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 March 31, 2005                
|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

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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(Address of principal executive offices) |  | 10043(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 atwww.citigroup.com



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Citicorp        TABLE OF CONTENTS        Part IFinancial Information

|                          |  |                                                                                                                  |  | Page No.
|------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | --------
|Item 1.                   |  | Financial Statements:                                                                                            |  |         
|                          |  | Consolidated Statement of Income (Unaudited)Three Months Ended March 31, 2005 and 2004                          |  | 46      
|                          |  | Consolidated Balance SheetMarch 31, 2005 (Unaudited) and December 31, 2004                                      |  | 47      
|                          |  | Consolidated Statement of Changes in Stockholder's Equity (Unaudited)Three Months Ended March 31, 2005 and 2004 |  | 48      
|                          |  | Consolidated Statement of Cash Flows (Unaudited)Three Months Ended March 31, 2005 and 2004                      |  | 49      
|                          |  | Consolidated Balance SheetCitibank, N.A. and Subsidiaries March 31, 2005 (Unaudited) and December 31, 2004      |  | 50      
|                          |  | Notes to Consolidated Financial Statements (Unaudited)                                                           |  | 51      
|Item 2.                   |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                            |  | 5-43    
|Item 3.                   |  | Quantitative and Qualitative Disclosures About Market Risk                                                       |  | 32, 55  
|Item 4.                   |  | Controls and Procedures                                                                                          |  | 44      
|Part IIOther Information
|Item 1.                   |  | Legal Proceedings                                                                                                |  | 73      
|Item 6.                   |  | Exhibits                                                                                                         |  | 74      
|Signatures                |  | 75                                                                                                              
|Exhibit Index             |  | 76                                                                                                              

2

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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, Corporate and Investment Banking (CIB) (formerly Global Corporate and Investment Bank), Global Wealth Management,
Asset Management and Alternative Investments (formerly Proprietary Investment Activities) business segments.

The
Company has completed certain strategic business acquisitions during the past two years, details of which can be found in Note 3 to the Consolidated Financial Statements.

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 2004 Annual Report on Form-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 athttp://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 athttp://www.sec.gov.

GLOBAL CONSUMER

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

Cardsprovides MasterCard, VISA, Diner's Club 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 March 31, 2005, North America Consumer Finance maintained 2,669 offices,
including 2,452 in the U.S., Canada, and Puerto Rico, and 217 offices in Mexico, while International Consumer Finance maintained 1,534 sales points, including 405 branches and 523 ALMs 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 Retail Distribution, the Commercial Business, Prime Home Finance, Student Loans,
and Mexico Retail Banking. Retail Distribution delivers banking, lending, investment and insurance services through 777 branches in the U.S. and Puerto Rico and through Citibank Online, an Internet
bank. The Commercial Business provides equipment leasing and financing, and banking services to small- and middle-market businesses. The Prime Home Finance business originates and services mortgages
for customers across the U.S. The Student Loan business is comprised of the origination and servicing of student loans in the U.S. Mexico Retail Banking consists of the branch banking operations of
Banamex, which maintains 1,346 branches, and the Banamex insurance operations formerly reported in the Life Insurance & Annuities business. International Retail Banking consists of 1,144
branches and provides full-service banking, investment and insurance services in EMEA, Japan, Asia, and Latin America. In addition to North America, the Commercial Business consists of the
suite of products and services offered to small- and middle-market businesses in the international regions.

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CORPORATE AND INVESTMENT BANKING

Corporate and Investment Banking (CIB)provides corporations, governments, institutions and investors in
approximately 100 countries with a broad range of financial products and services. CIB 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 WEALTH MANAGEMENT

Global Wealth Managementis one of the leading providers of wealth management services to
high-net-worth and affluent clients in the world. Citicorp Global Wealth Management is comprised solely ofPrivate Bankand
excludes the results of Citigroup'sSmith BarneyPrivate Client and Global Equity Research businesses.

Private Bankprovides personalized wealth management services for high-net-worth clients in 33 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 MANAGEMENT

Asset Managementincludes the businesses of Citibank Global Asset Management, the Banamex asset management and
retirement services businesses and other retirement services businesses in Latin America. 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, and pension administration services.

ALTERNATIVE INVESTMENTS

Alternative Investments(through the Citicorp Alternative Investments (CAI) business) manages certain of
Citicorp's proprietary and third-party investments.

CAI's
expansive product offering includes investments in private equity, hedge funds, managed futures, real estate, and a variety of fixed income alternatives (credit structures). The
proprietary portfolio is composed primarily of private equity investments made globally on a direct and indirect basis in a variety of industries.

CORPORATE/OTHER

Corporate/Otherincludes net treasury results, corporate expenses, certain intersegment eliminations, the results
for the Citicorp businesses included in the Sale of the Life Insurance & Annuities Business, and taxes not allocated to the individual businesses.

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

Financial Summary

Three Months Ended March 31,In millions of dollars2005

2004Revenues, net of interest expense(1)

$
16,105

$
15,439Operating expenses


7,861


7,237Benefits, claims, and credit losses(1)


1,944


2,366Income before taxes and minority interest


6,300


5,836Income taxes


2,002


1,830Minority interest, net of tax


159


73Net Income

$
4,139

$
3,933Return on Average Stockholder's Equity


17.5
%

18.8
%Total Assets (in billions of dollars)

$
943.2

$
853.6Total Equity (in billions of dollars)

$
97.1

$
86.0Tier 1 Capital Ratio


9.02
%

8.80
%Total Capital Ratio


12.92
%

13.00
%


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Business Focus

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

Citicorp Net IncomeProduct View

First QuarterIn millions of dollars2005

2004(1)Global ConsumerCards

$
1,086

$
980Consumer Finance


629


567Retail Banking


1,151


998Other


(181
)

(94
)Total Global Consumer


2,685


2,451Corporate and Investment BankingCapital Markets and Banking


799


923Transaction Services


245


234Total Corporate and Investment Banking


1,044


1,157Global Wealth ManagementPrivate Bank


122


159Asset Management


14


34Alternative Investments


331


14Corporate/Other


(57
)

118Net Income

$
4,139

$
3,933


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EVENTS IN 2005 and 2004

Certain of the statements below are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking
Statements" on page 45.

Citigroup's Sale of Travelers Life & Annuity and Substantially All International Insurance Businesses

On January 31, 2005, Citigroup announced an agreement for the sale of Citigroup's Travelers Life & Annuity, and substantially all of Citigroup's
international insurance businesses, to MetLife, Inc. (MetLife) for $11.5 billion, subject to closing adjustments.

The
transaction encompasses Travelers Life & Annuity's U.S. businesses and its international operations other than Citigroup's life business in Mexico (which is now included
withinRetail Banking). International operations include wholly owned insurance companies in the United Kingdom, Belgium, Australia, Brazil, Argentina,
and Poland; joint ventures in Japan and Hong Kong; and offices in China. The sale transaction also includes Citigroup's Argentine pension business. (The transaction described in the preceding two
paragraphs is referred to herein as the Sale of the Life Insurance & Annuities Business).

The
Citicorp international insurance and Argentine pension businesses being acquired by MetLife, as part of the Sale of the Life Insurance & Annuities Businesses generated total
revenues of $195 million and $139 million and net income of $36 million and $13 million, respectively, for the three months ended March 31, 2005 and 2004. These
businesses had total assets of $5.4 billion at March 31, 2005.

Results
for the Citicorp businesses included in the Sale of the Life Insurance & Annuities Business are recorded in the Corporate/Other segment for all periods presented.

The
transaction is subject to certain domestic and international regulatory approvals, as well as other customary conditions to closing, and is expected to close during the 2005 third
quarter.

Repositioning Charges

The Company recorded $278 million ($175 million after-tax) in charges during the 2005 first quarter for repositioning costs. The
repositioning charges were predominantly severance-related costs recorded in CIB ($71 million after-tax) and in Global Consumer ($95 million
after-tax). These repositioning actions are consistent with the Company's objectives of controlling expenses while continuing to invest in growth opportunities.

Resolution of Glendale Litigation

During the 2005 first quarter, the Company recorded a $72 million after-tax gain following the resolution ofGlendale
Federal Bank v. United States, an action brought by Glendale Federal Bank, a predecessor to Citibank (West), FSB, against the United States government.

Divestiture of the Manufactured Housing Loan Portfolio

In March 2005, Citicorp announced an agreement to sell its manufactured housing loan portfolio, consisting of $1.4 billion in loans, to 21st
Mortgage Corp. The Company recognized a $109 million after-tax loss in the 2005 first quarter related to the divestiture. The sale is subject to customary regulatory approvals.

Divestiture of CitiCapital's Transportation Finance Business

On November 22, 2004, the Company reached an agreement to sell CitiCapital's Transportation Finance Business based in Dallas and Toronto to GE Commercial
Finance for total cash consideration of approximately $4.6 billion. The sale, which was completed on January 31, 2005, resulted in an after-tax gain of $111 million.

Citigroup's Acquisition of First American Bank

On March 31, 2005, Citigroup completed its acquisition of First American Bank in Texas (FAB). The transaction establishes Citigroup's retail branch
presence in Texas, giving Citigroup 106 branches, $4.2 billion in assets and approximately 120,000 new customers in the state. FAB results are not included within Citicorp.

In
connection with its approval of the FAB transaction, the Federal Reserve Board (FRB) said in its order, dated March 16, 2005, that it expected Citigroup would not "undertake
significant expansion during the implementation period [of Citigroup's Five Point Plan]. The [FRB] believes it important that management's attention not
be diverted from these efforts by the demands that mergers and acquisitions place on management resources."

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Merger of Bank Holding Companies

On February 11, 2005, Citigroup announced plans to merge its two intermediate bank holding companies, Citigroup Holdings Company and Citicorp, into
Citigroup Inc. This transaction is subject to regulatory approval and is expected to take place by the end of the 2005 third quarter. Citigroup will assume all existing indebtedness and
outstanding guarantees of Citicorp.

Citigroup
also announced it would consolidate its capital markets funding activities in two legal entities: i) Citigroup Inc., which will continue to issue
long-term debt, trust preferred securities, preferred and common stock, and ii) Citigroup Funding Inc. ("CFI") a newly formed, fully guaranteed, first-tier
subsidiary of Citigroup, which will issue commercial paper and medium-term notes. It is anticipated that this funding consolidation will commence during the 2005 second quarter.

Shutdown of the Private Bank in Japan and Related Charge and Other Activities in Japan

The Financial Services Agency of Japan (FSA) issued an administrative order against Citibank Japan in September 2004. This order requires Citigroup to exit
all private banking operations in Japan by September 30, 2005. In accordance with the order, the Private Bank division of Citibank Japan suspended all new transactions with its customers
beginning on September 29, 2004.

In
connection with the exiting of private banking operations in Japan, the Company is performing a comprehensive review of the Private Bank's customers and products to develop an
appropriate exit plan. During the 2004 fourth quarter, the Company recorded a $400 million ($244 million after-tax) charge related to its anticipated exit plan implementation
(Exit Plan Charge). Implementation of the plan may result in additional charges in future periods.

The
Company's Private Bank operations in Japan had total revenues, net of interest expense, of $200 million and net income of $39 million (excluding the Exit Plan Charge)
during the year ended December 31, 2004 and $264 million and $83 million, respectively, for 2003.

On
October 25, 2004, Citigroup announced its decision to wind down Cititrust and Banking Corporation (Cititrust), a licensed trust bank in Japan, after concluding that there were
internal control, compliance and governance issues in that subsidiary. On April 22, 2005, the FSA issued an administrative order requiring Cititrust to suspend from engaging in all new trust
business beginning May 2, 2005. Cititrust is continuing to assure an orderly transition of its relationships with clients.

Sale of Samba Financial Group

On June 15, 2004, the Company sold, for cash, its 20% equity investment 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 CIB.

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 99.9% of KorAm's outstanding shares for a total of KRW 3.14 trillion ($2.7 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. During the 2004 fourth quarter, KorAm was merged
with the Citibank Korea branch to form Citibank Korea Inc. The operations of KorAm have been integrated into the businesses of Citicorp.

Credit

During the 2005 first quarter, the Company continued to experience a favorable world-wide credit environment. The Company released $20 million
of general reserves from Global Consumer during the 2005 first quarter consisting of a $17 million net release in the Consumer Finance portfolio and a $3 million net release in Retail
Banking. CIB had no general builds or releases during this period. During the 2005 first quarter, the allowance for credit losses declined by $129 million related to credit card securitizations
and by $90 million from the sale of CitiCapital's Transportation Finance Business. At March 31, 2005 and December 31, 2004, the Company's total allowance for loans, leases and
commitments was $11.471 billion and $11.869 billion, respectively.

During
the 2004 first quarter, the Company released $171 million of reserves, consisting of $150 million in CIB and $21 million in Global Consumer. At
March 31, 2004, the Company's total allowance for loans, leases and commitments was $13.106 billion.

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Management
evaluates the adequacy of loan loss reserves by analyzing probable loss scenarios and economic and geopolitical factors that impact the portfolios. See pages
10 - 11 herein and pages 30 - 34 of Citicorp's 2004 Annual Report on Form 10-K for an additional discussion of the reserve levels
and credit process.

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 included 427 WMF offices located in 26 states, primarily in the Southeastern and Southwestern United States, 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.

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Results of Operations

Income

Net income in the 2005 first quarter was $4.139 billion, up $206 million or 5% from $3.933 billion in the 2004 first quarter. Return on
average common equity was 17.5% compared to 18.8% a year ago.

Global
Consumer net income increased $234 million, or 10%, compared to the 2004 first quarter, Corporate and Investment Banking decreased $113 million, or 10%, and Global
Wealth Management decreased $37 million, or 23%. Asset Management decreased $20 million, or 59%, while Alternative Investments increased $317 million from the 2004 first quarter.

See
individual segment and product discussions on pages 12 - 24 for additional discussion and analysis of the Company's results of operations.

Revenues, Net of Interest Expense

Total revenues, net of interest expense, of $16.1 billion in the 2005 first quarter were up $666 million, or 4%, from the 2004 first quarter. Global
Consumer revenues were up $461 million, or 4%, in the 2005 first quarter to $11.5 billion, led by a $624 million, or 17%, increase in Retail Banking, reflecting the gain on the
divestiture of CitiCapital's Transportation Finance Business and the gain on the resolution of Glendale litigation, as well as growth in customer volumes.Consumer
Financenoted a $62 million, or 2%, increase,reflecting an increase in average loans partially offset by a decrease of
$22 million inCardsdue to spread compression driven by increased cost of funds and higher payment rates versus the prior-year
period.

Corporate
and Investment Banking revenues of $3.0 billion in the 2005 first quarter decreased $8 million from the 2004 first quarter, including a $203 million or 10%
decrease inCapital Markets and Banking.Transaction Servicesincreased $195 million or 21% from
the 2004 first quarter primarily reflecting higher customer volumes.

Global
Wealth Management revenues of $504 million decreased $69 million, or 12%, from the prior-year period due to the continued wind-down of the
Japan business and a decrease in transactional revenue. Asset Management decreased $42 million or 28% from the 2004 first quarter primarily due to a decrease in customer activity. Alternative
Investments in the 2005 first quarter increased $652 million from a year ago, primarily due to positive mark-to-market valuations in the private equity portfolio.

Selected Revenue Items

Net interest revenue of $9.0 billion decreased $481 million, or 5%, from year-ago levels, reflecting the impact of a changing rate
environment, business volume growth in certain markets and the impact of acquisitions.

Total
fees and commissions of $3.5 billion increased by $278 million, or 9%, compared to the 2004 first quarter, primarily as a result of positive market action and higher
transactional volumes.

Foreign
exchange revenues of $428 million were up $32 million or 8% from a year ago due to increased volatility and FX Trading. Trading account gains were up
$36 million to $619 million in the 2005 first quarter, primarily due to interest rate fluctuations during the quarter and prior-year weakness. Other revenue of
$2.3 billion increased $724 million, or 45%, from the 2004 first quarter, primarily reflecting increased securitization gains and activity.

Operating Expenses

Total operating expenses were $7.9 billion for the 2005 first quarter, up $624 million, or 9%, from the comparable 2004 period. The increase
includes a $278 million charge for repositioning costs, along with increased costs related to acquisitions and higher investment spending.

Global
Consumer expenses were up 11% from the 2004 first quarter, driven by acquisitions as well as increased marketing and advertising costs and repositioning costs. CIB expenses also
increased 11% from the 2004 first quarter primarily reflecting repositioning costs and increases in non-compensation expenses. Global Wealth Management noted flat expenses compared to the
prior year's first quarter and Asset Management noted a 1% increase. Alternative Investments expenses increased 23% from 2004 levels.

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Benefits, Claims, and Credit Losses

Benefits, claims, and credit losses were $1.9 billion in the 2005 first quarter, down $422 million, or 18%, from the 2004 first quarter.

Global
Consumer provisions for benefits, claims, and credit losses of $2.0 billion in the 2005 first quarter were down $414 million, or 17%, from the 2004 first quarter due
to a better overall credit environment, reflecting decreases inCardsandConsumer Finance, partially
offset by increases inRetail Banking. Total net credit losses (excluding Commercial Business) were $1.899 billion and the related loss ratio was
1.98% in the 2005 first quarter, as compared to $2.257 billion and 2.68% in the 2004 first quarter. The consumer loan delinquency ratio (90 days or more past due) decreased to 1.92% at
March 31, 2005 from 2.27% at March 31, 2004. See page 29 for a reconciliation of total consumer credit information.

Corporate
and Investment Banking reported net recoveries in the provision for credit losses of ($56) million in the 2005 first quarter, due to recoveries reflecting improved credit
quality in the corporate loan portfolio.

Corporate
cash-basis loans at March 31, 2005 and 2004 were $1.7 billion and $2.9 billion, respectively, while the corporate Other Real Estate Owned
(OREO) portfolio totaled $34 million and $41 million, respectively. The decrease in corporate cash-basis loans from March 31, 2004, was related to improvements in the
overall credit environment, write-offs, as well as sales of loans in the portfolio. Corporate cash-basis loans at March 31, 2005 decreased $174 million from
December 31, 2004.

Income Taxes

The Company's effective tax rate was 31.8% in the 2005 first quarter compared to 31.4% in the 2004 first quarter. The 2004 rate included a credit to the tax
provision of $150 million as a result of the closing of certain tax return audits.

Regulatory Capital

Total capital (Tier 1 and Tier 2) was $89.3 billion, or 12.92%, of net risk-adjusted assets, and Tier 1 capital was
$62.4 billion, or 9.02%, of net risk-adjusted assets at March 31, 2005, compared to $87.1 billion, or 12.59%, and $60.1 billion, or 8.69%, respectively, at
December 31, 2004.

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, Income Taxes and Legal Reserves. These policies are further described in the Company's 2004 Annual Report on
Form 10-K.

