translation. Growth in both average loans and average customer deposits was negatively impacted by volume declines in Latin
America, largely reflecting the impact of strategic repositioning in the area.

As
shown in the following table, revenues, net of interest expense, of $3.842 billion and $7.540 billion in the 2004 second quarter and six months, respectively, increased
$178 million or 5% and $493 million or 7% from the 2003 periods. The growth in revenues reflected an increase in International Retail Banking, partially offset by a decline in North
America. Revenues in North America decreased $102 million or 4% compared to the prior-year quarter and $36 million or 1% in the six-month comparison. The decline
in the 2004 second quarter in North America primarily reflected lower results in Consumer Assets and Mexico, offset by increases in CitiCapital and Citibanking North America. The decline in Consumer
Assets primarily resulted from lower securitization revenues, including the adoption of SAB 105, resulting in a one-time decrease in revenues of $35 million, and an
$80 million net pretax loss on mortgage servicing hedge ineffectiveness resulting from the volatile rate environment. In Mexico, revenues declined due to foreign currency translation and the
absence of prior-year benefits resulting from revised estimates of reserves related to certain investments, partially offset by the gain on the sale of a mortgage portfolio and the impact
of higher deposit volumes. The increase in CitiCapital primarily resulted from the reclassification of operating leases from loans to other assets and the related operating lease depreciation expense
from revenue to expense. This reclassification increased both revenues and expenses by $135 million pretax. In Citibanking North America the increase was driven by the benefit of higher deposit
and loan volumes, partially offset by lower net funding spreads. The decline in North America Retail Banking revenues in the six-month period was driven by a decline in Consumer Assets,
primarily from the lower securitization revenues, including the SAB 105 impact, and the hedge ineffectiveness, offset by increases in the remaining North America Retail Banking products.

International
Retail Banking revenues increased $280 million or 23% and $529 million or 22% in the 2004 second quarter and six-month period, respectively,
reflecting growth in all regions and the impact of strengthening currencies. Revenue increases in Asia benefited from the KorAm acquisition, increased investment product sales, favorable foreign
currency translation and growth in branch lending. Growth in EMEA was driven by improved investment product sales and increased branch lending, mainly in Germany, as well as the impact of favorable
foreign currency translation, while the Latin America increase primarily related to interest rate movements in Argentina. The increase in Japan was related to increased deposit and investment product
sales.

16

---





Three Months Ended June 30,



Six Months Ended June 30,In millions of dollars

%
Change

%
Change2004

2003

2004

2003Revenues, net of interest expenseCitibanking North America, Consumer Assets and CitiCapital

$
1,858

$
1,937

(4
)
$
3,674

$
3,732

(2
)Mexico


479


502

(5
)

956


934

2North America


2,337


2,439

(4
)

4,630


4,666

(1
)EMEA


721


585

23


1,406


1,133

24Japan


119


113

5


244


221

10Asia


540


418

29


1,007


809

24Latin America


125


109

15


253


218

16International


1,505


1,225

23


2,910


2,381

22Total revenues, net of interest expense

$
3,842

$
3,664

5

$
7,540

$
7,047

7


Operating expenses in the 2004 second quarter and six months increased $198 million or 10% and $353 million or 9%, respectively, from the comparable 2003
periods. In North America, expenses grew $118 million or 9% and $191 million or 7% from the 2003 second quarter and six months, respectively. The increase primarily reflected the impact
of the operating lease reclassification in CitiCapital of $135 million and higher volume-related expenses in Citibanking North America including increased advertising and marketing costs,
partially offset by declines in Mexico. Mexico's expenses declined in the 2004 second quarter primarily due to foreign currency translation, and was partially offset by increased legal costs in the
2004 six-month period. International Retail Banking operating expenses increased $80 million or 12% and $162 million or 12% from the 2003 second quarter and six months,
respectively, mainly reflecting the addition of KorAm, the impact of foreign currency translation, and increased investments for branch expansion, technology and advertising and marketing, partially
offset by the absence of prior-year repositioning costs, mainly in Latin America and, for the six-month period, in EMEA.

The
provisions for benefits, claims, and credit losses were $71 million and $259 million in the 2004 second quarter and six months, respectively, down $229 million
or 76% and $324 million or 56% from the comparable periods in 2003. The declines were driven by credit reserve releases of $138 million in the 2004 second quarter and lower net credit
losses in CitiCapital, Consumer Assets, Citibanking North America, Asia and Latin America. An increase in credit costs for EMEA was primarily driven by Germany. Net credit losses (excluding Commercial
Markets) were $176 million and the related loss ratio was 0.51% in the 2004 second quarter, compared to $155 million and 0.49% in the 2004 first quarter, and $165 million and
0.58% in the
2003 second quarter. The increase in credit losses from the 2004 first quarter was mainly driven by lower recoveries in Mexico. The decrease in the net credit loss ratio (excluding Commercial Markets)
from the 2003 second quarter was primarily due to improvements in all regions except EMEA and Mexico. The increase in EMEA primarily resulted from increases in Germany. Commercial Markets net credit
losses were $31 million and the related loss ratio was 0.31% in the 2004 second quarter, compared to $50 million and 0.51% in the 2004 first quarter, and $139 million and 1.30% in
the 2003 second quarter. The 2004 second quarter improvement in Commercial Markets net credit losses from both the 2004 first quarter and 2003 second quarter was due to declines in CitiCapital, Mexico
and Citibanking North America.

Loans
delinquent 90 days or more (excluding Commercial Markets) were $3.576 billion or 2.46% of loans at June 30, 2004, compared to $3.698 billion or 2.86% at
March 31, 2004, and $3.706 billion or 3.29% a year ago. Compared to a year ago, the decrease in delinquent loans resulted from improvements in Consumer Assets, Asia and Latin America,
partially offset by an increase in Germany, which included the impact of foreign currency translation. The decline in Consumer Assets mainly reflected a lower level of buybacks from GNMA pools where
credit risk is maintained by government agencies. The decline in Asia was mainly in Taiwan and was partially offset by the impact of KorAm.

Cash-basis
loans in Commercial Markets were $1.173 billion or 2.96% of loans at June 30, 2004, $1.213 billion or 3.11% at March 31, 2004, and
$1.165 billion or 2.76% at June 30, 2003. Cash-basis loans improved from the prior quarter primarily due to improvements in Mexico and CitiCapital, where the business
continues to work through the liquidation of non-core portfolios. These declines were partially offset by increases in Citibanking North America and EMEA. Compared to the 2003 second
quarter, the increase in cash-basis loans reflected increases in EMEA, mainly in Germany, and in Mexico, and was partially offset by improvements in CitiCapital and the other international
regions.

Average
assets of $250 billion and $240 billion in the 2004 second quarter and six months, respectively, increased $28 billion and $19 billion from the
comparable periods of 2003. The increase in average assets primarily reflected the impact of the KorAm acquisition and growth in mortgages, partially offset by a reduction in CitiCapital due to the
liquidation of non-core portfolios.

17

---



Other Consumer

Three Months Ended June 30,

Six Months Ended June 30,In millions of dollars2004

2003

2004

2003Revenues, net of interest expense

$
557

$
12

$
541

$
33Operating expenses


79


84


191


147Income before taxes (benefits)


478


(72
)

350


(114
)Income taxes (benefits)


174


(29
)

140


(43
)Net income (loss)

$
304

$
(43
)
$
210

$
(71
)


Other Consumerwhich includes certain treasury and other unallocated staff functions, global marketing and
other programsreported income of $304 million and $210 million in the 2004 second quarter and six months, respectively, compared to losses of $43 million and
$71 million in the comparable 2003 periods. The increase of $347 million and $281 million in the 2004 second quarter and six months, respectively, was primarily due to a
$378 million after-tax gain related to the sale of Samba in the 2004 second quarter. The increases were partially offset by lower treasury results, including the impact of higher
capital funding costs, and for the six-month period, an increase in legal reserves.

18

---



GLOBAL CORPORATE AND INVESTMENT BANK

Three Months Ended June 30,



Six Months Ended June 30,In millions of dollars

%
Change

%
Change2004

2003

2004

2003Revenues, net of interest expense

$
3,586

$
2,881

24

$
6,578

$
5,717

15Operating expenses


2,938


1,476

99


4,330


2,920

48Provision for credit losses


(347
)

298

NM


(407
)

414

NMIncome before taxes and minority interest


995


1,107

(10
)

2,655


2,383

11Income taxes (benefit)


243


267

(9
)

735


606

21Minority interest, after-tax


13


5

NM


24


10

NMNet income

$
739

$
835

(11
)
$
1,896

$
1,767

7


---

GCIB reported net income of $739 million and $1.896 billion in the 2004 second quarter and six months, down $96 million or 11% from the 2003 second
quarter and up $129 million or 7% from the 2003 six months, respectively. The 2004 second quarter reflects a decrease of $177 million or 27% inCapital Markets
and Banking, partially offset by an increase of $81 million or 45% inTransaction Services. The 2004 six months reflects
increases of $124 million or 33% inTransaction Servicesand $5 million inCapital Markets and
Banking.

Capital Markets and Bankingreported net income of $478 million and $1.401 billion in the 2004 second quarter and six
months, a decrease of $177 million or 27% from the 2003 second quarter and an increase of $5 million from the 2003 six months. The decrease in the 2004 second quarter primarily reflects
the approximately $850 million (after-tax) Litigation Reserve Charge as well as declines in Equity Markets revenues, partially offset by a lower provision for credit losses and
increases in Fixed Income Markets and Lending revenue. The increase in the 2004 six months primarily reflects a lower provision for credit losses as well as increases in Fixed Income Markets, Lending,
and Equity Markets revenues, partially offset by the Litigation Reserve Charge.

Transaction Servicesnet income of $261 million and $495 million in the 2004 second quarter and six months increased
$81 million or 45% from the 2003 second quarter and $124 million or 33% from the 2003 six months, respectively. The increases in net income in 2004 were primarily due to lower provision
for credit losses, higher revenue reflecting growth in assets under custody and liability balances, and improved spreads, partially offset by higher expenses.

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 approximately 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.

Capital Markets and Banking

Three Months Ended June 30,



Six Months Ended June 30,In millions of dollars

%
Change

%
Change2004

2003

2004

2003Revenues, net of interest expense

$
2,602

$
1,985

31

$
4,655

$
3,917

19Operating expenses


2,246


842

NM


2,980


1,661

79Provision for credit losses


(276
)

286

NM


(302
)

393

NMIncome before taxes and minority interest


632


857

(26
)

1,977


1,863

6Income taxes


142


197

(28
)

554


457

21Minority interest, after-tax


12


5

NM


22


10

NMNet income

$
478

$
655

(27
)
$
1,401

$
1,396




---

Capital Markets and Bankingreported net income of $478 million and $1.401 billion in the 2004 second
quarter and six months, a decrease of $177 million or 27% from the 2003 second quarter and an increase of $5 million from the 2003 six months. The decrease in the 2004 second quarter
primarily reflects the approximately $850 million (after-tax) Litigation Reserve Charge as well as declines in Equity Markets revenues, partially offset by a lower provision for
credit losses and increases in Fixed Income Markets and Lending revenue. The increase in the 2004 six months primarily reflects a lower provision for credit losses as well as increases in Fixed Income
Markets, Lending, and Equity Markets revenues, partially offset by the Litigation Reserve Charge.

Revenues,
net of interest expense, of $2.602 billion and $4.655 billion in the 2004 second quarter and six months, increased $617 million or 31% from the 2003 second
quarter and $738 million or 19% from the 2003 six months, respectively. Revenues increased in the 2004 second quarter driven by increases in Fixed Income Markets and Lending, partially offset
by declines in Equity Markets. Lending increased primarily due to the absence of prior-year losses in credit derivatives (which serve as an economic hedge for the

19

---



loan
portfolio) and the acquisition of KorAm. The Equity Markets decline reflects weak derivative activity, due to declines in volatility, and decreases in convertibles reflecting rising interest
rates and widening spreads.

The
increase in revenues in the 2004 six months was driven by increases in Fixed Income Markets, Lending, and Equity Markets. Lending's increase primarily reflects the absence of
prior-year losses on credit derivatives and the acquisition of KorAm. The Equity Markets increase is primarily driven by higher derivatives and cash trading, partially offset by declines
in convertibles.

Operating
expenses of $2.246 billion and $2.980 billion in the 2004 second quarter and six months were up $1.404 billion and $1.319 billion from the
respective 2003 periods, primarily reflecting the $1.4 billion Litigation Reserve Charge and the acquisition of KorAm.

The
provision for credit losses was ($276) million in the 2004 second quarter and ($302) million in the 2004 six months, down $562 million and $695 million, respectively,
from the 2003 periods primarily due to loan loss reserve releases as a result of improving credit quality, and lower credit losses in the power and energy industry, Argentina and Brazil. The current
quarter included the release of $276 million in loan loss reserves, which consisted of releases of $158 million in Mexico, $59 million in Latin America, $36 million in
Asia, $13 million in Japan and $10 million in EMEA.

Cash-basis
loans were $2.496 billion at June 30, 2004, compared to $2.806 billion at March 31, 2004, $3.246 billion at December 31,
2003, and $3.669 billion at June 30, 2003. Cash-basis loans decreased $1.173 billion from June 30, 2003, primarily due to decreases to borrowers in the
telecommunications and power and energy industries and charge-offs against reserves as well as paydowns from corporate borrowers in Argentina, Mexico, Hong Kong, and New Zealand, partially
offset by increases in Korea reflecting the acquisition of KorAm and a reclassification of cash-basis loans ($248 million) in Mexico from Transaction Services to Capital Markets and
Banking. Cash-basis loans decreased $310 million from March 31, 2004, primarily due to charge-offs taken against reserves and paydowns from borrowers in the power
and energy industry, Mexico, Australia and Argentina, partially offset by increases in Korea reflecting the acquisition of KorAm.

20

---



Transaction Services

Three Months Ended June 30,



Six Months Ended June 30,In millions of dollars

%
Change

%
Change2004

2003

2004

2003Revenues, net of interest expense

$
984

$
896

10

$
1,923

$
1,800

7Operating expenses


692


634

9


1,350


1,259

7Provision for credit losses


(71
)

12

NM


(105
)

21

NMIncome before taxes and minority interest


363


250

45


678


520

30Income taxes and minority interest, after-tax


102


70

46


183


149

23Net income

$
261

$
180

45

$
495

$
371

33


---

---

Transaction Servicesnet income of $261 million and $495 million in the 2004 second quarter and six months increased
$81 million or 45% from the 2003 second quarter and $124 million or 33% from the 2003 six months, respectively. The increases in net income in 2004 were primarily due to lower provision
for credit losses, higher revenue reflecting growth in assets under custody and liability balances and improved spreads, partially offset by higher expenses.

As
shown in the following table, average liability balances of $113 billion grew 18% compared to the 2003 second quarter, primarily due to increases in Asia and Europe reflecting
positive flow and foreign exchange impact. Assets under custody reached $7.0 trillion, an increase of $1.4 trillion or 25% compared to the 2003 second quarter, primarily reflecting market appreciation
and increases in customer volumes.

Three Months Ended
June 30,

Three Months Ended
June 30,%
Change2004

2003Liability balances(average in billions)

$
113

$
96

18Assets under custody(EOP in trillions)


7.0


5.6

25


---

Revenues,
net of interest expense, of $984 million and $1.923 billion in the 2004 second quarter and six months increased $88 million or 10% from the 2003 second
quarter and $123 million or 7% from the 2003 six months, respectively. The increases in both periods were primarily driven by growth in assets under custody and liability balances, improved
spreads and new business initiatives, including the acquisition of Forum Financial during the fourth quarter of 2003 and of KorAm in the second quarter of 2004. The 2003 six-month period
included gains on the early termination of intracompany deposits (which were offset inCapital Markets and Banking).

Operating
expenses of $692 million and $1.350 billion in the 2004 second quarter and six months increased $58 million or 9% from the 2003 second quarter and
$91 million or 7% from the 2003 six months, respectively. Expenses increased in the 2004 periods primarily due to higher business volumes, including the effect of the acquisitions of Forum
Financial and KorAm, as well as increased compensation and benefits costs.

The
provision for credit losses of $(71) and $(105) million in the 2004 second quarter and six months decreased $83 million from the 2003 second quarter and
$126 million from the 2003 six months, respectively, primarily due to general loan loss reserve releases of $74 million in the 2004 second quarter and $96 million in 2004 six
months as a result of improving credit quality and lower write-offs in Latin America.

Cash-basis
loans, which in theTransaction Servicesbusiness are primarily trade finance receivables, were
$118 million, $102 million, $156 million, and $513 million at June 30, 2004, March 31, 2004, December 31, 2003 and June 30, 2003, respectively.
Cash-basis loans decreased $395 million from June 30, 2003, primarily due to a reclassification of cash-basis loans ($248 million) in Mexico from Transaction ServicestoCapital Markets and Banking, along with charge-offs in Argentina and
Poland. The increase of $16 million from March 31, 2004 was primarily due to an increase in cash basis loans in EMEA.

21

---



GLOBAL INVESTMENT MANAGEMENT

|                                                   |  | Three Months Ended June 30, |     |   |   | Six Months Ended June 30, |  |     |  
|-------------------------------------------------- |  | --------------------------- | --- | - | - | ------------------------- |  | --- | -
|
|
|Revenues, net of interest expense                  |  | $                           | 793 |   | $ | 834                       |  | (5  | )
|Operating expenses                                 |  |                             | 467 |   |   | 490                       |  | (5  | )
|Provisions for benefits, claims, and credit losses |  |                             | 75  |   |   | 100                       |  | (25 | )
|                                                   |  |                             |     |   |   |                           |  |     |  
|Income before taxes and minority interest          |  |                             | 251 |   |   | 244                       |  | 3   |  
|Income taxes                                       |  |                             | 76  |   |   | 64                        |  | 19  |  
|Minority interest, after-tax                       |  |                             | (1  | ) |   |                          |  |    |  
|                                                   |  |                             |     |   |   |                           |  |     |  
|Net income                                         |  | $                           | 176 |   | $ | 180                       |  | (2  | )
|                                                   |  |                             |     |   |   |                           |  |     |  

Global Investment Managementnet income of $176 million in the 2004 second quarter and $405 million in the
2004 six months decreased $4 million or 2% and increased $64 million or 19% from the comparable 2003 periods.Life Insurance and Annuitiesnet income of $36 million in the 2004 second quarter and $73 million in the 2004 six months increased $11 million or 44% and $27 million or 59% from the comparable 2003
periods, driven by higher business volumes in Japan, Asia and Mexico as well as lower capital funding costs in CIG in both periods.

Private Banknet income was $152 million in the 2004 second quarter and $311 million in the 2004 six months, up
$13 million or 9% and $47 million or 18% from the comparable 2003 periods. The increase in net income of $13 million in the 2004 second quarter primarily reflects the impact of
positive operating leverage, as an 8% reduction in expenses more than offset a 3% decline in revenue, which primarily resulted from lower client transaction activity. The increase in income of
$47 million in the 2004 six-month period primarily reflects increased recurring spread and fee-based revenues combined with the benefit of increased client transaction
activity.

Asset Managementreported a net loss of $12 million in the 2004 second quarter, a decrease in income of $28 million from the
2003 second quarter. Net income of $21 million in the 2004 six-month period decreased $10 million or 32% from the prior year period. The 2004 second quarter and
six-month period income declines primarily reflect the impact of increased reserves for net claims and operating losses in the retirement services business in Argentina, the absence of
current-year tax benefits on the increase in reserves, partially offset by lower capital funding costs in Mexico. Actions taken by the Argentine government associated with its anticipated
debt restructuring could have an adverse impact on the retirement services business in Argentina and its customers. The extent of the financial impact to the Company will depend on future actions
taken by the Argentine government and the Company's response to such actions. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See
"Forward-Looking Statements" on page 47.

Life Insurance and Annuities

|                                  |  | Three Months Ended June 30, |     |  |   | Six Months Ended June 30, |  |     |  
|--------------------------------- |  | --------------------------- | --- |  | - | ------------------------- |  | --- | -
|
|
|Revenues, net of interest expense |  | $                           | 208 |  | $ | 195                       |  | 7   |  
|Provision for benefits and claims |  |                             | 76  |  |   | 94                        |  | (19 | )
|Operating expenses                |  |                             | 81  |  |   | 66                        |  | 23  |  
|                                  |  |                             |     |  |   |                           |  |     |  
|Income before taxes               |  |                             | 51  |  |   | 35                        |  | 46  |  
|Income taxes                      |  |                             | 15  |  |   | 10                        |  | 50  |  
|                                  |  |                             |     |  |   |                           |  |     |  
|Net income                        |  | $                           | 36  |  | $ | 25                        |  | 44  |  
|                                  |  |                             |     |  |   |                           |  |     |  

Life Insurance and Annuitiesreported net income of $36 million and $73 million in the 2004 second quarter
and six-month period, respectively, an increase of $11 million or 44% and $27 million or 59% from the comparable periods of 2003. The $11 million increase in the
three-month period reflects an increase of $8 million in IIM income and an increase of $3 million in CIG, while the $27 million increase in the six-month period
reflects an increase in IIM of $21 million and an increase of $6 million in CIG. The $8 million or 42% increase in IIM in the 2004 second quarter resulted from higher business
volumes in our operations in Japan, Asia and Mexico. The $21 million or 58% increase in IIM in the six-month period reflects higher business volumes in Japan,
Mexico and Asia as well as favorable investment results in Latin America due to improvements in the valuation of Argentine GPNs. The increases in CIG in the three- and six-month periods
were primarily driven by lower capital funding costs.

