SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

For Annual and Transition Reports Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934

|(Mark One) |                                                                                                                                      
|---------- | -------------------------------------------------------------------------------------------------------------------------------------
|ý          | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2004     
|OR        
|o          | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period
from            to

Commission file number: 1-5738

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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)                               

Registrant's
telephone number, including area code:(212) 559-1000

Securities
registered pursuant to Section 12(b) of the Act:

Securities
registered pursuant to Section 12(g) of the Act:

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ý

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). 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.

Documents
Incorporated by Reference: None

REDUCED DISCLOSURE FORMAT

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

Available on the Web at www.citigroup.com



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FINANCIAL INFORMATION

|THE COMPANY                                               |                                                                                                    | 3  
|--------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ---
|                                                          | Global Consumer                                                                                    |    
|                                                          | Global Corporate and Investment Bank                                                               |    
|                                                          | Global Wealth Management                                                                           |    
|                                                          | Global Investment Management                                                                       |    
|                                                          | Proprietary Investment Activities                                                                  |    
|                                                          | Corporate/Other                                                                                    |    
|MANAGEMENT'S DISCUSSION & ANALYSIS                        |                                                                                                    | 5  
|SUMMARY OF SELECTED FINANCIAL DATA                        |                                                                                                    | 5  
|EVENTS IN 2004                                            |                                                                                                    | 6  
|2005 SUBSEQUENT EVENT                                     |                                                                                                    | 7  
|EVENTS IN 2003                                            |                                                                                                    | 8  
|SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES |                                                                                                    | 9  
|                                                          | Accounting Changes and Future Application of Accounting Standards                                  |    
|BUSINESS FOCUS                                            |                                                                                                    | 13 
|                                                          | Citicorp Net IncomeProduct View                                                                   |    
|RESULTS OF OPERATIONS                                     |                                                                                                    | 14 
|GLOBAL CONSUMER                                           |                                                                                                    | 15 
|                                                          | Cards                                                                                              |    
|                                                          | Consumer Finance                                                                                   |    
|                                                          | Retail Banking                                                                                     |    
|                                                          | Other Consumer                                                                                     |    
|                                                          | Global Consumer Outlook                                                                            |    
|GLOBAL CORPORATE AND INVESTMENT BANK                      |                                                                                                    | 20 
|                                                          | Capital Markets and Banking                                                                        |    
|                                                          | Transaction Services                                                                               |    
|                                                          | Global Corporate and Investment Bank Outlook                                                       |    
|GLOBAL WEALTH MANAGEMENT                                  |                                                                                                    | 22 
|                                                          | Private Bank                                                                                       |    
|                                                          | Global Wealth Management Outlook                                                                   |    
|GLOBAL INVESTMENT MANAGEMENT                              |                                                                                                    | 23 
|                                                          | Life Insurance and Annuities                                                                       |    
|                                                          | Asset Management                                                                                   |    
|                                                          | Global Investment Management Outlook                                                               |    
|PROPRIETARY INVESTMENT ACTIVITIES                         |                                                                                                    | 24 
|CORPORATE/OTHER                                           |                                                                                                    | 25 
|MANAGING GLOBAL RISK                                      |                                                                                                    | 26 
|                                                          | Credit Risk Management Process                                                                     |    
|                                                          | Loans Outstanding                                                                                  |    
|                                                          | Other Real Estate Owned and Other Repossessed Assets                                               |    
|                                                          | Details of Credit Loss Experience                                                                  |    
|                                                          | Cash-Basis, Renegotiated, and Past Due Loans                                                       |    
|                                                          | Foregone Interest Revenue on Loans                                                                 |    
|                                                          | Consumer Credit Risk                                                                               |    
|                                                          | Consumer Portfolio Review                                                                          |    
|                                                          | Corporate Credit Risk                                                                              |    
|                                                          | Global Corporate Portfolio Review                                                                  |    
|                                                          | Loan Maturities and Fixed/Variable Pricing                                                         |    
|                                                          | Market Risk Management Process                                                                     |    
|                                                          | Operational Risk Management Process                                                                |    
|                                                          | Country and Cross-Border Risk Management Process                                                   |    
|CAPITAL RESOURCES AND LIQUIDITY                           |                                                                                                    | 39 
|                                                          | Capital Resources                                                                                  |    
|                                                          | Liquidity                                                                                          |    
|                                                          | Off-Balance Sheet Arrangements                                                                     |    
|CORPORATE GOVERNANCE AND CONTROLS AND PROCEDURES          |                                                                                                    | 46 
|FORWARD-LOOKING STATEMENTS                                |                                                                                                    | 46 
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   |                                                                                                    | 47 
|CONSOLIDATED FINANCIAL STATEMENTS                         |                                                                                                    | 48 
|                                                          | Consolidated Statement of Income                                                                   |    
|                                                          | Consolidated Balance Sheet                                                                         |    
|                                                          | Consolidated Statement of Changes in Stockholder's Equity                                          |    
|                                                          | Consolidated Statement of Cash Flows                                                               |    
|                                                          | Consolidated Balance SheetCitibank, N.A. and Subsidiaries                                         |    
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                |                                                                                                    | 53 
|FINANCIAL DATA SUPPLEMENT                                 |                                                                                                    | 93 
|                                                          | Average Balances and Interest Rates, Taxable Equivalent BasisAssets                               |    
|                                                          | Average Balances and Interest Rates, Taxable Equivalent BasisLiabilities and Stockholder's Equity |    
|                                                          | Analysis of Changes in Net Interest Revenue, Taxable Equivalent Basis                              |    
|                                                          | Ratios                                                                                             |    
|                                                          | Average Deposit Liabilities in Offices Outside the U.S.                                            |    
|                                                          | Maturity Profile of Time Deposits ($100,000 or more) in U.S. Offices                               |    
|                                                          | Short-Term and Other Borrowings                                                                    |    
|                                                          | Regulation and Supervision                                                                         |    
|                                                          | Legal Proceedings                                                                                  |    
|10-K CROSS-REFERENCE INDEX                                |                                                                                                    | 103
|CORPORATE INFORMATION                                     |                                                                                                    | 104
|                                                          | Exhibits and Financial Statement Schedules                                                         |    