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

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11

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GLOBAL CONSUMER

|                                                   |  | First Quarter |        |  |  
|-------------------------------------------------- |  | ------------- | ------ |  | -
|
|
|Revenues, net of interest expense                  |  | $             | 11,503 |  | $
|Operating expenses                                 |  |               | 5,609  |  |  
|Provisions for benefits, claims, and credit losses |  |               | 1,956  |  |  
|                                                   |  |               |        |  |  
|Income before taxes and minority interest          |  |               | 3,938  |  |  
|Income taxes                                       |  |               | 1,240  |  |  
|Minority interest, net of tax                      |  |               | 13     |  |  
|                                                   |  |               |        |  |  
|Net income                                         |  | $             | 2,685  |  | $
|                                                   |  |               |        |  |  

Global Consumerreported net income of $2.685 billion in the 2005 first quarter, up $234 million or 10% from the
prior-year period, driven by double-digit growth across all products, partially offset by a $109 million after-tax loss on the sale of a Manufactured Housing Loan
portfolio inOther Consumer.Retail Bankingnet income increased $153 million or 15% in the 2005
first quarter, primarily reflecting a $111 million after-tax gain on the sale of the CitiCapital Transportation Finance business, a $72 million after-tax gain
relating to the resolution of the Glendale litigation, and growth in Asia and Mexico, partially offset by a decline in EMEA due to repositioning costs.
Cardsnet income increased $106 million or 11% in the 2005 first quarter primarily due to an improved credit environment and the impact of
securitization gains in North America, growth in sales and volumes, and the benefit of foreign currency translation in International Cards.Consumer
Financenet income increased $62 million or 11% in the 2005 first quarter primarily due to lower credit losses, lower expenses and higher volumes in North America, as
well as improved International Consumer Finance results due to lower credit losses in Japan and growth in personal loans in Asia; this was partially offset by a deterioration in EMEA, which included
repositioning and branch expansion costs.

On
July 1, 2004, Citigroup acquired Principal Residential Mortgage, Inc. (PRMI), a servicing portfolio of $115 billion. 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 inRetail
Bankingand $1.1 billion inCardsat June 30, 2004. In January 2004, Citigroup completed the acquisition of
Washington Mutual Finance (WMF), which added $3.8 billion in average loans and 427 loan offices. These business acquisitions were accounted for as purchases; therefore, their results are
included in the Global Consumer results from the dates of acquisition.

Global
Consumer has divested itself of several non-strategic businesses and portfolios as opportunities to exit became available. These divestitures include a
$1.4 billion Manufactured Housing Loan portfolio and the CitiCapital Transportation Finance business, consisting of $4.3 billion of assets, in the 2005 first quarter; Global Consumer's
share of Citigroup's 20% stake in Samba in the 2004 second quarter, and a $900 million vendor finance leasing business in Europe in the 2004 fourth quarter.

Cards

|                                          |  | First Quarter |       |   |  
|----------------------------------------- |  | ------------- | ----- | - | -
|
|
|Revenues, net of interest expense         |  | $             | 4,576 |   | $
|Operating expenses                        |  |               | 2,077 |   |  
|Provision for credit losses               |  |               | 910   |   |  
|                                          |  |               |       |   |  
|Income before taxes and minority interest |  |               | 1,589 |   |  
|Income taxes                              |  |               | 502   |   |  
|Minority interest, net of tax             |  |               | 1     |   |  
|                                          |  |               |       |   |  
|Net income                                |  | $             | 1,086 |   | $
|                                          |  |               |       |   |  
|Average assets (in billions of dollars)   |  | $             | 96    |   | $
|Return on assets                          |  |               | 4.59  | % |  
|                                          |  |               |       |   |  

Cardsreported net income of $1.086 billion in the 2005 first quarter, up $106 million or 11% from the 2004 first quarter.
North America Cards reported net income of $911 million, up $79 million or 9% over 2004, mainly reflecting lower net credit losses as a result of the improved credit environment and the
impact of securitization gains, partially offset by lower net interest revenue due to increased cost of funds and higher payment rates. International Cards net income of $175 million increased
$27 million or 18% over 2004, reflecting higher sales and volumes, the impact of the KorAm acquisition, the benefit of foreign currency translation and lower taxes, partially offset by the
impact of repositioning costs of $13 million pretax ($9 million after-tax).

As
shown in the following table, average managed loans grew 5% from the 2004 first quarter, reflecting growth of 3% in North America and 23% in International Cards. Growth in North
America is primarily the result of increased marketing efforts in the U.S. and growth in Mexico accounts. International Cards growth reflected increases in all regions and also included the benefit of
the KorAm acquisition and strengthening currencies.

12

---



Total
card sales were $86.4 billion, up 9% from the 2004 first quarter. North America sales were up 6% over the prior-year quarter to $71.7 billion, reflecting
higher purchase volumes. International Cards sales grew 30% over the prior-year quarter to $14.7 billion, reflecting broad-based growth led by Asia, which included the KorAm
acquisition, and the benefit of strengthening currencies.

|                                     |               | First Quarter |       |       |  
|------------------------------------ | ------------- | ------------- | ----- | ----- | -
|
|
|Sales                                |               |               |       |       |  
|                                     | North America |               | $     | 71.7  |  
|                                     | International |               |       | 14.7  |  
|                                     |               |               |       |       |  
|Total Sales                          |               |               | 86.4  |       |  
|Average managed loans                |               |               |       |       |  
|                                     | North America |               |       | 143.3 |  
|                                     | International |               |       | 17.9  |  
|                                     |               |               |       |       |  
|Total average managed loans          |               |               | 161.2 |       |  
|Average securitized receivables      |               |               | (86.5 | )     |  
|Average loans held for sale          |               |               | (0.2  | )     |  
|                                     |               |               |       |       |  
|Total on-balance sheet average loans |               | $             | 74.5  |       | $
|                                     |               |               |       |       |  

Revenues,
net of interest expense, of $4.576 billion in the 2005 first quarter were essentially unchanged from the prior-year quarter, reflecting a decline in North
America of $119 million or 3% and an increase in International Cards of $97 million or 13%. The decline in North America was mainly due to the impact of higher cost of funds and
increased payment rates resulting from the overall improved economy, partially offset by higher securitization-related gains of $258 million, higher purchase sales and increased loans in
Mexico. Citicorp recognizes a gain on sale upon the securitization of credit card receivables. Prior to 2005, this gain was allocated between Other Revenue and the Provision for Credit Losses, which
reflected the portion of the Allowance for Credit Losses related to the receivables sold. Commencing in 2005, the entire gain on sale upon securitization is recorded in Other Revenue.

In
the 2005 first quarter, Other Revenue includes $258 million of gains, of which $129 million corresponds to the allowance for credit losses for the receivables sold.

Revenue
growth in International Cards reflected the benefit of increased loans and sales in all regions, as well as the benefit of foreign currency translation. Leading the growth was
Asia, which included the impact of the KorAm acquisition, and Latin America. Offsetting this increase were declines resulting from the repositioning of our UK Cards and Diners' Club businesses in
EMEA.

Operating
expenses of $2.077 billion were $139 million or 7% higher than the prior-year quarter, reflecting the impact of the KorAm acquisition, repositioning
actions, foreign currency translation, and higher purchased credit card receivable amortization in North America. Repositioning expenses were $32 million pretax, with $19 million in
North America and $13 million internationally.

The
provision for credit losses was $910 million in the 2005 first quarter, compared to $1.228 billion in the prior-year quarter. The decline in the provision
for credit losses was mainly in North America and reflected the impact of an improved credit environment and higher levels of securitizations.

The
securitization of credit card receivables is limited to the Citi Cards business within North America. At March 31, 2005, securitized credit card receivables were $87.7 billon,
compared to $76.2 billion at March 31, 2004. There was $0.6 billion in credit card receivables held for sale at March 31, 2005, compared to zero at March 31, 2004.
Securitization changes Citicorp's role from that of a lender to that of a loan servicer, as receivables are removed from the balance sheet but continue to be serviced by Citicorp. As a result,
securitization affects the amount of revenue and the manner in which revenue and the provision for credit losses are recorded with respect to securitized receivables.

A
gain is recorded at the time receivables are securitized, representing the difference between the carrying value of the receivables removed from the balance sheet and the fair value of
the proceeds received and interests retained. Interests retained from securitization transactions include interest-only strips, which represent the present value of estimated excess cash
flows associated with securitized receivables (including estimated credit losses). Collections of these excess cash flows are recorded as commissions and fees revenue (for servicing fees) or other
revenue. For loans not securitized, these excess cash flows would otherwise be reported as gross amounts of net interest revenue, commissions and fees revenue and credit losses.

In
addition to interest-only strip assets, Citigroup may retain one or more tranches of certificates issued in securitization transactions, provide escrow cash accounts or
subordinate certain principal receivables to collateralize the securitization interests sold to third parties. However, Citicorp's exposure to credit losses on securitized receivables is limited to
the amount of the interests retained and collateral provided.

13

---



Including securitized receivables and receivables held for sale, managed net credit losses in the 2005 first quarter were $2.081 billion, with a related loss ratio of 5.23%,
compared to $2.150 billion and 5.33% in the 2004 fourth quarter, and $2.554 billion and 6.69% in the 2004 first quarter. In North America, the 2005 first quarter net credit loss ratio of
5.50% declined from 5.59% in the 2004 fourth quarter and 6.99% in the 2004 first quarter. In International Cards, the 2005 first quarter net credit loss ratio of 3.08% declined from 3.16% in the 2004
fourth quarter and 3.85% in the 2004 first quarter. The decline in these ratios from the prior quarter and prior year was primarily due to the improved credit environment, with the international
ratios slightly off set by higher ratios in the UK Cards and Diner's Club businesses.

Loans
delinquent 90 days or more on a managed basis were $2.753 billion, or 1.74% of loans, at March 31, 2005, compared to $2.944 billion or 1.78% at
December 31, 2004 and $3.152 billion or 2.08% at March 31, 2004. The decline in delinquent loans from the prior quarter and prior year was primarily attributable to improved
economic environments across most regions. A summary of delinquency and net credit loss experience related to the on-balance sheet loan portfolio is included in the table on page 29.

Consumer Finance

|                                                   |  | First Quarter |       |   |  
|-------------------------------------------------- |  | ------------- | ----- | - | -
|
|
|Revenues, net of interest expense                  |  | $             | 2,750 |   | $
|Operating expenses                                 |  |               | 960   |   |  
|Provisions for benefits, claims, and credit losses |  |               | 817   |   |  
|                                                   |  |               |       |   |  
|Income before taxes                                |  |               | 973   |   |  
|Income taxes                                       |  |               | 344   |   |  
|                                                   |  |               |       |   |  
|Net income                                         |  | $             | 629   |   | $
|                                                   |  |               |       |   |  
|Average assets (in billions of dollars)            |  | $             | 119   |   | $
|Return on assets                                   |  |               | 2.14  | % |  
|                                                   |  |               |       |   |  

Consumer Financereported net income of $629 million in the 2005 first quarter, up $62 million or 11% from the 2004 first
quarter, reflecting continued growth in North America of $56 million or 13% and improvements in International Consumer Finance of $6 million or 5%. Growth in North America was driven by
lower credit losses due to the improved credit environment, lower expenses, and higher revenues due to volumes, partially offset by spread compression. The improved international results reflect
increases in Japan from lower credit losses and Asia from personal loan growth, partially offset by a deterioration in EMEA driven by repositioning costs, higher expenses related to branch expansion
and higher credit losses in the UK.

|                          |  | First Quarter |       |  |  
|------------------------- |  | ------------- | ----- |  | -
|
|
|Average loans             |  |               |       |  |  
|Real estate-secured loans |  | $             | 62.0  |  | $
|Personal                  |  |               | 25.7  |  |  
|Auto                      |  |               | 11.8  |  |  
|Sales finance and other   |  |               | 5.4   |  |  
|                          |  |               |       |  |  
|Total average loans       |  | $             | 104.9 |  | $
|                          |  |               |       |  |  

As
shown in the preceding table, average loans grew $6.8 billion or 7% compared to the 2004 first quarter, reflecting growth in North America of $5.9 billion or 8%, and in
International Consumer Finance of $0.9 billion or 4%. Growth in North America resulted from an increase in all products, driven by real estate-secured and auto loans, with the growth in
real-estate-secured loans mainly reflecting portfolio acquisitions. Growth in the international markets was mainly driven by an increase in real estate-secured and personal loan portfolios
in EMEA and Asia, and the impact of strengthening currencies, partially offset by a continued decline in EMEA auto loans. In Japan, average loans declined 8% from the comparable 2004 period, as the
benefit of foreign currency translation was more than offset by the impact of higher pay-downs and reduced loan demand.

As
shown in the following table, the average net interest margin ratio of 9.84% in the 2005 first quarter decreased 32 basis points from 2004, reflecting spread compression in North
America, where the average net interest margin was 8.23%, a decline of 46 basis points from the prior-year quarter. The decline in North America resulted from lower yields in the real
estate secured, auto and personal loan businesses, which continue to reflect the shift towards higher-quality loans. The average net interest margin for International Consumer Finance was 15.70% in
the 2005 first quarter, increasing 35 basis points from the prior-year quarter, primarily driven by higher yields in Japan and Asia. The increase in Japan was primarily driven by a change
in recording adjustments and refunds of interest in Japan. Prior to the 2004 second quarter, a portion of adjustments and refunds of interest charged to customer accounts were treated as reductions in
net interest margin. For all subsequent periods, such adjustments and refunds of interest were accounted for in net credit losses. If all adjustments and refunds of interest were accounted for in net
credit losses, the average net interest margin ratio for International Consumer Finance in the 2004 first quarter would have been 15.93%.

14

---



|                                  |  | First Quarter |   |       |  
|--------------------------------- |  | ------------- | - | ----- | -
|
|Average Net Interest Margin Ratio |  |               |   |       |  
|North America                     |  | 8.23          | % | 8.69  | %
|International                     |  | 15.70         | % | 15.35 | %
|Total                             |  | 9.84          | % | 10.16 | %
|                                  |  |               |   |       |  

Revenues,
net of interest expense, of $2.750 billion in the 2005 first quarter, increased $62 million or 2% from the 2004 first quarter. Revenues, net of interest expense,
in North America increased $10 million or 1% from 2004, due to growth in receivables, and capital gains related to repositioning of assets in the insurance investment portfolio, partially
offset by the impact of the lower yields. Revenue in International Consumer Finance increased $52 million or 6% from the 2004 first quarter, mainly due to growth in Asia, EMEA, and Latin
America, as well as the impact of foreign currency translation. Japan declined excluding the impact of foreign currency translation due to lower volumes.

Operating
expenses of $960 million in the 2005 first quarter increased $37 million or 4% from the prior-year period due to higher Consumer Finance International
expenses of $77 million or 23%, offset by lower expenses in North America of $40 million or 7%. The increase in International was primarily due to repositioning costs in EMEA of
$38 million, the impact of foreign currency translation, investment spending associated with branch expansions in Asia, EMEA and Latin America, partially offset by
expense savings from branch closings and headcount reductions in Japan. The decline in North America resulted from efficiencies gained from the WMF integration and reductions in legal, and credit and
collection costs.

The
provisions for benefits, claims, and credit losses were $817 million in the 2005 first quarter, down from $910 million in the 2004 fourth quarter, and
$916 million in the 2004 first quarter, primarily reflecting lower net credit losses due to improved credit conditions, a $17 million credit reserve release and the shift to better
credit quality portfolios in the U.S., and lower credit losses in Japan due to lower bankruptcy losses. Net credit losses and the related loss ratio were $797 million and 3.08% in the 2005
first quarter, compared to $872 million and 3.33% in the 2004 fourth quarter, and $870 million and 3.57% in the 2004 first quarter. In North America, the 2005 first quarter net credit
loss ratio of 2.40% was down from 2.61% in the 2004 fourth quarter and 2.79% in the 2004 first quarter, primarily reflecting improvements in the auto and real-estate secured loans,
reflecting better overall credit conditions in the market and the shift to better credit quality portfolios. The net credit loss ratio for International Consumer Finance was 5.59% in the 2005 first
quarter, down from 5.92% in the 2004 fourth quarter and 6.31% in the 2004 first quarter. The decrease was driven by lower bankruptcy losses in Japan, and was offset by higher loss rates in all other
regions, but primarily EMEA. Adjusting the 2004 first quarter net credit loss ratio for the change in treatment of adjustments and refunds of interest in Japan, as discussed above, would have resulted
in an International Consumer Finance net credit loss ratio of 6.89%.

Loans
delinquent 90 days or more were $1.875 billion or 1.80% of loans at March 31, 2005, compared to $2.014 billion or 1.90% at December 31, 2004 and
$2.127 billion or 2.15% at March 31, 2004. The decrease in the delinquency ratio versus the prior quarter and prior year was mainly due to improvements in North America and Japan, and
was partially offset by increases in EMEA.

Retail Banking

|                                                   |  | First Quarter |       |   |  
|-------------------------------------------------- |  | ------------- | ----- | - | -
|
|
|Revenues, net of interest expense                  |  | $             | 4,396 |   | $
|Operating expenses                                 |  |               | 2,494 |   |  
|Provisions for benefits, claims, and credit losses |  |               | 229   |   |  
|                                                   |  |               |       |   |  
|Income before taxes and minority interest          |  |               | 1,673 |   |  
|Income taxes                                       |  |               | 510   |   |  
|Minority interest, net of tax                      |  |               | 12    |   |  
|                                                   |  |               |       |   |  
|Net income                                         |  | $             | 1,151 |   | $
|                                                   |  |               |       |   |  
|Average assets(in billions of dollars)             |  | $             | 284   |   | $
|Return on assets                                   |  |               | 1.64  | % |  
|                                                   |  |               |       |   |  

Retail Bankingreported net income of $1.151 billion in the 2005 first quarter, up $153 million or 15% from the 2004 first
quarter. The increase inRetail Bankingwas driven by growth in North America Retail Banking of $169 million or 27%, primarily due to a
$111 million after-tax gain on the sale of the CitiCapital Transportation Finance business, a $72 million after-tax gain relating to the resolution of the
Glendale litigation, and growth in Mexico. International Retail Banking net income declined $16 million or 4% driven by declines in EMEA of $39 million or 30%, partially offset by
improvements in Asia of $30 million or 18%. The decline in EMEA primarily resulted from higher expenses due to repositioning costs of $36 million after-tax
($58 million pretax), continued investment spending, and higher credit losses, partially offset by revenue growth. The increase in Asia primarily resulted from the KorAm acquisition and
broad-based revenue growth, partially offset by continued investment spending.