Revenues,
net of interest expense, of $208 million and $434 million for the 2004 second quarter and six-month period, respectively, increased $13 million
or 7% and $60 million or 16% from the comparable periods of 2003. The increases in both periods were primarily driven by higher business volumes in Japan, Mexico and Asia. Operating expenses of
$81 million and $165 million for the 2004 second quarter and six-month period, respectively, increased $15 million or 23% and $41 million or 33% from the
comparable periods of 2003. These increases were primarily related to higher business volumes and the impact of foreign exchange rates.

22

---



International Insurance Manufacturing

The majority of the annuity business and a substantial portion of the life business written by IIM are accounted for as investment contracts, such that the
premiums are considered deposits and are not included in revenues. Combined net written premiums and deposits is a non-GAAP financial measure which management uses to measure business
volumes, and may not be comparable to similarly captioned measurements used by other life insurance companies.

The
following table shows combined net written premiums and deposits, which is a non-GAAP financial measure, by product line for the three-month and six-month
periods ended June 30, 2004 and 2003:

|                       |                                 | Three Months Ended June 30, |       | Six Months Ended June 30,
|---------------------- | ------------------------------- | --------------------------- | ----- | -------------------------
|
|
|Annuity products       |                                 |                             |       |                          
|                       | Japan                           |                             | $     | 1,063                    
|                       | All other premiums and deposits |                             |       | 242                      
|                       |                                 |                             |       |                          
|Total annuity products |                                 |                             | 1,305 |                          
|Life products          |                                 |                             | 475   |                          
|                       |                                 |                             |       |                          
|Total(1)(2)            |                                 | $                           | 1,780 |                          
|                       |                                 |                             |       |                          

---

---

IIM
annuity product net written premiums and deposits increased $819 million and $2.1 billion to $1.3 billion and $2.9 billion in the 2004 second quarter and
six-month period, respectively. The increase in both periods was driven by strong variable annuity sales in Japan through the Company's joint venture with Mitsui Sumitomo.

IIM
life products net written premiums and deposits were $475 million and $811 million in the second quarter and six-month period of 2004, increases of
$359 million and $597 million from the prior-year periods, which were primarily driven by strong Variable Universal Life sales in Mexico as well as sales of Endowment and
Unit Linked products in Hong Kong.

23

---



Private Bank

|                                                                 |  | Three Months Ended June 30, |      |   |   | Six Months Ended June 30, |   |    |  
|---------------------------------------------------------------- |  | --------------------------- | ---- | - | - | ------------------------- | - | -- | -
|
|
|Revenues, net of interest expense                                |  | $                           | 505  |   | $ | 521                       |   | (3 | )
|Operating expenses                                               |  |                             | 286  |   |   | 311                       |   | (8 | )
|Provision for credit losses                                      |  |                             | (1   | ) |   | 6                         |   | NM |  
|                                                                 |  |                             |      |   |   |                           |   |    |  
|Income before taxes                                              |  |                             | 220  |   |   | 204                       |   | 8  |  
|Income taxes                                                     |  |                             | 68   |   |   | 65                        |   | 5  |  
|                                                                 |  |                             |      |   |   |                           |   |    |  
|Net income                                                       |  | $                           | 152  |   | $ | 139                       |   | 9  |  
|                                                                 |  |                             |      |   |   |                           |   |    |  
|Average assets(in billions of dollars)                           |  | $                           | 41   |   | $ | 38                        |   | 8  |  
|Return on assets                                                 |  |                             | 1.49 | % |   | 1.47                      | % |    |  
|                                                                 |  |                             |      |   |   |                           |   |    |  
|Client business volumes under management(in billions of dollars) |  | $                           | 203  |   | $ | 180                       |   | 13 |  
|                                                                 |  |                             |      |   |   |                           |   |    |  

---

NM    Not meaningful

---

Private Bankreported net income of $152 million in the 2004 second quarter and $311 million in the 2004 six months, up
$13 million or 9% and $47 million or 18% from the corresponding 2003 periods. Growth in the 2004 second quarter was driven by positive operating leverage as an 8% reduction in expenses
more than offset a 3% decline in revenue, which primarily resulted from lower client transaction activity. In the six-month comparison, the increase in income was mainly driven by growth
in recurring spread and fee-based revenues combined with the benefit of increased client transaction activity.

|                                        |  | June 30, |     | 
|--------------------------------------- |  | -------- | --- | 
|
|
|Client Business Volumes:                |  |          |     | 
|Proprietary Managed Assets              |  | $        | 36  | 
|Other Assets under Fee-Based Management |  |          | 8   | 
|Banking and Fiduciary Deposits          |  |          | 46  | 
|Investment Finance                      |  |          | 40  | 
|Other, Principally Custody Accounts     |  |          | 73  | 
|                                        |  |          |     | 
|Total                                   |  | $        | 203 | 
|                                        |  |          |     | 

Client
business volumes were $203 billion at the end of the 2004 second quarter, up $23 billion or 13% from $180 billion at the end of the 2003
second quarter. Growth in client business volumes was led by an increase in custody assets, which were higher in all regions. Investment finance volumes, which include loans, letters of credit, and
commitments, increased $5 billion or 14% reflecting growth in all regions including increased real estate-secured loans in the U.S. and growth in margin lending in the international businesses.
Banking and fiduciary deposits grew $5 billion or 12%, with double-digit growth in the U.S., Japan and Europe. Proprietary managed assets increased $3 billion or 9% as net inflows were
partially offset by the impact of negative market action.

Revenues,
net of interest expense, were $505 million in the 2004 second quarter and $1.078 billion in the 2004 six months, down $16 million or 3% from the
prior-year quarter but up $97 million or 10% from the 2003 six-month period. In the three months ended June 30, 2004, a decline in client transaction activity,
particularly in capital markets in Asia and Japan, resulted in an $18 million or 12% decline in related transaction revenues. In the six months ended June 30, 2004, the benefit of
continued growth in client business volumes combined with an increase in transaction activity was partially offset by the impact of spread compression in the deposit and lending portfolios.

Operating
expenses of $286 million and $625 million in the 2004 second quarter and six months, respectively, were down $25 million or 8% from the
prior-year quarter but up $39 million or 7% from the 2003 six-month period, primarily reflecting changes in incentive and other variable compensation associated with the
corresponding changes in revenue, as well as lower technology and legal-related costs, which were partially offset by increased costs associated with an investment in front-end staff.

The
provision for credit losses was ($1) million and $3 million in the 2004 second quarter and six months, respectively, compared to $6 million and $10 million in
the 2003 second quarter and six months, respectively. The improvement from the prior year was mainly due to net recoveries in Japan and Asia combined with the absence of prior-year
increases to the loan loss reserve. Loans 90 days or more past due were $146 million or 0.39% of total loans outstanding at June 30, 2004, compared with $155 million or
0.43% at March 31, 2004 and $140 million or 0.42% at June 30, 2003.

24

---



Asset Management

|                                                   |  | Three Months Ended June 30, |     |   |   | Six Months Ended June 30, |   |     |  
|-------------------------------------------------- |  | --------------------------- | --- | - | - | ------------------------- | - | --- | -
|
|
|Revenues, net of interest expense                  |  | $                           | 80  |   | $ | 118                       |   | (32 | )
|Operating expenses                                 |  |                             | 100 |   |   | 113                       |   | (12 | )
|                                                   |  |                             |     |   |   |                           |   |     |  
|Income before taxes and minority interest          |  |                             | (20 | ) |   | 5                         |   | NM  |  
|Income taxes (benefits)                            |  |                             | (7  | ) |   | (11                       | ) | 36  |  
|Minority interest, after-tax                       |  |                             | (1  | ) |   |                          |   |    |  
|                                                   |  |                             |     |   |   |                           |   |     |  
|Net income                                         |  | ($                          | 12  | ) | $ | 16                        |   | NM  |  
|                                                   |  |                             |     |   |   |                           |   |     |  
|Assets under management(in billions of dollars)(1) |  | $                           | 173 |   | $ | 177                       |   | (2  | )
|                                                   |  |                             |     |   |   |                           |   |     |  

---

NM    Not meaningful

---

Asset Managementreported a net loss of $12 million in the 2004 second quarter and net income of $21 million in the 2004
six-month period, down $28 million and $10 million, respectively, compared to the prior-year periods. The decrease in net income primarily reflects the impact of
increased reserves for net claims and operating losses in a retirement services business in Argentina, the absence of current year tax benefits on the increase in reserves, partially offset by lower
capital funding costs in Mexico.

Assets
under management for the 2004 second quarter were $173 billion, a decrease of $4 billion or 2% from the 2003 second quarter.

Revenues,
net of interest expense, of $80 million and $239 million in the 2004 second quarter and six months decreased $38 million or 32% and increased
$9 million or 4% from the respective 2003 periods. The decrease in the three-month period was primarily due to the impact of increased reserves for net claims and operating losses in a
retirement services business in Argentina, partially offset by lower capital funding costs in Mexico. The 2004 six-month period was positively impacted by the assets consolidated under FIN
46-R (which are denominated in euro) which generated $10 million of gains (offset in minority interest) due to foreign currency translation.

Operating
expenses of $100 million and $208 million in the 2004 second quarter and six months declined $13 million or 12% and $14 million or 6% from the
respective 2003 periods, primarily reflecting continued expense management, including a decline in incentive compensation.

Minority
interest, after-tax, of $5 million for the 2004 six months was due to the impact of consolidating certain assets under FIN 46-R.

25

---



PROPRIETARY INVESTMENT ACTIVITIES

|                                          |  | Three Months Ended June 30, |     |   |   | Six Months Ended June 30, |  |    
|----------------------------------------- |  | --------------------------- | --- | - | - | ------------------------- |  | ---
|
|
|Revenues, net of interest expense         |  | $                           | 455 |   | $ | 168                       |  | NM 
|Operating expenses                        |  |                             | 92  |   |   | 61                        |  | 51 
|Provision for credit losses               |  |                             | (1  | ) |   | 1                         |  | NM 
|                                          |  |                             |     |   |   |                           |  |    
|Income before taxes and minority interest |  |                             | 364 |   |   | 106                       |  | NM 
|Income taxes                              |  |                             | 119 |   |   | 46                        |  | NM 
|Minority interest, after-tax              |  |                             | 7   |   |   | 17                        |  | (59
|                                          |  |                             |     |   |   |                           |  |    
|Net Income                                |  | $                           | 238 |   | $ | 43                        |  | NM 
|                                          |  |                             |     |   |   |                           |  |    

---

NM    Not meaningful

---

Proprietary Investment Activitiesrevenues, net of interest expense, of $455 million in the 2004 second quarter increased
$287 million from the 2003 second quarter. The increase resulted primarily from higher net impairment/valuation revenues of $263 million, net realized gains on sales of investments of
$90 million, and other revenues of $74 million, partially offset by mark-to-market losses on public securities of $140 million. Operating expenses of
$92 million in the 2004 second quarter increased $31 million or 51% from the 2003 second quarter, primarily reflecting increased private equity business activity in the Emerging Markets
portfolio. Minority interest, after-tax, of $7 million in the 2004 second quarter decreased $10 million from the 2003 second quarter reflecting lower investment performance
in majority-owned hedge funds.

For
the 2004 six months, revenues, net of interest expense, of $587 million increased $330 million from the 2003 six-month period. The increase resulted
primarily from higher net impairment/valuation revenues of $388 million, net realized gains on sales of investments of $86 million, and other revenues of $113 million, primarily
from higher Private Equity results, partially offset by mark-to-market losses on public securities of $257 million. Operating expenses of $148 million in the 2004
six-month period increased $34 million or 30% from the 2003 six-month period primarily reflecting increased expenses related to investments held within the Emerging
Markets portfolio. Minority interest, after-tax, of $43 million in the 2004 six-month period increased $18 million from the 2003 comparable period, reflecting a
mark-to-market valuation on the recapitalization of investments held within the Emerging Markets private equity portfolio, partially offset by lower investment performance in
the majority-owned hedge funds.

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, in companies primarily located in the
United States and Western Europe, including investments made by CVC Equity Partners Fund, investments in companies located in developing economies, CVC/Opportunity Equity Partners, LP (Opportunity)
and the investment portfolio related to the Banamex acquisition in August 2001. 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. The remaining investments in the Banamex portfolio were liquidated during 2003.

Certain
private equity investments held in investment company subsidiaries and Opportunity are carried at fair value with unrealized gains and losses recorded in income. Direct
investments in companies
located in developing economies are principally carried at cost with impairments recognized in income for "other than temporary" declines in value.

As
of June 30, 2004 and June 30, 2003, Private Equity included assets of $5.063 billion and $6.100 billion, respectively, with the portfolio primarily
invested in industrial, consumer goods, communication and technology companies. The decline in the portfolio of $1.037 billion relates to sales of private and public equity investments, the
impact of valuation adjustments, and the liquidation of the Banamex portfolio.

26

---



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

|                                  |  | Three Months Ended June 30, |     | Six Months Ended June 30, |  
|--------------------------------- |  | --------------------------- | --- | ------------------------- | -
|
|
|Net realized gains (losses)(1)    |  | $                           | 255 |                           | $
|Public mark-to-market             |  |                             | (18 | )                         |  
|Net impairments/valuations(2)     |  |                             | 98  |                           |  
|Other(3)                          |  |                             | 124 |                           |  
|                                  |  |                             |     |                           |  
|Revenues, net of interest expense |  | $                           | 459 |                           | $
|                                  |  |                             |     |                           |  

---

---

Revenues,
net of interest expense, of $459 million in the 2004 second quarter increased $337 million from the 2003 second quarter, reflecting higher net
impairment/valuation revenues of $318 million, net realized gains on sales of investments of $94 million, and other revenues of $65 million resulting from increased dividends and
fees and lower funding costs, partially offset by mark-to-market losses on public securities of $140 million. The higher net impairment/valuation revenues and net
realized gains on sale of investments in the 2004 second quarter were primarily driven by investment activity in Emerging Markets and Europe. The higher mark-to-market losses
on public securities was primarily driven by the absence of prior-year mark-to-market gains on investments in the United States and Emerging Markets.

For
the 2004 six-month period, revenues, net of interest expense, of $535 million increased $349 million from the 2003 six-month period reflecting
higher net impairment/valuation revenues of $416 million, net realized gains on sales of investments of $87 million, and other revenues of $103 million resulting from increased
dividends and fees and lower funding costs, partially offset by mark-to-market losses on public securities of $257 million. The higher net impairment/valuation revenues
and net realized gains on sale of investments for the 2004 six months were primarily driven by investment activity in Emerging Markets and Europe. The higher net mark-to-market
losses on public securities for the 2004 six months was primarily driven by an investment in an Indian software company, reflecting a general decline in public market values in the Indian software
sector.

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.

Other
Investment Activities investments are primarily carried at fair value, with impairment write-downs recognized in income for "other than temporary" declines in value. As of
June 30, 2004, Other Investment Activities included assets of $1.714 billion, consisting of $1.349 billion in hedge funds (the majority of which represents money managed for
third-party customers), $264 million in the LDC Debt/ Refinancing portfolios, and $101 million in other assets. As of June 30, 2003, total assets of Other Investment Activities
were $1.576 billion, including, $945 million in hedge funds, $511 million in the LDC Debt/Refinancing portfolios and $120 million in other assets.

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

|                                  |  | Three Months Ended June 30, |     | Six Months Ended June 30,
|--------------------------------- |  | --------------------------- | --- | -------------------------
|
|
|LDC Debt/Refinancing portfolios   |  | $                           |    |                          
|Hedge fund investments            |  |                             | (23 | )                        
|Other                             |  |                             | 19  |                          
|                                  |  |                             |     |                          
|Revenues, net of interest expense |  | $                           | (4  | )                        
|                                  |  |                             |     |                          

Revenues,
net of interest expense, in the 2004 second quarter of ($4) million, reflects a $50 million decrease from the 2003 second quarter, primarily resulting
from a $59 million decrease in hedge fund results and a $2 million decrease in the LDC Debt/Refinancing revenues, partially offset by improvements in CAI results of $11 million.

For
the 2004 six-month period, revenues, net of interest expense, of $52 million decreased $19 million from the comparable 2003 period, primarily resulting from
a $30 million decrease in hedge fund results, partially offset by improvements in CAI results of $15 million.

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 47.

27

---



CORPORATE/OTHER

|                                                  |  | Three Months Ended June 30, |     | Six Months Ended June 30, |  
|------------------------------------------------- |  | --------------------------- | --- | ------------------------- | -
|
|
|Revenues, net of interest expense                 |  | $                           | 137 |                           | $
|Operating expenses                                |  |                             | 78  |                           |  
|Provision for benefits, claims, and credit losses |  |                             |    |                           |  
|                                                  |  |                             |     |                           |  
|Income before taxes and minority interest         |  |                             | 59  |                           |  
|Income taxes                                      |  |                             | 14  |                           |  
|Minority interest, after-tax                      |  |                             | 5   |                           |  
|                                                  |  |                             |     |                           |  
|Net Income                                        |  | $                           | 40  |                           | $
|                                                  |  |                             |     |                           |  

Corporate/Otherreported net income of $40 million and $135 million in the 2004 second quarter and six
months ended June 30, 2004, respectively, which represented a decrease in income of $15 million from the 2003 three-month period and an increase in income of $59 million from the
2003 six-month period. The decrease in the three-month period was primarily attributable to
lower net treasury results, while the increase in the six-month period was primarily attributable to the sale of EFS, which resulted in an after-tax gain of $180 million
in the 2004 first quarter, partially offset by lower intersegment eliminations.

Revenues,
net of interest expense, of $137 million and $526 million in the 2004 second quarter and six months, respectively, decreased $156 million and
$109 million, from the corresponding prior-year periods. The second quarter decrease was driven by lower intersegment eliminations, lower net treasury results and the absence of the
prior-year revenues earned in the EFS business. The six-month decrease was primarily due to lower intersegment eliminations and lower net treasury results, partially offset by
the EFS gain. The lower net treasury results for the three months were primarily driven by a tightening of spreads as well as a lower benefit from yen capital hedging. For the six months, in addition
to the above, earnings were also impacted by higher interest expense.

Operating
expenses of $78 million and $284 million in the 2004 second quarter and six months decreased $142 million and $195 million, respectively, from the
2003 periods. The second quarter and six-month period decreases are primarily due to lower intersegment eliminations, the absence of prior-year operating expenses in EFS and
lower employee related costs.

28

---



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 2003 Annual Report on Form 10-K under the section titled "Managing Global Risk."

The
Citigroup risk management framework recognizes the diversity of Citigroup's global business activities by balancing strong corporate oversight with well-defined
independent risk management functions within each business.

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



The
Citigroup Senior Risk Officer is responsible for establishing standards for the measurement, approval, reporting and limiting of risk, for managing, evaluating, and compensating the
senior independent risk managers at the business level, for approving business-level risk management policies, for approving business risk-taking authority through the allocation of limits
and capital, and for reviewing, on an ongoing basis, major risk exposures and concentrations across the organization. Risks are regularly reviewed with the independent business-level risk managers,
the Citigroup senior business managers, and, as appropriate, the Citigroup Board of Directors.

The
independent risk managers at the business level are responsible for establishing and implementing risk management policies and practices within their business, while ensuring
consistency with Citigroup standards. As noted above, the independent risk managers report directly to the Citigroup Senior Risk Officer, however they remain accountable, on a
day-to-day basis, for appropriately meeting and responding to the needs and issues of their business unit, and for overseeing the risks present.

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

29

---



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 obligations. Credit
risk arises in many of the Company's business activities including lending activities, sales and trading activities, derivatives activities, 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.