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, Global Corporate and Investment Bank (GCIB), Global Wealth Management, Global Investment Management (GIM) and
Proprietary Investment Activities business segments.

The
Company has completed certain strategic business acquisitions during the past three years, details of which can be found in Note 2 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. Additional information on the
Company's regulation and supervision can be found within the Regulation and Supervision section beginning on page 97.

At
December 31, 2004, the Company had approximately 99,200 full-time and 6,000 part-time employees in the United States and approximately 140,000
full-time employees outside the United States.

Additional
business and financial information concerning the Company can be found in the Annual Report on Form 10-K for the year ended December 31, 2004 of
Citigroup Inc.

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

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

GLOBAL CONSUMER

Global Consumerdelivers a wide array of banking, lending, insurance and investment services through a network of
local branches, offices, 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 December 31, 2004, North America Consumer Finance maintained 2,642 offices,
including 2,452 in the U.S., Canada, and Puerto Rico, and 190 offices in Mexico, while International Consumer Finance maintained 1,481 sales points, including 405 branches and 512 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 775 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 1,349 branches. International Retail Banking consists of 1,129 branches and provides full-service banking and investment 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.

GLOBAL CORPORATE AND INVESTMENT BANK

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

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

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

3

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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.

GLOBAL INVESTMENT MANAGEMENT

Global Investment Managementoffers a broad range of life insurance, annuity and asset management products and
services distributed to institutional and retail clients. Global Investment Management includesLife Insurance and Annuitiesand Asset Management.

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

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

PROPRIETARY INVESTMENT ACTIVITIES

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

CORPORATE/OTHER

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

4

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MANAGEMENT'S DISCUSSION AND ANALYSIS

SUMMARY OF SELECTED FINANCIAL DATA
Citicorp and Subsidiaries

|In millions of dollars                           |  | 2004 |        | 2003 |  
|------------------------------------------------ |  | ---- | ------ | ---- | -
|Revenues, net of interest expense(1)             |  | $    | 62,902 |      | $
|Operating expenses                               |  |      | 31,739 |      |  
|Benefits, claims, and credit losses(1)           |  |      | 6,758  |      |  
|                                                 |  |      |        |      |  
|Income before income taxes and minority interest |  |      | 24,405 |      |  
|Income taxes                                     |  |      | 7,294  |      |  
|Minority interest, after-tax                     |  |      | 203    |      |  
|                                                 |  |      |        |      |  
|Net Income                                       |  | $    | 16,908 |      | $
|                                                 |  |      |        |      |  
|Return on average total stockholder's equity     |  |      | 19.3   | %    |  
|Total assets(in billions)                        |  | $    | 953.6  |      | $
|Total equity(in billions)                        |  | $    | 94.7   |      | $
|Tier 1 Capital Ratio                             |  |      | 8.69   | %    |  
|Total Capital Ratio                              |  |      | 12.59  | %    |  
|                                                 |  |      |        |      |  

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5

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EVENTS IN 2004

Charge for Regulatory and Legal Matters

During the 2004 second quarter, Citigroup recorded a charge of $7.915 billion ($4.95 billion after-tax) related to a settlement of class
action litigation brought on behalf of purchasers of WorldCom securities and an increase in litigation reserves.

In
connection with the settlement of the WorldCom class action, Citigroup reevaluated and increased its reserves for numerous other lawsuits and legal proceedings arising out of alleged
misconduct in connection with:



The
Company is a defendant in numerous lawsuits and other legal proceedings arising out of the transactions and activities described in (ii) above. 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 (Litigation Reserve Charge).

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 interest of the Company. See "Legal
Proceedings" on page 100.

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 GCIB.

Credit Improvement Performance

During the past two years, the world-wide credit environment has continuously improved, as evidenced by declining cash-basis loan balances
and lower delinquency rates. Accordingly, the Company has reduced its Allowance for Credit Losses.