15

---



|                                |                                  | First Quarter       |       |       |      
|------------------------------- | -------------------------------- | ------------------- | ----- | ----- | -----
|
|
|Average customer deposits       |                                  |                     |       |       |      
|                                | North America                    |                     | $     | 120.6 |      
|                                | Bank Deposit Program balances(1) |                     |       | 42.3  |      
|                                |                                  |                     |       |       |      
|                                |                                  | Total North America |       |       | 162.9
|                                |                                  | International       |       |       | 112.6
|                                |                                  |                     |       |       |      
|Total average customer deposits |                                  | $                   | 275.5 |       | $    
|                                |                                  |                     |       |       |      
|Average loans                   |                                  |                     |       |       |      
|                                | North America                    |                     | $     | 150.1 |      
|                                | North AmericaLiquidating        |                     |       | 2.4   |      
|                                |                                  |                     |       |       |      
|                                |                                  | Total North America |       |       | 152.5
|                                |                                  | International       |       |       | 54.6 
|                                |                                  |                     |       |       |      
|Total average loans             |                                  | $                   | 207.1 |       | $    
|                                |                                  |                     |       |       |      

---

As
shown in the preceding table,Retail Bankinggrew 2005 first quarter average customer deposits and average loans by 10% and 24%,
respectively, from the prior-year period. Average customer deposit growth in North America of 6% primarily reflected increases in higher-margin demand balances in Retail Distribution, the
Commercial Business and Mexico, in money market deposits in Retail Distribution, and in Prime Home Finance mortgage escrow deposits due to the PRMI acquisition, partially offset by declines in Retail
Distribution time deposits. Average loan growth in North America of 19% reflected increases in Prime Home Finance, Student Loans, Retail Distribution and Mexico, partially offset by a decline in the
Commercial Business primarily due to the 2005 first quarter sale of the CitiCapital Transportation Finance business. In the international markets, average customer deposits grew 17% from the prior
year, driven by growth in Asia, EMEA and Latin America, which included the benefits of the KorAm acquisition and foreign currency translation. International Retail Banking average loans grew 43%,
primarily reflecting the KorAm acquisition, the impact of foreign currency translation and growth in mortgages and personal loans.

As
shown in the following table, revenues, net of interest expense, of $4.396 billion in the 2005 first quarter increased $624 million or 17% from the 2004 period. Revenues
in North America of $2.756 billion increased $389 million or 16% in the 2005 first quarter primarily driven by the sale of the CitiCapital Transportation Finance Business, the resolution
of the Glendale litigation, loan and deposit growth, and higher net interest margin in Prime Home Finance, partially offset by lower treasury revenues. Retail Distribution revenues grew
$101 million or 13% primarily due to the resolution of the Glendale litigation of $110 million ($72 million after-tax) and the impact of higher loan and deposit
volumes, partially offset by lower treasury earnings and fee revenues. The Commercial Business revenues grew $204 million or 43% mainly due to the gain on the sale of the CitiCapital
Transportation Finance Business of $161 million ($111 million after-tax) and the reclassification of operating leases from loans to other assets and the related operating
lease depreciation expense from revenue to expense, partially offset by lower revenues from the absence of the sold transportation business and lower treasury earnings. The reclassification of
operating leases, which began in the 2004 second quarter, increased both revenues and expenses by $123 million in the 2005 first quarter. Prime Home Finance revenues grew $50 million or
11% due to higher net interest margin in the home equity and mortgage businesses, as well as the benefit of the PRMI acquisition, partially offset by lower net servicing and securitization revenues.
Student loan revenues declined $17 million or 11% primarily due to lower net interest margin and the absence of a 2004 first quarter securitization gain. Mexico revenues increased
$51 million or 9% driven by higher loan, deposit and investment volumes, partially offset by lower treasury earnings, which included the impact of higher capital funding costs. International
Retail Banking revenues increased $235 million or 17% in the 2005 first quarter, reflecting improvements in Asia, EMEA and Latin America, and included the impact of strengthening currencies and
the addition of KorAm, partially offset by a slight decline in Japan. Excluding the impact of foreign currency translation and KorAm, growth in Asia, EMEA and Latin America was driven by higher
deposit and branch lending revenues. The decline in Japan was driven primarily by declines in investment product fees and deposit revenues.

16

---



|                                        |  | First Quarter |       |  |  
|--------------------------------------- |  | ------------- | ----- |  | -
|
|
|Revenues, net of interest expense       |  |               |       |  |  
|Retail Distribution                     |  | $             | 852   |  | $
|Commercial Business                     |  |               | 678   |  |  
|Prime Home Finance                      |  |               | 492   |  |  
|Student Loans                           |  |               | 132   |  |  
|Mexico                                  |  |               | 602   |  |  
|                                        |  |               |       |  |  
|North America                           |  |               | 2,756 |  |  
|                                        |  |               |       |  |  
|EMEA                                    |  |               | 766   |  |  
|Japan                                   |  |               | 121   |  |  
|Asia                                    |  |               | 610   |  |  
|Latin America                           |  |               | 143   |  |  
|                                        |  |               |       |  |  
|International                           |  |               | 1,640 |  |  
|                                        |  |               |       |  |  
|Total revenues, net of interest expense |  | $             | 4,396 |  |  
|                                        |  |               |       |  |  

Operating
expenses in the 2005 first quarter increased $396 million or 19% from the comparable 2004 period. In North America, operating expense growth of $151 million or
11% was mainly driven by the impact of the operating lease reclassification in the Commercial Business of $123 million, repositioning costs of $10 million pretax ($6 million
after-tax), higher investment spending and volume-related costs in Retail Distribution, and the impact of the PRMI acquisition. International Retail Banking operating expenses increased
$245 million or 33%, mainly reflecting repositioning costs in EMEA of $58 million pretax ($36 million after-tax) and Latin America of $12 million pretax
($8 million after-tax), the impact of foreign currency translation, the addition of KorAm in Asia, and increased investment spending primarily related to branch expansion in Asia,
EMEA and Latin America.

The
provisions for benefits, claims and credit losses were $229 million in the 2005 first quarter, up from $226 million in the prior-year period, reflecting
higher net credit losses in EMEA, primarily Germany; the absence of a prior-year recovery in Mexico; and the impact of the KorAm acquisition, partially offset by lower credit losses in the
Commercial Business due to the improved credit quality of the portfolio. Net credit losses (excluding the Commercial Business) were $192 million and the related loss ratio was 0.46% in the 2005
first quarter, compared to $186 million and 0.46% in the 2004 fourth quarter and $155 million and 0.49% in the prior-year first quarter. The decrease in the net credit loss
ratio (excluding the Commercial Business) from the prior-year first quarter was mainly due to the improved credit environment, partially offset by the absence of a prior-year
recovery in Mexico. Commercial Business net credit losses were $26 million and the related loss ratio was 0.28% in the 2005 first quarter, compared to $90 million and 0.89% in the 2004
fourth quarter and $50 million and 0.51% in the prior-year first quarter. The improvement in the Commercial Business net credit losses from the prior-year first quarter
reflects the improved credit environment, partially offset by higher losses in Asia.

Loans
delinquent 90 days or more (excluding the Commercial Business) were $3.992 billion or 2.30% of loans at March 31, 2005, compared to $4.094 billion or
2.47% at December 31, 2004, and $3.698 billion or 2.86% a year ago. Compared to a year ago, the increase in delinquent loans was primarily due to Prime Home Finance, reflecting the
impact of a GNMA portfolio that was purchased in the PRMI acquisition, the impact of foreign currency translation, increases in Student Loans and the addition of KorAm, partially offset by declines in
EMEA, primarily Germany, and Latin America.

Cash-basis
loans in the Commercial Business were $520 million or 1.45% of loans at March 31, 2005, compared to $735 million or 1.78% at
December 31, 2004 and $1.213 billion or 3.11% a year ago. The decrease in cash-basis loans from the prior year was mainly due to declines in North America (excluding Mexico),
where the business continued to work through the liquidation of non-core portfolios, including the sale of the CitiCapital Transportation Finance Business in the 2005 first quarter, and
declines in Mexico and EMEA.

Average
assets of $284 billion in the 2005 first quarter increased $52 billion or 22% from the comparable 2004 period. The increase primarily reflected growth in average
loans in Prime Home Finance, the impact of the
KorAm and PRMI acquisitions, and the impact of foreign currency translation, partially offset by reductions in the Commercial Business due to continued liquidation of non-core portfolios,
including the sale of the CitiCapital Transportation Finance business.

17

---



Other Consumer

|                                  |  | First Quarter |     
|--------------------------------- |  | ------------- | ----
|
|Revenues, net of interest expense |  | $             | (219
|Operating expenses                |  |               | 78  
|                                  |  |               |     
|Income before tax benefits        |  |               | (297
|Income tax benefits               |  |               | (116
|                                  |  |               |     
|Net loss                          |  | $             | (181
|                                  |  |               |     

Other Consumerwhich includes certain treasury and other unallocated staff functions, global marketing and other
programsreported a loss of $181 million in the 2005 first quarter, compared to a loss of $94 million in the
prior-year quarter. The decline in income from the prior-year period reflects the 2005 first quarter loss on the sale of a Manufactured Housing Loan portfolio of
$109 million after-tax. Excluding this item, the reduction in losses in the 2005 first quarter was primarily due to the absence of prior-year provisions for litigation
reserves, partially offset by higher global marketing and staff-related costs, and lower treasury results, including the impact of higher capital funding costs.

Revenues,
expenses, and the provision for benefits, claims, and credit losses reflect offsets to certain line-item reclassifications reported in other Global Consumer
products.

18

---





CORPORATE AND INVESTMENT BANKING

|                                          |  | First Quarter |       |   |  
|----------------------------------------- |  | ------------- | ----- | - | -
|
|
|Revenues, net of interest expense         |  | $             | 2,984 |   | $
|Operating expenses                        |  |               | 1,540 |   |  
|Provision for credit losses               |  |               | (56   | ) |  
|                                          |  |               |       |   |  
|Income before taxes and minority interest |  |               | 1,500 |   |  
|Income taxes                              |  |               | 449   |   |  
|Minority interest, net of tax             |  |               | 7     |   |  
|                                          |  |               |       |   |  
|Net income                                |  | $             | 1,044 |   | $
|                                          |  |               |       |   |  

Corporate and Investment Bankingreported net income of $1.044 billion in the 2005 first quarter, down $113 million or 10%
from the 2004 first quarter. The 2005 period reflects a decrease of $124 million or 13% inCapital Markets and Banking, partially offset by an
increase of $11 million or 5% inTransaction Services.

Capital Markets and Bankingnet income of $799 million in the 2005 first quarter decreased $124 million or 13% compared to
the 2004 first quarter, primarily due to lower revenues from Fixed Income Markets and Equity Markets.

Transaction Servicesnet income of $245 million in the 2005 first quarter increased $11 million or 5% from the 2004 first
quarter, primarily due to higher revenue reflecting increased liability balances held on behalf of customers and growth in assets under custody, partially offset by higher expenses and increased
credit costs.

The
businesses of CIB 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

|                                          |  | First Quarter |       |   |  
|----------------------------------------- |  | ------------- | ----- | - | -
|
|
|Revenues, net of interest expense         |  | $             | 1,850 |   | $
|Operating expenses                        |  |               | 739   |   |  
|Provision for credit losses               |  |               | (43   | ) |  
|                                          |  |               |       |   |  
|Income before taxes and minority interest |  |               | 1,154 |   |  
|Income taxes                              |  |               | 349   |   |  
|Minority interest, net of tax             |  |               | 6     |   |  
|                                          |  |               |       |   |  
|Net income                                |  | $             | 799   |   | $
|                                          |  |               |       |   |  

Capital Markets and Bankingnet income of $799 million in the 2005 first quarter was down $124 million or 13% from the 2004
first quarter primarily due to lower revenues.

Revenues,
net of interest expense, of $1.850 billion in the 2005 first quarter decreased $203 million or 10% from the 2004 first quarter. The revenue decrease in the 2005
first quarter was driven by decreases in Fixed Income Markets and Equity Markets.

Operating
expenses of $739 million in the 2005 first quarter increased $5 million or 1% from the 2004 first quarter primarily due to higher compensation and benefits
expense (primarily reflecting repositioning costs), increased investment spending on strategic growth initiatives, and the impact of acquisitions of Knight, Lava Trading and KorAm.

Net
credit recoveries in the provision for credit losses of $43 million in the 2005 first quarter, was down $17 million from the 2004 first quarter, primarily reflecting
the continuing positive credit environment, partially offset by the absence of loan loss reserve releases recorded in the 2004 first quarter.

Cash-basis
loans were $1.655 billion at March 31, 2005, compared to $1.794 billion at December 31, 2004, and $2.806 billion at
March 31, 2004. Cash-basis loans net of write-offs decreased $1.151 billion from March 31, 2004, primarily due to charge-offs against reserves
as well as paydowns from corporate borrowers in Argentina, North America, Mexico, and Australia, partially offset by increases in Korea reflecting the acquisition of KorAm. Cash-basis
loans decreased $139 million from December 31, 2004, primarily due to asset sales and paydowns in Argentina and Brazil.

19

---



Transaction Services

|                                          |  | First Quarter |       |  
|----------------------------------------- |  | ------------- | ----- | -
|
|
|Revenues, net of interest expense         |  | $             | 1,134 |  
|Operating expenses                        |  |               | 801   |  
|Provision for credit losses               |  |               | (13   | )
|                                          |  |               |       |  
|Income before taxes and minority interest |  |               | 346   |  
|Income taxes                              |  |               | 100   |  
|Minority interest, net of tax             |  |               | 1     |  
|                                          |  |               |       |  
|Net income                                |  | $             | 245   |  
|                                          |  |               |       |  

Transaction Servicesreported net income of $245 million in the 2005 first quarter, up $11 million or 5% from the prior
year, primarily due to revenue reflecting growth in liability balances, assets under custody and fees, improved spreads in Cash Management, a benefit from foreign currency translation, and the impact
of the KorAm acquisition, partially offset by higher expenses, which included $31 million pretax of repositioning costs.

As
shown in the following table, average liability balances of $139 billion grew 25% compared to the 2004 first quarter, primarily due to increases in Asia and Europe reflecting
positive flow and the impact of the KorAm acquisition. Assets under custody reached $8 trillion, an increase of $1.4 trillion or 21% compared to 2004, primarily reflecting increased customer volumes,
market appreciation and a benefit from foreign currency translation.

|                                         |  | Three Months Ended
March 31, |     | Three Months Ended
March 31, |   |    
|---------------------------------------- |  | ---------------------------- | --- | ---------------------------- | - | ---
|
|
|Liability balances (average in billions) |  | $                            | 139 |                              | $ | 111
|Assets under custody (EOP in trillions)  |  |                              | 8.0 |                              |   | 6.6
|                                         |  |                              |     |                              |   |    

Revenues,
net of interest expense, increased $195 million or 21% to $1.134 billion in the 2005 first quarter, reflecting growth in all business units. Revenue in Cash
Management increased $136 million or 26% from the prior year, mainly due to growth in liability balances, improved spreads, the impact of the KorAm acquisition, a benefit from foreign currency
translation and increased fees. Revenue in Securities Services increased $56 million or 20% from the prior year, primarily reflecting higher assets under custody and fees, and the impact of
acquisitions, including ABN Amro's client custody business, which closed this quarter. Trade revenue increased $3 million or 2% from the prior year, primarily due to higher trade assets, offset
by lower spreads.

Operating
expenses increased $143 million or 22% in the first quarter of 2005 to $801 million, including $31 million of repositioning costs. Excluding the
repositioning costs, operating expenses increased 17% versus the prior year, primarily due to the impact of foreign currency translation and higher business volumes, including the effect of
acquisitions, as well as increased compensation and benefits costs.

Net
credit recoveries in the provision for credit losses of $13 million in the first quarter of 2005 increased by $21 million, primarily due to general loan loss reserve
releases of $22 million in the first quarter of 2004, improving credit quality and current period net credit recoveries in Latin America.

Cash-basis
loans, which in theTransaction Servicesbusiness are primarily trade finance receivables, were $77 million,
$112 million, and $102 million at March 31, 2005, December 31, 2004, and March 31, 2004, respectively. Cash-basis loans decreased $25 million from
March 31, 2004, primarily due to reductions in cash-basis loans in Argentina and Brazil. The decrease in cash-basis loans of $35 million from December 31,
2004 was primarily due to charge-offs in Poland, India, Argentina and Mexico.

20

---



GLOBAL WEALTH MANAGEMENT

|                                                                  |  | First Quarter |     |   |  
|----------------------------------------------------------------- |  | ------------- | --- | - | -
|
|
|Revenues, net of interest expense                                 |  | $             | 504 |   | $
|Operating expenses                                                |  |               | 339 |   |  
|Provision for credit losses                                       |  |               | (16 | ) |  
|                                                                  |  |               |     |   |  
|Income before taxes                                               |  |               | 181 |   |  
|Income taxes                                                      |  |               | 59  |   |  
|                                                                  |  |               |     |   |  
|Net income                                                        |  | $             | 122 |   | $
|                                                                  |  |               |     |   |  
|Client business volumes under management (in billions of dollars) |  | $             | 221 |   | $
|                                                                  |  |               |     |   |  

---

Private Bankreported net income of $122 million in the 2005 first quarter, a decrease of $37 million or 23% from the 2004
first quarter, primarily driven by a $34 million decline resulting from the continued wind-down of the business in Japan. Excluding Japan, net income decreased $3 million or
2% from the 2004 first quarter, as lower transactional revenues were largely offset by improved credit and growth in recurring fee-based and net interest revenues.

|                         |                                         | First Quarter |   |   
|------------------------ | --------------------------------------- | ------------- | - | --
|
|
|Client Business Volumes: |                                         |               |   |   
|                         | Proprietary Managed Assets              |               | $ | 43
|                         | Other Assets under Fee-Based Management |               |   | 9 
|                         | Banking and Fiduciary Deposits          |               |   | 46
|                         | Investment Finance                      |               |   | 42
|                         | Other, principally Custody Accounts     |               |   | 81
|                         |                                         |               |   |   
|                         |                                         | Total         |   | $ 
|                         |                                         |               |   |   

Client
business volumes were $221 billion at the end of the 2005 first quarter, up $19 billion or 9% from $202 billion at the end of the 2004 first quarter. Growth
in client business volumes was led by an increase in proprietary managed assets of $7 billion or 19%, mainly driven by the impact of positive net flows in the U.S. Custody assets grew
$6 billion or 8%, with growth in all regions except Japan. Investment finance volumes, which include loans, letters of credit and commitments, increased $4 billion or 11%, primarily
reflecting growth in real-estate and tailored lending in the U.S. Banking and Fiduciary Deposits grew $1 billion or 2% including a $2 billion or 42% decline in Japan.
Excluding Japan, banking and fiduciary deposits grew $3 billion or 9%, mainly in EMEA and the U.S.

Revenues,
net of interest expense, were $504 million in the 2005 first quarter, down $69 million or 12% from the prior-year quarter, with revenues in Japan down
$61 million or 73%. Excluding Japan, revenues were down $8 million or 2%, as declines in Asia and EMEA were partially offset by growth in North America. Revenues declined
$12 million or 9% in Asia and $9 million or 11% in EMEA, primarily reflecting lower client transactional activity that was partially offset by growth in banking-related revenue. In
North America, revenues increased $13 million or 6%, mainly driven by strong growth in banking and lending volumes in the U.S., partially offset by net interest margin compression, resulting
from increased interest rates, as well as a decline in transactional revenue in Mexico.