Details of Credit Loss Experience

|In millions of dollars                                              |  | 2nd Qtr.
2004 |        | 1st Qtr.
2004 |   | 4th Qtr.
2003 |   | 3rd Qtr.
2003 |        | 2nd Qtr.
2003 |  
|------------------------------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------- | - | ------------- | ------ | ------------- | -
|Allowance for credit losses at beginning of period                  |  | $             | 12,506 |               | $ | 12,643        |   | $             | 10,843 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Provision for credit losses                                         |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               | 1,935  |               |   | 2,290         |   |               | 1,951  |               |  
|Corporate                                                           |  |               | (345   | )             |   | (60           | ) |               | 244    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 1,590  |               |   | 2,230         |   |               | 2,195  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Gross credit losses:                                                |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 1,769  |               |   | 1,952         |   |               | 1,640  |               |  
|In offices outside the U.S.                                         |  |               | 803    |               |   | 794           |   |               | 821    |               |  
|Corporate                                                           |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 9      |               |   | 18            |   |               | 57     |               |  
|In offices outside the U.S.                                         |  |               | 79     |               |   | 248           |   |               | 441    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 2,660  |               |   | 3,012         |   |               | 2,959  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Credit recoveries:                                                  |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 260    |               |   | 275           |   |               | 212    |               |  
|In offices outside the U.S.                                         |  |               | 165    |               |   | 164           |   |               | 205    |               |  
|Corporate(1)                                                        |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 10     |               |   | 35            |   |               | 11     |               |  
|In offices outside the U.S.                                         |  |               | 98     |               |   | 53            |   |               | 62     |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 533    |               |   | 527           |   |               | 490    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net credit losses                                                   |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 1,508  |               |   | 1,660         |   |               | 1,474  |               |  
|In offices outside the U.S.                                         |  |               | 619    |               |   | 825           |   |               | 995    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 2,127  |               |   | 2,485         |   |               | 2,469  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Othernet(2)                                                        |  |               | 746    |               |   | 118           |   |               | 2,074  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Allowance for credit losses at end of period                        |  | $             | 12,715 |               | $ | 12,506        |   | $             | 12,643 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Allowance for unfunded lending commitments(3)                       |  |               | 600    |               |   | 600           |   |               | 600    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Total allowance for loans, leases, and unfunded lending commitments |  | $             | 13,315 |               | $ | 13,106        |   | $             | 13,243 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net consumer credit losses                                          |  | $             | 2,147  |               | $ | 2,307         |   | $             | 2,044  |               | $
|As a percentage of average consumer loans                           |  |               | 2.22   | %             |   | 2.45          | % |               | 2.26   | %             |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net corporate credit losses                                         |  | $             | (20    | )             | $ | 178           |   | $             | 425    |               | $
|As a percentage of average corporate loans                          |  |               | NM     |               |   | 0.73          | % |               | 1.72   | %             |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  

---

NM Not meaningful

30

---



Cash-Basis, Renegotiated, and Past Due Loans

|In millions of dollars                                               |  | June 30,
2004 |       | Mar. 31,
2004 |   | Dec. 31,
2003 |  | Sept. 30,
2003 |       | June 30,
2003
|-------------------------------------------------------------------- |  | ------------- | ----- | ------------- | - | ------------- |  | -------------- | ----- | -------------
|Corporate cash-basis loans                                           |  |               |       |               |   |               |  |                |       |              
|Collateral dependent (at lower of cost or collateral value)(1)       |  | $             | 59    |               | $ | 71            |  | $              | 8     |              
|Other(2)                                                             |  |               | 2,555 |               |   | 2,837         |  |                | 3,394 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Total                                                                |  | $             | 2,614 |               | $ | 2,908         |  | $              | 3,402 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Corporate cash-basis loans(2)                                        |  |               |       |               |   |               |  |                |       |              
|In U.S. offices                                                      |  | $             | 498   |               | $ | 513           |  | $              | 623   |              
|In offices outside the U.S.                                          |  |               | 2,116 |               |   | 2,395         |  |                | 2,779 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Total                                                                |  | $             | 2,614 |               | $ | 2,908         |  | $              | 3,402 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Renegotiated loans (includes Corporate and Commercial Markets Loans) |  |               |       |               |   |               |  |                |       |              
|In U.S. offices                                                      |  | $             | 81    |               | $ | 91            |  | $              | 107   |              
|In offices outside the U.S.                                          |  |               | 30    |               |   | 33            |  |                | 33    |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Total                                                                |  | $             | 111   |               | $ | 124           |  | $              | 140   |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Consumer loans on which accrual of interest had been suspended(2)    |  |               |       |               |   |               |  |                |       |              
|In U.S. offices                                                      |  | $             | 2,712 |               | $ | 2,877         |  | $              | 3,127 |              
|In offices outside the U.S.                                          |  |               | 2,860 |               |   | 3,029         |  |                | 2,958 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Total                                                                |  | $             | 5,572 |               | $ | 5,906         |  | $              | 6,085 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Accruing loans 90 or more days delinquent(3)(4)                      |  |               |       |               |   |               |  |                |       |              
|In U.S. offices                                                      |  | $             | 2,770 |               | $ | 2,983         |  | $              | 3,298 |              
|In offices outside the U.S.                                          |  |               | 503   |               |   | 545           |  |                | 576   |              
|                                                                     |  |               |       |               |   |               |  |                |       |              
|Total                                                                |  | $             | 3,273 |               | $ | 3,528         |  | $              | 3,874 |              
|                                                                     |  |               |       |               |   |               |  |                |       |              

---

---

Other Real Estate Owned and Other Repossessed Assets

|In millions of dollars        |  | June 30,
2004 |     | Mar. 31,
2004 |   | Dec. 31,
2003 |  | Sept. 30,
2003 |     | June 30,
2003
|----------------------------- |  | ------------- | --- | ------------- | - | ------------- |  | -------------- | --- | -------------
|Other real estate owned(1)    |  |               |     |               |   |               |  |                |     |              
|Consumer                      |  | $             | 369 |               | $ | 396           |  | $              | 437 |              
|Corporate                     |  |               | 26  |               |   | 41            |  |                | 59  |              
|                              |  |               |     |               |   |               |  |                |     |              
|Total other real estate owned |  | $             | 395 |               | $ | 437           |  | $              | 496 |              
|                              |  |               |     |               |   |               |  |                |     |              
|Other repossessed assets(2)   |  | $             | 97  |               | $ | 123           |  | $              | 151 |              
|                              |  |               |     |               |   |               |  |                |     |              

---

31

---



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 non-accrual 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 theCardsbusiness. For a further discussion of managed basis reporting, see theCardsbusiness on page 12 and Note 10 to the Consolidated Financial
Statements.

32

---



Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios

|In millions of dollars,
except total and average loan amounts in billions |       | Total
Loans   |       | 90 Days or More
Past Due(1) |                     | Average
Loans |      | Net Credit Losses(1) |       
|------------------------------------------------------------------------- | ----- | ------------- | ----- | --------------------------- | ------------------- | ------------- | ---- | -------------------- | ------
|
|Cards                                                                     |       | $             | 154.4 |                             | $                   | 2,808         |      | $                    | 3,152 
|                                                                          | Ratio |               |       |                             |                     |               | 1.82 | %                    |       
|                                                                          |       | North America |       |                             | 138.7               |               |      | 2,565                |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 1.85  
|                                                                          |       | International |       |                             | 15.7                |               |      | 243                  |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 1.55  
|Consumer Finance                                                          |       |               | 99.6  |                             |                     | 1,948         |      |                      | 2,127 
|                                                                          | Ratio |               |       |                             |                     |               | 1.96 | %                    |       
|                                                                          |       | North America |       |                             | 78.4                |               |      | 1,444                |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 1.84  
|                                                                          |       | International |       |                             | 21.2                |               |      | 504                  |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 2.38  
|Retail Banking                                                            |       |               | 145.4 |                             |                     | 3,576         |      |                      | 3,698 
|                                                                          | Ratio |               |       |                             |                     |               | 2.46 | %                    |       
|                                                                          |       | North America |       |                             | 101.4               |               |      | 2,054                |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 2.03  
|                                                                          |       | International |       |                             | 44.0                |               |      | 1,522                |       
|                                                                          |       |               | Ratio |                             |                     |               |      |                      | 3.46  
|Private Bank(2)                                                           |       |               | 37.3  |                             |                     | 146           |      |                      | 155   
|                                                                          | Ratio |               |       |                             |                     |               | 0.39 | %                    |       
|Other Consumer                                                            |       |               | 1.1   |                             |                     |              |      |                      |      
|                                                                          |       |               |      
|Managed loans (excluding Commercial Markets)(3)                           |       | $             | 437.8 |                             | $                   | 8,478         |      | $                    | 9,132 
|Ratio                                                                     |       |               |       |                             |                     | 1.94          | %    |                      | 2.19  
|                                                                          |      
|Securitized receivables
(all in North America Cards)                      |       |               | (76.4 | )                           |                     | (1,222        | )    |                      | (1,399
|Credit card receivables held-for-sale(4)                                  |       |               | (6.3  | )                           |                     | (133          | )    |                      |      
|                                                                          |      
|On-balance sheet loans
(excluding Commercial Markets)(5)                  |       | $             | 355.1 |                             | $                   | 7,123         |      | $                    | 7,733 
|Ratio                                                                     |       |               |       |                             |                     | 2.01          | %    |                      | 2.27  
|                                                                          |      
|                                                                          |       |               |       |                             | Cash-Basis Loans(1) |               |      |                      |       
|Commercial Markets Groups                                                 |       | $             | 39.6  |                             | $                   | 1,173         |      | $                    | 1,213 
|                                                                          | Ratio |               |       |                             |                     |               | 2.96 | %                    |       
|                                                                          |       |               |      
|Total Consumer Loans                                                      |       | $             | 394.7 |                             |                     |               |      |                      |       
|                                                                          |      
|Regional View:                                                            |       |               |       |                             |                     |               |      |                      |       
|North America (excluding Mexico)                                          |       | $             | 332.5 |                             | $                   | 5,758         |      | $                    | 6,316 
|                                                                          | Ratio |               |       |                             |                     |               | 1.73 | %                    |       
|Mexico                                                                    |       |               | 7.5   |                             |                     | 380           |      |                      | 395   
|                                                                          | Ratio |               |       |                             |                     |               | 5.07 | %                    |       
|EMEA                                                                      |       |               | 34.3  |                             |                     | 1,720         |      |                      | 1,722 
|                                                                          | Ratio |               |       |                             |                     |               | 5.02 | %                    |       
|Japan                                                                     |       |               | 16.8  |                             |                     | 340           |      |                      | 382   
|                                                                          | Ratio |               |       |                             |                     |               | 2.02 | %                    |       
|Asia (excluding Japan)                                                    |       |               | 43.8  |                             |                     | 248           |      |                      | 281   
|                                                                          | Ratio |               |       |                             |                     |               | 0.57 | %                    |       
|Latin America                                                             |       |               | 2.9   |                             |                     | 32            |      |                      | 36    
|                                                                          | Ratio |               |       |                             |                     |               | 1.11 | %                    |       
|                                                                          |       |               |      
|Managed loans
(excluding Commercial Markets)(3)                           |       | $             | 437.8 |                             | $                   | 8,478         |      | $                    | 9,132 
|Ratio                                                                     |       |               |       |                             |                     | 1.94          | %    |                      | 2.19  
|                                                                          |      

33

---



Consumer Loan Balances, Net of Unearned Income

|                        |  | End of Period |       | Average |  
|----------------------- |  | ------------- | ----- | ------- | -
|
|Total managed           |  | $             | 477.4 |         | $
|Securitized receivables |  |               | (76.4 | )       |  
|Loans held-for-sale(1)  |  |               | (6.3  | )       |  
|                        |  |               |       |         |  
|On-balance sheet(2)     |  | $             | 394.7 |         | $
|                        |  |               |       |         |  

---

Total
delinquencies 90 days or more past due (excluding Commercial Markets) in the managed portfolio were $8.478 billion or 1.94% of loans at June 30, 2004, compared
to $9.132 billion or 2.19% at March 31, 2004 and $8.341 billion or 2.31% at June 30, 2003. Total cash-basis loans in Commercial Markets were
$1.173 billion or 2.96% of loans at June 30, 2004, compared to $1.213 billion or 3.11% at March 31, 2004 and $1.165 billion or 2.76% at June 30, 2003. Total
managed net credit losses (excluding Commercial Markets) in the 2004 second quarter were $3.406 billion and the related loss ratio was 3.21%, compared to $3.582 billion and 3.47% in the
2004 first quarter and $2.953 billion and 3.26% in the 2003 second quarter. In Commercial Markets, total net credit losses were $31 million and the related loss ratio was 0.31% in the
2004 second quarter, compared to $50 million and 0.51% in the 2004
first quarter and $139 million and 1.30% in the 2003 second quarter. For a discussion of trends by business, see business discussions on pages 12 to 18 and page 24.

Citicorp's
total allowance for loans, leases and unfunded lending commitments of $13.315 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 $9.316 billion at June 30, 2004, $9.218 billion at
March 31, 2004 and $7.136 billion at June 30, 2003. The increase in the allowance for credit losses from June 30, 2003 was primarily due to additions of
$2.1 billion, $274 million and $148 million associated with the acquisitions of Sears, KorAm and WMF, respectively, as well as the reclassification in the 2004 second quarter of
certain valuation reserves related to capital leases into the allowance for credit losses. These additions were partially offset by the impact of credit reserve releases of $212 million in
Global Consumer, primarily related to improving credit conditions in North America, and the write-down of Argentine compensation notes in the 2003 third quarter.

On-balance
sheet consumer loans of $394.7 billion increased $66.8 billion or 20% from June 30, 2003, primarily driven by the additions of the Sears,
KorAm, WMF and Home Depot portfolios, combined with growth in mortgage and other real estate-secured loans in Consumer Assets,Consumer Financeand Private Bankand the impact of strengthening currencies. Growth in student loans in North America and margin lending inPrivate
Bankalso contributed to the growth in consumer loans. Excluding the impact of acquisitions, growth in credit card receivables was partially offset by a decline in introductory
promotional rate balances reflecting a shift in acquisition marketing strategies and higher securitization levels. In CitiCapital, loans declined $6.3 billion reflecting the reclassification of
operating leases from loans to other assets of $2.0 billion during the 2004 second quarter and the continued liquidation of non-core portfolios, including a reduction of
approximately $1.2 billion resulting from the 2003 third quarter sale of the CitiCapital Fleet Services 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.

34

---



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, except when the loan is well-secured and in the process of collection. 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, less disposal costs.

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

|In millions of dollars                                                            |  | June 30, 2004 |       | Mar. 31, 2004 |   | Dec. 31, 2003 |   | June 30, 2003 |      
|--------------------------------------------------------------------------------- |  | ------------- | ----- | ------------- | - | ------------- | - | ------------- | -----
|Corporate Cash-Basis Loans                                                        |  |               |       |               |   |               |   |               |      
|Capital Markets and Banking(1)                                                    |  | $             | 2,496 |               | $ | 2,806         |   | $             | 3,246
|Transaction Services                                                              |  |               | 118   |               |   | 102           |   |               | 156  
|                                                                                  |  |               |       |               |   |               |   |               |      
|Total Corporate Cash-Basis Loans                                                  |  | $             | 2,614 |               | $ | 2,908         |   | $             | 3,402
|                                                                                  |  |               |       |               |   |               |   |               |      
|Net Credit Losses                                                                 |  |               |       |               |   |               |   |               |      
|Capital Markets and Banking                                                       |  | $             | (21   | )             | $ | 184           |   | $             | 415  
|Transaction Services                                                              |  |               | 2     |               |   | (7            | ) |               | 13   
|Other                                                                             |  |               | (1    | )             |   | 1             |   |               | (3   
|                                                                                  |  |               |       |               |   |               |   |               |      
|Total Net Credit Losses                                                           |  | $             | (20   | )             | $ | 178           |   | $             | 425  
|                                                                                  |  |               |       |               |   |               |   |               |      
|Corporate Allowance for Credit Losses                                             |  | $             | 3,399 |               | $ | 3,288         |   | $             | 3,555
|Corporate Allowance for Credit Losses on Unfunded
    Lending Commitments(2)      |  |               | 600   |               |   | 600           |   |               | 600  
|                                                                                  |  |               |       |               |   |               |   |               |      
|Total Corporate Allowance for Loans, Leases, and
    Unfunded Lending Commitments |  | $             | 3,999 |               | $ | 3,888         |   | $             | 4,155
|                                                                                  |  |               |       |               |   |               |   |               |      
|Corporate Allowance As a Percentage of Total Corporate
    Loans(3)               |  |               | 2.96  | %             |   | 3.25          | % |               | 3.59 
|                                                                                  |  |               |       |               |   |               |   |               |      

---

---

Corporate
cash-basis loans were $2.614 billion, $2.908 billion, $3.402 billion and $4.182 billion at June 30, 2004, March 31, 2004,
December 31, 2003, and June 30, 2003, respectively. Cash-basis loans decreased $1.568 billion from June 30, 2003 due to decreases in Capital Markets and BankingandTransaction Services.Capital Markets and
Bankingat June 30, 2004 primarily reflects decreases to borrowers in the telecommunications and power and energy industries and charge-offs against reserves
as well as paydowns from corporate borrowers in Argentina, Mexico, Hong Kong and New Zealand, partially offset by an increase from the KorAm acquisition.Transaction
Servicesdecreased primarily due to a reclassification of cash-basis loans along with charge-offs in Argentina and Poland. Cash-basis loans
decreased $294 million compared to March 31, 2004 primarily due to a decrease inCapital Markets and Banking. This decrease primarily
consisted of charge-offs taken against reserves and paydowns from borrowers in the power and energy industry as well as corporate borrowers in Mexico, Australia and Argentina, partially
offset by an increase from the KorAm acquisition.

Total
corporate Other Real Estate Owned (OREO) was $26 million, $41 million, $59 million and $60 million at June 30, 2004, March 31, 2004,
December 31, 2003 and June 30, 2003, respectively.

Total
corporate loans outstanding at June 30, 2004 were $115 billion as compared to $101 billion at March 31, 2004, $99 billion at December 31,
2003 and $109 billion at June 30, 2003.

Total
corporate net credit losses of $(20) million at June 30, 2004 decreased $275 million as compared to June 30, 2003, primarily reflecting recoveries and lower
net credit losses from counterparties in the telecommunications and power and energy industries as well as counterparties in Brazil, Europe and Argentina. The $198 million decrease from the
2004 first quarter primarily reflects recoveries as well as lower net credit losses from counterparties in Europe, Mexico and Poland.

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 and 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. Judgmental assessments are used to determine
residual losses on the leasing portfolio.

Citicorp's
allowance for credit losses for loans, leases, and unfunded lending commitments of $13.315 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 corporate portfolio was $3.999 billion at June 30, 2004 compared to
$3.888 billion at March 31, 2004,

35

---



$4.155 billion
at December 31, 2003, and $4.598 billion at June 30, 2003. The allowance attributed to corporate loans, leases and unfunded lending commitments as a
percentage of corporate loans was 3.48% at June 30, 2004 as compared to 3.84%, 4.20% and 4.23% at March 31, 2004, December 31, 2003 and June 30, 2003, respectively. The
$599 million decrease in total corporate reserves for the 12 months ending June 30, 2004 primarily reflects write-offs against previously-established reserves in the
telecommunications and power and energy industries and reserve releases of $800 million due to improving credit quality in the portfolio. The $111 million increase in total corporate
reserves from March 31, 2004 reflects $441 million of additional reserves related to the KorAm acquisition partially offset by a $350 million reserve release due to improving
credit quality in the portfolio. The $350 million reserve release was geographically attributed to Mexico $(200 million), Latin America $(75 million), Asia (excluding Japan)
$(45 million), Japan $(17 million) and EMEA $(13 million). 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 improve from 2003 reflecting improving
global economic conditions. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

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 2003 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 in a fiduciary role, 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.

Risk and Control Self-Assessment

The Company's Risk and Control Self-Assessment (RCSA) incorporates standards for risk and control self-assessment that are applicable to
all businesses and establish RCSA as the process whereby risks that are inherent in a business' strategy, objectives, and activities are identified and the effectiveness of the controls over those
risks are evaluated and monitored. The Company's RCSA is based on principles of The Committee of Sponsoring Organizations of the Treadway Commission, which have been adopted as the minimum standards
for all internal control reviews that comply with Sarbanes-Oxley, Federal Deposit Insurance Corporation Improvement Act (FDICIA) or operational risk requirements. The policy requires, on a quarterly
basis, businesses and staff functions to perform an RCSA that includes documentation of the control environment and policies, assessing the risks and controls, testing commensurate with risk level,
corrective action tracking for control breakdowns or deficiencies and periodic reporting, including reporting to senior management and Citigroup's Audit and Risk Management Committee. The entire
process is subject to audit by Citigroup's Audit and Risk Review with reporting to the Audit and Risk Management Committee of Citigroup's Board of Directors.

Information Security and Continuity of Business

Citigroup formed an Executive Council of senior business managers to oversee information security and continuity of business policy and implementation. These are
important issues for the Company and the entire industry in light of the risk environment. Significant upgrades to the Company's processes are continuing.

The
Company's Information Security Program complies with the Gramm-Leach Bliley Act and other regulatory guidance. The Citigroup Information Security Office conducted an
end-to-end review of company-wide risk management processes for mitigating, monitoring, and responding to information security risk.

Citigroup
mitigates business continuity risks by its long-standing practice of annual testing and review of recovery procedures by business units. The Citigroup Office of
Business Continuity and the Global Continuity of Business Committee oversee this broad program area. Together, these groups issued a corporate-wide Continuity of Business policy effective
January 2003 to improve consistency in contingency planning standards across the Company.

36

---



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 Federal Financial Institutions Examination Council (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.

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 represent 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:

|            |  | June 30, 2004 |     | December 31, 2003
|----------- |  | ------------- | --- | -----------------
|
|
|
|Germany     |  | $             | 7.7 |                  
|Korea       |  |               | 0.6 |                  
|France      |  |               | 2.6 |                  
|Canada      |  |               | 0.8 |                  
|Italy       |  |               | 0.5 |                  
|Netherlands |  |               | 2.6 |                  
|Switzerland |  |               | 3.1 |                  
|Mexico      |  |               |    |                  
|Australia   |  |               | 0.6 |                  
|            |  |               |     |                  

---

37

---



CAPITAL RESOURCES AND LIQUIDITY

CAPITAL RESOURCES

Overview

Citicorp's capital management framework is designed to ensure the capital position and ratios of Citicorp and its subsidiaries are consistent with the Company's
risk profile, all applicable regulatory standards or guidelines, and external ratings considerations. The capital management process embodies centralized senior management oversight and ongoing review
at the entity and country level as applicable.

The
capital plans, forecasts, and positions of Citicorp and its principal subsidiaries are reviewed by, and subject to oversight of, Citigroup's Finance and Capital Committee. Current
members of this committee include Citicorp's Chairman, Chief Executive Officer and President, Chief Financial Officer, Corporate Treasurer, Senior Risk Officer, and several senior business managers.

The
Finance and Capital Committee's capital management responsibilities include: determination of the overall financial structure of Citigroup and its principal subsidiaries, including
debt/equity ratios and asset growth guidelines; ensuring appropriate actions are taken to maintain capital adequacy for Citigroup and its regulated entities; determination and monitoring of hedging of
capital and foreign exchange translation risk associated with non-dollar earnings; and review and recommendation of Citigroup share repurchase levels and dividends on common and preferred
stock. The Finance and Capital Committee establishes applicable capital targets for Citigroup on a consolidated basis and for significant subsidiaries, including Citicorp. These targets exceed
applicable regulatory standards.

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 unfunded 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 Capital Ratio of at least 6%, a combined Tier 1 and Tier 2 Capital 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.

As
noted in the table below, Citicorp maintained its well-capitalized position during the first half of 2004 and the full year of 2003. The decreases in the Tier 1 and Total
Capital Ratios during the 2004 second quarter were primarily due to the Litigation Reserve Charge and the acquisition of KorAm Bank.

Citicorp Regulatory Capital Ratios

|                                  |  | June 30, 2004 |   | March 31, 2004 |   | December 31, 2003 |  
|--------------------------------- |  | ------------- | - | -------------- | - | ----------------- | -
|Tier 1 Capital                    |  | 8.39          | % | 8.80           | % | 8.44              | %
|Total capital (Tier 1 and Tier 2) |  | 12.55         | % | 13.00          | % | 12.68             | %
|Leverage(1)                       |  | 6.45          | % | 6.69           | % | 6.70              | %
|Common stockholder's equity       |  | 9.72          | % | 10.08          | % | 9.97              | %
|                                  |  |               |   |                |   |                   |  

---

38

---



Components of Capital Under Regulatory Guidelines

|In millions of dollars                                               |  | June 30, 2004 |         | Mar. 31, 2004 |   | Dec. 31, 2003 |  
|-------------------------------------------------------------------- |  | ------------- | ------- | ------------- | - | ------------- | -
|Tier 1 Capital                                                       |  |               |         |               |   |               |  
|Common stockholder's equity                                          |  | $             | 86,759  |               | $ | 86,005        |  
|Qualifying mandatorily redeemable securities of subsidiary trusts    |  |               | 822     |               |   | 853           |  
|Minority interest                                                    |  |               | 1,150   |               |   | 1,228         |  
|Less: Net unrealized loss (gain) on securities available-for-sale(1) |  |               | 97      |               |   | (1,252        | )
|Accumulated net gains on cash flow hedges, net of tax                |  |               | (573    | )             |   | (710          | )
|Intangible assets:(2)                                                |  |               |         |               |   |               |  
|Goodwill                                                             |  |               | (27,944 | )             |   | (26,269       | )
|Other disallowed intangible assets                                   |  |               | (6,269  | )             |   | (6,105        | )
|Other                                                                |  |               | (265    | )             |   | (207          | )
|                                                                     |  |               |         |               |   |               |  
|Total Tier 1 Capital                                                 |  |               | 53,777  |               |   | 53,543        |  
|                                                                     |  |               |         |               |   |               |  
|Tier 2 Capital                                                       |  |               |         |               |   |               |  
|Allowance for credit losses(3)                                       |  |               | 8,190   |               |   | 7,787         |  
|Qualifying debt(4)                                                   |  |               | 18,435  |               |   | 17,638        |  
|Unrealized marketable equity securities gains(1)                     |  |               | 87      |               |   | 101           |  
|                                                                     |  |               |         |               |   |               |  
|Total Tier 2 Capital                                                 |  |               | 26,712  |               |   | 25,526        |  
|                                                                     |  |               |         |               |   |               |  
|Total capital (Tier 1 and Tier 2)                                    |  | $             | 80,489  |               | $ | 79,069        |  
|                                                                     |  |               |         |               |   |               |  
|Risk-adjusted assets(5)                                              |  | $             | 641,290 |               | $ | 608,294       |  
|                                                                     |  |               |         |               |   |               |  

---

---

Stockholder's
equity increased a net $5.0 billion during the first six months of 2004 to $86.8 billion at June 30, 2004, representing 9.7% of assets, compared to
$81.8 billion and 10.0% at year-end 2003. The increase in stockholder's equity during the first six months of 2004 reflected net income of $8.1 billion and
$0.1 billion related to employee benefit plans and other activity, offset by $1.9 billion related to the after-tax change in equity from non-owner sources and
dividends paid of $1.3 billion. The decrease in stockholder's equity ratio during the first six months of 2004 reflected the above items and the 9% increase in total assets.

Total
mandatorily redeemable securities of subsidiary trusts (trust preferred securities), which qualify as Tier 1 Capital, at June 30, 2004 and December 31, 2003 were
$822 million and $840 million, respectively. During the 2004 first quarter, the Company deconsolidated the subsidiary issuer trusts in accordance with FIN 46-R. The FRB has
issued interim guidance that continues to recognize trust preferred securities as a component of Tier 1 Capital. On May 6, 2004, the FRB issued a proposed rule that would retain trust preferred
securities in Tier 1 Capital of Bank Holding Companies (BHCs), subject to conditions. See "Regulatory Capital and Accounting Standards Developments" on page 40. If Tier 2 Capital treatment had been
required at June 30, 2004, Citicorp would have continued to be "well-capitalized."

Citicorp's
subsidiary depository institutions in the United States are subject to risk-based capital guidelines issued by their respective primary federal bank regulatory
agencies, which are similar to the FRB's guidelines. To be "well-capitalized" under federal bank regulatory agency definitions, Citicorp's depository institutions must have a Tier 1
Capital Ratio of at least 6%, a combined Tier 1 and Tier 2 Capital Ratio of at least 10%, and a leverage ratio of at least 5%, and not be subject to a directive, order, or written agreement to meet
and maintain specific capital levels. At June 30, 2004, all of Citicorp's subsidiary depository institutions were "well-capitalized" under the federal regulatory agencies'
definitions.

39

---



Citibank, N.A. Ratios

|                                  |  | June 30, 2004 |   | March, 31, 2004 |   | December 31, 2003 |  
|--------------------------------- |  | ------------- | - | --------------- | - | ----------------- | -
|Tier 1 Capital                    |  | 8.42          | % | 8.86            | % | 8.40              | %
|Total Capital (Tier 1 and Tier 2) |  | 12.62         | % | 13.00           | % | 12.56             | %
|Leverage(1)                       |  | 6.30          | % | 6.62            | % | 6.57              | %
|Common stockholder's equity       |  | 7.46          | % | 7.69            | % | 7.56              | %
|                                  |  |               |   |                 |   |                   |  

---

---

Citibank, N.A. Components of Capital Under Regulatory Guidelines

|In billions of dollars            |  | June 30, 2004 |      | March, 31, 2004 |   | December 31, 2003
|--------------------------------- |  | ------------- | ---- | --------------- | - | -----------------
|Tier 1 Capital                    |  | $             | 38.5 |                 | $ | 38.3             
|Total Capital (Tier 1 and Tier 2) |  | $             | 57.7 |                 | $ | 56.2             
|                                  |  |               |      |                 |   |                  

Citibank's
net income for the second quarter of 2004 amounted to $2.1 billion. Total subordinated notes issued to Citicorp that were outstanding at June 30, 2004 and
December 31, 2003 and included in Citibank's Tier 2 Capital amounted to $13.3 billion and $12.3 billion, respectively.

Regulatory Capital and Accounting Standards Developments

The Basel Committee on Banking Supervision (the Basel Committee), consisting of central banks and bank supervisors from 13 countries, has developed a new set of
risk-based capital standards (the New Accord), on which it has received significant input from Citigroup and other major banking organizations. The Basel Committee published the text of
the New Accord on June 26, 2004. The Basel Committee has added an additional year of impact analysis and parallel testing for banks adopting the advanced approaches, with implementation
extended until year-end 2007. The U.S. banking regulators issued an advance notice of proposed rulemaking in August 2003 to address issues in advance of publishing 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 BHCs. Citigroup and Citicorp are assessing the impact of the
proposed new capital standards, while continuing to participate in efforts to refine the standards and monitor the progress of the Basel initiative.

In
January 2003, FASB issued accounting guidance in FIN 46 (which was subsequently revised in December 2003) which requires the consolidation of certain types of
special-purpose vehicles that previously were recorded as off-balance sheet exposures. Although FASB deferred the effective date of FIN 46 until periods ending after December 15,
2003, Citicorp 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. FIN 46-R was adopted in the 2004 first quarter. See Note 2 to the Consolidated Financial Statements. The impact of both these implementations 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 was effective for the reporting periods September 30, 2003 through June 30,
2004.

On
May 6, 2004, the FRB issued a proposed rule that would retain trust preferred securities in the Tier 1 Capital of BHCs, but with stricter quantitative limits and clearer
qualitative standards. Under the proposal, after a three-year transition period, the aggregate amount of trust preferred securities and certain other capital elements would be limited to
25% of Tier 1 Capital elements, net of goodwill. Under these proposed rules Citicorp currently would have less than 2% against this limit. The amount of trust preferred securities and certain other
elements in excess of the limit could be included in Tier 2 Capital, subject to restrictions. Internationally-active BHCs would generally be expected to limit trust preferred securities and certain
other capital elements to 15% of Tier 1 Capital elements, net of goodwill. Based on all limits set in the proposal, Citicorp would be able to retain the trust preferred securities within Tier 1
Capital.

On
July 20, 2004, the federal banking and thrift regulatory agencies issued the final rule on capital requirements for asset-backed commercial paper (ABCP) programs. The final
rule, which becomes effective September 30, 2004, increases the capital requirement on most short-term liquidity facilities that provide support to ABCP by imposing a 10% conversion
factor on such facilities. Additionally, the final rule permanently excludes ABCP program assets consolidated under FIN 46-R and any minority interests from the calculation of
risk-weighted assets and Tier 1 Capital, respectively. The denominator of the Tier 1 leverage ratio calculation will remain unaffected by the final rule, as the risk-based
capital treatment does not alter the reporting of the on-balance sheet assets under GAAP guidelines. Citicorp is assessing the impact of adopting the final rule.

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 47.

40

---



LIQUIDITY

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 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 composed of Citigroup's Chief Financial Officer, Senior 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 of the objectives of the Global ALCO is to monitor and review the overall liquidity and balance sheet positions of
Citigroup and its principal subsidiaries, including Citicorp, 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
principal 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, experience level of local management, 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 Citigroup's liquidity. For bank entities these include cash
capital (defined as core deposits, long-term liabilities, and capital compared to illiquid assets), liquid assets
against liquidity gaps, core deposits to loans, long-term assets to long-term liabilities and deposits to loans. Several measures exist to review potential concentrations of
funding by individual name, product, industry, or geography. On a combined basis at the holding company level, there are ratios established for liquid assets against short-term
obligations. Triggers to elicit management discussion, which may result in other actions, 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 Citigroup's access to the markets. Citigroup 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.

Simulated
liquidity stress testing is periodically 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 either 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 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.

On
a combined basis at the holding company level, Citigroup and Citicorp maintain sufficient liquidity to meet all maturing unsecured debt obligations due within a one-year
time horizon without incremental access to the unsecured markets.

41

---



Funding

As a financial holding company, substantially all of Citicorp's net earnings are generated within its operating subsidiaries. These subsidiaries make funds
available to Citicorp, primarily in the form of dividends. Certain subsidiaries' dividend paying abilities may be limited by covenant restrictions in credit agreements, regulatory requirements and/or
rating agency requirements that also impact their capitalization levels.

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.

As
of June 30, 2004, Citicorp's national and state-chartered bank subsidiaries can declare dividends to their respective parent companies, without regulatory approval, of
approximately $9.3 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 June 30, 2004, its bank subsidiaries can directly or through their parent holding company
distribute dividends to Citicorp of approximately $7.6 billion of the available $9.3 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.

During
2004, 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 47.

Primary
sources of liquidity for Citicorp and its principal subsidiaries include deposits, collateralized financing transactions, senior and subordinated debt, issuance of commercial
paper, proceeds from issuance of trust preferred securities, and purchased/wholesale funds. Citicorp and its principal subsidiaries also generate funds through securitizing financial assets including
credit card receivables and single-family or multi-family residences. Finally, Citicorp's net earnings provide a significant source of funding to the Company.

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 of $527.4 billion at June 30, 2004. Citicorp's deposits represent 59% and 58% of
total funding at June 30, 2004 and
December 31, 2003, respectively. A significant portion of these deposits have been, and are expected to be, long-term and stable and are considered core.

Citigroup
and its subsidiaries have a significant presence in the global capital markets. A substantial portion of the publicly underwritten debt issuance is originated in the name of
Citigroup. Publicly underwritten debt was also formerly issued by Citicorp, Associates First Capital Corporation (Associates), and CitiFinancial Credit Company, which includes WMF. Citicorp has
guaranteed various debt obligations of Associates, and CitiFinancial Credit Company, each an indirect subsidiary of Citicorp. Other significant elements of long-term debt in the
Consolidated Balance Sheet include advances from the Federal Home Loan Bank system, asset-backed outstandings related to the purchase of Sears, and debt of foreign subsidiaries.

Citigroup
and Citicorp, both of which are bank holding companies, maintain combined liquidity reserves of cash, securities and unused bank lines of credit to support their combined
outstanding commercial paper.

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates, had an unutilized credit facility of Canadian $1.0 billion as of June 30, 2004 that matures
in 2004. The facility is guaranteed by Citicorp. In connection therewith, Citicorp is required to maintain a certain level of consolidated stockholder's equity (as defined in the credit facility
agreement). At June 30, 2004, this requirement was exceeded by approximately $66.4 billion.

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. There are various legal restrictions on the extent to which a bank holding company and certain of its nonbank subsidiaries can borrow or
otherwise obtain credit from banking subsidiaries or engage in certain other transactions with or involving those banking subsidiaries. In general,

42

---



these
restrictions require that any such transactions must be on terms that would ordinarily be offered to unaffiliated entities and secured by designated amounts of specified collateral.

Citicorp
uses its liquidity to service debt obligations, to pay dividends to its stockholder's to support organic growth, and to fund acquisitions. Each of Citicorp's major operating
subsidiaries finances its operations on a basis consistent with its capitalization, regulatory structure and the environment in which it operates.

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, a 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, Moody's Investors Service, or Fitch Ratings, 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 derivative
contracts 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.

Our
credit card receivable and mortgage loan securitizations are organized as QSPEs and are, therefore, not VIEs subject to FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities" (FIN 46). SPEs may be QSPEs or VIEs or neither. When an entity is deemed a variable interest entity (VIE) under FIN 46, the entity in question must be consolidated by the primary
beneficiary; however, we are not the primary beneficiary of most of these entities and as such do not consolidate most of them.

Securitization of Citicorp's Assets

In certain of these off-balance sheet arrangements, including credit card receivable and mortgage loan securitizations, Citicorp is securitizing
assets that were previously recorded in its Consolidated Balance Sheet. A summary of certain cash flows received from and paid to securitization trusts is included in Note 10 to the
Consolidated Financial Statements.

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

43

---



proceeds
are used to purchase new receivables and replenish the receivables in the trust. The Company relies on securitizations to fund approximately 60% of its Citi Cards business.

At
June 30, 2004 and December 31, 2003, total assets in the off-balance sheet credit card trusts were $83 billion and $89 billion, respectively.
Of those amounts at June 30, 2004 and December 31, 2003, $75 billion and $76 billion, respectively, has been sold to investors via trust-issued securities, and the
remaining seller's interest of $8 billion and $13 billion, respectively, is recorded in Citicorp's Consolidated Balance Sheet as Consumer Loans. Included in the $75 billion and
$76 billion are retained securities issued by the trust totaling $1.2 billion and $1.1 billion at June 30, 2004 and December 31, 2003, respectively. Citicorp retains
credit risk on its seller's interests and reserves for expected credit losses. Amounts receivable from the trusts were $1.1 billion and $1.4 billion, respectively, and amounts due to the
trusts were $1.1 billion and $1.1 billion, respectively, at June 30, 2004 and December 31, 2003. The Company also recognized an interest-only strip of
$836 million at both June 30, 2004 and December 31, 2003, that arose from the calculation of gain or loss at the time assets were sold to the QSPE. In the three months ended
June 30, 2004 and June 30, 2003, the Company recorded net gains of $1 million and $69 million, respectively, and $1 million and $215 million for the six
months of 2004 and 2003, respectively, primarily related to the securitization of credit card receivables as a result of changes in estimates in the timing of revenue recognition on securitizations.

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
that 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 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. In addition to servicing rights, the Company also retains a residual interest in its auto loan, student loan and other assets securitizations, consisting of
securities and interest-only strips that arise from the calculation of gain or loss at the time assets are sold to the SPE. At June 30, 2004 and December 31, 2003, the total
amount of mortgage and other loan products securitized and outstanding was $132.6 billion and $141.1 billion, respectively. Servicing rights and other retained interests amounted to
$3.3 billion and $2.7 billion at June 30, 2004 and December 31, 2003, respectively. The Company recognized gains related to the securitization of mortgages and other assets
of $6 million and $185 million during the three months ended June 30, 2004 and 2003, respectively, and $84 million and $321 million during the first six months of
2004 and 2003, 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. Generally, the clients
continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. Clients absorb the first losses of the conduits by
providing collateral in the form of excess assets or residual interest. 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 protection in the form of letters of credit and other guarantees. All fees are charged on a market basis. During 2003, to comply with FIN 46, all
but two of the conduits issued "first loss" subordinated notes, such that one third-party investor in each conduit would be deemed the primary beneficiary and would consolidate that conduit. These
non-consolidation conclusions were not changed upon the adoption of FIN 46 (revised December 2003) (FIN 46-R) in the first quarter of 2004. At June 30, 2004 and
December 31, 2003, total assets in the unconsolidated conduits were $41 billion and $44 billion, respectively, and liabilities were $41 billion and $44 billion,
respectively. One conduit with assets of $409 million at June 30, 2004 and $823 million at December 31, 2003 is consolidated.

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 and private bank clients as well as retail customers, that match the clients' investment needs and preferences. The SPEs 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. The Company

44

---



typically
manages the SPEs for market-rate fees. In addition, the Company may be one of several liquidity providers to the SPEs and may place the securities with investors.

The
Company packages and securitizes assets purchased in the financial markets in order to create new security offerings, including arbitrage collateralized debt obligations (CDOs) and
synthetic CDOs for institutional clients and retail customers, that match the clients' investment needs and preferences. Typically these instruments diversify investors' risk to a pool of assets as
compared with investments in an individual asset. The variable interest entities (VIEs), which are issuers of CDO securities, are generally organized as limited liability corporations. The Company
typically receives fees for structuring and/or distributing the securities sold to investors. In some cases, the Company may repackage the investment with higher-rated debt CDO securities or U.S.
Treasury securities to provide a greater or a very high degree of certainty of the return of invested principal. A third-party manager is typically retained by the VIE to select collateral for
inclusion in the pool and then actively manage it or, in other cases, only to manage work-out credits. The Company may also provide other financial services and/or products to the VIEs for
market-rate fees. These may include: the provision of liquidity or contingent liquidity facilities, interest rate or foreign exchange hedges and credit derivative instruments, as well as
the purchasing and warehousing of securities until they are sold to the SPE. The Company is not the primary beneficiary of these VIEs under FIN 46 due to our limited continuing involvement and, as a
result, we do not consolidate their assets and liabilities in our financial statements.

See
Note 10 to the Consolidated Financial Statements for additional information about off-balance sheet arrangements.

Credit Commitments and Lines of Credit

The table below summarizes Citicorp's credit commitment as of June 30, 2004 and December 31, 2003. Further details are included in the footnotes.

|In millions of dollars                                                         |  | June 30, 2004 |           | December 31, 2003
|------------------------------------------------------------------------------ |  | ------------- | --------- | -----------------
|Financial standby letters of credit and foreign office guarantees              |  | $             | 38,397    |                  
|Performance standby letters of credit and foreign office guarantees            |  |               | 8,794     |                  
|Commercial and similar letters of credit                                       |  |               | 6,550     |                  
|One- to four-family residential mortgages                                      |  |               | 5,033     |                  
|Revolving open-end loans secured by one- to four-family residential properties |  |               | 13,096    |                  
|Commercial real estate, construction and land development                      |  |               | 1,536     |                  
|Credit card lines(1)                                                           |  |               | 749,294   |                  
|Commercial and other consumer loan commitments(2)                              |  |               | 240,430   |                  
|                                                                               |  |               |           |                  
|Total                                                                          |  | $             | 1,063,130 |                  
|                                                                               |  |               |           |                  

---

See
Note 12 to the Consolidated Financial Statements for additional information on credit commitments and lines of credit.

45

---



CORPORATE GOVERNANCE AND CONTROLS AND PROCEDURES

Citigroup has had a long-standing process whereby business and financial officers throughout the Company attest to the accuracy of financial
information reported in corporate systems as well as the effectiveness of internal controls over financial reporting and disclosure processes. The Sarbanes-Oxley Act of 2002 requires CEOs and CFOs to
make certain certifications with respect to this report and to the Company's disclosure controls and procedures and internal control over financial reporting.

The
Company's Disclosure Committee has responsibility for ensuring that there is an adequate and effective process for establishing, maintaining, and evaluating disclosure controls and
procedures for the Company in connection with its external disclosures. Citigroup has a Code of Conduct that expresses the values that drive employee behavior and maintains the Company's commitment to
the highest standards of conduct. The Company has established an ethics hotline for employees. In addition, the Company adopted a Code of Ethics for Financial Professionals which applies to all
finance, accounting, treasury, tax and investor relations professionals worldwide and which supplements the Company-wide Code of Conduct.

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 Securities Exchange Act of 1934) 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.

46

---



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: the continued improvement in global economic conditions; sovereign or regulatory actions, including actions
taken by the Argentine government associated with its anticipated debt restructuring; 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; the effect of
acquisitions; and the resolution of legal proceedings and related matters.