Operating
expenses of $339 million in the 2005 first quarter were unchanged from the prior year, due to lower incentive and variable compensation, in line with lower transactional
revenue, which was partially offset by repositioning costs of $7 million associated with limited staff reductions.

Net
recoveries in the provision for credit losses were $16 million in the 2005 first quarter, compared to a provision for credit losses of $4 million in the 2004 first
quarter. The improvement in the provision in the 2005 first quarter reflects a reduction in the allowance for loan losses combined with net recoveries in Asia and EMEA. Loans 90 days or more
past due as of March 31, 2005, were $125 million or 0.32% of total loans outstanding.

21

---



ASSET MANAGEMENT

|                                                    |  | First Quarter |     |   |  
|--------------------------------------------------- |  | ------------- | --- | - | -
|
|
|Revenues, net of interest expense                   |  | $             | 108 |   | $
|Operating expenses                                  |  |               | 99  |   |  
|                                                    |  |               |     |   |  
|Income before taxes and minority interest           |  |               | 9   |   |  
|Income taxes (benefits)                             |  |               | (5  | ) |  
|Minority interest, net of tax                       |  |               |    |   |  
|                                                    |  |               |     |   |  
|Net income                                          |  | $             | 14  |   | $
|                                                    |  |               |     |   |  
|Assets under management (in billions of dollars)(1) |  | $             | 131 |   | $
|                                                    |  |               |     |   |  

---

Asset Managementreported net income of $14 million in the 2005 first quarter, down $20 million or 59% compared to the 2004
first quarter, primarily reflecting a change in the profit sharing arrangement for CAI Institutional earnings, higher capital funding costs and lower business volumes in Mexico. Beginning in 2005, the
pretax profits of CAI, which were previously recorded in the respective Citicorp distributor's income statement as a component of revenues (including $10 million pretax in Asset Management in
the first quarter of 2004), are now reflected in Alternative Investments (see page 23).

Assets
under management for the 2005 first quarter were $131 billion, an increase of $5 billion or 4% from the 2004 first quarter.

Revenues,
net of interest expense, decreased $42 million or 28% from the prior-year period to $108 million in the 2005 first quarter, primarily due to the
impact of a decrease in certain assets consolidated under FIN 46-R. The assets consolidated under FIN 46-R (which are denominated in euro) generated $10 million of gains
(offset in minority interest) due to foreign currency translation in the prior-year first quarter. The decrease in revenue also reflects the absence of profit sharing revenues from CAI
Institutional, higher capital funding costs and lower business volumes in Mexico.

Operating
expenses of $99 million in the 2005 first quarter were up $1 million or 1% from the 2004 first quarter.

Minority
interest, after-tax, of $6 million in the 2004 first quarter represents the impact of consolidating certain assets under FIN 46-R.

22

---





ALTERNATIVE INVESTMENTS

First QuarterIn millions of dollars2005

2004Revenues, net of interest expense

$
784

$
132Operating expenses


69


56Income before taxes and minority interest


715


76Income taxes


252


26Minority interest, net of tax


132


36Net Income

$
331

$
14


Alternative Investmentsreported revenues, net of interest expense, of $784 million in the 2005 first quarter, an
increase of $652 million over the 2004 first quarter. Revenues, net of interest expense, consisted of the following:

First QuarterIn millions of dollars2005

2004Proprietary Investment Activities:Net realized gains (losses)(1)

$
37

$
37Net unrealized gains (losses):Publicly-traded investments


(40
)

(114
)Private equity and other investments(2)


677


128Fees, dividends and interest


68


29Other(3)


28


40Proprietary Investment Activities revenues


770


120Client Revenues(4)


14


12Revenues, net of interest expense

$
784

$
132


---

Proprietary Investment Activities revenues

The proprietary investment portfolio of Alternative Investments consists of private equity, single- and multi-manager hedge funds and real estate. Private equity,
which constitutes the majority of proprietary investments, on both a direct and indirect basis, is in the form of equity and mezzanine debt financing in companies across a broad range of industries
worldwide, including investments in companies located in developing economies. Such investments include Citigroup Venture Capital International Brazil, LP (CVC/Brazil, formerly CVC/Opportunity Equity
Partners, LP), which invests in companies privatized by the government of Brazil in the mid-1990s.

Private
equity investments held in investment company subsidiaries and CVC/Brazil are carried at fair value with net 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. Other investment activities are primarily
carried at fair value, with net unrealized gains and losses recorded in income.

Total
proprietary revenues, net of interest expense, of $770 million in the 2005 first quarter increased $650 million over the first quarter of 2004. The growth in
proprietary revenues was driven by higher net unrealized gains on private equity investments of $549 million, lower net unrealized losses on publicly-traded investments of $74 million,
higher fees, dividends and interest of $39 million, partially offset by lower other proprietary revenues of $12 million. The higher net unrealized gains on private equity investments
were primarily attributable to investment activity in Europe. European results reflect improved performance in many of the underlying investments and an improving private equity market. The net
unrealized losses on publicly-traded investments were primarily due to lower net
mark-to-market losses on an investment in an Indian software company. The increase in fees, dividends and interest revenues was primarily due to a dividend received from an
underlying investment and higher dividend and interest income from European investments. The higher net realized gains were driven by sales of certain portfolio investments. The decline in other
revenues was the result of lower management fees and higher funding costs.

Proprietary
capital under management of $7.2 billion as of March 31, 2005 increased $1.7 billion from March 31, 2004 due to valuation and other increases in
private equity and hedge fund investments.

23

---



Client revenues

CAI has a growing client portfolio comprised of single- and multi-manager hedge funds, real estate, private equity, and a variety of leveraged fixed income
products (credit structures). Clients include both institutions and high-net-worth individuals. Products are distributed directly to investors and through Citicorp's Asset
Management andPrivate Bankbusinesses. Prior to 2005, the pretax profits of CAI were recorded in the respective Citicorp distributor's income statement
as a component of revenues.

Total
client revenues, net of interest expense, of $14 million in the 2005 first quarter increased $2 million or 17% over the first quarter of 2004. CAI managed
$11.4 billion in unlevered client capital as of March 31, 2005, an increase of $1.3 billion from March 31, 2004.

Operating
expenses of $69 million in the first quarter 2005 increased $13 million from the first quarter of 2004 primarily due to higher employee-related expenses and an
increase in the operating expenses from hedge funds and real estate.

Minority
interest, net of tax, of $132 million in the first quarter 2005, increased $96 million from the first quarter of 2004, primarily due to the increase in net
unrealized gains related to consolidated legal entities.

CORPORATE/OTHER

|                                                   |  | First Quarter
|-------------------------------------------------- |  | -------------
|
|
|Revenues, net of interest expense                  |  | $            
|Operating expenses                                 |  |              
|Provisions for benefits, claims, and credit losses |  |              
|                                                   |  |              
|Income (loss) before taxes and minority interest   |  |              
|Income taxes                                       |  |              
|Minority interest, net of tax                      |  |              
|                                                   |  |              
|Net income (loss)                                  |  | $            
|                                                   |  |              

Corporate/Otherreported a net loss of $57 million in the 2005 first quarter, a decrease of $175 million
from the 2004 first quarter. The decrease was primarily due to the absence of the gain on the sale of EFS, which resulted in an after-tax gain of $180 million in the 2004 first
quarter.

Revenues,
net of interest expense, of $222 million in the 2005 first quarter decreased $328 million from the 2004 first quarter, primarily driven by the absence of the EFS
gain in the prior year.

Operating
expenses of $205 million in the 2005 first quarter decreased $76 million from the 2004 first quarter primarily due to lower unallocated corporate costs.

Income
taxes of $7 million in the 2005 first quarter decreased $87 million from the 2004 first quarter primarily due to lower income before taxes, partially offset by
higher unallocated taxes held at the Corporate level.

The
international insurance and Argentine pension businesses that are included in the Sale of the Life Insurance & Annuities business are reflected within the Corporate/Other
segment.

24

---



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 2004 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 six 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 reviewed regularly 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.

25

---



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 costs arise in many of the Company's business activities including lending 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 Citicorp relies on corporate-wide standards to ensure consistency and integrity, with
business-specific policies and practices to ensure applicability and ownership. Credit losses on derivatives and trading activities are recorded in Principal transactions on the Consolidated Statement
of Income. Credit losses in the Company's loan portfolio are recorded as a reduction to the Allowance for credit losses on the Consolidated Balance Sheet. The following table presents the details of
credit losses from the Company's loan portfolio.

Details of Credit Loss Experience

|In millions of dollars                                              |  | 1st Qtr. 2005 |        | 4th Qtr. 2004 |   | 3rd Qtr. 2004 |   | 2nd Qtr. 2004 |        | 1st Qtr. 2004 |  
|------------------------------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------- | - | ------------- | ------ | ------------- | -
|Allowance for credit losses at beginning of period                  |  | $             | 11,269 |               | $ | 12,034        |   | $             | 12,715 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Provision for credit losses                                         |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               | 1,869  |               |   | 1,549         |   |               | 1,431  |               |  
|Corporate                                                           |  |               | (56    | )             |   | (163          | ) |               | (403   | )             |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 1,813  |               |   | 1,386         |   |               | 1,028  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Gross credit losses:                                                |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 1,539  |               |   | 1,674         |   |               | 1,542  |               |  
|In offices outside the U.S.                                         |  |               | 840    |               |   | 859           |   |               | 848    |               |  
|Corporate                                                           |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 23     |               |   | 7             |   |               | 27     |               |  
|In offices outside the U.S.                                         |  |               | 49     |               |   | 87            |   |               | 157    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 2,451  |               |   | 2,627         |   |               | 2,574  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Credit recoveries:                                                  |  |               |        |               |   |               |   |               |        |               |  
|Consumer                                                            |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 261    |               |   | 261           |   |               | 283    |               |  
|In offices outside the U.S.                                         |  |               | 193    |               |   | 190           |   |               | 172    |               |  
|Corporate                                                           |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 13     |               |   | 32            |   |               | 28     |               |  
|In offices outside the U.S.                                         |  |               | 82     |               |   | 67            |   |               | 178    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 549    |               |   | 550           |   |               | 661    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net credit losses                                                   |  |               |        |               |   |               |   |               |        |               |  
|In U.S. offices                                                     |  |               | 1,288  |               |   | 1,388         |   |               | 1,258  |               |  
|In offices outside the U.S.                                         |  |               | 614    |               |   | 689           |   |               | 655    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|                                                                    |  |               | 1,902  |               |   | 2,077         |   |               | 1,913  |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Othernet(1) (2)                                                    |  |               | (309   | )             |   | (74           | ) |               | 204    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Allowance for credit losses at end of period                        |  | $             | 10,871 |               | $ | 11,269        |   | $             | 12,034 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Allowance for unfunded lending commitments(3)                       |  |               | 600    |               |   | 600           |   |               | 600    |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Total allowance for loans, leases, and unfunded lending commitments |  | $             | 11,471 |               | $ | 11,869        |   | $             | 12,634 |               | $
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net consumer credit losses                                          |  | $             | 1,925  |               | $ | 2,082         |   | $             | 1,935  |               | $
|As a percentage of average consumer loans                           |  |               | 1.83   | %             |   | 1.97          | % |               | 1.93   | %             |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  
|Net corporate credit losses                                         |  | $             | (23    | )             | $ | (5            | ) | $             | (22    | )             | $
|As a percentage of average corporate loans                          |  |               | NM     |               |   | NM            |   |               | NM     |               |  
|                                                                    |  |               |        |               |   |               |   |               |        |               |  

---

26

---



Cash-Basis, Renegotiated, and Past Due Loans

|In millions of dollars                                                |  | Mar. 31, 2005 |       | Dec. 31, 2004 |   | Sept. 30, 2004 |  | June 30, 2004 |       | Mar. 31, 2004
|--------------------------------------------------------------------- |  | ------------- | ----- | ------------- | - | -------------- |  | ------------- | ----- | -------------
|Corporate cash-basis loans                                            |  |               |       |               |   |                |  |               |       |              
|Collateral dependent (at lower of cost or collateral value)(1)        |  | $             | 8     |               | $ | 7              |  | $             | 15    |              
|Other                                                                 |  |               | 1,724 |               |   | 1,899          |  |               | 2,181 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Total(2)                                                              |  | $             | 1,732 |               | $ | 1,906          |  | $             | 2,196 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Corporate cash-basis loans                                            |  |               |       |               |   |                |  |               |       |              
|In U.S. offices                                                       |  | $             | 238   |               | $ | 254            |  | $             | 330   |              
|In offices outside the U.S.                                           |  |               | 1,494 |               |   | 1,652          |  |               | 1,866 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Total(2)                                                              |  | $             | 1,732 |               | $ | 1,906          |  | $             | 2,196 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Renegotiated loans (includes Corporate and Commercial Business Loans) |  |               |       |               |   |                |  |               |       |              
|In U.S. offices                                                       |  | $             | 21    |               | $ | 63             |  | $             | 69    |              
|In offices outside the U.S.                                           |  |               | 15    |               |   | 20             |  |               | 26    |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Total                                                                 |  | $             | 36    |               | $ | 83             |  | $             | 95    |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Consumer loans on which accrual of interest had been suspended        |  |               |       |               |   |                |  |               |       |              
|In U.S. offices                                                       |  | $             | 2,107 |               | $ | 2,485          |  | $             | 2,622 |              
|In offices outside the U.S.                                           |  |               | 2,890 |               |   | 2,978          |  |               | 2,830 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Total                                                                 |  | $             | 4,997 |               | $ | 5,463          |  | $             | 5,452 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Accruing loans 90 or more days delinquent(3)                          |  |               |       |               |   |                |  |               |       |              
|In U.S. offices                                                       |  | $             | 2,962 |               | $ | 3,153          |  | $             | 3,298 |              
|In offices outside the U.S.                                           |  |               | 390   |               |   | 401            |  |               | 358   |              
|                                                                      |  |               |       |               |   |                |  |               |       |              
|Total                                                                 |  | $             | 3,352 |               | $ | 3,554          |  | $             | 3,656 |              
|                                                                      |  |               |       |               |   |                |  |               |       |              

---

Other Real Estate Owned and Other Repossessed Assets

|In millions of dollars        |  | Mar. 31,
2005 |     | Dec. 31,
2004 |   | Sept. 30,
2004 |  | June 30,
2004 |     | Mar. 31,
2004
|----------------------------- |  | ------------- | --- | ------------- | - | -------------- |  | ------------- | --- | -------------
|Other real estate owned(1)    |  |               |     |               |   |                |  |               |     |              
|Consumer                      |  | $             | 286 |               | $ | 320            |  | $             | 373 |              
|Corporate                     |  |               | 34  |               |   | 33             |  |               | 26  |              
|                              |  |               |     |               |   |                |  |               |     |              
|Total other real estate owned |  | $             | 320 |               | $ | 353            |  | $             | 399 |              
|                              |  |               |     |               |   |                |  |               |     |              
|Other repossessed assets(2)   |  | $             | 74  |               | $ | 93             |  | $             | 100 |              
|                              |  |               |     |               |   |                |  |               |     |              

---

27

---



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
Business, which is included withinRetail Banking, includes loans and leases made principally to small- and middle-market
businesses. Commercial Business 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 Business 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 Business 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. For example, theCardsbusiness considers both on-balance sheet and securitized balances (together, their managed portfolio) when determining capital allocation and general management decisions and compensation.
Furthermore, investors utilize information about the credit quality of the entire managed portfolio, as the results of both the held and securitized portfolios impact the overall performance of the Cardsbusiness. For a further discussion of managed basis reporting, see theCardsbusiness on page 12
and Note 9 to the Consolidated Financial Statements.

28

---



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                                                                     |       | $           | 158.3 |                             | $ | 2,753         |      | $                    | 2,944 
|                                                                          | Ratio |             |       |                             |   |               | 1.74 | %                    |       
|North America                                                             |       |             | 140.5 |                             |   | 2,479         |      |                      | 2,667 
|                                                                          | Ratio |             |       |                             |   |               | 1.76 | %                    |       
|International                                                             |       |             | 17.8  |                             |   | 274           |      |                      | 277   
|                                                                          | Ratio |             |       |                             |   |               | 1.54 | %                    |       
|Consumer Finance                                                          |       |             | 104.3 |                             |   | 1,875         |      |                      | 2,014 
|                                                                          | Ratio |             |       |                             |   |               | 1.80 | %                    |       
|North America                                                             |       |             | 82.0  |                             |   | 1,399         |      |                      | 1,525 
|                                                                          | Ratio |             |       |                             |   |               | 1.71 | %                    |       
|International                                                             |       |             | 22.3  |                             |   | 476           |      |                      | 489   
|                                                                          | Ratio |             |       |                             |   |               | 2.13 | %                    |       
|Retail Banking                                                            |       |             | 173.2 |                             |   | 3,992         |      |                      | 4,094 
|                                                                          | Ratio |             |       |                             |   |               | 2.30 | %                    |       
|North America                                                             |       |             | 123.3 |                             |   | 2,469         |      |                      | 2,515 
|                                                                          | Ratio |             |       |                             |   |               | 2.00 | %                    |       
|International                                                             |       |             | 49.9  |                             |   | 1,523         |      |                      | 1,579 
|                                                                          | Ratio |             |       |                             |   |               | 3.05 | %                    |       
|Private Bank(2)                                                           |       |             | 39.0  |                             |   | 125           |      |                      | 127   
|                                                                          | Ratio |             |       |                             |   |               | 0.32 | %                    |       
|Other Consumer                                                            |       |             | 1.6   |                             |   |              |      |                      |      
|                                                                          |       |             |       |                             |   |               |      |                      |       
|Managed loans
(excluding Commercial Business)(3)                          |       | $           | 476.4 |                             | $ | 8,745         |      | $                    | 9,179 
|Ratio                                                                     |       |             |       |                             |   | 1.84          | %    |                      | 1.92  
|                                                                          |       |             |       |                             |   |               |      |                      |       
|Securitized receivables (all in North America Cards)                      |       |             | (87.7 | )                           |   | (1,296        | )    |                      | (1,296
|Credit card receivables held for sale(4)                                  |       |             | (0.6  | )                           |   | (10           | )    |                      | (32   
|                                                                          |       |             |       |                             |   |               |      |                      |       
|On-balance sheet loans (excluding Commercial Business)                    |       | $           | 388.1 |                             | $ | 7,439         |      | $                    | 7,851 
|Ratio                                                                     |       |             |       |                             |   | 1.92          | %    |                      | 2.02  
|                                                                          |       |             |       |                             |   |               |      |                      |       
|
|Commercial Business Groups(5)                                             |       | $           | 35.8  |                             | $ | 520           |      | $                    | 735   
|                                                                          | Ratio |             |       |                             |   |               | 1.45 | %                    |       
|                                                                          |       |             |       |                             |   |               |      |                      |       
|Total Consumer Loans(6)                                                   |       | $           | 423.9 |                             |   |               |      |                      |       
|                                                                          |       |             |       |                             |   |               |      |                      |       
|Regional View:                                                            |       |             |       |                             |   |               |      |                      |       
|North America (excluding Mexico)                                          |       | $           | 361.2 |                             | $ | 5,957         |      | $                    | 6,327 
|                                                                          | Ratio |             |       |                             |   |               | 1.65 | %                    |       
|Mexico                                                                    |       |             | 9.3   |                             |   | 436           |      |                      | 433   
|                                                                          | Ratio |             |       |                             |   |               | 4.70 | %                    |       
|EMEA                                                                      |       |             | 38.5  |                             |   | 1,732         |      |                      | 1,781 
|                                                                          | Ratio |             |       |                             |   |               | 4.50 | %                    |       
|Japan                                                                     |       |             | 14.8  |                             |   | 276           |      |                      | 308   
|                                                                          | Ratio |             |       |                             |   |               | 1.86 | %                    |       
|Asia (excluding Japan)                                                    |       |             | 49.3  |                             |   | 316           |      |                      | 299   
|                                                                          | Ratio |             |       |                             |   |               | 0.64 | %                    |       
|Latin America                                                             |       |             | 3.3   |                             |   | 28            |      |                      | 31    
|                                                                          | Ratio |             |       |                             |   |               | 0.85 | %                    |       
|                                                                          |       |             |       |                             |   |               |      |                      |       
|Managed loans (excluding Commercial Business)(3)                          |       | $           | 476.4 |                             | $ | 8,745         |      | $                    | 9,179 
|Ratio                                                                     |       |             |       |                             |   | 1.84          | %    |                      | 1.92  
|                                                                          |       |             |       |                             |   |               |      |                      |       