47

---



CONSOLIDATED FINANCIAL STATEMENTS

CITICORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

|                                                                       |                                     | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|---------------------------------------------------------------------- | ----------------------------------- | --------------------------- | ------ | ------------------------- | -
|
|
|Interest revenue                                                       |                                     |                             |        |                           |  
|Loans, including fees                                                  |                                     | $                           | 10,803 |                           | $
|Deposits with banks                                                    |                                     |                             | 144    |                           |  
|Federal funds sold and securities purchased under agreements to resell |                                     |                             | 84     |                           |  
|Investments, including dividends                                       |                                     |                             | 1,387  |                           |  
|Trading account assets                                                 |                                     |                             | 498    |                           |  
|Loans held-for-sale                                                    |                                     |                             | 199    |                           |  
|                                                                       |                                     |                             |        |                           |  
|                                                                       |                                     |                             | 13,115 |                           |  
|                                                                       |                                     |                             |        |                           |  
|Interest expense                                                       |                                     |                             |        |                           |  
|Deposits                                                               |                                     |                             | 2,103  |                           |  
|Trading account liabilities                                            |                                     |                             | 23     |                           |  
|Purchased funds and other borrowings                                   |                                     |                             | 505    |                           |  
|Long-term debt                                                         |                                     |                             | 1,080  |                           |  
|                                                                       |                                     |                             |        |                           |  
|                                                                       |                                     |                             | 3,711  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Net interest revenue                                                   |                                     |                             | 9,404  |                           |  
|Benefits, claims, and credit losses                                    |                                     |                             |        |                           |  
|Policyholder benefits and claims                                       |                                     |                             | 117    |                           |  
|Provision for credit losses                                            |                                     |                             | 1,590  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Total benefits, claims, and credit losses                              |                                     |                             | 1,707  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Net interest revenue after benefits, claims, and credit losses         |                                     |                             | 7,697  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Fees, commissions, and other revenue                                   |                                     |                             |        |                           |  
|Fees and commissions                                                   |                                     |                             | 3,467  |                           |  
|Foreign exchange                                                       |                                     |                             | 438    |                           |  
|Trading account                                                        |                                     |                             | 387    |                           |  
|Investment transactions                                                |                                     |                             | 173    |                           |  
|Other revenue                                                          |                                     |                             | 2,645  |                           |  
|                                                                       |                                     |                             |        |                           |  
|                                                                       |                                     |                             | 7,110  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Operating expense                                                      |                                     |                             |        |                           |  
|Salaries                                                               |                                     |                             | 2,898  |                           |  
|Employee benefits                                                      |                                     |                             | 648    |                           |  
|                                                                       |                                     |                             |        |                           |  
|                                                                       | Total employee and related expenses |                             |        | 3,546                     |  
|Net premises and equipment                                             |                                     |                             | 1,091  |                           |  
|Restructuring-related items                                            |                                     |                             |       |                           |  
|Other expense                                                          |                                     |                             | 4,110  |                           |  
|                                                                       |                                     |                             |        |                           |  
|                                                                       |                                     |                             | 8,747  |                           |  
|                                                                       |                                     |                             |        |                           |  
|Income before income taxes and minority interest                       |                                     |                             | 6,060  |                           |  
|Income taxes                                                           |                                     |                             | 1,893  |                           |  
|Minority interest, net of income taxes                                 |                                     |                             | 39     |                           |  
|                                                                       |                                     |                             |        |                           |  
|Net income                                                             |                                     | $                           | 4,128  |                           | $
|                                                                       |                                     |                             |        |                           |  

---

See
Notes to the Unaudited Consolidated Financial Statements.

48

---



CITICORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

|In millions of dollars                                                                                                         |                                                                                                                              | June 30,
2004
(Unaudited) |         | December 31,
2003 |  
|------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------- | ----------------- | -
|Assets                                                                                                                         |                                                                                                                              |                           |         |                   |  
|Cash and due from banks                                                                                                        |                                                                                                                              | $                         | 18,629  |                   | $
|Deposits at interest with banks                                                                                                |                                                                                                                              |                           | 24,745  |                   |  
|Federal funds sold and securities purchased under agreements to resell                                                         |                                                                                                                              |                           | 14,753  |                   |  
|Trading account assets (including $2,223 and $2,078 pledged to creditors at June 30, 2004 and December 31, 2003, respectively) |                                                                                                                              |                           | 85,186  |                   |  
|Investments                                                                                                                    |                                                                                                                              |                           |         |                   |  
|                                                                                                                               | Held to maturity                                                                                                             |                           |         | 52                |  
|                                                                                                                               | Available-for-sale (including $11,435 and $10,126 pledged to creditors at June 30, 2004 and December 31, 2003, respectively) |                           |         | 140,014           |  
|                                                                                                                               | Venture capital                                                                                                              |                           |         | 3,421             |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total investments                                                                                                              |                                                                                                                              |                           | 143,487 |                   |  
|Loans held-for-sale                                                                                                            |                                                                                                                              |                           | 16,205  |                   |  
|Loans, net of unearned income                                                                                                  |                                                                                                                              |                           |         |                   |  
|                                                                                                                               | Consumer                                                                                                                     |                           |         | 398,558           |  
|                                                                                                                               | Corporate                                                                                                                    |                           |         | 114,804           |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Loans, net of unearned income                                                                                                  |                                                                                                                              |                           | 513,362 |                   |  
|                                                                                                                               | Allowance for credit losses                                                                                                  |                           |         | (12,715           | )
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total loans, net                                                                                                               |                                                                                                                              |                           | 500,647 |                   |  
|Goodwill                                                                                                                       |                                                                                                                              |                           | 27,944  |                   |  
|Intangible assets                                                                                                              |                                                                                                                              |                           | 13,567  |                   |  
|Premises and equipment, net                                                                                                    |                                                                                                                              |                           | 8,590   |                   |  
|Interest and fees receivable                                                                                                   |                                                                                                                              |                           | 5,832   |                   |  
|Other assets                                                                                                                   |                                                                                                                              |                           | 32,641  |                   |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total assets                                                                                                                   |                                                                                                                              | $                         | 892,226 |                   | $
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Liabilities                                                                                                                    |                                                                                                                              |                           |         |                   |  
|Non-interest-bearing deposits in U.S. offices                                                                                  |                                                                                                                              | $                         | 31,826  |                   | $
|Interest-bearing deposits in U.S. offices                                                                                      |                                                                                                                              |                           | 153,238 |                   |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                      |                                                                                                                              |                           | 27,549  |                   |  
|Interest-bearing deposits in offices outside the U.S.                                                                          |                                                                                                                              |                           | 314,799 |                   |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total deposits                                                                                                                 |                                                                                                                              |                           | 527,412 |                   |  
|Trading account liabilities                                                                                                    |                                                                                                                              |                           | 41,394  |                   |  
|Purchased funds and other borrowings                                                                                           |                                                                                                                              |                           | 78,532  |                   |  
|Accrued taxes and other expense                                                                                                |                                                                                                                              |                           | 10,646  |                   |  
|Long-term debt                                                                                                                 |                                                                                                                              |                           | 114,128 |                   |  
|Other liabilities                                                                                                              |                                                                                                                              |                           | 33,355  |                   |  
|Stockholder's equity                                                                                                           |                                                                                                                              |                           |         |                   |  
|Common stock: ($0.01 par value) issued shares: 1,000 in each period                                                            |                                                                                                                              |                           |        |                   |  
|Surplus                                                                                                                        |                                                                                                                              |                           | 40,360  |                   |  
|Retained earnings                                                                                                              |                                                                                                                              |                           | 50,720  |                   |  
|Accumulated other changes in equity from nonowner sources                                                                      |                                                                                                                              |                           | (4,321  | )                 |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total stockholder's equity                                                                                                     |                                                                                                                              |                           | 86,759  |                   |  
|                                                                                                                               |                                                                                                                              |                           |         |                   |  
|Total liabilities and stockholder's equity                                                                                     |                                                                                                                              | $                         | 892,226 |                   | $
|                                                                                                                               |                                                                                                                              |                           |         |                   |  

See
Notes to the Unaudited Consolidated Financial Statements.

49

---



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

|                                                                              |                                               | Six Months Ended June 30, |       
|----------------------------------------------------------------------------- | --------------------------------------------- | ------------------------- | ------
|
|
|Balance at beginning of period                                                |                                               | $                         | 81,794
|Net income                                                                    |                                               |                           | 8,061 
|Net change in unrealized gains and losses on investment securities, after-tax |                                               |                           | (1,045
|Net change in foreign currency translation adjustment, after-tax              |                                               |                           | (563  
|Net change for cash flow hedges, after-tax                                    |                                               |                           | (306  
|                                                                              |                                               |                           |       
|                                                                              | Total changes in equity from nonowner sources |                           |       
|Dividends paid                                                                |                                               |                           | (1,339
|Employee benefit plans and other activity                                     |                                               |                           | 157   
|                                                                              |                                               |                           |       
|Balance at end of period                                                      |                                               | $                         | 86,759
|                                                                              |                                               |                           |       
|Summary of changes in equity from nonowner sources                            |                                               |                           |       
|Net income                                                                    |                                               | $                         | 8,061 
|Other changes in equity from nonowner sources                                 |                                               |                           | (1,914
|                                                                              |                                               |                           |       
|Total changes in equity from nonowner sources                                 |                                               | $                         | 6,147 
|                                                                              |                                               |                           |       

See
Notes to the Unaudited Consolidated Financial Statements.

50

---



CITICORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

|                                                                                                   |                                                         | Six Months Ended June 30, |        
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------- | -------
|
|
|Cash flows from operating activities                                                               |                                                         |                           |        
|Net income                                                                                         |                                                         | $                         | 8,061  
|Adjustments to reconcile net income to net cash (used in) provided by operating activities         |                                                         |                           |        
|                                                                                                   | Provision for credit losses                             |                           |        
|                                                                                                   | Depreciation and amortization of premises and equipment |                           |        
|                                                                                                   | Restructuring-related items                             |                           |        
|                                                                                                   | Venture capital activity                                |                           |        
|                                                                                                   | Net gain on sale of securities                          |                           |        
|                                                                                                   | Changes in accruals and other, net                      |                           |        
|                                                                                                   | Net increase in loans held for sale                     |                           |        
|                                                                                                   | Net decrease (increase) in trading account assets       |                           |        
|                                                                                                   | Net decrease in trading account liabilities             |                           |        
|                                                                                                   |                                                         |                           |        
|Total adjustments                                                                                  |                                                         |                           | (13,162
|                                                                                                   |                                                         |                           |        
|Net cash (used in) provided by operating activities                                                |                                                         |                           | (5,101 
|                                                                                                   |                                                         |                           |        
|Cash flows from investing activities                                                               |                                                         |                           |        
|Net increase in deposits at interest with banks                                                    |                                                         |                           | (3,031 
|Securitiesavailable for sale and short-term and other                                             |                                                         |                           |        
|                                                                                                   | Purchases                                               |                           |        
|                                                                                                   | Proceeds from sales                                     |                           |        
|                                                                                                   | Maturities                                              |                           |        
|Net decrease (increase) in federal funds sold and securities purchased under resale agreements     |                                                         |                           | 4,478  
|Net increase in loans                                                                              |                                                         |                           | (19,932
|Proceeds from sales of loans                                                                       |                                                         |                           | 6,709  
|Business acquisitions                                                                              |                                                         |                           | (2,935 
|Capital expenditures on premises and equipment                                                     |                                                         |                           | (1,279 
|Proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets |                                                         |                           | 2,313  
|                                                                                                   |                                                         |                           |        
|Net cash used in investing activities                                                              |                                                         |                           | (28,777
|                                                                                                   |                                                         |                           |        
|Cash flows from financing activities                                                               |                                                         |                           |        
|Net increase in deposits                                                                           |                                                         |                           | 26,670 
|Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements |                                                         |                           | 5,962  
|Net increase in commercial paper and funds borrowed                                                |                                                         |                           | 755    
|Proceeds from issuance of long-term debt                                                           |                                                         |                           | 14,023 
|Repayment of long-term debt                                                                        |                                                         |                           | (10,176
|Dividends paid                                                                                     |                                                         |                           | (1,339 
|                                                                                                   |                                                         |                           |        
|Net cash provided by financing activities                                                          |                                                         |                           | 35,895 
|                                                                                                   |                                                         |                           |        
|Effect of exchange rate changes on cash and due from banks                                         |                                                         |                           | (95    
|                                                                                                   |                                                         |                           |        
|Net increase in cash and due from banks                                                            |                                                         |                           | 1,922  
|Cash and due from banks at beginning of period                                                     |                                                         |                           | 16,707 
|                                                                                                   |                                                         |                           |        
|Cash and due from banks at end of period                                                           |                                                         | $                         | 18,629 
|                                                                                                   |                                                         |                           |        
|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.

51

---





CITIBANK, N.A. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEET

|In millions of dollars                                                                                                    |                                                                                                                            | June 30,
2004
(Unaudited) |         | December 31,
2003 |  
|------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------- | ----------------- | -
|Assets                                                                                                                    |                                                                                                                            |                           |         |                   |  
|Cash and due from banks                                                                                                   |                                                                                                                            | $                         | 16,044  |                   | $
|Deposits at interest with banks                                                                                           |                                                                                                                            |                           | 23,432  |                   |  
|Federal funds sold and securities purchased under agreements to resell                                                    |                                                                                                                            |                           | 12,623  |                   |  
|Trading account assets (including $84 and $258 pledged to creditors at June 30, 2004 and December 31, 2003, respectively) |                                                                                                                            |                           | 79,265  |                   |  
|Investments                                                                                                               |                                                                                                                            |                           |         |                   |  
|                                                                                                                          | Held to maturity                                                                                                           |                           |         | 47                |  
|                                                                                                                          | Available-for-sale (including $2,270 and $1,043 pledged to creditors at June 30, 2004 and December 31, 2003, respectively) |                           |         | 105,101           |  
|                                                                                                                          | Venture capital                                                                                                            |                           |         | 511               |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total investments                                                                                                         |                                                                                                                            |                           | 105,659 |                   |  
|Loans held-for-sale                                                                                                       |                                                                                                                            |                           | 6,397   |                   |  
|Loans, net of unearned income                                                                                             |                                                                                                                            |                           | 359,136 |                   |  
|Allowance for credit losses                                                                                               |                                                                                                                            |                           | (8,966  | )                 |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total loans, net                                                                                                          |                                                                                                                            |                           | 350,170 |                   |  
|Goodwill                                                                                                                  |                                                                                                                            |                           | 8,787   |                   |  
|Intangible assets                                                                                                         |                                                                                                                            |                           | 9,682   |                   |  
|Premises and equipment, net                                                                                               |                                                                                                                            |                           | 5,939   |                   |  
|Interest and fees receivable                                                                                              |                                                                                                                            |                           | 4,382   |                   |  
|Other assets                                                                                                              |                                                                                                                            |                           | 25,863  |                   |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total assets                                                                                                              |                                                                                                                            | $                         | 648,243 |                   | $
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Liabilities                                                                                                               |                                                                                                                            |                           |         |                   |  
|Non-interest-bearing deposits in U.S. offices                                                                             |                                                                                                                            | $                         | 22,983  |                   | $
|Interest-bearing deposits in U.S. offices                                                                                 |                                                                                                                            |                           | 96,847  |                   |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                 |                                                                                                                            |                           | 22,549  |                   |  
|Interest-bearing deposits in offices outside the U.S.                                                                     |                                                                                                                            |                           | 284,516 |                   |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total deposits                                                                                                            |                                                                                                                            |                           | 426,895 |                   |  
|Trading account liabilities                                                                                               |                                                                                                                            |                           | 41,394  |                   |  
|Purchased funds and other borrowings                                                                                      |                                                                                                                            |                           | 57,974  |                   |  
|Accrued taxes and other expense                                                                                           |                                                                                                                            |                           | 7,813   |                   |  
|Long-term debt and subordinated notes                                                                                     |                                                                                                                            |                           | 40,328  |                   |  
|Other liabilities                                                                                                         |                                                                                                                            |                           | 23,558  |                   |  
|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                                                                                                                   |                                                                                                                            |                           | 25,775  |                   |  
|Retained earnings                                                                                                         |                                                                                                                            |                           | 23,787  |                   |  
|Accumulated other changes in equity from nonowner sources(1)                                                              |                                                                                                                            |                           | (1,982  | )                 |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total stockholder's equity                                                                                                |                                                                                                                            |                           | 50,281  |                   |  
|                                                                                                                          |                                                                                                                            |                           |         |                   |  
|Total liabilities and stockholder's equity                                                                                |                                                                                                                            | $                         | 648,243 |                   | $
|                                                                                                                          |                                                                                                                            |                           |         |                   |  

---

See
Notes to the Unaudited Consolidated Financial Statements.

52

---





CITIGROUP INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     Basis of Presentation

The accompanying unaudited consolidated financial statements as of June 30, 2004 and for the three-and six-month period ended June 30,
2004 include the accounts of 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 2003 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

Consolidation of Variable Interest Entities

On January 1, 2004, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest
Entities (revised December 2003)," (FIN 46-R), which includes substantial changes from the original FIN 46. Included in these changes, the calculation of expected losses and
expected residual returns has been altered to reduce the impact of decision maker and guarantor fees in the calculation of expected residual returns and expected losses. In addition, the definition of
a variable interest has been changed in the revised guidance. The Company has determined that in accordance with FIN 46-R, the multi-seller finance companies administered by the Company
should continue to not be consolidated. However, the trust preferred security vehicles are now deconsolidated. The cumulative effect of adopting FIN 46-R was an increase to assets and
liabilities of approximately $1.1 billion, primarily due to certain structured finance transactions.

FIN
46 and FIN 46-R change 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 FIN 46-R and is called a variable interest entity (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" (SFAS 94). 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.

For
any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities, and noncontrolling interests 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 interests of
the VIE. In October 2003, 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 $1.0 billion. 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
Company administers several third-party owned, special purpose, multi-seller finance companies (the "conduits") that purchase pools of trade receivables, credit cards, and other
financial assets from third-party clients of the Company. The Company has no ownership interest in the conduits, but as administrator provides them with accounting, funding, and operations services.
Generally, the clients continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. Clients absorb the first
losses of the conduits by providing collateral in the form of excess assets or residual interest. 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 protection in the form of letters of credit and other guarantees. During 2003, to comply with FIN 46, all but two of the
conduits issued "first loss" subordinated notes, such that one third-party investor in each conduit would be deemed the primary beneficiary and would consolidate that conduit.

53

---



Some
of the Company's private equity subsidiaries may invest in venture capital entities that may also be subject to FIN 46-R. The Company accounts for its venture capital
activities in accordance with the Investment Company Audit Guide (Audit Guide). The FASB deferred adoption of FIN 46-R for non registered investment companies that apply the Audit Guide.
The FASB permitted nonregistered investment companies to defer consolidation of VIEs with which they are involved until a Statement of Position on the scope of the Audit Guide is finalized, which is
expected by the end of 2004. Following issuance of the Statement of Position, the FASB will consider further modification to FIN 46-R to provide an exception for companies that qualify to
apply the revised Audit Guide. Following issuance of the revised Audit Guide, the Company will assess the effect of such guidance on its private equity business.

The
Company may provide administrative, trustee and/or investment management services to numerous personal estate trusts, which are considered VIEs under FIN 46, but are not
consolidated.

See
Note 10 to the Consolidated Financial Statements.

Accounting for Loan Commitments Accounted For As Derivatives

On April 1, 2004, the Company adopted the SEC's Staff Accounting Bulletin No. 105, "Application of Accounting Principles to Loan Commitments" (SAB
105), which specifies that servicing assets embedded in commitments for loans to be held for sale should be recognized only when the servicing asset has been contractually separated from the
associated loans by sale or securitization. The impact of implementing SAB 105 across all of the Company's businesses was a delay in recognition of $35 million pretax in the second quarter
2004.

Profit Recognition on Bifurcated Hybrid Instruments

On January 1, 2004, Citicorp revised the application of Derivatives Implementation Group (DIG) Issue B6, "Embedded Derivatives: Allocating the Basis of a
Hybrid Instrument to the Host Contract and the Embedded Derivative." In December 2003, the SEC staff gave a speech which revised the accounting for derivatives embedded in financial instruments
("hybrid instruments") to preclude the recognition of any profit on the trade date for hybrid instruments that must be bifurcated for accounting purposes. The trade-date revenue must
instead be amortized over the life of the hybrid instrument. The impact of this change in application was approximately $36 million pretax reduction in revenue across all of the Company's
businesses during the first six months of 2004. This revenue will be recognized over the life of the transactions.

Adoption of SFAS 132-R

In December 2003, FASB issued SFAS No.132 (Revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits"
(SFAS 132-R), which retains the disclosure requirements contained in SFAS 132 and requires additional disclosure in financial statements about the assets, obligations, cash
flows, and net periodic benefit cost of domestic defined benefit pension plans and other domestic defined benefit postretirement plans for periods ending after December 15, 2003, except for the
disclosure of expected future benefit payments, which must be disclosed for fiscal years ending after June 15, 2004. The new disclosure requirements for foreign retirement plans apply to fiscal
years ending after June 15, 2004. However, the Company has elected to adopt SFAS 132-R for its foreign plans as of December 31, 2003. Certain disclosures required by
SFAS 132-R are effective for interim periods beginning after December 15, 2003. Accordingly, the new interim disclosures are included in Note 11 to the Consolidated
Financial Statements.

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.

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 No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). In particular, this SFAS 149 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 Consolidated Financial Statements.

54

---



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 on its
balance sheet. 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. SFAS 150 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 Consolidated Financial Statements.

Stock-Based Compensation

On January 1, 2003, the Company adopted the fair value recognition provisions of SFAS 123, prospectively for all awards granted, modified, or
settled after December 31, 2002. The prospective method is one of the adoption methods provided for under SFAS No. 148, "Accounting for Stock-Based CompensationTransition
and Disclosure" (SFAS 148) 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 APB 25, the alternative
method of accounting, under SFAS 123, an offsetting increase to stockholders' equity is recorded equal to the amount of compensation expense charged. Earnings per share dilution is recognized
as well. During the 2004 first quarter, the Company changed its option valuation from the Black-Scholes model to the binomial method. The impact of this change was immaterial.

Guarantees and Indemnifications

In November 2002, FASB issued 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. On January 1, 2003, the Company adopted the recognition and measurement provisions of FIN 45. The impact of adopting FIN 45 was not
material. FIN 45 also requires additional disclosures in financial statements for periods ending after December 15, 2002. Accordingly, these disclosures are included in Note 12 to the
Consolidated Financial Statements.