---

29

---



Consumer Loan Balances, Net of Unearned Income

|                                                     |  | End of Period |       | Average |  
|---------------------------------------------------- |  | ------------- | ----- | ------- | -
|
|Total managed(1)(Including Commercial Business)      |  | $             | 512.2 |         | $
|Securitized receivables (all in North America Cards) |  |               | (87.7 | )       |  
|Credit card receivables held for sale(2)             |  |               | (0.6  | )       |  
|                                                     |  |               |       |         |  
|On-balance sheet(3)(Including Commercial Business)   |  | $             | 423.9 |         | $
|                                                     |  |               |       |         |  

---

Total
delinquencies 90 days or more past due (excluding the Commercial Business) in the managed portfolio were $8.745 billion or 1.84% of loans at March 31, 2005,
compared to $9.179 billion or 1.92% at December 31, 2004 and $9.132 billion or 2.19% at March 31, 2004. Total cash-basis loans in the Commercial Business were
$520 million or 1.45% of loans at March 31, 2005, compared to $735 million or 1.78% at December 31, 2004 and $1.213 billion or 3.11% at March 31, 2004. Total
managed net credit losses (excluding the Commercial Business) in the 2005 first quarter were $3.065 billion and the related loss ratio was 2.62%, compared to $3.206 billion and 2.73% in
the 2004 fourth quarter and $3.582 billion and 3.47% in the 2004 first quarter. In the Commercial Business, total net credit losses were $26 million and the related loss ratio was 0.28%
in the 2005 first quarter, compared to $90 million and 0.89% in the 2004 fourth quarter and $50 million and 0.51% in the 2004 first quarter. For a discussion of trends by business, see
business discussions on pages 12 to 18 and page 21.

Citicorp's
total allowance for loans, leases and unfunded lending commitments of $11.471 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 $8.037 billion at March 31, 2005, $8.379 billion at
December 31, 2004 and $9.218 billion at March 31, 2004. The decrease in the allowance for credit losses from March 31, 2004 of $1.181 billion was primarily due to
the impact of reserve releases which occurred subsequent to March 31, 2004 of $1.181 billion related to continued improved credit conditions in North America, Latin America, Asia and
Japan, and reductions related to securitizations in theCardsbusiness and the sale of CitiCapital's Transportation Finance Business and purchase
accounting adjustments related to the Sears acquisition. Offsetting this decrease in the allowance for credit losses was the addition of $274 million from the KorAm acquisition, the impact of
reserve builds of $78 million, primarily related to Germany, the impact of foreign currency translation, and the 2004 second quarter reclassification of certain valuation reserves related to
capital leases into the allowance for credit losses.

On-balance
sheet consumer loans of $423.9 billion increased $44.1 billion or 12% from March 31, 2004, primarily driven by growth in mortgage and other
real-estate-secured loans in Prime Home Finance,Consumer FinanceandPrivate Bank, the
addition of the KorAm portfolio and the impact of strengthening currencies. Growth in student loans in North America also contributed to the increase in consumer loans. Credit card receivables
declined, primarily due to the impact of securitization activities and higher payment rates by customers. In the North America, excluding Mexico, Commercial Business, loans declined reflecting the
continued liquidation and sale of non-core portfolios, including a decline of approximately $4.3 billion resulting from the 2005 first quarter sale of CitiCapital's Transportation
Finance Business and the $2.0 billion reclassification of operating leases from loans to other assets in the 2004 second quarter. Loans in Japan also declined mainly reflecting continued
contraction in theConsumer Financeportfolio.

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.

30

---



CORPORATE CREDIT RISK

For corporate clients and investment banking activities across the organization, the credit process is grounded in a series of fundamental policies, including:



These
policies apply universally across corporate clients and investment banking activities. Businesses that require tailored credit processes, due to unique or unusual risk
characteristics in their activities, may only do so under a Credit Program that has been approved by independent credit risk management. In all cases, the above policies must be adhered to, or
specific exceptions must be granted by independent credit risk management.

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                                                        |  | Mar. 31, 2005 |       | Dec. 31, 2004 |   | Mar. 31, 2004 |  
|----------------------------------------------------------------------------- |  | ------------- | ----- | ------------- | - | ------------- | -
|Corporate Cash-Basis Loans                                                    |  |               |       |               |   |               |  
|Capital Markets and Banking                                                   |  | $             | 1,655 |               | $ | 1,794         |  
|Transaction Services                                                          |  |               | 77    |               |   | 112           |  
|                                                                              |  |               |       |               |   |               |  
|Total Corporate Cash-Basis Loans(1)                                           |  | $             | 1,732 |               | $ | 1,906         |  
|                                                                              |  |               |       |               |   |               |  
|Net Credit Losses                                                             |  |               |       |               |   |               |  
|Capital Markets and Banking                                                   |  | $             | (14   | )             | $ | (7            | )
|Transaction Services                                                          |  |               | (12   | )             |   | 2             |  
|Other                                                                         |  |               | 3     |               |   |              |  
|                                                                              |  |               |       |               |   |               |  
|Total Net Credit Losses                                                       |  | $             | (23   | )             | $ | (5            | )
|                                                                              |  |               |       |               |   |               |  
|Corporate Allowance for Credit Losses                                         |  | $             | 2,834 |               | $ | 2,890         |  
|Corporate Allowance for Credit Losses on Unfunded Lending Commitments(2)      |  |               | 600   |               |   | 600           |  
|                                                                              |  |               |       |               |   |               |  
|Total Corporate Allowance for Loans, Leases, and Unfunded Lending Commitments |  | $             | 3,434 |               | $ | 3,490         |  
|                                                                              |  |               |       |               |   |               |  
|Corporate Allowance As a Percentage of Total Corporate Loans(3)               |  |               | 2.40  | %             |   | 2.53          | %
|                                                                              |  |               |       |               |   |               |  

---

Corporate
cash-basis loans were $1.732 billion, $1.906 billion and $2.908 billion at March 31, 2005, December 31, 2004 and
March 31, 2004, respectively. Cash-basis loans decreased $1.176 billion from March 31, 2004 due to a $1.151 billion decrease inCapital
Markets and Bankingand a $25 million decrease inTransaction Services.Capital Markets and
Bankingdecreased primarily due to charge-offs against reserves as well as paydowns on corporate borrowers in Argentina, North America and Mexico, partially offset
by the addition of KorAm.

Cash-basis
loans decreased $174 million from December 31, 2004 due to decreases inCapital Markets and BankingandTransaction Services.Capital Markets and Bankingdecreased primarily due to asset sales and
paydowns from borrowers in Argentina and Brazil.

31

---



Total
corporate Other Real Estate Owned (OREO) was $34 million, $33 million and $41 million at March 31, 2005, December 31, 2004 and March 31,
2004, respectively.

Total
corporate loans outstanding at March 31, 2005 were $118 billion as compared to $114 billion and $101 billion at December 31, 2004 and
March 31, 2004, respectively.

Total
corporate net credit losses of ($23) million at March 31, 2005 decreased $201 million compared to March 31, 2004, primarily reflecting recoveries as well as
lower net credit losses from counterparties in Europe, particularly in Poland, and Mexico.

The
allowance for credit losses is established by management based upon estimates of probable losses 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 lending commitments of $11.471 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 $3.434 billion at March 31, 2005, compared to
$3.490 billion at December 31, 2004 and $3.888 billion at March 31, 2004. The allowance attributed to corporate loans, leases and unfunded lending commitments as a
percentage of corporate loans was 2.91% at March 31, 2005, as compared to 3.06% and 3.84% at December 31, 2004 and March 31, 2004, respectively. The $454 million decrease
in the total allowance at March 31, 2005 from March 31, 2004 primarily reflects reserve releases of $750 million due to continued improvement in the portfolio, partially offset by
the addition of KorAm. 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.

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 2004 Annual Report on Form 10-K.

32

---





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

A formal governance structure has been established through the Risk and Control Self-Assessment (RCSA) Policy to provide direction, oversight, and
monitoring of Citigroup's RCSA programs. The RCSA Policy incorporates standards for risk and control self-assessment that are applicable to all businesses and establishes 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. RCSA is
based on COSO (The Committee of Sponsoring Organizations of the Treadway Commission) principles, which have been adopted as the minimum standards for all internal control reviews that comply with
Sarbanes-Oxley, FDICIA or operational risk requirements. The policy requires, on a quarterly basis, businesses and staff functions to perform a 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 the Citigroup 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 the Citigroup Board.

Information Security and Continuity of Business

In the fall of 2004, Citigroup created the function of Chief Information Technology Risk Officer to enhance risk management practices between information security
and continuity of business. This is an important step in Citigroup's strategy to better manage and aggregate risk on an enterprise-wide basis.

The
Information Security Program complies with the Gramm-Leach-Bliley Act and other regulatory guidance. During 2004, 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
continued to mitigate business continuity risks by reviewing and testing recovery procedures. The Corporate Office of Business Continuity with the support of the Global Senior
Continuity of Business Committee monitors compliance with all internal and external regulatory standards to enhance Citigroup's resilience in the financial markets.

33

---



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.

34

---



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

|March 31, 2005 |  | December 31, 2004
|-------------- |  | -----------------
|
|
|
|Germany        |  | $                
|Korea          |  |                  
|Netherlands    |  |                  
|Italy          |  |                  
|Canada         |  |                  
|Spain          |  |                  
|Mexico         |  |                  
|France         |  |                  
|               |  |                  

---

35

---



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 other senior business
managers of Citicorp and Citigroup.

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 three months of 2005 and the full year of 2004.

Citicorp Regulatory Capital Ratios

|                                  |  | March 31, 2005 |   | December 31, 2004 |  
|--------------------------------- |  | -------------- | - | ----------------- | -
|
|Tier 1 Capital                    |  | 9.02           | % | 8.69              | %
|Total Capital (Tier 1 and Tier 2) |  | 12.92          | % | 12.59             | %
|Leverage(1)                       |  | 6.90           | % | 6.74              | %
|Common stockholder's equity       |  | 10.29          | % | 9.93              | %
|                                  |  |                |   |                   |  

---

---

36

---



Components of Capital Under Regulatory Guidelines

|In millions of dollars                                            |  | March 31, 2005 |         | December 31, 2004 |  
|----------------------------------------------------------------- |  | -------------- | ------- | ----------------- | -
|Tier 1 Capital                                                    |  |                |         |                   |  
|Common stockholder's equity                                       |  | $              | 97,057  |                   | $
|Qualifying mandatorily redeemable securities of subsidiary trusts |  |                | 808     |                   |  
|Minority interest                                                 |  |                | 953     |                   |  
|Less: Net unrealized gains on securities available-for-sale(1)    |  |                | (410    | )                 |  
|Accumulated net gains on cash flow hedges, net of tax             |  |                | (186    | )                 |  
|Intangible assets:                                                |  |                |         |                   |  
|Goodwill                                                          |  |                | (29,110 | )                 |  
|Other disallowed intangible assets                                |  |                | (6,294  | )                 |  
|Other                                                             |  |                | (395    | )                 |  
|                                                                  |  |                |         |                   |  
|Total Tier 1 Capital                                              |  |                | 62,423  |                   |  
|                                                                  | 
|Tier 2 Capital                                                    |  |                |         |                   |  
|Allowance for credit losses(2)                                    |  |                | 8,818   |                   |  
|Qualifying debt(3)                                                |  |                | 17,972  |                   |  
|Unrealized marketable equity securities gains(1)                  |  |                | 132     |                   |  
|                                                                  |  |                |         |                   |  
|Total Tier 2 Capital                                              |  |                | 26,922  |                   |  
|                                                                  |  |                |         |                   |  
|Total Capital (Tier 1 and Tier 2)                                 |  | $              | 89,345  |                   | $
|                                                                  | 
|Risk-adjusted assets(4)                                           |  | $              | 691,746 |                   | $
|                                                                  |  |                |         |                   |  
|                                                                  | 

Stockholder's
equity increased $2.4 billion during the first three months of 2005 to $97.1 billion at March 31, 2005, representing 10.29% of assets, compared to
$94.7 billion and 9.93% at year-end 2004. The increase in stockholder's equity mainly reflected net income of $4.1 billion and employee benefits and other activity of
$0.1 billion. These increases were offset by dividends paid of $1.0 billion and net changes in equity from nonowner sources of $0.8 billion. The increase in the stockholder's
equity ratio during the year reflected the above items and the 1% decrease in assets.

Total
mandatorily redeemable securities of subsidiary trusts (trust preferred securities), which qualify as Tier 1 Capital, at March 31, 2005 and December 31, 2004
were $808 million and $823 million, respectively. On March 1, 2005, the FRB issued the final rule that allows for the continued limited inclusion of trust preferred securities in
the Tier 1 Capital of Bank Holding Companies (BHCs). Under the final rule, trust preferred securities and other restricted core capital elements will be subject to stricter quantitative limits.
The final rule provides a transition period, ending March 31, 2009, for application of the quantitative limits. See "Regulatory Capital and Accounting Standards Developments" on page 38.

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 March 31, 2005, all of Citicorp's subsidiary depository institutions were "well capitalized" under the federal regulatory agencies' definitions.

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Citibank, N.A. Ratios

|                                  |  | March 31, 2005 |   | December 31, 2004 |  
|--------------------------------- |  | -------------- | - | ----------------- | -
|Tier 1 Capital                    |  | 8.65           | % | 8.42              | %
|Total Capital (Tier 1 and Tier 2) |  | 12.97          | % | 12.51             | %
|Leverage(1)                       |  | 6.33           | % | 6.28              | %
|Common stockholder's equity       |  | 7.78           | % | 7.51              | %
|                                  |  |                |   |                   |  

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

|In billions of dollars            |  | March 31, 2005 |      | December 31, 2004
|--------------------------------- |  | -------------- | ---- | -----------------
|Tier 1 Capital                    |  | $              | 42.7 |                  
|Total Capital (Tier 1 and Tier 2) |  | $              | 64.0 |                  
|                                  |  |                |      |                  

Citibank's
net income for the first quarter of 2005 amounted to $2.3 billion. During the first quarter of 2005, Citibank paid dividends of $0.5 billion.

During
the first three months of 2005 and the full year 2004, Citibank issued an additional $1.1 billion and $1.6 billion, respectively, of subordinated notes to Citicorp
that qualify for inclusion in Citibank's Tier 2 capital. Total subordinated notes issued to Citicorp that were outstanding at March 31, 2005 and December 31, 2004 and included in
Citibank's Tier 2 capital amounted to $15.0 billion and $13.9 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, specified that parallel testing will be necessary, and designated a new implementation date of year-end 2007. The U.S. banking regulators issued an
advance notice of proposed rulemaking in August 2003, and subsequently issued additional guidance in October 2004, relating to the new Basel standards. Citigroup and Citicorp, along with
other major banking organizations and associations, are continuing to provide significant input into these proposed rules. In addition, Citigroup and Citicorp are participating in certain quantitative
studies of these proposed rules, discussing the proposed rules with banking regulators and developing overall implementation plans. The final version of these new capital rules will apply to Citigroup
and Citicorp, as well as to other large U.S. banks and BHCs. Citigroup and Citicorp continue to assess the impact and participate in efforts to refine these future capital standards.

On
March 1, 2005, the FRB issued the final rule, with an effective date of April 11, 2005, which retains trust preferred securities in Tier 1 Capital of BHCs, but
with stricter quantitative limits and clearer qualitative standards. Under the rule, after a five-year transition period, the aggregate amount of trust preferred securities and certain
other capital elements included in Tier 1 Capital would be limited to 25% of Tier 1 Capital elements, net of goodwill less any associated deferred tax liability. Under this rule,
Citicorp currently would have less than 2% against the 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 (such as Citicorp) would generally be expected to limit trust preferred securities and certain other capital elements to 15% of Tier 1
Capital elements, net of goodwill, less any deferred tax liability. Under this 15% limit, Citicorp would be able to retain the full amount of its trust preferred securities within Tier 1
Capital.

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 45.

38

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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, 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
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 Head of Risk Architecture.
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 aggregate bank entities, these
include cash capital (defined as core deposits, long-term debt, and capital compared with 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. For Citigroup and Citicorp, on a combined basis at the holding company level, a ratio was 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 Head of Risk Architecture 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.

On
February 11, 2005, Citigroup announced plans to merge its two intermediate bank holding companies, Citigroup Holdings Company and Citicorp, into Citigroup Inc. This
transaction is subject to regulatory approval and is expected to take place by the end of the 2005 third quarter. Citigroup will assume all existing indebtedness and outstanding guarantees of
Citicorp.

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Citigroup
also announced it would consolidate its capital markets funding activities in two legal entities: i) Citigroup Inc., which will continue to issue
long-term debt, trust preferred securities, preferred and common stock, and ii) Citigroup Funding Inc. ("CFI") a newly formed, fully guaranteed, first-tier
subsidiary of Citigroup, which will issue commercial paper and medium-term notes. It is anticipated that this funding consolidation will commence during the 2005 second quarter.

Certain
of the statements above are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 45.

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 March 31, 2005, Citicorp's national and state-chartered bank subsidiaries can declare dividends to their respective parent companies, without regulatory approval, of
approximately $13.7 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 March 31, 2005, its bank subsidiaries can directly or through their parent holding
company distribute dividends to Citicorp of approximately $12.3 billion of the available $13.7 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
2005, 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 45.

Citicorp's
assets and liabilities, which are principally held through its bank and nonbank subsidiaries, are diversified across many currencies, geographic areas, and businesses.
Particular attention is paid to those businesses that for tax, sovereign risk, or regulatory reasons cannot be freely and readily funded in the international markets. Citicorp's assets consist
primarily of consumer and corporate loans, available-for-sale and trading securities, and placements.

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 corporation.

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 and its major
operating subsidiaries includes a large geographically diverse retail and corporate deposit base of $569.8 billion at March 31, 2005. Citicorp's deposits represent 60% and 59% of total
funding at March 31, 2005 and December 31, 2004, respectively. A significant portion of these deposits have been, and are expected to be, long-term and stable and are
considered core.

Asset
securitization programs remain an important source of liquidity. See note 9 to the Consolidated Financial Statements for additional information about securitization
activities.

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 the underwritten debt
previously issued by WMF. Citicorp has guaranteed various debt obligations of Associates and CitiFinancial Credit Company, each an indirect

40

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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.

On
a combined basis at the Holding Company level, Citigroup and Citicorp, both of which are bank holding companies, maintain sufficient liquidity to meet all maturing obligations due
within a one-year time horizon without incremental access to the unsecured markets. In aggregate, bank subsidiaries maintain "cash capital," defined as core deposits, long-term
debt, and capital, in excess of their illiquid assets.

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates, had an unutilized credit facility of Canadian $1.0 billion as of March 31, 2005 that matures
in October 2005. 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 March 31, 2005, this requirement was exceeded by approximately $78.0 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, 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, 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, the Company transferring assets to an SPE converts those assets into cash before they would have been
realized in the normal course of business. The SPE obtains the cash needed to pay the transferor for the assets received by issuing securities to investors in the form of debt and equity instruments,
certificates, commercial paper, and other notes of indebtedness. Investors usually have recourse to the assets in the SPE and often benefit from other credit enhancements, such as a cash collateral
account or overcollateralization in the form of excess assets in the SPE, or from a liquidity facility, such as a line of credit or asset purchase agreement. Accordingly, the SPE can typically obtain
a more favorable credit rating from rating agencies, such as Standard & 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 Qualifying SPEs (QSPEs) and are, therefore, not VIEs subject to FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities (revised December 2003)," (FIN 46-R). SPEs may be QSPEs or VIEs or neither. When an entity is deemed a variable interest entity
(VIE) under FIN 46-R, 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.

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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 9 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 seller's interest, retained securities, and an
interest-only strip that arises from the calculation of gain or loss at the time receivables are sold to the SPE. When the predetermined amount is reached, net revenue with respect to the
investors' interest is passed directly to the Citicorp subsidiary that sold the receivables. Credit card securitizations are revolving securitizations; that is, as customers pay their credit card
balances, the cash proceeds are used to purchase new receivables and replenish the receivables in the trust. The Company relies on securitizations to fund approximately 60% of its Citi Cards business.

At
March 31, 2005 and December 31, 2004, total assets in the credit card trusts were $97 billion and $101 billion, respectively. Of those amounts at
March 31, 2005 and December 31, 2004, $85 billion and $82 billion, respectively, has been sold to investors via trust-issued securities, and of the remaining seller's
interest, $9.1 billion and $15.8 billion, respectively, is recorded in Citicorp's Consolidated Balance Sheet as Consumer Loans. Additional retained securities issued by the trusts
totaling $2.9 billion at March 31, 2005 and December 31, 2004, are included in Citicorp's Consolidated Balance Sheet as available-for-sale securities.
Citicorp retains credit risk on its seller's interest, retained securities, and reserves for expected credit losses. Amounts receivable from the trusts were $1.4 billion and
$1.4 billion, respectively, and amounts due to the trusts were $1.4 billion and $1.3 billion, respectively, at March 31, 2005 and December 31, 2004. The Company also
recognized an interest-only strip of $1.4 billion and $1.1 billion at March 31, 2005 and December 31, 2004, respectively, that arose from the calculation of
gain or loss at the time assets were sold to the QSPE. In the three months ended March 31, 2005, the Company recorded net securitization gains of $258 million. No such gains were
recorded during the first quarter of 2004.

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 asset 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. The Company recognized gains related to the securitization of
mortgages and other assets of $80 million and $78 million during the first three months of 2005 and 2004, 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

42

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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
enhancement 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. At March 31, 2005 and December 31,
2004, total assets and liabilities in the unconsolidated conduits were $58 and $51 billion, respectively. One conduit with assets of $412 million is consolidated at March 31,
2005, compared with $656 million consolidated at December 31, 2004.

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 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.

See
Note 9 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 commitments as of March 31, 2005 and December 31, 2004.

|In millions of dollars                                                         |  | March 31, 2005 |           | December 31, 2004
|------------------------------------------------------------------------------ |  | -------------- | --------- | -----------------
|Financial standby letters of credit and foreign office guarantees              |  | $              | 49,469    |                  
|Performance standby letters of credit and foreign office guarantees            |  |                | 8,855     |                  
|Commercial and similar letters of credit                                       |  |                | 5,965     |                  
|One- to four-family residential mortgages                                      |  |                | 3,484     |                  
|Revolving open-end loans secured by one- to four-family residential properties |  |                | 17,436    |                  
|Commercial real estate, construction and land development                      |  |                | 1,722     |                  
|Credit card lines(1)                                                           |  |                | 794,824   |                  
|Commercial and other consumer loan commitments(2)                              |  |                | 270,073   |                  
|                                                                               |  |                |           |                  
|Total                                                                          |  | $              | 1,151,828 |                  
|                                                                               |  |                |           |                  

---

See
Note 11 to the Consolidated Financial Statements for additional information on credit commitments and lines of credit.

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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 control and procedures and internal control over financial reporting.

The
Company has a Disclosure Committee, which 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 that applies
to all finance, accounting, treasury, tax and investor relations professionals worldwide and that 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.

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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: changing economic conditionsU.S., global, regional, or related to specific issuers or industries;
movements in interest rates and foreign exchange rates; the credit environment, inflation, and geopolitical risks; the ability to gain market share in both new and established markets internationally;
levels of activity in the global capital markets; macro-economic factors and political policies and developments in the countries in which the Company's businesses operate; the level of bankruptcy
filings and unemployment rates; the continued threat of terrorism; the effects of the Company's repositioning activities; costs associated with the implementation of the Japan Private Bank Exit Plan;
the Company's subsidiaries' dividending capabilities; the effect of banking and financial services reforms; possible amendments to, and interpretations of, risk-based capital guidelines
and reporting instructions; and the resolution of legal and regulatory proceedings and related matters.

45

---





CONSOLIDATED FINANCIAL STATEMENTS    CITICORP AND SUBSIDIARIES  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

Three Months Ended March 31,In millions of dollars2005

2004(1)Interest revenueLoans, including fees

$
11,277

$
10,775Deposits with banks


341


206Federal funds sold and securities purchased under agreements to resell


112


112Investments, including dividends


1,651


1,213Trading account assets


578


447Loans held-for-sale


115


7914,074


12,832Interest expenseDeposits


2,968


1,875Trading account liabilities


24


30Purchased funds and other borrowings


837


483Long-term debt


1,203


9215,032


3,309Net interest revenue


9,042


9,523Benefits, claims and credit lossesPolicyholder benefits and claims


131


136Provision for credit losses


1,813


2,230Total benefits, claims and credit losses


1,944


2,366Net interest revenue after benefits, claims and credit losses


7,098


7,157Fees, commissions and other revenueFees and commissions


3,479


3,201Foreign exchange


428


396Trading account


619


583Investment transactions


189


112Other revenue


2,348


1,6247,063


5,916Operating ExpenseSalaries


3,237


2,727Employee benefits


767


678Total employee-related expenses


4,004


3,405Net premises and equipment


1,113


924Restructuring-related items





(3
)Other expense


2,744


2,9117,861


7,237Income before income taxes and minority interest


6,300


5,836Income taxes


2,002


1,830Minority interest, after-tax


159


73Net income

$
4,139

$
3,933


---

See
Notes to the Unaudited Consolidated Financial Statements.

46

---



CITICORP AND SUBSIDIARIES    CONSOLIDATED BALANCE SHEET

In millions of dollars

March 31,
2005
(Unaudited)

December 31,
2004AssetsCash and due from banks

$
18,993

$
17,453Deposits at interest with banks


28,840


23,889Federal funds sold and securities purchased under agreements to resell


13,310


14,151Trading account assets (including $1,733 and $2,278 pledged to creditors at March 31, 2005 and December 31, 2004, respectively)


94,217


102,686Investments (including $12,731 and $13,468 pledged to creditors at March 31, 2005 and December 31, 2004, respectively)


151,265


147,630Loans held-for-sale


10,278


11,379Loans, net of unearned incomeConsumer


427,428


435,226Corporate


118,026


114,230Loans, net of unearned income


545,454


549,456Allowance for credit losses


(10,871
)

(11,269
)Total loans, net


534,583


538,187Goodwill


29,110


29,330Intangible assets


14,581


14,275Premises and equipment, net


8,669


9,096Interest and fees receivable


6,797


6,351Other assets


32,594


39,177Total assets

$
943,237

$
953,604LiabilitiesNon-interest-bearing deposits in U.S. offices

$
32,549

$
31,913Interest-bearing deposits in U.S. offices


164,111


161,113Non-interest-bearing deposits in offices outside the U.S.


30,331


28,597Interest-bearing deposits in offices outside the U.S.


342,760


344,486Total deposits


569,751


566,109Trading account liabilities


46,981


56,936Purchased funds and other borrowings


69,405


70,460Accrued taxes and other expense


12,854


14,556Long-term debt


114,388


116,319Other liabilities


32,801


34,546Stockholder's equityCommon stock: ($0.01 par value) issued shares: 1,000 in each period





Surplus


40,687


40,601Retained earnings


59,419


56,276Accumulated other changes in equity from nonowner sources


(3,049
)

(2,199
)Total stockholder's equity


97,057


94,678Total liabilities and stockholder's equity

$
943,237

$
953,604


See
Notes to the Unaudited Consolidated Financial Statements.

47

---





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

|                                                                               |                                               | Three Months Ended
March 31, |       
|------------------------------------------------------------------------------ | --------------------------------------------- | ---------------------------- | ------
|
|
|Balance at beginning of period                                                 |                                               | $                            | 94,678
|Net income                                                                     |                                               |                              | 4,139 
|Net change in unrealized gains and losses on investment securities, net of tax |                                               |                              | (296  
|Net change in foreign currency translation adjustment, net of tax              |                                               |                              | (616  
|Net change for cash flow hedges, net of tax                                    |                                               |                              | 62    
|                                                                               |                                               |                              |       
|                                                                               | Total changes in equity from nonowner sources |                              |       
|Dividends paid                                                                 |                                               |                              | (997  
|Employee benefit plans and other activity                                      |                                               |                              | 87    
|                                                                               |                                               |                              |       
|Balance at end of period                                                       |                                               | $                            | 97,057
|                                                                               |                                               |                              |       
|Summary of changes in equity from nonowner sources                             |                                               |                              |       
|Net income                                                                     |                                               | $                            | 4,139 
|Other changes in equity from nonowner sources                                  |                                               |                              | (850  
|                                                                               |                                               |                              |       
|Total changes in equity from nonowner sources                                  |                                               | $                            | 3,289 
|                                                                               |                                               |                              |       

See
Notes to the Unaudited Consolidated Financial Statements.

48

---



CITICORP AND SUBSIDIARIES  CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

|                                                                                                   |                                                         | Three Months Ended
March 31, |       
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------- | ------
|
|
|Cash flows from operating activities                                                               |                                                         |                              |       
|Net income                                                                                         |                                                         | $                            | 4,139 
|Adjustments to reconcile net income to net cash 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 decrease (increase) in loans held for sale          |                              |       
|                                                                                                   | Net decrease in trading account assets                  |                              |       
|                                                                                                   | Net decrease in trading account liabilities             |                              |       
|                                                                                                   |                                                         |                              |       
|Total adjustments                                                                                  |                                                         |                              | 3,517 
|                                                                                                   |                                                         |                              |       
|Net cash provided by operating activities                                                          |                                                         |                              | 7,656 
|                                                                                                   |                                                         |                              |       
|Cash flows from investing activities                                                               |                                                         |                              |       
|Net increase in deposits at interest with banks                                                    |                                                         |                              | (4,951
|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     |                                                         |                              | 841   
|Net increase in loans                                                                              |                                                         |                              | (5,854
|Proceeds from sales of loans                                                                       |                                                         |                              | 3,716 
|Business acquisitions                                                                              |                                                         |                              |      
|Capital expenditures on premises and equipment                                                     |                                                         |                              | (602  
|Proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets |                                                         |                              | 5,065 
|                                                                                                   |                                                         |                              |       
|Net cash used in investing activities                                                              |                                                         |                              | (6,293
|                                                                                                   |                                                         |                              |       
|Cash flows from financing activities                                                               |                                                         |                              |       
|Net increase in deposits                                                                           |                                                         |                              | 3,642 
|Net decrease in federal funds purchased and securities sold under repurchase agreements            |                                                         |                              | (1,712
|Net increase in commercial paper and funds borrowed                                                |                                                         |                              | 1,083 
|Proceeds from issuance of long-term debt                                                           |                                                         |                              | 3,186 
|Repayment of long-term debt                                                                        |                                                         |                              | (4,883
|Dividends paid                                                                                     |                                                         |                              | (997  
|                                                                                                   |                                                         |                              |       
|Net cash provided by financing activities                                                          |                                                         |                              | 319   
|                                                                                                   |                                                         |                              |       
|Effect of exchange rate changes on cash and due from banks                                         |                                                         |                              | (142  
|                                                                                                   |                                                         |                              |       
|Net increase in cash and due from banks                                                            |                                                         |                              | 1,540 
|Cash and due from banks at beginning of period                                                     |                                                         |                              | 17,453
|                                                                                                   |                                                         |                              |       
|Cash and due from banks at end of period                                                           |                                                         | $                            | 18,993
|                                                                                                   |                                                         |                              |       
|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.

49

---





CITIBANK, N.A. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEET

In millions of dollars

March 31,
2005
(Unaudited)

December 31,
2004AssetsCash and due from banks

$
15,630

$
13,354Deposits at interest with banks


26,770


21,756Federal funds sold and securities purchased under agreements to resell


15,118


15,637Trading account assets (including $220 and $389 pledged to creditors at March 31, 2005 and December 31, 2004, respectively)


89,239


97,697Investments (including $1,580 and $2,484 pledged to creditors at March 31, 2005 and December 31, 2004, respectively)


111,962


108,780Loans held-for-sale


2,345


3,580Loans, net of unearned income


373,201


378,100Allowance for credit losses


(7,574
)

(7,897
)Total loans, net


365,627


370,203Goodwill


9,424


9,593Intangible assets


10,886


10,557Premises and equipment, net


5,843


6,288Interest and fees receivable


5,683


5,250Other assets


26,065


31,834Total assets

$
684,592

$
694,529LiabilitiesNon-interest-bearing deposits in U.S. offices

$
24,485

$
22,399Interest-bearing deposits in U.S. offices


104,186


102,376Non-interest-bearing deposits in offices outside the U.S.


25,922


24,443Interest-bearing deposits in offices outside the U.S.


309,134


309,784Total deposits


463,727


459,002Trading account liabilities


46,571


56,630Purchased funds and other borrowings


44,106


47,160Accrued taxes and other expense


9,287


10,970Long-term debt and subordinated notes


41,086


41,038Other liabilities


24,590


25,588Stockholder's equityPreferred stock ($100 par value)


1,950


1,950Capital stock ($20 par value) outstanding shares: 37,534,553 in each period


751


751Surplus


26,034


25,972Retained earnings


27,666


25,935Accumulated other changes in equity from nonowner sources(1)


(1,176
)

(467
)Total stockholder's equity


55,225


54,141Total liabilities and stockholder's equity

$
684,592

$
694,529


---

See
Notes to the Unaudited Consolidated Financial Statements.

50

---





CITICORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     Basis of Presentation

The accompanying unaudited consolidated financial statements as of March 31, 2005 and for the three-month period ended March 31, 2005 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 2004
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

Accounting for Certain Loans or Debt Securities Acquired in a Transfer

During the first quarter of 2005, Statement of Position (SOP) No. 03-3, "Accounting for Certain Loans or Debt Securities Acquired in a
Transfer" (SOP 03-3), was adopted for loan acquisitions. 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 an impairment.

Future Application of Accounting Standards

Stock-Based Compensation

In December 2004, the FASB issued SFAS No. 123 (Revised 2004), "Share-Based Payment" (SFAS 123-R), which replaces the existing
SFAS 123 and supersedes APB 25. SFAS 123-R requires companies to measure and record compensation expense for stock options and other share-based payment based on the
instruments' fair value. SFAS 123-R as issued is effective for interim and annual reporting periods beginning after June 15, 2005. However, on April 14, 2005, the
Securities and Exchange Commission (SEC) announced the adoption of a new rule that amends the compliance date for SFAS 123-R. The SEC's new rule allows companies to implement
SFAS 123-R at the start of their fiscal year beginning after June 15, 2005. Thus, the Company will adopt SFAS 123-R on January 1, 2006 by using the
modified prospective approach, which requires recognizing expense for options granted prior to the adoption date equal to the fair value of the unvested amounts over their remaining vesting period.
The portion of these options' fair value attributable to vested awards prior to the adoption of SFAS 123-R is never recognized. For unvested stock-based awards granted before
January 1, 2003 ("APB 25 awards"), the Company will expense the fair value of the awards as at the grant date over the remaining vesting period. The impact of recognizing compensation expense
for the unvested APB 25 awards will be immaterial to Citicorp's 2006 consolidated results. The Company continues to evaluate other aspects of adopting SFAS 123-R.

Other-Than-Temporary Impairments of Certain Investments

On September 30, 2004, the FASB voted unanimously to delay the effective date of EITF 03-1, "The Meaning of
Other-Than-Temporary Impairment and its Application to Certain Investments." The delay applies to both debt and equity securities and specifically applies to impairments caused
by interest rate and sector spreads. In addition, the provisions of EITF 03-1 that have been delayed relate to the requirements that a company declare its intent to hold the security to
recovery and designate a recovery period in order to avoid recognizing an other-than-temporary impairment charge through earnings.

The
FASB will be issuing implementation guidance related to this topic. Once issued, Citicorp will evaluate the impact of adopting EITF 03-1. The disclosures required by EITF
03-1 are included in Note 5 to the Consolidated Financial Statements.

51

---



3.     Business Developments and Combinations

Citigroup's Sale of Travelers Life & Annuity and Substantially All International Insurance Businesses

On January 31, 2005, Citigroup announced an agreement for the sale of Citigroup's Travelers Life & Annuity, and substantially all of Citigroup's
international insurance businesses, to MetLife, Inc. (MetLife) for $11.5 billion, subject to closing adjustments.