Future Application of Accounting Standards

Other-Than-Temporary Impairments of Certain Investments

On March 31, 2004, the FASB ratified EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments," (EITF 03-1) which provides guidance on recognizing other-than-temporary impairments on certain investments. The Issue is
effective for other-than-temporary impairment evaluations for investments accounted for under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," as well as non-marketable equity securities accounted for under the cost method for reporting periods beginning after June 15, 2004. The Company is evaluating the
impact of adopting EITF 03-1 and has not yet completed this analysis.

Postretirement Benefits

In May 2004, FASB issued FASB Staff Position FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003" (FSP FAS 106-2), which supersedes FSP FAS 106-1, in response to the December 2003 enactment of the
Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). The Act introduces a prescription drug benefit for individuals under Medicare (Medicare Part D) as well as a
federal subsidy equal to 28% of prescription drug claims for sponsors of retiree health care plans with drug benefits that are at least actuarially equivalent to those to be offered under Medicare
Part D. If a plan is determined to be actuarially equivalent to Medicare Part D, FSP FAS 106-2 requires plan sponsors to disclose the effect of the subsidy on the net
periodic expense and the accumulated postretirement benefit obligation in their interim and annual financial statements for periods beginning after June 15, 2004. Plan sponsors who initially
elected to defer accounting for the effects of the subsidy are allowed the option of retroactive application to the date of enactment or prospective application from the date of adoption.

Under
FSP FAS 106-1, the Company elected to defer the accounting for the effects of the Act. However, Citigroup believes that its plans are eligible for the subsidy
and has decided to adopt FSP FAS 106-2 in the third quarter of 2004 retroactive to January 1, 2004. The adoption of FSP FAS 106-2 is not expected to have a
material effect on the Company's Consolidated Financial Statements.

55

---



Accounting for Certain Loans or Debt Securities Acquired in a Transfer

On December 12, 2003, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) No. 03-3,
"Accounting for Certain Loans or Debt Securities Acquired in a Transfer" (SOP 03-3). SOP 03-3 is effective for loans acquired in fiscal years beginning after
December 15, 2004. SOP 03-3 requires acquired loans to be recorded at fair value and prohibits carrying over valuation allowances in the initial accounting for all loans acquired in
a transfer that have evidence of deterioration in credit quality since origination, when it is probable that the investor will be unable to collect all contractual cash flows. Loans carried at fair
value, mortgage loans held-for-sale, and loans to borrowers in good standing under revolving credit agreements are excluded from the scope of SOP 03-3.

SOP
03-3 limits the yield that may be accreted to the excess of the undiscounted expected cash flows over the investor's initial investment in the loan. The excess of the
contractual cash flows over expected cash flows may not be recognized as an adjustment of yield. Subsequent increases in cash flows expected to be collected are recognized prospectively through an
adjustment of the loan's yield over its remaining life. Decreases in expected cash flows are recognized as impairment.

3.     Business Developments and Combinations

Acquisition of KorAm Bank

On April 30, 2004, Citigroup completed its tender offer to purchase all the outstanding shares of KorAm Bank (KorAm) at a price of KRW 15,500 per share in
cash. In total Citigroup has acquired 99.3% of KorAm's outstanding shares for a total of KRW 3.07 trillion ($2.73 billion). The results of KorAm are included in the Consolidated Financial
Statements from May 2004 forward.

KorAm
is a leading commercial bank in Korea, with 223 domestic branches and total assets at June 30, 2004 of $37 billion. In the 2004 fourth quarter, Citigroup plans to
merge its Citibank Korea Branch into KorAm. On June 25, 2004, the union employees of KorAm initiated a strike that was settled on July 12, 2004. Approximately 70% of KorAm's workers were
out during that time resulting in the temporary closure of 170 of its branches. The operations of KorAm were integrated into the businesses of Citicorp.

Acquisition of Principal Residential Mortgage, Inc.

On July 1, 2004, Citigroup completed the acquisition of Principal Residential Mortgage, Inc. (PRMI) from Acquire Principal Residential
Mortgage, Inc. for $1.3 billion in cash. PRMI, one of the largest independent mortgage servicers in the United States, originates, purchases, sells and services home loans, consisting
primarily of conventional, conforming, fixed-rate prime mortgages.

The
transaction includes approximately $6.6 billion in assets and also includes $137 million of franchise premium, subject to the finalization of the purchase price
allocation. The operations of PRMI will be integrated into the businesses of Citicorp.

Acquisition of Washington Mutual Finance Corporation

On January 9, 2004, Citigroup completed the acquisition of Washington Mutual Finance Corporation (WMF) for $1.25 billion in cash. WMF was the
consumer finance subsidiary of Washington Mutual, Inc. WMF provides direct consumer installment loans and real-estate-secured loans, as well as sales finance and the sale of
insurance. The acquisition includes 427 WMF offices located in 26 states, primarily in the Southeastern and Southwestern United States. WMF has more than 2,300 employees and total assets of
$3.8 billion. Citicorp has guaranteed all outstanding unsecured indebtedness of WMF in connection with this acquisition. The operations of WMF were integrated into the businesses of Citicorp.

Acquisition of Sears' Credit Card and Financial Products Business

On November 3, 2003, Citigroup acquired the Sears' Credit Card and Financial Products business (Sears). $28.6 billion of gross receivables were
acquired for a 10% premium of $2.9 billion and annual performance payments over the next 10 years based on new accounts, retail sales volume, and financial product sales.
$5.8 billion of intangible assets and goodwill have been recorded as a result of this transaction. In addition, the companies signed a multi-year marketing and servicing agreement
across a range of each company's businesses, products, and services. The results of Sears are included in the Consolidated Financial Statements from November 2003 forward. The operations of
Sears were integrated into the businesses of Citicorp.

Acquisition of The Home Depot's Private-Label Portfolio

In July 2003, Citigroup completed the acquisition of The Home Depot's private-label portfolio (Home Depot), which added $6 billion in receivables
and 12 million accounts. The results of Home Depot are included in the Consolidated Financial Statements from July 2003 forward. The operations of Home Depot were integrated into the
businesses of Citicorp.

56

---



Goodwill and Intangible Assets

During the second quarter of 2004, the Company recorded approximately $2.2 billion of goodwill, $170 million of customer relationship intangibles,
$81 million of core deposit intangibles and $41 million of other intangibles in connection with the KorAm acquisition. In the first quarter of 2004, the Company recorded approximately
$890 million of goodwill and $140 million of customer relationship intangibles for the WMF acquisition. Subsequently, $130 million of the WMF goodwill was reclassed during the
2004 second quarter to establish a deferred tax asset. The Company also recorded in the first quarter of 2004, approximately $150 million of intangibles representing the present value of future
profits associated with an acquired insurance portfolio. The goodwill and intangible amounts associated with these acquisitions are subject to the finalization of the purchase price allocations.

All
identifiable intangible assets associated with these acquisitions are being amortized over a period of seven to twenty years. The Company's intangible assets amortization expense was
$334 million and $284 million for the three months ended June 30, 2004 and 2003, and $653 million and $572 million for the six months ended June 30, 2004 and
2003, respectively.

For
the quarter and six months ended June 30, 2004 and 2003 no goodwill was impaired or written off.

4.     Business Segment Information

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

|                                     |  | Total Revenues, Net
of Interest Expense |        | Provision
for Income Taxes |   | Net Income
(Loss)(1) |  | Identifiable Assets
|------------------------------------ |  | --------------------------------------- | ------ | -------------------------- | - | -------------------- |  | -------------------
|
|
|
|Global Consumer                      |  | $                                       | 11,543 |                            | $ | 9,424                |  | $                  
|Global Corporate and Investment Bank |  |                                         | 3,586  |                            |   | 2,881                |  |                    
|Global Investment Management         |  |                                         | 793    |                            |   | 834                  |  |                    
|Proprietary Investment Activities    |  |                                         | 455    |                            |   | 168                  |  |                    
|Corporate/Other                      |  |                                         | 137    |                            |   | 293                  |  |                    
|                                     |  |                                         |        |                            |   |                      |  |                    
|Total                                |  | $                                       | 16,514 |                            | $ | 13,600               |  | $                  
|                                     |  |                                         |        |                            |   |                      |  |                    

|                                     |  | Total Revenues, Net
of Interest Expense |        | Provision
for Income Taxes |   | Net Income
(Loss)(1)
|------------------------------------ |  | --------------------------------------- | ------ | -------------------------- | - | --------------------
|
|
|
|Global Consumer                      |  | $                                       | 22,511 |                            | $ | 18,694              
|Global Corporate and Investment Bank |  |                                         | 6,578  |                            |   | 5,717               
|Global Investment Management         |  |                                         | 1,751  |                            |   | 1,585               
|Proprietary Investment Activities    |  |                                         | 587    |                            |   | 257                 
|Corporate/Other                      |  |                                         | 526    |                            |   | 635                 
|                                     |  |                                         |        |                            |   |                     
|Total                                |  | $                                       | 31,953 |                            | $ | 26,888              
|                                     |  |                                         |        |                            |   |                     

---

57

---



5.     Investments

|In millions of dollars                                       |  | June 30,
2004 |         | December 31,
2003
|------------------------------------------------------------ |  | ------------- | ------- | -----------------
|Fixed maturities, primarily available-for-sale at fair value |  | $             | 134,928 |                  
|Equity securities, primarily at fair value                   |  |               | 4,903   |                  
|Venture capital, at fair value                               |  |               | 3,421   |                  
|Short-term and other                                         |  |               | 235     |                  
|                                                             |  |               |         |                  
|                                                             |  | $             | 143,487 |                  
|                                                             |  |               |         |                  

The
amortized cost and fair value of investments in fixed maturities and equity securities at June 30, 2004 and December 31, 2003 were as follows:

|                                              |  |   |         | June 30, 2004 |   |       |  | December 31, 2003(1)
|--------------------------------------------- |  | - | ------- | ------------- | - | ----- |  | --------------------
|
|Fixed maturity securities held to maturity(2) |  | $ | 52      |               | $ |      |  | $                   
|                                              |  |   |         |               |   |       |  |                     
|Fixed maturity securities available-for-sale  |  |   |         |               |   |       |  |                     
|U.S. Treasury and Federal agencies            |  |   | 45,284  |               |   | 139   |  |                     
|State and municipal                           |  |   | 8,337   |               |   | 338   |  |                     
|Foreign government                            |  |   | 54,229  |               |   | 359   |  |                     
|U.S. corporate                                |  |   | 10,209  |               |   | 110   |  |                     
|Other debt securities                         |  |   | 17,072  |               |   | 122   |  |                     
|                                              |  |   |         |               |   |       |  |                     
|                                              |  |   | 135,131 |               |   | 1,068 |  |                     
|                                              |  |   |         |               |   |       |  |                     
|Total fixed maturities                        |  | $ | 135,183 |               | $ | 1,068 |  | $                   
|                                              |  |   |         |               |   |       |  |                     
|Equity securities(3)                          |  | $ | 4,710   |               | $ | 230   |  | $                   
|                                              |  |   |         |               |   |       |  |                     

---

---

The
following table presents venture capital investment gains and losses:

|                                           |  | Six Months Ended June 30, |     
|------------------------------------------ |  | ------------------------- | ----
|
|
|Net realized investment gains (losses)     |  | $                         | 71  
|Gross unrealized gains                     |  |                           | 474 
|Gross unrealized (losses)                  |  |                           | (262
|                                           |  |                           |     
|Net realized and unrealized gains (losses) |  | $                         | 283 
|                                           |  |                           |     

6.     Trading Account Assets and Liabilities

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

|In millions of dollars                                             |  | June 30,
2004 |        | December 31,
2003
|------------------------------------------------------------------ |  | ------------- | ------ | -----------------
|Trading account assets                                             |  |               |        |                  
|U.S. Treasury and Federal agency securities                        |  | $             | 5,429  |                  
|Foreign government securities, corporate and other debt securities |  |               | 40,361 |                  
|Derivative and other contractual commitments(1)                    |  |               | 39,396 |                  
|                                                                   |  |               |        |                  
|Total trading account assets                                       |  | $             | 85,186 |                  
|                                                                   |  |               |        |                  
|Trading account liabilities                                        |  |               |        |                  
|Securities sold, not yet purchased                                 |  | $             | 6,841  |                  
|Derivative and other contractual commitments(1)                    |  |               | 34,553 |                  
|                                                                   |  |               |        |                  
|Total trading account liabilities                                  |  | $             | 41,394 |                  
|                                                                   |  |               |        |                  

---

58

---



7.     Restructuring-Related Items

|                         |                     | Restructuring Initiatives |    
|------------------------ | ------------------- | ------------------------- | ---
|
|
|Original charges         |                     | $                         | 1  
|                         |                     |                           |    
|Acquisitions during:(1)  |                     |                           |    
|                         | Second quarter 2004 |                           |    
|                         | First quarter 2004  |                           |    
|                         | 2003                |                           |    
|                         |                     |                           |    
|                         |                     |                           | 54 
|                         |                     |                           |    
|Utilization during:(2)   |                     |                           |    
|                         | Second quarter 2004 |                           |    
|                         | First quarter 2004  |                           |    
|                         | 2003                |                           |    
|                         |                     |                           |    
|                         |                     |                           | (15
|                         |                     |                           |    
|Other                    |                     |                           |   
|                         |                     |                           |    
|Balance at June 30, 2004 |                     | $                         | 40 
|                         |                     |                           |    

---

---

During
the first six months of 2004, Citicorp recognized $1 million of restructuring charges for WMF and $54 million in the purchase price allocations of WMF and KorAm.

Of
the $54 million, $33 million was recorded in the second quarter of 2004 as a liability in the purchase price allocation of KorAm for the integration of its operations.
This restructuring initiative is expected to be substantially implemented over the next 12 months.

In
addition, $21 million was recognized in the first quarter of 2004 as a liability in the purchase price allocation of WMF for the integration of its operations and operating
platforms within the Global Consumer businesses. Of the $21 million, $4 million was related to employee severance and $17 million related to exiting leasehold and other
contractual obligations.

Through
June 30, 2004, the 2004 restructuring reserve utilization was $15 million (of which $2 million was related to severance, $2 million related to
leasehold and other exit costs which have been paid in cash, and $11 million is legally obligated), and approximately 100 gross staff positions have been eliminated in connection with the WMF
acquisition.

During
2003, Citicorp recorded a restructuring reserve of $82 million in the purchase price allocation of Sears for the integration of its operations and operating platforms
within the Global Consumer business. Of the $82 million, $47 million was related to employee severance and $35 million was related to exiting leasehold and other contractual
obligations. Through June 30, 2004, the 2003 restructuring reserve utilization was $26 million, which included $7 million of severance paid in cash and $19 million is
legally obligated. Through June 30, 2004, approximately 1,700 gross staff positions have been eliminated under this program.

Restructuring-related
items included in the Consolidated Statement of Income for the three- and six-month periods ended June 30, 2004 and 2003 are as follows:

|                                  |  | Three Months Ended June 30, |   | Six Months Ended June 30, |  
|--------------------------------- |  | --------------------------- | - | ------------------------- | -
|
|
|Restructuring charges             |  | $                           |  |                           | $
|Changes in estimates              |  |                             |  |                           |  
|                                  |  |                             |   |                           |  
|Total restructuring-related items |  | $                           |  |                           | $
|                                  |  |                             |   |                           |  

Changes
in estimates are attributable to facts and circumstances arising subsequent to an original restructuring charge. Changes in estimates are attributable to lower than anticipated
costs of implementing certain projects and a reduction in the scope of certain initiatives. There were no changes in estimates during the second quarter of 2004. There was a reduction of prior
restructuring initiative of $4 million, offset by the $1 million restructuring charge for WMF during the 2004 first quarter. Changes in estimates during the first and second quarters of
2003 resulted in a reduction of reserves for prior restructuring initiatives of $12 million and $1 million, respectively.

Additional
information about restructuring-related items, including the business segments affected, can be found in Citicorp's 2003 Annual Report on Form 10-K.

59

---



8.     Changes in Equity from Nonowner Sources

Changes
in each component of "Accumulated Other Changes in Equity from Nonowner Sources" for the three- and six-month periods ended March 31, 2004 and June 30,
2004 are as follows:

|In millions of dollars                                                           |  | Net Unrealized
Gains on
Investment
Securities |        | Foreign
Currency
Translation
Adjustment |   | Cash Flow
Hedges |   | Accumulated
Other Changes
in Equity from
Nonowner
Sources |     
|-------------------------------------------------------------------------------- |  | --------------------------------------------- | ------ | --------------------------------------- | - | ---------------- | - | --------------------------------------------------------- | ----
|Balance, December 31, 2003                                                       |  | $                                             | 948    |                                         | $ | (4,234           | ) | $                                                         | 879 
|Increase in net unrealized gains on investment securities, after-tax(1)          |  |                                               | 377    |                                         |   |                 |   |                                                           |    
|Less: Reclassification adjustment for gains included in net income, after-tax(1) |  |                                               | (73    | )                                       |   |                 |   |                                                           |    
|Foreign currency translation adjustment, after-tax(1)                            |  |                                               |       |                                         |   | 90               |   |                                                           |    
|Cash flow hedges, after-tax                                                      |  |                                               |       |                                         |   |                 |   |                                                           | (169
|                                                                                 |  |                                               |        |                                         |   |                  |   |                                                           |     
|Current period change                                                            |  |                                               | 304    |                                         |   | 90               |   |                                                           | (169
|                                                                                 |  |                                               |        |                                         |   |                  |   |                                                           |     
|Balance, March 31, 2004                                                          |  | $                                             | 1,252  |                                         | $ | (4,144           | ) | $                                                         | 710 
|Decrease in net unrealized gains on investment securities, after-tax(2)          |  |                                               | (1,236 | )                                       |   |                 |   |                                                           |    
|Less: Reclassification adjustment for gains included in net income, after-tax(2) |  |                                               | (113   | )                                       |   |                 |   |                                                           |    
|Foreign currency translation adjustment, after-tax(3)                            |  |                                               |       |                                         |   | (653             | ) |                                                           |    
|Cash flow hedges, after-tax                                                      |  |                                               |       |                                         |   |                 |   |                                                           | (137
|                                                                                 |  |                                               |        |                                         |   |                  |   |                                                           |     
|Current period change                                                            |  |                                               | (1,349 | )                                       |   | (653             | ) |                                                           | (137
|                                                                                 |  |                                               |        |                                         |   |                  |   |                                                           |     
|Balance, June 30, 2004                                                           |  | $                                             | (97    | )                                       | $ | (4,797           | ) | $                                                         | 573 

---

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 six-month periods ended June 30, 2004 and 2003:

|                                                                                                                                     |  | Three Months Ended June 30, |      | Six Months Ended June 30, |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ---- | ------------------------- | -
|
|
|Fair Value Hedges:                                                                                                                   |  |                             |      |                           |  
|Hedge ineffectiveness recognized in earnings                                                                                         |  | $                           | (235 | )                         | $
|Net gain (loss) excluded from assessment of effectiveness(1)                                                                         |  |                             | 181  |                           |  
|Cash Flow Hedges:                                                                                                                    |  |                             |      |                           |  
|Hedge ineffectiveness recognized in earnings                                                                                         |  |                             | 11   |                           |  
|Net gain excluded from assessment of effectiveness(1)                                                                                |  |                             |     |                           |  
|Net Investment Hedges:                                                                                                               |  |                             |      |                           |  
|Net gain (loss) included in foreign currency translation adjustment within accumulated other changes in equity from nonowner sources |  | $                           | 209  |                           | $
|                                                                                                                                     |  |                             |      |                           |  

---

60

---



The accumulated other changes in equity from nonowner sources from cash flow hedges for the three-and six-month periods ended June 30, 2004 and 2003 can be summarized
as follows (after-tax):

|In millions of dollars                |  | 2004 |      | 2003 |  
|------------------------------------- |  | ---- | ---- | ---- | -
|Balance at January 1,                 |  | $    | 879  |      | $
|Net gain (loss) from cash flow hedges |  |      | 8    |      |  
|Net amounts reclassified to earnings  |  |      | (177 | )    |  
|                                      |  |      |      |      |  
|Balance at March 31,                  |  | $    | 710  |      | $
|Net gain (loss) from cash flow hedges |  |      | (11  | )    |  
|Net amounts reclassified to earnings  |  |      | (126 | )    |  
|                                      |  |      |      |      |  
|Balance at June 30,                   |  | $    | 573  |      | $
|                                      |  |      |      |      |  

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 corporate debt securities,
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 servicing rights 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 risk with the owner of the mortgage loans such as FNMA or FHLMC or with a private investor, insurer or guarantor. Losses on recourse servicing occur
primarily when foreclosure sale proceeds of the property underlying a defaulted mortgage loan are less than the outstanding principal balance and accrued interest of the loan and the cost of holding
and disposing of the underlying property.

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.

61

---



The
following table summarizes certain cash flows received from and paid to securitization trusts during the three and six months ended June 30, 2004 and 2003:

|                                                                   |  | Three Months Ended
June 30, 2004 |      | Three Months Ended
June 30, 2003
|------------------------------------------------------------------ |  | -------------------------------- | ---- | --------------------------------
|
|Proceeds from new securitizations                                  |  | $                                | 3.7  |                                 
|Proceeds from collections reinvested in new receivables            |  |                                  | 38.7 |                                 
|Servicing fees received                                            |  |                                  | 0.4  |                                 
|Cash flows received on retained interests and other net cash flows |  |                                  | 1.3  |                                 
|                                                                   |  |                                  |      |                                 

|                                                                   |  | Six Months Ended
June 30, 2004 |      | Six Months Ended
June 30, 2003
|------------------------------------------------------------------ |  | ------------------------------ | ---- | ------------------------------
|
|Proceeds from new securitizations                                  |  | $                              | 6.5  |                               
|Proceeds from collections reinvested in new receivables            |  |                                | 77.1 |                               
|Servicing fees received                                            |  |                                | 0.7  |                               
|Cash flows received on retained interests and other net cash flows |  |                                | 2.5  |                               
|                                                                   |  |                                |      |                               

---

---

The Company recognized gains (losses) on securitizations of mortgages of ($27) million and $168 million for the three-month periods ended
June 30, 2004 and 2003, respectively, and $51 million and $298 million during the first six months of 2004 and 2003, respectively. In the second quarter and first six months of
2004 the Company recorded gains of $1 million and $1 million, respectively, and $69 million and $215 million, respectively, during the second quarter and first six months
of 2003 related to the securitization of credit card receivables as a result of changes in estimates in the timing of revenue recognition on securitizations. Gains recognized on the securitization of
other assets during the second quarter of 2004 and 2003 were $33 million and $17 million, respectively, and $33 million and $23 during the first six months of 2004 and 2003,
respectively.