The
transaction encompasses Travelers Life & Annuity's U.S. businesses and its international operations other than Citigroup's life business in Mexico (which is now included
withinRetail Banking). International operations include wholly owned insurance companies in the United Kingdom, Belgium, Australia, Brazil, Argentina,
and Poland; joint ventures in Japan and Hong Kong; and offices in China. The sale transaction also includes Citigroup's Argentine pension business. (The transaction described in the preceding two
paragraphs is referred to herein as the Sale of the Life Insurance & Annuities Business).

The
Citicorp international insurance and Argentine pension businesses being acquired by MetLife as part of the Sale of the Life Insurance & Annuities Business generated total
revenues of $195 million and $139 million and net income of $36 million and $13 million, respectively, for the three months ended March 31, 2005 and 2004. These
businesses had total assets of $5.4 billion at March 31, 2005.

The
transaction is subject to certain domestic and international regulatory approvals, as well as other customary conditions to closing, and is expected to close during the 2005 third
quarter.

Results
for the Citicorp businesses included in the Sale of the Life Insurance & Annuities Business are recorded in the Corporate/Other segment for all periods presented.

Divestiture of CitiCapital's Transportation Finance Business

On November 22, 2004, the Company reached an agreement to sell CitiCapital's Transportation Finance Business based in Dallas and Toronto to GE Commercial
Finance for total cash consideration of approximately $4.6 billion. The sale, which was completed on January 31, 2005, resulted in an after-tax gain of $111 million.

Sale of Samba Financial Group

On June 15, 2004, the Company sold, for cash, its 20% equity investment 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 CIB.

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 99.9% of KorAm's outstanding shares for a total of KRW 3.14 trillion ($2.7 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. During the 2004 fourth quarter, KorAm was merged
with the Citibank Korea branch to form Citibank Korea Inc. The operations of KorAm were integrated into the businesses of Citicorp.

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), a subsidiary of Citigroup, 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 included 427 WMF offices located in 26 states, primarily in the Southeastern and Southwestern United States, and total assets of $3.8 billion. 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.

52

---



Goodwill and Intangible Assets

During the first quarters of 2005 and 2004 no goodwill was impaired or written off. Intangible assets amortization expense was $447 million and
$319 million for the three months ended March 31, 2005 and 2004, respectively.

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                  |  | $                                       | 11,503 |                            | $ | 11,042               |  | $                  
|Corporate and Investment Banking |  |                                         | 2,984  |                            |   | 2,992                |  |                    
|Global Wealth Management         |  |                                         | 504    |                            |   | 573                  |  |                    
|Asset Management                 |  |                                         | 108    |                            |   | 150                  |  |                    
|Alternative Investments          |  |                                         | 784    |                            |   | 132                  |  |                    
|Corporate/Other                  |  |                                         | 222    |                            |   | 550                  |  |                    
|                                 |  |                                         |        |                            |   |                      |  |                    
|Total                            |  | $                                       | 16,105 |                            | $ | 15,439               |  | $                  
|                                 |  |                                         |        |                            |   |                      |  |                    

---

5.     Investments

|In millions of dollars                                               |  | March 31,
2005 |         | December 31,
2004
|-------------------------------------------------------------------- |  | -------------- | ------- | -----------------
|Fixed maturities, substantially all available-for-sale at fair value |  | $              | 139,574 |                  
|Equity securities(1)                                                 |  |                | 7,023   |                  
|Venture capital, at fair value                                       |  |                | 4,346   |                  
|Short-term and other                                                 |  |                | 322     |                  
|                                                                     |  |                |         |                  
|Total investments                                                    |  | $              | 151,265 |                  
|                                                                     |  |                |         |                  

---

The
amortized cost and fair value of investments in fixed maturities and equity securities at March 31, 2005 and December 31, 2004 were as follows:

|                                              |  | March 31, 2005 |         | December 31, 2004(1)
|--------------------------------------------- |  | -------------- | ------- | --------------------
|
|Fixed maturity securities held to maturity(2) |  | $              | 89      |                     
|                                              |  |                |         |                     
|Fixed maturity securities available-for-sale  |  |                |         |                     
|U.S. Treasury and Federal agencies            |  |                | 36,166  |                     
|State and municipal                           |  |                | 9,042   |                     
|Foreign government                            |  |                | 63,539  |                     
|U.S. corporate                                |  |                | 15,523  |                     
|Other debt securities                         |  |                | 15,085  |                     
|                                              |  |                |         |                     
|                                              |  |                | 139,355 |                     
|                                              |  |                |         |                     
|Total fixed maturities                        |  | $              | 139,444 |                     
|                                              |  |                |         |                     
|Equity securities(3)                          |  | $              | 6,729   |                     
|                                              |  |                |         |                     

---

53

---



The
following table presents venture capital investment gains and losses:

|                                           |  | Three Months Ended March 31, |    
|------------------------------------------ |  | ---------------------------- | ---
|
|
|Net realized investment gains (losses)     |  | $                            | 34 
|Gross unrealized gains                     |  |                              | 674
|Gross unrealized (losses)                  |  |                              | (86
|                                           |  |                              |    
|Net realized and unrealized gains (losses) |  | $                            | 622
|                                           |  |                              |    

6.     Trading Account Assets and Liabilities

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

|In millions of dollars                                        |  | March 31,
2005 |        | December 31,
2004
|------------------------------------------------------------- |  | -------------- | ------ | -----------------
|Trading account assets                                        |  |                |        |                  
|U.S. Treasury and Federal agency securities                   |  | $              | 4,355  |                  
|Foreign government securities, corporate and other securities |  |                | 35,744 |                  
|Equity securities                                             |  |                | 14,317 |                  
|Derivative and other(1)                                       |  |                | 39,801 |                  
|                                                              |  |                |        |                  
|Total trading account assets                                  |  | $              | 94,217 |                  
|                                                              |  |                |        |                  
|Trading account liabilities                                   |  |                |        |                  
|Securities sold, not yet purchased                            |  | $              | 9,484  |                  
|Derivative and other contractual commitments(1)               |  |                | 37,497 |                  
|                                                              |  |                |        |                  
|Total trading account liabilities                             |  | $              | 46,981 |                  
|                                                              |  |                |        |                  

---

7.     Changes in Equity from Nonowner Sources

Changes in each component of "Accumulated Other Changes in Equity from Nonowner Sources" for the three-month period ended March 31, 2005 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, 2004                                                        |  | $                                             | 706  |                                         | $ | (3,029           | ) | $                                                         | 124
|Decrease in unrealized gains on investment securities, net of tax(1)              |  |                                               | (173 | )                                       |   |                 |   |                                                           |   
|Less: Reclassification adjustment for gains included in net income, net of tax(1) |  |                                               | (123 | )                                       |   |                 |   |                                                           |   
|Foreign currency translation adjustment, net of tax(2)                            |  |                                               |     |                                         |   | (616             | ) |                                                           |   
|Cash flow hedges, net of tax                                                      |  |                                               |     |                                         |   |                 |   |                                                           | 62 
|                                                                                  |  |                                               |      |                                         |   |                  |   |                                                           |    
|Current period change                                                             |  |                                               | (296 | )                                       |   | (616             | ) |                                                           | 62 
|                                                                                  |  |                                               |      |                                         |   |                  |   |                                                           |    
|Balance, March 31, 2005                                                           |  | $                                             | 410  |                                         | $ | (3,645           | ) | $                                                         | 186
|                                                                                  |  |                                               |      |                                         |   |                  |   |                                                           |    

---

54

---



8.     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 months ended March 31, 2005 and 2004:

|                                                                                                                                     |  | Three Months Ended March 31, |     
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ----
|
|
|Fair Value Hedges:                                                                                                                   |  |                              |     
|Hedge ineffectiveness recognized in earnings                                                                                         |  | $                            | 5   
|Net gain (loss) excluded from assessment of effectiveness(2)                                                                         |  |                              | (267
|Cash Flow Hedges:                                                                                                                    |  |                              |     
|Hedge ineffectiveness recognized in earnings                                                                                         |  |                              | (1  
|Net gain (loss) excluded from assessment of effectiveness(2)                                                                         |  |                              |    
|Net Investment Hedges:                                                                                                               |  |                              |     
|Net gain (loss) included in foreign currency translation adjustment within accumulated other changes in equity from nonowner sources |  | $                            | 230 
|                                                                                                                                     |  |                              |     

---

The
accumulated other changes in equity from nonowner sources from cash flow hedges for the three months ended March 31, 2005 and 2004 can be summarized as follows
(after-tax):

|In millions of dollars               |  | 2005 |     | 2004 |  
|------------------------------------ |  | ---- | --- | ---- | -
|Balance at January 1,                |  | $    | 124 |      | $
|Net gain from cash flow hedges       |  |      | 88  |      |  
|Net amounts reclassified to earnings |  |      | (26 | )    |  
|                                     |  |      |     |      |  
|Balance at March 31,                 |  | $    | 186 |      | $
|                                     |  |      |     |      |  

55

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9.     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 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's mortgage loan securitizations are primarily non-recourse, thereby effectively transferring the risk of future credit losses to the
purchaser of the securities issued by the trust.

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

The
following tables summarize certain cash flows received from and paid to securitization trusts during the three months ended March 31, 2005 and 2004:

|                                                                   |  | Three Months Ended March 31, 2005
|------------------------------------------------------------------ |  | ---------------------------------
|
|Proceeds from new securitizations                                  |  | $                                
|Proceeds from collections reinvested in new receivables            |  |                                  
|Servicing fees received                                            |  |                                  
|Cash flows received on retained interests and other net cash flows |  |                                  
|                                                                   |  |                                  

|                                                                   |  | Three Months Ended March 31, 2004
|------------------------------------------------------------------ |  | ---------------------------------
|
|Proceeds from new securitizations                                  |  | $                                
|Proceeds from collections reinvested in new receivables            |  |                                  
|Servicing fees received                                            |  |                                  
|Cash flows received on retained interests and other net cash flows |  |                                  
|                                                                   |  |                                  

---

The
Company recognized gains on securitizations of mortgages of $80 million and $78 million for the three-month periods ended March 31, 2005 and 2004, respectively.
In the first quarter of 2005, the Company recorded gains of $258 million related to the securitization of credit card receivables. No such gains were recorded during the first quarter of 2004.
No gains were recognized on the securitization of other assets during the first three months of 2005 or 2004.

56

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Key
assumptions used for credit cards, mortgages and other assets during the three months ended March 31, 2005 and 2004 in measuring the fair value of retained interests at the
date of sale or securitization follow:

|                              |  | Three Months Ended
March 31, 2005 |  | Three Months Ended
March 31, 2004
|----------------------------- |  | --------------------------------- |  | ---------------------------------
|
|Discount rate                 |  | 13.6% to 15.6%                    |  | 5.0% to 12.3%                    
|Constant prepayment rate(2)   |  | 13.7% to 17.5%                    |  | 7.0% to 8.1%                     
|Anticipated net credit losses |  | 5.3% to 6.2%                      |  | 0.8% to 9.0%                     
|                              |  |                                   |  |                                  

---

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

At
March 31, 2005, 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 March 31, 2005: |  | Discount Rate  |  | Constant
Prepayment Rate(1) |  | Anticipated Net
Credit Losses
|---------------------------------- |  | -------------- |  | --------------------------- |  | -----------------------------
|Credit cards                       |  | 10.0% to 15.6% |  | 13.7% to 17.5%              |  | 4.8% to 6.2%                 
|Mortgages and other                |  | 5.0% to 10.4%  |  | 7.0% to 14.2%               |  | 0.8% to 9.0%                 
|                                   |  |                |  |                             |  |                              

---

|In millions of dollars               |  | March 31, 2005 |      
|------------------------------------ |  | -------------- | -----
|Carrying value of retained interests |  | $              | 9,164
|                                     |  |                |      
|Discount rate                        |  |                |      
|+10%                                 |  | $              | (138 
|+20%                                 |  | $              | (269 
|                                     |  |                |      
|Constant prepayment rate             |  |                |      
|+10%                                 |  | $              | (352 
|+20%                                 |  | $              | (664 
|                                     |  |                |      
|Anticipated net credit losses        |  |                |      
|+10%                                 |  | $              | (236 
|+20%                                 |  | $              | (461 
|                                     |  |                |      

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
March 31, 2005 and December 31, 2004, and credit losses, net of recoveries, for the three-month periods ended March 31, 2005 and 2004.

57

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Credit Card Receivables

|In billions of dollars            |  | March 31, 2005 |        | December 31, 2004 |  
|--------------------------------- |  | -------------- | ------ | ----------------- | -
|Principal amounts, at period end: |  |                |        |                   |  
|Total managed                     |  | $              | 158.3  |                   | $
|Securitized amounts               |  |                | (87.7  | )                 |  
|Loans held for sale               |  |                | (0.6   | )                 |  
|                                  |  |                |        |                   |  
|On-balance sheet                  |  | $              | 70.0   |                   | $
|                                  |  |                |        |                   |  
|In millions of dollars            |  |                |        |                   |  
|Delinquencies, at period end:     |  |                |        |                   |  
|Total managed                     |  | $              | 2,753  |                   | $
|Securitized amounts               |  |                | (1,296 | )                 |  
|Loans held for sale               |  |                | (10    | )                 |  
|                                  |  |                |        |                   |  
|On-balance sheet                  |  | $              | 1,447  |                   | $
|                                  |  |                |        |                   |  
|
|
|
|Credit losses, net of recoveries: |  |                |        |                   |  
|Total managed                     |  | $              | 2,081  |                   | $
|Securitized amounts               |  |                | (1,162 | )                 |  
|Loans held for sale               |  |                | (4     | )                 |  
|                                  |  |                |        |                   |  
|On-balance sheet                  |  | $              | 915    |                   | $
|                                  |  |                |        |                   |  

Servicing Rights

The fair value of capitalized mortgage loan servicing rights was $4.2 billion, $4.1 billion and $1.9 billion at March 31, 2005,
December 31, 2004 and March 31, 2004, respectively. The following table summarizes the changes in capitalized mortgage servicing rights (MSR):

|                                      |  | Three Months Ended March 31, |      
|------------------------------------- |  | ---------------------------- | -----
|
|
|Balance, beginning of period          |  | $                            | 4,149
|Originations                          |  |                              | 172  
|Purchases                             |  |                              |     
|Amortization                          |  |                              | (196 
|Gain (loss) on change in MSR value(1) |  |                              | 59   
|Provision for impairment(2)(3)        |  |                              | 6    
|                                      |  |                              |      
|Balance, end of period                |  | $                            | 4,190
|                                      |  |                              |      

---

58

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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            |  | March 31, 2005 |      | December 31, 2004
|--------------------------------- |  | -------------- | ---- | -----------------
|Cash                              |  | $              | 0.8  |                  
|Trading account assets            |  |                | 13.9 |                  
|Investments                       |  |                | 4.4  |                  
|Loans                             |  |                | 9.5  |                  
|Other assets                      |  |                | 0.6  |                  
|                                  |  |                |      |                  
|Total assets of consolidated VIEs |  | $              | 29.2 |                  
|                                  |  |                |      |                  

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 FIN46-R as of January 1, 2004 and $0.1 billion related to VIEs newly consolidated as a result of adopting FIN 46 at
July 1, 2003. Of the $29.2 billion and $29.4 billion of total assets of VIEs consolidated by the Company at March 31, 2005 and December 31, 2004, respectively,
$23.7 billion and $22.8 billion, respectively, 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, $3.6 billion and $4.5 billion, respectively, represent investment vehicles that were established to
provide a return to the investors in the vehicles, and $1.9 billion and $2.1 billion represent vehicles that hold lease receivables and equipment as collateral to issue debt securities,
thus obtaining secured financing at favorable interest rates.

The
Company may, along with other financial institutions, provide liquidity facilities to the VIEs. Furthermore, the Company may be a party to derivative contracts with VIEs, may provide
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 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 $0.8 billion during the first quarter of 2004. The Company's liabilities to these trusts are included
in long-term debt at March 31, 2005 and December 31, 2004.

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
March 31, 2005 and December 31, 2004, total assets in unconsolidated conduits were $58.4 billion and $51.0 billion, respectively. One conduit with assets of
$412 million and $656 million is consolidated at March 31, 2005 and December 31, 2004, 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.

59

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In
addition to the conduits discussed above, the total assets of unconsolidated VIEs where the Company has significant involvement are $45.1 billion and $47.9 billion at
March 31, 2005 and December 31, 2004, respectively, including $4.8 billion and $7.4 billion in investment-related transactions, $1.9 billion and $0.1 billion
in mortgage-related transactions, $1.0 billion and $0.5 billion in CDO-type transactions, $0.8 billion and $0.8 billion in trust preferred securities, and
$36.6 billion and $39.1 billion in structured finance and other transactions.

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 $51.9 billion at March 31, 2005. 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 addition, the Company may be
party to other derivative contracts with VIEs. Exposures that are considered to be guarantees are also included in Note 11 to the Consolidated Financial Statements.

10.   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 $56 million and $64 million at March 31, 2005 and
2004, respectively. Citicorp's allocated share of the net expense was $34 million and $18 million at March 31, 2005 and 2004, respectively.

The
Company also has various defined benefit pension and termination indemnity plans covering employees outside the United States that resulted in net expense of $38 million and
$34 million at March 31, 2005 and 2004, 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 $12 million and $11 million at March 31, 2005 and 2004,
respectively.

The
Company's retirement benefit plans are described in more detail in Citigroup's 2004 Annual Report on Form 10-K.

60

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11.   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 March 31, 2005 and December 31, 2004 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 March 31, 2005 and December 31, 2004:

|                                                      |  | March 31, 2005
|----------------------------------------------------- |  | --------------
|
|
|Financial standby letters of credit                   |  | $             
|Performance guarantees                                |  |               
|Derivative instruments                                |  |               
|Guarantees of collection of contractual cash flows(1) |  |               
|Loans sold with recourse                              |  |               
|Securities lending indemnifications(1)                |  |               
|Credit card merchant processing(1)                    |  |               
|Custody indemnifications(1)                           |  |               
|                                                      |  |               
|Total                                                 |  | $             
|                                                      |  |               

|                                                      |  | December 31, 2004
|----------------------------------------------------- |  | -----------------
|
|
|Financial standby letters of credit                   |  | $                
|Performance guarantees                                |  |                  
|Derivative instruments                                |  |                  
|Guarantees of collection of contractual cash flows(1) |  |                  
|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
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
March 31, 2005 and December 31, 2004, the Company's maximum potential amount of future payments under these guarantees was approximately $673.4 billion and
$405.7 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,

61

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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 and 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 March 31, 2005 and December 31,
2004, the Company held as collateral approximately $8 million and $6 million, respectively, of merchant escrow deposits and also had $102.8 million and $68 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 March 31, 2005 and December 31, 2004, this maximum potential exposure was estimated to be $27.1 billion and
$29.7 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 March 31,
2005, 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 the first quarters of 2005 and 2004. 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 March 31, 2005, 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 March 31, 2005 and December 31, 2004, related to these indemnifications and they are not included in the table
above.