Key
assumptions used for credit cards, mortgages and other assets during the three months ended June 30, 2004 in measuring the fair value of retained interests at the date of sale
or securitization follow:

|                              |  | Credit Cards   |  | Mortgages and Other |  
|----------------------------- |  | -------------- |  | ------------------- | -
|Discount rate                 |  | 10.0%          |  | 9.8                 | %
|Constant prepayment rate      |  | 15.0% to 17.5% |  | 4.6                 | %
|Anticipated net credit losses |  | 5.6% to 10.0%  |  | 8.1                 | %
|                              |  |                |  |                     |  

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.

62

---



At June 30, 2004, 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 June 30, 2004:    |  | Discount Rate |  | Constant
Prepayment Rate |  | Anticipated Net
Credit Losses |               
|------------------------------------ |  | ------------- |  | ------------------------ |  | ----------------------------- | --------------
|Credit cards                         |  | 10.0%         |  | 14.7% to 17.5%           |  |                               | 4.8% to 10.0% 
|Mortgages and other                  |  | 8.8%          |  | 12.7%                    |  |                               | 6.3%          
|Auto loans                           |  | 15.0%         |  | 21.8% to 23.0%           |  |                               | 13.2% to 15.6%
|In millions of dollars               |  |               |  |                          |  | June 30, 2004                 |               
|Carrying value of retained interests |  |               |  |                          |  | $                             | 5,169         
|Discount rate                        |  |               |  |                          |  |                               |               
|+10%                                 |  |               |  |                          |  | $                             | (167          
|+20%                                 |  |               |  |                          |  | $                             | (251          
|                                     | 
|Constant prepayment rate             |  |               |  |                          |  |                               |               
|+10%                                 |  |               |  |                          |  | $                             | (346          
|+20%                                 |  |               |  |                          |  | $                             | (582          
|                                     | 
|Anticipated net credit losses        |  |               |  |                          |  |                               |               
|+10%                                 |  |               |  |                          |  | $                             | (290          
|+20%                                 |  |               |  |                          |  | $                             | (502          
|                                     |  |               |  |                          |  |                               |               

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) at
June 30, 2004 and December 31, 2003, and credit losses, net of recoveries, for the three-month and six-month periods ended June 30, 2004 and 2003.

Credit Card Receivables

|In billions of dollars            |  | June 30, 2004 |        | December 31, 2003 |  
|--------------------------------- |  | ------------- | ------ | ----------------- | -
|Principal amounts, at period end: |  |               |        |                   |  
|Total managed                     |  | $             | 154.4  |                   | $
|Securitized amounts               |  |               | (76.4  | )                 |  
|Loans held-for-sale               |  |               | (6.3   | )                 |  
|                                  |  |               |        |                   |  
|On-balance sheet                  |  | $             | 71.7   |                   | $
|                                  |  |               |        |                   |  
|In millions of dollars            |  |               |        |                   |  
|Delinquencies, at period end:     |  |               |        |                   |  
|Total managed                     |  | $             | 2,808  |                   | $
|Securitized amounts               |  |               | (1,222 | )                 |  
|Loans held-for-sale               |  |               | (133   | )                 |  
|                                  |  |               |        |                   |  
|On-balance sheet                  |  | $             | 1,453  |                   | $
|                                  |  |               |        |                   |  

|                                  |  | Three Months Ended June 30, |        | Six Months Ended June 30, |  
|--------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|
|Credit losses, net of recoveries: |  |                             |        |                           |  
|Total managed                     |  | $                           | 2,373  |                           | $
|Securitized amounts               |  |                             | (1,244 | )                         |  
|Loans held-for-sale               |  |                             | (46    | )                         |  
|                                  |  |                             |        |                           |  
|On-balance sheet                  |  | $                           | 1,083  |                           | $
|                                  |  |                             |        |                           |  

63

---



Servicing Rights

The fair value of capitalized mortgage loan servicing rights was $2.469 billion, $1.980 billion and $1.086 billion at June 30, 2004,
December 31, 2003, and June 30, 2003, respectively. The following table summarizes the changes in capitalized mortgage servicing rights (MSR):

|                                      |  | Three Months Ended June 30, |       | Six Months Ended June 30, |  
|------------------------------------- |  | --------------------------- | ----- | ------------------------- | -
|
|
|Balance, beginning of period          |  | $                           | 1,904 |                           | $
|Originations                          |  |                             | 212   |                           |  
|Purchases                             |  |                             |      |                           |  
|Amortization                          |  |                             | (113  | )                         |  
|Gain (loss) on change in MSR value(1) |  |                             | 223   |                           |  
|Provision for impairment(2)(3)        |  |                             | 243   |                           |  
|                                      |  |                             |       |                           |  
|Balance, end of period                |  | $                           | 2,469 |                           | $
|                                      |  |                             |       |                           |  

---

Variable Interest Entities

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 billions of dollars            |  | June 30, 2004 |      | December 31, 2003
|--------------------------------- |  | ------------- | ---- | -----------------
|Cash                              |  | $             | 0.6  |                  
|Trading account assets            |  |               | 11.7 |                  
|Investments                       |  |               | 5.3  |                  
|Loans                             |  |               | 8.1  |                  
|Other assets                      |  |               | 0.8  |                  
|                                  |  |               |      |                  
|Total assets of consolidated VIEs |  | $             | 26.5 |                  
|                                  |  |               |      |                  

The
consolidated VIEs included in the table above represent hundreds of separate entities with which the Company is involved and includes approximately $1.1 billion related to
VIEs newly-consolidated as a result of adopting FIN 46-R as of January 1, 2004 and $1.0 billion related to VIEs newly consolidated as a result of adopting FIN 46 at
July 1, 2003. Of the $26.5 billion and $27.1 billion of total assets of VIEs consolidated by the Company at June 30, 2004 and December 31, 2003, respectively,
$20.4 billion and $20.1 billion represent 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 clients, $4.1 billion and $5.6 billion, respectively, represent investment vehicles that were established to provide a return to
the investors in the vehicles, and $2.0 billion and $0.6 billion represent vehicles that hold lease receivables and equipment as collateral to issue debt securities, thus obtaining
secured financing at favorable interest rates. In addition, at December 31, 2003, $0.8 billion relates to trust preferred securities which are a source of funding and regulatory capital
for the Company. In accordance with FIN 46-R, the trust preferred securities had been deconsolidated at March 31, 2004.

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
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 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-R, 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, collateralized debt obligations (CDOs), structured finance transactions, and numerous investment
funds. In addition to

64

---



these
VIEs, the Company issues preferred securities to third-party investors through trust vehicles as a source of funding and regulatory capital. In accordance with FIN 46-R, the Company
deconsolidated the preferred securities trusts with assets of $780 million during the first quarter of 2004. The Company's liabilities to these trusts are included in long-term debt
at June 30, 2004 and December 31, 2003.

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. Generally, 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 protection in the form of letters of credit and other guarantees. All fees are charged on a market basis. During 2003, to comply with FIN 46,
all but two of the conduits issued "first loss" subordinated notes such that one third party investor in each conduit would be deemed the primary beneficiary and would consolidate the conduit. At
June 30, 2004 and December 31, 2003, total assets in unconsolidated conduits were $41.0 billion and $44.3 billion, respectively. One conduit with assets of
$409 million and $823 million is consolidated at June 30, 2004 and December 31, 2003, respectively.

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. 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. In a limited number of cases, the Company may guarantee the return of principal to investors. 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. Many
investment funds are organized as registered investment companies (RICs), corporations or partnerships with sufficient capital to fund their operations without additional credit support.

The
Company also packages and securitizes assets purchased in the financial markets in order to create new security offerings, including arbitrage collateralized debt obligations (CDOs)
and synthetic CDOs for institutional clients and retail customers, that match the clients' investment needs and preferences. Typically these instruments diversify investors' risk to a pool of assets
as compared with investments in an individual asset. The VIEs, which are issuers of CDO securities, are generally organized as limited liability corporations. The Company typically receives fees for
structuring and/or distributing the securities sold to investors. In some cases, the Company may repackage the investment with higher rated debt CDO securities or U.S. Treasury securities to provide a
greater or a very high degree of certainty of the return of invested principal. A third-party manager is typically retained by the VIE to select collateral for inclusion in the pool and then actively
manage it, or, in other cases, only to manage work-out credits. The Company may also provide other financial services and/or products to the VIEs for market-rate fees. These
may include: the provision of liquidity or contingent liquidity facilities, interest rate or foreign exchange hedges and credit derivative instruments, as well as the purchasing and warehousing of
securities until they are sold to the SPE. The Company is not the primary beneficiary of these VIEs under FIN 46-R due to our limited continuing involvement and, as a result, we do not
consolidate their assets and liabilities in our financial statements.

In
addition to the conduits discussed above, the total assets of unconsolidated VIEs where the Company has significant involvement is $55.2 billion and $65.5 billion at
June 30, 2004 and December 31, 2003, respectively, including $7.4 billion and $6.4 billion in investment-related transactions, $1.8 billion and $0.5 billion
in CDO-type transactions, and $45.2 billion and $58.2 billion in structured finance and other transactions. Also included in the total unconsolidated VIEs were
$0.8 billion in trust preferred securities at June 30, 2004, and $0.4 billion in mortgage-related transactions at December 31, 2003.

The
Company has also established a number of investment funds as opportunities for qualified employees to invest in venture capital investments. The Company acts as investment manager to
these funds and may provide employees with financing on both a recourse and non-recourse basis for a portion of the employees' investment commitments.

In
addition, the Company administers numerous personal estate trusts. The Company may act as trustee and may also be the investment manager for the trust 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 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 $42.4 billion at June 30, 2004. 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. In

65

---



addition,
the Company may be party to other derivative contracts with VIEs. Exposures that are considered to be guarantees are also included in Note 12 to the Consolidated Financial Statements.

11.   Retirement Benefits

Retirement Benefits

Citigroup has several non-contributory defined benefit pension plans covering substantially all U.S. employees. The U.S. defined benefit plan provides
benefits under a cash balance formula. Employees satisfying certain age and service requirements remain covered by a prior final pay formula.

Citicorp
participates with affiliated companies in the Citigroup U.S. pension plans that resulted in net expense of $64 million and $26 million for the quarters ended
June 30,2004 and 2003, respectively, and $128 million and $52 million for the first six months of 2004 and 2003, respectively. Citicorp's allocated share of the net expense was
$18 million and $4 million for the quarters ended June 30, 2004 and 2003, respectively, and $36 million and $8 million for the first six months of 2004 and 2003,
respectively.

The
Company also has various defined benefit pension and termination indemnity plans covering employees outside the United States which resulted in net expense of $34 million and
$68 million in the second quarter and first six months of 2004, respectively, and $34 million and $68 million for the second quarter and first six months of 2003, respectively.

The
Company also participates in Citigroup-sponsored postretirement health care and life insurance benefits to certain eligible U.S. retired employees, as well as to certain eligible
employees outside the United States. Citicorp's allocated share of the U.S. and non-U.S. plans' net expense was $11 million and $11 million for the three months ended
June 30, 2004 and 2003, respectively, and $22 million and $22 million for the six months ended June 30, 2004 and 2003, respectively.

The
Company's retirement benefit plans are described in more detail in Citigroup's 2003 Annual Report on Form 10-K.

66

---



12.   Guarantees

Obligations under 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 tables below summarize at June 30, 2004 and December 31, 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.

The
following tables present information about the Company's guarantees at June 30, 2004 and December 31, 2003:

|                                                   |  | June 30, 2004
|-------------------------------------------------- |  | -------------
|
|Financial standby letters of credit                |  | $            
|Performance guarantees                             |  |              
|Derivative instruments                             |  |              
|Guarantees of collection of contractual cash flows |  |              
|Loans sold with recourse                           |  |              
|Securities lending indemnifications(1)             |  |              
|Credit card merchant processing(1)                 |  |              
|Custody indemnifications(1)                        |  |              
|                                                   |  |              
|Total                                              |  | $            
|                                                   |  |              

|                                                   |  | December 31, 2003
|-------------------------------------------------- |  | -----------------
|
|Financial standby letters of credit                |  | $                
|Performance guarantees                             |  |                  
|Derivative instruments                             |  |                  
|Guarantees of collection of contractual cash flows |  |                  
|Loans sold with recourse                           |  |                  
|Securities lending indemnifications(1)             |  |                  
|Credit card merchant processing(1)                 |  |                  
|Custody indemnifications(1)                        |  |                  
|                                                   |  |                  
|Total                                              |  | $                
|                                                   |  |                  

---

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. 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.
Derivative instruments include credit default swaps, total return swaps, written foreign exchange options, written put options, and written equity warrants. 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. Loans sold with
recourse represent the Company's obligations to reimburse the buyers for loan losses under certain circumstances. 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

67

---



security.
Credit card merchant processing guarantees represent the Company's obligations in connection with the processing of credit card transactions on behalf of merchants. Custody 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.

At
June 30, 2004 and December 31, 2003, the Company's maximum potential amount of future payments under these guarantees was approximately $299.2 billion and
$252.7 billion, respectively. 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.

Citicorp's
primary credit card business is the issuance of credit cards to individuals. The Company also provides processing services to various merchants, processing credit card
transactions on their behalf and managing the merchant's cash flow related to their credit card activity. In connection with these services, a contingent liability arises in the event of a billing
dispute between the merchant and a cardholder that is ultimately resolved in the cardholder's favor and generally extends between three and six months after the date the transaction is processed or
the receipt of the product or service, depending on industry practice or statutory requirements. In this situation, the transaction is "charged back" to the merchant and the disputed amount is
credited or otherwise refunded to the cardholder. If
the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder. The risk of loss is mitigated as the cash flows between the
Company and the merchant are settled on a net basis as the Company has the right to offset any payments with cash flows otherwise due to the merchant. To further mitigate this risk, Citicorp may
require the merchant to make an escrow deposit, delay settlement, include event triggers to provide the Company with more financial and operational control in the event of the financial deterioration
of the merchant, or require various credit enhancements (including letters of credit and bank guarantees). At June 30, 2004 and December 31, 2003, respectively, the Company held as
collateral approximately $9 million and $26 million, respectively, of merchant escrow deposits and also had $107 million and $109 million, respectively, payable to
merchants, which the Company has the right to set off against amounts due from the individual merchants.

The
Company's maximum potential liability for this contingent merchant processing liability is estimated to be the total volume of credit card transactions that meet the associations'
requirements to be valid chargeback transactions at any given time. At June 30, 2004 and December 31, 2003, this maximum potential exposure was estimated to be $27.1 billion and
$22.6 billion, respectively. However, the Company believes that the maximum exposure is not representative of the actual potential loss exposure based on the Company's historical experience. In
most cases, this contingent liability is unlikely to arise, as most products and services are delivered when purchased and amounts are refunded when items are returned to merchants. The Company
assesses the probability and amount of its liability related to merchant processing based on the extent and nature of unresolved chargebacks and its historical loss experience.

At
June 30, 2004, the estimated losses incurred and the carrying amount of the Company's obligations related to merchant processing activities was immaterial.

In
addition, the Company, through its credit card business, provides various cardholder protection programs on several of its card products, including programs that provide insurance
coverage for rental cars, coverage for certain losses associated with purchased products, price protection for certain purchases and protection for lost luggage. These guarantees are not included in
the table above since the total outstanding amount of the guarantees and the Company's maximum exposure to loss cannot be quantified. The protection is limited to certain types of purchases and
certain types of losses and it is not possible to quantify the purchases that would qualify for these benefits at any given time. Actual losses related to these programs were not material during 2004
and 2003. The Company assesses the probability and amount of its potential liability related to these programs based on the extent and nature of its historical loss experience. At June 30,
2004, the estimated losses incurred and the carrying value of the Company's obligations related to these programs are immaterial.

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 Balance Sheet as of June 30, 2004 and December 31, 2003, related to these indemnifications and they are not included in the table
above.

68

---



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 Balance Sheet as of June 30, 2004 or
December 31, 2003 for potential obligations that could arise from the Company's involvement with VTN associations.

At
June 30, 2004 and December 31, 2003, the carrying amounts of the liabilities related to the guarantees and indemnifications included in the table above amounted to
approximately $10.2 billion and $12.6 billion. 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. The carrying value of the guarantees of contractual cash flows are offset against the receivables from the credit card trusts. For loans sold with recourse the carrying
value of the liability is included in other liabilities. In addition, at June 30, 2004 and December 31, 2003, other liabilities includes an allowance for credit losses of
$600 million, relating to letters of credit and unfunded lending commitments.

In
addition to the collateral available in respect of the credit card merchant processing contingent liability discussed above, the Company has collateral available to reimburse
potential losses on its other guarantees. Cash collateral available to the Company to reimburse losses realized under these guarantees and indemnifications amounted to $38.4 billion and
$38.3 billion at June 30, 2004 and December 31, 2003, respectively. Securities and other marketable assets held as collateral amounted to $29.5 billion and
$29.6 billion and letters of credit in favor of the Company held as collateral amounted to $1.8 billion and $1.5 billion at June 30, 2004 and December 31, 2003,
respectively. 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.

13.   Contingencies

For a discussion of certain legal proceedings, see Part II, Item 1 of this Form 10-Q. On May 10, 2004, at the time of Citigroup's
settlement of the WorldCom class action lawsuit, Citigroup announced that it had reevaluated its reserves and that it was taking a charge of $4.95 billion after-tax to cover the
cost of resolving numerous lawsuits and other legal proceedings arising out of the transactions and activities that were the subjects of (i) the April 2003 settlement of research and IPO
spinning-related inquiries conducted by the Securities and Exchange Commission, the National Association of Securities Dealers, the New York Stock Exchange and the New York Attorney General,
(ii) the July 2003 settlement of the Enron-related inquiries conducted by the Securities and Exchange Commission, the Federal Reserve Bank of New York, the Office of the Comptroller of
the Currency, and the Manhattan District Attorney, (iii) underwritings for, and research coverage of, WorldCom, and (iv) the allocation of, and aftermarket trading in, securities sold in
initial public offerings. The Company is a defendant in numerous lawsuits and other legal proceedings arising out of the transactions and activities described in (ii) above. As part of the
reevaluation of reserves described above, Citicorp increased its reserve for these transactions and activities by approximately $1.4 billion pretax. The Company's litigation reserve is
$2.0 billion on a pretax basis at June 30, 2004.

The
Company believes that this reserve is adequate to meet all of its remaining exposure for these matters. However, in view of the large number of these matters, the uncertainties of
the timing and outcome of this type of litigation, and the significant amounts involved, it is possible that the ultimate costs of these matters may exceed or be below the reserve. The Company will
continue to defend itself vigorously in these cases, and seek to resolve them in the manner management believes is in the best interest of the Company.

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.

14.   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 deposits, charges for operational support and the borrowing and lending of funds and are entered into
in the ordinary course of business.

69

---



15.   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 (Associates)

In connection with Citigroup's November 30, 2000 acquisition of Associates in which Associates 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 Associates and Associates Corporation of North America (ACONA), a subsidiary
of Associates.

Effective
as of August 10, 2001, CBC, the parent company of CCC, transferred 100% of the stock of CCC to Associates in exchange for convertible preferred stock of Associates,
making CCC a wholly owned subsidiary of Associates. The condensed consolidating financial statements account for the transaction in a manner similar to a pooling of interest and therefore all prior
periods have been restated.

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

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

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates, had an unutilized credit facility of Canadian $1.0 billion as of June 30, 2004 that matures
in 2004. The facility is guaranteed by Citicorp. In connection therewith, Citicorp is required to maintain a certain level of consolidated stockholder's equity (as defined in the credit facility
agreement). At June 30, 2004, this requirement was exceeded by approximately $66.4 billion. Citicorp also has guaranteed various debt obligations of Associates and CCC.