In
addition, the Company is a member of or shareholder in hundreds of value transfer networks (VTNs) (payment, clearing and settlement systems as well as securities exchanges) around the
world. As a condition of membership, many of these VTNs require that members stand ready to backstop the net effect on the VTNs of a member's default on its obligations. The Company's potential
obligations as a shareholder or member of VTN associations are excluded from the scope of FIN 45, since the shareholders and members represent subordinated classes of investors in the VTNs.
Accordingly, the Company's participation in VTNs is not reported in the table above and there are no amounts reflected on the Consolidated Balance Sheet as of March 31, 2005 or
December 31, 2004 for potential obligations that could arise from the Company's involvement with VTN associations.

62

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At
March 31, 2005 and December 31, 2004, the carrying amounts of the liabilities related to the guarantees and indemnifications included in the table above amounted to
approximately $15.5 billion and $13.9 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 March 31, 2005 and December 31, 2004, 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 $51.2 billion and
$43.3 billion at March 31, 2005 and December 31, 2004, respectively. Securities and other marketable assets held as collateral amounted to $30.3 billion and
$31.6 billion and letters of credit in favor of the Company held as collateral amounted to $541 million and $560 million at March 31, 2005 and December 31, 2004,
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.

12.   Contingencies

As described in the "Legal Proceedings" discussion on page 73, the Company is a defendant in numerous lawsuits and other legal proceedings arising out of
alleged misconduct in connection with underwritings for Enron and other transactions and activities related to Enron and Dynegy.

During
the 2004 second quarter, in connection with the settlement of the WorldCom class action, the Company reevaluated and increased its reserves for these matters. The Company recorded
a charge of $1.4 billion ($850 million after-tax) relating to an increase in litigation reserves for these matters.

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, the novel issues presented, 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 interests 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.

63

---



13.   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 March 31, 2005 that matures
in October 2005. 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
agreements). At March 31, 2005, this requirement was exceeded by approximately $78.0 billion.

Merger of Bank Holding Companies

On February 11, 2005, Citigroup announced plans to merge its two intermediate bank holding companies, Citigroup Holdings Company and Citicorp, into
Citigroup Inc. This transaction is subject to regulatory approval and is expected to take place by the end of the 2005 third quarter. Citigroup will assume all existing indebtedness and
outstanding guarantees of Citicorp.

Citigroup
also announced it would consolidate its capital markets funding activities in two legal entities: i) Citigroup Inc., which will continue to issue
long-term debt, trust preferred securities, preferred and common stock, and ii) Citigroup Funding Inc. ("CFI") a newly formed, fully guaranteed, first-tier
subsidiary of Citigroup, which will issue commercial paper and medium-term notes. It is anticipated that this funding consolidation will commence during the 2005 second quarter.

64

---



Condensed Consolidating Statement of Income

|                                                                                           |  | Three Months Ended March 31, 2005
|------------------------------------------------------------------------------------------ |  | ---------------------------------
|
|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                                                                                 |  | $                                
|                                                                                           |  |                                  

---

65

---



Condensed Consolidating Statement of Income

|                                                                                           |  | Three Months Ended March 31, 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                                                                                 |  | $                                
|                                                                                           |  |                                  

---

66

---



Condensed Consolidating Balance Sheet

|                                                  |                  | March 31, 2005 |        
|------------------------------------------------- | ---------------- | -------------- | -------
|
|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      |                  |                | 4,760  
|Investments                                       |                  |                | 52     
|Loans, net of unearned incomethird party         |                  |                |       
|Loans, net of unearned incomeintercompany        |                  |                |       
|Allowance for credit losses                       |                  |                |       
|                                                  |                  |                |        
|                                                  | Total loans, net |                |        
|Advances to subsidiaries                          |                  |                | 46,174 
|Investments in subsidiaries                       |                  |                | 108,813
|Other assetsthird party                          |                  |                | 2,787  
|Other assetsintercompany                         |                  |                |       
|                                                  |                  |                |        
|Total assets                                      |                  | $              | 162,591
|                                                  |                  |                |        
|Liabilities and stockholder's equity              |                  |                |        
|Deposits                                          |                  | $              |       
|Purchased funds and other borrowingsthird party  |                  |                | 15,942 
|Purchased funds and other borrowingsintercompany |                  |                |       
|Long-term debtthird party                        |                  |                | 48,029 
|Long-term debtintercompany                       |                  |                |       
|Advances from subsidiaries                        |                  |                | 411    
|Other liabilitiesthird party                     |                  |                | 1,014  
|Other liabilitiesintercompany                    |                  |                | 138    
|Stockholder's equity                              |                  |                | 97,057 
|                                                  |                  |                |        
|Total liabilities and stockholder's equity        |                  | $              | 162,591
|                                                  |                  |                |        

---

67

---



Condensed Consolidating Balance Sheet

|                                                  |                  | December 31, 2004 |        
|------------------------------------------------- | ---------------- | ----------------- | -------
|
|Assets                                            |                  |                   |        
|Cash and due from banksthird party               |                  | $                 |       
|Cash and due from banksintercompany              |                  |                   | 7      
|Deposits at interest with banksthird party       |                  |                   |       
|Deposits at interest with banksintercompany      |                  |                   | 4,006  
|Investments                                       |                  |                   | 56     
|Loans, net of unearned incomethird party         |                  |                   |       
|Loans, net of unearned incomeintercompany        |                  |                   |       
|Allowance for credit losses                       |                  |                   |       
|                                                  |                  |                   |        
|                                                  | Total loans, net |                   |        
|Advances to subsidiaries                          |                  |                   | 43,174 
|Investments in subsidiaries                       |                  |                   | 106,085
|Other assetsthird party                          |                  |                   | 2,367  
|Other assetsintercompany                         |                  |                   |       
|                                                  |                  |                   |        
|Total assets                                      |                  | $                 | 155,695
|                                                  |                  |                   |        
|Liabilities and stockholder's equity              |                  |                   |        
|Deposits                                          |                  | $                 |       
|Purchased funds and other borrowingsthird party  |                  |                   | 11,666 
|Purchased funds and other borrowingsintercompany |                  |                   |       
|Long-term debtthird party                        |                  |                   | 48,122 
|Long-term debtintercompany                       |                  |                   |       
|Advances from subsidiaries                        |                  |                   | 443    
|Other liabilitiesthird party                     |                  |                   | 751    
|Other liabilitiesintercompany                    |                  |                   | 35     
|Stockholder's equity                              |                  |                   | 94,678 
|                                                  |                  |                   |        
|Total liabilities and stockholder's equity        |                  | $                 | 155,695
|                                                  |                  |                   |        

---

68

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                          |  | Three Months Ended March 31, 2005 |       
|------------------------------------------------------------------------- |  | --------------------------------- | ------
|
|Net cash provided by operating activities                                 |  | $                                 | 192   
|                                                                          |  |                                   |       
|Cash flows from investing activities                                      |  |                                   |       
|Investmentsavailable-for-sale and short-term and other                   |  |                                   |       
|Purchases                                                                 |  |                                   |      
|Proceeds from sales                                                       |  |                                   | 4     
|Maturities                                                                |  |                                   |      
|Changes in investments and advancesintercompany                          |  |                                   | (3,353
|Net increase in loans                                                     |  |                                   |      
|Proceeds from sales of loans                                              |  |                                   |      
|Other investing activities                                                |  |                                   |      
|                                                                          |  |                                   |       
|Net cash (used in) provided by investing activities                       |  |                                   | (3,349
|                                                                          |  |                                   |       
|Cash flows from financing activities                                      |  |                                   |       
|Net increase in deposits                                                  |  |                                   |      
|Net change in purchased funds and other borrowingsthird party            |  |                                   | 4,275 
|Net change in purchased funds, other borrowings and advancesintercompany |  |                                   | (32   
|Net repayment from issuance of long-term debtthird party                 |  |                                   | (91   
|Net proceeds (repayments) from issuance of long-term debtintercompany    |  |                                   |      
|Dividends paid                                                            |  |                                   | (997  
|                                                                          |  |                                   |       
|Net cash provided by (used in) financing activities                       |  |                                   | 3,155 
|                                                                          |  |                                   |       
|Effect of exchange rate changes on cash and due from banks                |  |                                   |      
|                                                                          |  |                                   |       
|Net (decrease) increase in cash and due from banks                        |  |                                   | (2    
|Cash and due from banks at beginning of period                            |  |                                   | 7     
|                                                                          |  |                                   |       
|Cash and due from banks at end of period                                  |  | $                                 | 5     
|                                                                          |  |                                   |       
|Supplemental disclosure of cash flow information                          |  |                                   |       
|Cash paid during the year for:                                            |  |                                   |       
|Interest                                                                  |  | $                                 | 287   
|Income taxes                                                              |  |                                   | 46    
|Non-cash investing activities:                                            |  |                                   |       
|Transfers to repossessed assets                                           |  |                                   |      
|                                                                          |  |                                   |       

---

69

---



Condensed Consolidating Statements of Cash Flows (Unaudited)

|                                                                          |  | Three Months Ended March 31, 2004 |     
|------------------------------------------------------------------------- |  | --------------------------------- | ----
|
|Net cash provided by operating activities                                 |  | $                                 | 627 
|                                                                          |  |                                   |     
|Cash flows from investing activities                                      |  |                                   |     
|Investmentsavailable for sale and short-term and other                   |  |                                   |     
|Purchases                                                                 |  |                                   |    
|Proceeds from sales                                                       |  |                                   | 24  
|Maturities                                                                |  |                                   |    
|Changes in investments and advancesintercompany                          |  |                                   | 180 
|Net increase in loans                                                     |  |                                   |    
|Proceeds from sales of loans                                              |  |                                   |    
|Business acquisitions                                                     |  |                                   |    
|Other investing activities                                                |  |                                   |    
|                                                                          |  |                                   |     
|Net cash provided by (used in) investing activities                       |  |                                   | 204 
|                                                                          |  |                                   |     
|Cash flows from financing activities                                      |  |                                   |     
|Net increase in deposits                                                  |  |                                   |    
|Net change in purchased funds and other borrowingsthird party            |  |                                   | 198 
|Net change in purchased funds, other borrowings and advancesintercompany |  |                                   | (297
|Net (repayments) proceeds from issuance of long-term debtthird party     |  |                                   | (735
|Proceeds from issuance of long-term debtintercompany, net                |  |                                   |    
|Dividends paid                                                            |  |                                   | (4  
|                                                                          |  |                                   |     
|Net cash (used in) provided by financing activities                       |  |                                   | (838
|                                                                          |  |                                   |     
|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 (received) during the period for:                               |  |                                   |     
|Interest                                                                  |  | $                                 | 169 
|Income taxes                                                              |  |                                   | (299
|Non-cash investing activities:                                            |  |                                   |     
|Transfers to repossessed assets                                           |  |                                   |    
|Capital contributions to subsidiaries                                     |  |                                   | 112 
|                                                                          |  |                                   |     

---

14.   Related Party Balances

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

70

---



FINANCIAL DATA SUPPLEMENT (UNAUDITED)

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

|                                                                       |                             | Average Volume |         | Interest Revenue |   | % Average Rate
|---------------------------------------------------------------------- | --------------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Assets                                                                 |                             |                |         |                  |   |               
|Loans (net of unearned income)(4)                                      |                             |                |         |                  |   |               
|Consumer loans                                                         |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             | $              | 299,226 |                  | $ | 294,364       
|In offices outside the U.S.(5)                                         |                             |                | 131,672 |                  |   | 130,336       
|                                                                       |                             |                |         |                  |   |               
|Total consumer loans                                                   |                             |                | 430,898 |                  |   | 424,700       
|                                                                       |                             |                |         |                  |   |               
|Corporate loans                                                        |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 16,866  |                  |   | 15,929        
|In offices outside the U.S.(5)                                         |                             |                | 98,860  |                  |   | 98,280        
|                                                                       |                             |                |         |                  |   |               
|Total corporate loans                                                  |                             |                | 115,726 |                  |   | 114,209       
|                                                                       |                             |                |         |                  |   |               
|Total loans                                                            |                             |                | 546,624 |                  |   | 538,909       
|                                                                       |                             |                |         |                  |   |               
|Federal funds sold and securities purchased under agreements to resell |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 4,739   |                  |   | 6,374         
|In offices outside the U.S.(5)                                         |                             |                | 10,647  |                  |   | 10,703        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 15,386  |                  |   | 17,077        
|                                                                       |                             |                |         |                  |   |               
|Investments                                                            |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Taxable                     |                |         | 54,208           |   |               
|                                                                       | Exempt from U.S. income tax |                |         | 9,184            |   |               
|In offices outside the U.S.(5)                                         |                             |                | 84,806  |                  |   | 82,993        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 148,198 |                  |   | 144,091       
|                                                                       |                             |                |         |                  |   |               
|Trading account assets(6)                                              |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 27,023  |                  |   | 24,039        
|In offices outside the U.S.(5)                                         |                             |                | 27,129  |                  |   | 25,758        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 54,152  |                  |   | 49,797        
|                                                                       |                             |                |         |                  |   |               
|Loans held-for-sale, in U.S. offices                                   |                             |                | 8,766   |                  |   | 11,041        
|                                                                       |                             |                |         |                  |   |               
|Deposits at interest with banks(5)                                     |                             |                | 28,869  |                  |   | 27,208        
|                                                                       |                             |                |         |                  |   |               
|Total interest-earning assets                                          |                             |                | 801,995 |                  |   | 788,123       
|                                                                       |                             |                |         |                  |   |               
|Non-interest earning assets(6)                                         |                             |                | 143,783 |                  |   | 143,524       
|                                                                       |                             |                |         |                  |   |               
|Total assets                                                           |                             | $              | 945,778 |                  | $ | 931,647       
|                                                                       |                             |                |         |                  |   |               

---

71

---



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

|                                                                           |                     | Average Volume |         | Interest Expense |   | % Average Rate
|-------------------------------------------------------------------------- | ------------------- | -------------- | ------- | ---------------- | - | --------------
|
|Liabilities                                                                |                     |                |         |                  |   |               
|Deposits                                                                   |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                |         |                  |   |               
|                                                                           | Savings deposits(4) |                | $       | 132,401          |   | $             
|                                                                           | Other time deposits |                |         | 32,688           |   |               
|In offices outside the U.S.(5)                                             |                     |                | 340,734 |                  |   | 335,822       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 505,823 |                  |   | 497,608       
|                                                                           |                     |                |         |                  |   |               
|Trading account liabilities(6)                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 8,030   |                  |   | 7,430         
|In offices outside the U.S.(5)                                             |                     |                | 1,585   |                  |   | 1,552         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 9,615   |                  |   | 8,982         
|                                                                           |                     |                |         |                  |   |               
|Purchased funds and other borrowings                                       |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 40,749  |                  |   | 40,614        
|In offices outside the U.S.(5)                                             |                     |                | 29,480  |                  |   | 31,247        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 70,229  |                  |   | 71,861        
|                                                                           |                     |                |         |                  |   |               
|Long-term debt                                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 94,928  |                  |   | 92,943        
|In offices outside the U.S.(5)                                             |                     |                | 21,649  |                  |   | 21,885        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 116,577 |                  |   | 114,828       
|                                                                           |                     |                |         |                  |   |               
|Total interest-bearing liabilities                                         |                     |                | 702,244 |                  |   | 693,279       
|                                                                           |                     |                |         |                  |   |               
|Demand deposits in U.S. offices                                            |                     |                | 4,916   |                  |   | 4,554         
|Other non-interest bearing liabilities(6)                                  |                     |                | 142,503 |                  |   | 141,499       
|Total stockholder's equity                                                 |                     |                | 96,115  |                  |   | 92,315        
|                                                                           |                     |                |         |                  |   |               
|Total liabilities and stockholder's equity                                 |                     | $              | 945,778 |                  | $ | 931,647       
|                                                                           |                     |                |         |                  |   |               
|Net interest revenue as a percentage of average interest-earning assets(7) |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     | $              | 420,515 |                  | $ | 412,924       
|In offices outside the U.S.                                                |                     |                | 381,480 |                  |   | 375,199       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     | $              | 801,995 |                  | $ | 788,123       
|                                                                           |                     |                |         |                  |   |               

---

72

---





PART II.    OTHER INFORMATION

Item 1.    Legal Proceedings

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, 2004.

Enron Corp.

In April 2005, Citigroup, along with other financial institution defendants, reached an agreement-in-principle to settle four
state-court actions brought by various investment funds, which were not previously consolidated or coordinated with the NEWBY action. The four cases are OCM OPPORTUNITIES FUND III, L.P., et al. v.
CITIGROUP INC., et al.; PACIFIC INVESTMENT MANAGEMENT CO. LLC, et al. v. CITIGROUP INC., et al.; AUSA LIFE INSURANCE v. CITIGROUP INC., et al. and PRINCIPAL GLOBAL INVESTORS v.
CITIGROUP INC., et al. The amounts to be paid in settlement of these actions are covered by existing litigation reserves.

Dynegy Inc.

The court had previously denied lead plaintiff's motion for leave to amend; no appeal was yet timely while the remainder of the case remained pending. On
April 15, 2005, as part of a global settlement involving all defendants, Citigroup entered into a memorandum of understanding to settle this case. The amount to be paid in settlement is covered
by existing litigation reserves.

Parmalat

On February 28, 2005, the Court granted in part and denied in part defendants' motion to dismiss the New Jersey action. Defendants filed an answer and
counterclaims on March 17, 2005, alleging causes of action for fraud, negligent misrepresentation, conversion and breach of warranty. On April 21, 2005, plaintiff/counterclaim defendant
filed a motion to dismiss the counterclaims. That motion remains pending.

Foreign Currency Conversion

On March 9, 2005, the United States District Court for the Southern District of New York granted in part and denied in part defendants' motions for
reconsideration of certain aspects of the October 15, 2004 rulings. Among other things, the Court narrowed the antitrust classes to certain VISA-branded or MasterCard-branded
cardholders of Citibank (South Dakota) and J.P. Morgan Chase & Co., and declined to certify a Diners Club subclass. Plaintiffs have since filed a motion asking the Court to reconsider portions
of its March 9, 2005 rulings.

73

---



Item 6.    Exhibits

See Exhibit Index.

74

---





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 16th day of May, 2005.

| |  |    |  |                                                                                          
| |  | -- |  | -----------------------------------------------------------------------------------------
| |  |    |  | CITICORP(Registrant)                                                                     
| |  | By |  | /s/SALLIE KRAWCHECKSallie Krawcheck
Chief Financial Officer
(Principal Financial Officer)
| |  | By |  | /s/JOHN C. GERSPACHJohn C. Gerspach
Controller
(Principal Accounting Officer)            

75

---





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.                                                                                                                                                                               

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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.

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