70

---



Condensed Consolidating Statement of Income (Unaudited)

|                                                                                           |  | Three Months Ended June 30, 2004
|------------------------------------------------------------------------------------------ |  | --------------------------------
|
|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 taxes (benefits)                                                                    |  |                                 
|Minority interest, net of income taxes                                                     |  |                                 
|Equity in undistributed income of subsidiaries                                             |  |                                 
|                                                                                           |  |                                 
|Net income                                                                                 |  | $                               
|                                                                                           |  |                                 

---

71

---



Condensed Consolidating Statement of Income (Unaudited)

|                                                                                           |  | Three Months Ended June 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 taxes (benefits)                                                                    |  |                                 
|Minority interest, net of income taxes                                                     |  |                                 
|Equity in undistributed income of subsidiaries                                             |  |                                 
|                                                                                           |  |                                 
|Net income                                                                                 |  | $                               
|                                                                                           |  |                                 

---

72

---



Condensed Consolidating Statement of Income (Unaudited)

|                                                                                           |  | Six Months Ended June 30, 2004
|------------------------------------------------------------------------------------------ |  | ------------------------------
|
|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 taxes (benefits)                                                                    |  |                               
|Minority interest, net of income taxes                                                     |  |                               
|Equity in undistributed income of subsidiaries                                             |  |                               
|                                                                                           |  |                               
|Net income                                                                                 |  | $                             
|                                                                                           |  |                               

---

73

---



Condensed Consolidating Income Statement (Unaudited)

|                                                                                           |  | Six Months Ended June 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 taxes (benefits)                                                                    |  |                               
|Minority interest, net of income taxes                                                     |  |                               
|Equity in undistributed income of subsidiaries                                             |  |                               
|                                                                                           |  |                               
|Net income                                                                                 |  | $                             
|                                                                                           |  |                               

---

74

---



Condensed Consolidating Balance Sheet (Unaudited)

|                                                  |                  | June 30, 2004 |        
|------------------------------------------------- | ---------------- | ------------- | -------
|
|Assets                                            |                  |               |        
|Cash and due from banksthird party               |                  | $             |       
|Cash and due from banksintercompany              |                  |               | 5      
|Deposits at interest with banksthird party       |                  |               |       
|Deposits at interest with banksintercompany      |                  |               | 3,349  
|Investments                                       |                  |               | 56     
|Loans, net of unearned incomethird party         |                  |               | 1,148  
|Loans, net of unearned incomeintercompany        |                  |               |       
|Allowance for credit losses                       |                  |               |       
|                                                  |                  |               |        
|                                                  | Total loans, net |               |        
|Advances to subsidiaries                          |                  |               | 43,404 
|Investments in subsidiaries                       |                  |               | 98,107 
|Other assetsthird party                          |                  |               | 1,903  
|Other assetsintercompany                         |                  |               |       
|                                                  |                  |               |        
|Total assets                                      |                  | $             | 147,972
|                                                  |                  |               |        
|Liabilities and stockholder's equity              |                  |               |        
|Deposits                                          |                  | $             |       
|Purchased funds and other borrowingsthird party  |                  |               | 12,272 
|Purchased funds and other borrowingsintercompany |                  |               |       
|Long-term debtthird party                        |                  |               | 47,154 
|Long-term debtintercompany                       |                  |               |       
|Advances from subsidiaries                        |                  |               | 947    
|Other liabilitiesthird party                     |                  |               | 670    
|Other liabilitiesintercompany                    |                  |               | 170    
|Stockholder's equity                              |                  |               | 86,759 
|                                                  |                  |               |        
|Total liabilities and stockholder's equity        |                  | $             | 147,972
|                                                  |                  |               |        

---

75

---



Condensed Consolidating Balance Sheet

|                                                  |                  | December 31, 2003 |        
|------------------------------------------------- | ---------------- | ----------------- | -------
|
|Assets                                            |                  |                   |        
|Cash and due from banksthird party               |                  | $                 |       
|Cash and due from banksintercompany              |                  |                   | 12     
|Deposits at interest with banksthird party       |                  |                   |       
|Deposits at interest with banksintercompany      |                  |                   | 3,236  
|Investments                                       |                  |                   | 89     
|Loans, net of unearned incomethird party         |                  |                   |       
|Loans, net of unearned incomeintercompany        |                  |                   |       
|Allowance for credit losses                       |                  |                   |       
|                                                  |                  |                   |        
|                                                  | Total loans, net |                   |        
|Advances to subsidiaries                          |                  |                   | 46,812 
|Investments in subsidiaries                       |                  |                   | 91,127 
|Other assetsthird party                          |                  |                   | 2,013  
|Other assetsintercompany                         |                  |                   |       
|                                                  |                  |                   |        
|Total assets                                      |                  | $                 | 143,289
|                                                  |                  |                   |        
|Liabilities and stockholder's equity              |                  |                   |        
|Deposits                                          |                  | $                 |       
|Purchased funds and other borrowingsthird party  |                  |                   | 13,147 
|Purchased funds and other borrowingsintercompany |                  |                   |       
|Long-term debtthird party                        |                  |                   | 45,033 
|Long-term debtintercompany                       |                  |                   |       
|Advances from subsidiaries                        |                  |                   | 2,095  
|Other liabilitiesthird party                     |                  |                   | 1,057  
|Other liabilitiesintercompany                    |                  |                   | 163    
|Stockholder's equity                              |                  |                   | 81,794 
|                                                  |                  |                   |        
|Total liabilities and stockholder's equity        |                  | $                 | 143,289
|                                                  |                  |                   |        

---

76

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                            |                     | Six Months Ended June 30, 2004 |       
|--------------------------------------------------------------------------- | ------------------- | ------------------------------ | ------
|
|Net cash (used in) provided by operating activities                         |                     | $                              | (94   
|                                                                            |                     |                                |       
|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                          |                     |                                | 2,435 
|Net increase in loans                                                       |                     |                                | (1,148
|Proceeds from sales of loans                                                |                     |                                |      
|Business acquisitions                                                       |                     |                                |      
|Other investing activities                                                  |                     |                                |      
|                                                                            |                     |                                |       
|Net cash provided by (used in) investing activities                         |                     |                                | 1,320 
|                                                                            |                     |                                |       
|Cash flows from financing activities                                        |                     |                                |       
|Net increase in deposits                                                    |                     |                                |      
|Net change in purchased funds and other borrowings  third party            |                     |                                | 1,181 
|Net change in purchased funds, other borrowings and advances  intercompany |                     |                                | (268  
|(Repayments of) proceeds from long-term debt  third party, net             |                     |                                | (807  
|Proceeds from issuance of long-term debt  intercompany, net                |                     |                                |      
|Dividends paid                                                              |                     |                                | (1,339
|                                                                            |                     |                                |       
|Net cash (used in) provided by financing activities                         |                     |                                | (1,233
|                                                                            |                     |                                |       
|Effect of exchange rate changes on cash and due from banks                  |                     |                                |      
|                                                                            |                     |                                |       
|Net (decrease) increase in cash and due from banks                          |                     |                                | (7    
|Cash and due from banks at beginning of period                              |                     |                                | 12    
|                                                                            |                     |                                |       
|Cash and due from banks at end of period                                    |                     | $                              | 5     
|                                                                            |                     |                                |       
|Supplemental disclosure of cash flow information                            |                     |                                |       
|Cash paid during the period for:                                            |                     |                                |       
|Interest                                                                    |                     | $                              | 391   
|Income taxes                                                                |                     |                                | 1,677 
|Non-cash investing activities:                                              |                     |                                |       
|Transfers to repossessed assets                                             |                     |                                |      
|Capital contributions to subsidiaries                                       |                     |                                | 233   
|                                                                            |                     |                                |       

---

77

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                            |                     | Six Months Ended June 30, 2003 |       
|--------------------------------------------------------------------------- | ------------------- | ------------------------------ | ------
|
|Net cash provided by operating activities                                   |                     | $                              | 3,382 
|                                                                            |                     |                                |       
|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                          |                     |                                | (4,225
|Net increase in loans                                                       |                     |                                |      
|Proceeds from sales of loans                                                |                     |                                |      
|Other investing activities                                                  |                     |                                |      
|                                                                            |                     |                                |       
|Net cash (used in) provided by investing activities                         |                     |                                | (3,954
|                                                                            |                     |                                |       
|Cash flows from financing activities                                        |                     |                                |       
|Net (decrease) increase in deposits                                         |                     |                                |      
|Net change in purchased funds and other borrowings  third party            |                     |                                | (3,285
|Net change in purchased funds, other borrowings and advances  intercompany |                     |                                | (1,218
|Proceeds from (repayments of) long-term debt  third-party, net             |                     |                                | 9,172 
|Proceeds from issuance of long-term debt  Intercompany, net                |                     |                                |      
|Dividends paid                                                              |                     |                                | (4,110
|Contributions from parent company                                           |                     |                                |      
|                                                                            |                     |                                |       
|Net cash provided by (used in) financing activities                         |                     |                                | 559   
|                                                                            |                     |                                |       
|Effect of exchange rate changes on cash and due from banks                  |                     |                                |      
|                                                                            |                     |                                |       
|Net (decrease) increase in cash and due from banks                          |                     |                                | (13   
|Cash and due from banks at beginning of period                              |                     |                                | 22    
|                                                                            |                     |                                |       
|Cash and due from banks at end of period                                    |                     | $                              | 9     
|                                                                            |                     |                                |       
|Supplemental disclosure of cash flow information                            |                     |                                |       
|Cash paid during the period for:                                            |                     |                                |       
|Interest                                                                    |                     | $                              | 648   
|Income taxes                                                                |                     |                                | 1,042 
|Non-cash investing activities:                                              |                     |                                |       
|Transfers to repossessed assets                                             |                     |                                |      
|Capital contributions to subsidiaries                                       |                     |                                | 664   
|Non-cash financing activities:                                              |                     |                                |       
|Dividends                                                                   |                     |                                | 664   
|                                                                            |                     |                                |       

---

78

---



FINANCIAL DATA SUPPLEMENT (UNAUDITED)

AVERAGE BALANCES AND INTEREST RATES, TAXABLE EQUIVALENT BASISQuarterly(1)(2)(3)(4)
Citicorp and Subsidiaries

|                                                                       |                             | Average Volume |         | Interest Revenue |   | % Average Rate
|---------------------------------------------------------------------- | --------------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Assets                                                                 |                             |                |         |                  |   |               
|Loans (net of unearned income)(5)                                      |                             |                |         |                  |   |               
|Consumer loans                                                         |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             | $              | 280,436 |                  | $ | 276,258       
|In offices outside the U.S.(6)                                         |                             |                | 113,462 |                  |   | 105,992       
|                                                                       |                             |                |         |                  |   |               
|Total consumer loans                                                   |                             |                | 393,898 |                  |   | 382,250       
|                                                                       |                             |                |         |                  |   |               
|Corporate loans                                                        |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Commercial and industrial   |                |         | 14,163           |   |               
|                                                                       | Lease financing             |                |         | 2,020            |   |               
|                                                                       | Mortgage and real estate    |                |         | 96               |   |               
|In offices outside the U.S.(6)                                         |                             |                | 92,510  |                  |   | 81,698        
|                                                                       |                             |                |         |                  |   |               
|Total corporate loans                                                  |                             |                | 108,789 |                  |   | 98,883        
|                                                                       |                             |                |         |                  |   |               
|Total loans                                                            |                             |                | 502,687 |                  |   | 481,133       
|                                                                       |                             |                |         |                  |   |               
|Federal funds sold and securities purchased under agreements to resell |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 6,193   |                  |   | 6,818         
|In offices outside the U.S.(6)                                         |                             |                | 12,164  |                  |   | 15,062        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 18,357  |                  |   | 21,880        
|                                                                       |                             |                |         |                  |   |               
|Investments                                                            |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Taxable                     |                |         | 55,262           |   |               
|                                                                       | Exempt from U.S. income tax |                |         | 8,476            |   |               
|In offices outside the U.S.(6)                                         |                             |                | 75,145  |                  |   | 70,439        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 138,883 |                  |   | 132,945       
|                                                                       |                             |                |         |                  |   |               
|Trading account assets(7)                                              |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 20,449  |                  |   | 14,801        
|In offices outside the U.S.(6)                                         |                             |                | 21,308  |                  |   | 20,838        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 41,757  |                  |   | 35,639        
|                                                                       |                             |                |         |                  |   |               
|Loans held-for-sale, in U.S. offices                                   |                             |                | 12,968  |                  |   | 8,859         
|                                                                       |                             |                |         |                  |   |               
|Deposits at interest with banks(6)                                     |                             |                | 26,694  |                  |   | 24,529        
|                                                                       |                             |                |         |                  |   |               
|Total interest-earning assets                                          |                             |                | 741,346 |                  |   | 704,985       
|                                                                       |                             |                |         |                  |   |               
|Non-interest earning assets(7)                                         |                             |                | 130,542 |                  |   | 131,578       
|                                                                       |                             |                |         |                  |   |               
|Total assets                                                           |                             | $              | 871,888 |                  | $ | 836,563       
|                                                                       |                             |                |         |                  |   |               

---

79

---



AVERAGE BALANCES AND INTEREST RATES, TAXABLE EQUIVALENT BASISQuarterly(1)(2)(3)(4)
Citicorp and Subsidiaries

|                                                                           |                     | Average Volume |         | Interest Expense |   | % Average Rate
|-------------------------------------------------------------------------- | ------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Liabilities                                                                |                     |                |         |                  |   |               
|Deposits                                                                   |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                |         |                  |   |               
|                                                                           | Savings deposits(5) |                | $       | 124,294          |   | $             
|                                                                           | Other time deposits |                |         | 29,425           |   |               
|In offices outside the U.S.(6)                                             |                     |                | 305,746 |                  |   | 284,325       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 459,465 |                  |   | 434,482       
|                                                                           |                     |                |         |                  |   |               
|Trading account liabilities(7)                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 5,203   |                  |   | 5,504         
|In offices outside the U.S.(6)                                             |                     |                | 1,658   |                  |   | 1,939         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 6,861   |                  |   | 7,443         
|                                                                           |                     |                |         |                  |   |               
|Purchased funds and other borrowings                                       |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 50,848  |                  |   | 45,471        
|In offices outside the U.S.(6)                                             |                     |                | 27,987  |                  |   | 25,845        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 78,835  |                  |   | 71,316        
|                                                                           |                     |                |         |                  |   |               
|Long-term debt                                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 93,959  |                  |   | 96,158        
|In offices outside the U.S.(6)                                             |                     |                | 14,904  |                  |   | 8,709         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 108,863 |                  |   | 104,867       
|                                                                           |                     |                |         |                  |   |               
|Total interest-bearing liabilities                                         |                     |                | 654,024 |                  |   | 618,108       
|                                                                           |                     |                |         |                  |   |               
|Demand deposits in U.S. offices                                            |                     |                | 4,248   |                  |   | 4,740         
|Other non-interest bearing liabilities(7)                                  |                     |                | 127,589 |                  |   | 129,717       
|Total stockholder's equity                                                 |                     |                | 86,027  |                  |   | 83,998        
|                                                                           |                     |                |         |                  |   |               
|Total liabilities and stockholder's equity                                 |                     | $              | 871,888 |                  | $ | 836,563       
|                                                                           |                     |                |         |                  |   |               
|Net interest revenue as a percentage of average interest-earning assets(8) |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     | $              | 400,378 |                  | $ | 386,342       
|In offices outside the U.S.                                                |                     |                | 340,968 |                  |   | 318,643       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     | $              | 741,346 |                  | $ | 704,985       
|                                                                           |                     |                |         |                  |   |               

---

80

---



AVERAGE BALANCES AND INTEREST RATES, TAXABLE EQUIVALENT BASISSix Months(1)(2)(3)(4)
Citicorp and Subsidiaries

|                                                                       |                             | Average Volume |         | Interest Revenue |   | % Average Rate
|---------------------------------------------------------------------- | --------------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Assets                                                                 |                             |                |         |                  |   |               
|Loans (net of unearned income)(5)                                      |                             |                |         |                  |   |               
|Consumer loans                                                         |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             | $              | 278,347 |                  | $ | 241,322       
|In offices outside the U.S.(6)                                         |                             |                | 109,727 |                  |   | 92,869        
|                                                                       |                             |                |         |                  |   |               
|Total consumer loans                                                   |                             |                | 388,074 |                  |   | 334,191       
|                                                                       |                             |                |         |                  |   |               
|Corporate loans                                                        |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Commercial and industrial   |                |         | 14,695           |   |               
|                                                                       | Lease financing             |                |         | 1,976            |   |               
|                                                                       | Mortgage and real estate    |                |         | 61               |   |               
|In offices outside the U.S.(6)                                         |                             |                | 87,104  |                  |   | 81,948        
|                                                                       |                             |                |         |                  |   |               
|Total corporate loans                                                  |                             |                | 103,836 |                  |   | 104,180       
|                                                                       |                             |                |         |                  |   |               
|Total loans                                                            |                             |                | 491,910 |                  |   | 438,371       
|                                                                       |                             |                |         |                  |   |               
|Federal funds sold and securities purchased under agreements to resell |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 6,506   |                  |   | 3,962         
|In offices outside the U.S.(6)                                         |                             |                | 13,613  |                  |   | 5,905         
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 20,119  |                  |   | 9,867         
|                                                                       |                             |                |         |                  |   |               
|Investments                                                            |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Taxable                     |                |         | 54,805           |   |               
|                                                                       | Exempt from U.S. income tax |                |         | 8,317            |   |               
|In offices outside the U.S.(6)                                         |                             |                | 72,792  |                  |   | 59,014        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 135,914 |                  |   | 123,646       
|                                                                       |                             |                |         |                  |   |               
|Trading account assets(7)                                              |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 17,625  |                  |   | 6,996         
|In offices outside the U.S.(6)                                         |                             |                | 21,073  |                  |   | 17,327        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 38,698  |                  |   | 24,323        
|                                                                       |                             |                |         |                  |   |               
|Loans held-for-sale, in U.S. offices                                   |                             |                | 10,914  |                  |   | 13,906        
|                                                                       |                             |                |         |                  |   |               
|Deposits at interest with banks(6)                                     |                             |                | 25,611  |                  |   | 18,194        
|                                                                       |                             |                |         |                  |   |               
|Total interest-earning assets                                          |                             |                | 723,166 |                  |   | 628,307       
|                                                                       |                             |                |         |                  |   |               
|Non-interest earning assets(7)                                         |                             |                | 131,060 |                  |   | 115,930       
|                                                                       |                             |                |         |                  |   |               
|Total assets                                                           |                             | $              | 854,226 |                  | $ | 744,237       
|                                                                       |                             |                |         |                  |   |               

---

81

---



AVERAGE BALANCES AND INTEREST RATES, TAXABLE EQUIVALENT BASISSix Months(1)(2)(3)(4)
Citicorp and Subsidiaries

|                                                                           |                     | Average Volume |         | Interest Expense |   | % Average Rate
|-------------------------------------------------------------------------- | ------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Liabilities                                                                |                     |                |         |                  |   |               
|Deposits                                                                   |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                |         |                  |   |               
|                                                                           | Savings deposits(5) |                | $       | 122,352          |   | $             
|                                                                           | Other time deposits |                |         | 29,586           |   |               
|In offices outside the U.S.(6)                                             |                     |                | 295,036 |                  |   | 248,261       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 446,974 |                  |   | 392,387       
|                                                                           |                     |                |         |                  |   |               
|Trading account liabilities(7)                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 5,354   |                  |   | 3,448         
|In offices outside the U.S.(6)                                             |                     |                | 1,799   |                  |   | 762           
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 7,153   |                  |   | 4,210         
|                                                                           |                     |                |         |                  |   |               
|Purchased funds and other borrowings                                       |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 48,160  |                  |   | 42,384        
|In offices outside the U.S.(6)                                             |                     |                | 26,916  |                  |   | 18,869        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 75,076  |                  |   | 61,253        
|                                                                           |                     |                |         |                  |   |               
|Long-term debt                                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 95,059  |                  |   | 73,053        
|In offices outside the U.S.(6)                                             |                     |                | 11,807  |                  |   | 8,665         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 106,866 |                  |   | 81,718        
|                                                                           |                     |                |         |                  |   |               
|Total interest-bearing liabilities                                         |                     |                | 636,069 |                  |   | 539,568       
|                                                                           |                     |                |         |                  |   |               
|Demand deposits in U.S. offices                                            |                     |                | 4,494   |                  |   | 9,630         
|Other non-interest bearing liabilities(7)                                  |                     |                | 128,651 |                  |   | 119,655       
|Total stockholder's equity                                                 |                     |                | 85,012  |                  |   | 75,384        
|                                                                           |                     |                |         |                  |   |               
|Total liabilities and stockholder's equity                                 |                     | $              | 854,226 |                  | $ | 744,237       
|                                                                           |                     |                |         |                  |   |               
|Net interest revenue as a percentage of average interest-earning assets(8) |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     | $              | 393,360 |                  | $ | 353,132       
|In offices outside the U.S.                                                |                     |                | 329,806 |                  |   | 275,175       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     | $              | 723,166 |                  | $ | 628,307       
|                                                                           |                     |                |         |                  |   |               

---

82

---





PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

Parmalat

On July 29, 2004, Enrico Bondi, as extraordinary commissioner of Parmalat and other affiliated entities, filed lawsuit in New Jersey Superior Court against
Citigroup and Citibank, N.A., among others, alleging that the defendants participated in the fraud committed by the officers and directors of Parmalat and seeking associated damages. Citigroup is also
a defendant in three class action complaints filed in the United States District Court for the Southern District of New York relating to the collapse of Parmalat Finanziaria S.P.A. On May 21,
2004, the court issued an order consolidating the complaints, appointing lead plaintiffs and requiring that a consolidated amended complaint be filed by October 18, 2004. The Citigroup
defendants believe they have meritorious defenses in these actions and are prepared to defend themselves vigorously.

The
following information supplements and amends our discussion set forth under Part I, Item 3 "Legal Proceedings" in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2003, as updated by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

Enron Corp.

In NEWBY, ET AL. V. ENRON CORP., ET AL., Citigroup has answered the complaint and discovery is ongoing.

Additional
actions have been filed against Citigroup and certain of its affiliates, including Citicorp, along with other parties, including (i) actions brought by the Attorney
General of Connecticut in connection with various commercial and investment banking services provided to Enron; in one such case, the Attorney General of Connecticut voluntarily dismissed all claims
against Citigroup; and (ii) a third-party action brought by Arthur Andersen as a defendant in an Enron-related litigation pending in Texas state court, alleging a right to contribution from
Citigroup.

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

On April 16, 2004, the Company filed a Current Report on Form 8-K, dated April 15, 2004, reporting under Item 5 thereof the
summarized results of its operations for the quarter ended March 31, 2004.

No
other reports on Form 8-K were filed during the 2004 second quarter; however,

On
July 15, 2004, the Company filed a Current Report on Form 8-K, dated July 15, 2004, reporting under Item 5 thereof the summarized results of its
operations for the quarter ended June 30, 2004.

83

---





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 August, 2004.

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

84

---





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.                                                                                                                                                                     
|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.

85

---



QuickLinks