During
2004, the Company released $2.004 billion of reserves, consisting of $900 million from GCIB's reserves and $1.104 billion from Global Consumer's reserves. The
GCIB releases consisted of a $737 million release inCapital Markets and Bankingand a $163 million release in Transaction Services. The Global
Consumer releases consisted of a $691 million net release in theCardsportfolio, a $339 million net release inRetail Banking, and a
$74 million net release in Consumer Finance. At December 31, 2004, the Company's total allowance for loans, leases and commitments was $11.869 billion.

During
2003, the Company released $508 million of reserves, consisting of $300 million in GCIB and $208 million in Global Consumer. At December 31, 2003, the
Company's total allowance for loans, leases and commitments was $13.243 billion.

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 and pages 3034 for an additional discussion of the reserve levels and credit process. See also Note 8 to the Consolidated Financial
Statements.

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 $4.4 billion. The sale, which was completed on January 31, 2005, resulted in an after-tax gain of approximately
$100 million.

The
Transportation Finance business is part of the Company's Global Consumer Retail Banking business and provides financing, leasing, and asset-based lending to the commercial trucking
industry.

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

The Financial Services Agency of Japan 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. Accordingly, 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)
for 2004 and $264 million and $83 million, respectively, for 2003.

On
October 25, 2004, Citigroup announced that it has decided to wind down Cititrust and Banking Corporation, a licensed trust bank in Japan, after concluding that there were
internal control, compliance and governance issues in that subsidiary.

6

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Acquisition of First American Bank

On August 24, 2004, Citigroup announced it will acquire First American Bank in Texas (FAB). The transaction is expected to close in the first quarter of
2005. The transaction will establish Citigroup's retail branch presence in Texas, giving Citigroup more than 100 branches, $3.5 billion in assets and approximately 120,000 new customers in the
state. The operations of FAB will be integrated into the businesses of Citicorp.

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 99.8% 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) 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.

2005 SUBSEQUENT EVENT

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. 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
Citicorp international insurance businesses being acquired by MetLife as a part of this transaction generated total revenues of $575 million and net income of
$82 million for the twelve months ended December 31, 2004. The businesses had total assets of $5.4 billion at December 31, 2004.

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 second
or third quarter.

Argentina

The restructuring of customer annuity liabilities was approved by the Argentine Ministry of Insurance on July 3, 2003. During the 2003 fourth quarter, the
Company contributed $55 million of new capital to its Argentine Global Investment Management companies, primarily to fund the voluntary annuity restructuring plan. During 2004, additional
capital totaling $184 million was injected principally to meet local regulatory requirements.

The
insurance companies in Argentina are included in the announced sale of Travelers Life and Annuity disclosed above which was announced by Citigroup on January 31, 2005.

The
Argentine government launched its $100 billion debt exchange offer on January 14, 2005. The exchange offer closed on February 25, 2005. The Global Investment
Management business in Argentina tendered all of its original U.S. dollar bonds (approximately $1.6 billion of AUMs). The Company tendered the defaulted government bonds it held for its own
account on February 18, 2005. At this time, any financial impact resulting from the tender is not expected to be significant to the Company.

The
Company believes it has a sound basis to bring a claim as a result of various actions of the Argentine government. A recovery on such a claim could serve to reduce the economic loss
of the Company in Argentina. However, the amount of any recovery would be affected by the debt exchange described above and by events described on page 8.

Certain
of the above statements in this section are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on
page 46.

7

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EVENTS IN 2003

Acquisition of Sears' Credit Card and Financial Products Business

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

Acquisition of The Home Depot's Private-Label Portfolio

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

Settlement of Certain Legal and Regulatory Matters

On July 28, 2003, Citigroup entered into final settlement agreements with the Securities and Exchange Commission (SEC), the Office of the Comptroller of the
Currency (OCC), the Federal Reserve Bank of New York (FED), and the Manhattan District Attorney's Office that resolved on a civil basis their investigations into Citigroup's structured finance work
for Enron. The Company also announced that its settlement agreement with the SEC concluded that agency's investigation into certain Citigroup work for Dynegy. The agreements were reached by Citigroup
(and, in the case of the agreement with the OCC, Citibank, N.A.) without admitting or denying any wrongdoing or liability, and the agreements do not establish wrongdoing or liability for the purpose
of civil litigation or any other proceeding. Citigroup paid from previously established reserves an aggregate amount of $145.5 million in connection with these settlements.

Impact from Argentina's Economic Changes

As a result of an improving credit environment, the Global Consumer allowance for credit losses was reduced by $100 million in 2003 and $39 million
in 2004 and the Global Corporate and Investment Bank reduced allowance for credit losses by approximately $164 million in 2004.

In
2003, the Company wrote off $127 million of its government-issued compensation notes against previously established reserves. This write-off was triggered by, among
other things, the government's disallowance of compensation for pesification of certain credit card and overdraft loans. While the notes were adjusted, the disallowance is still being negotiated. The
initial payment of approximately $57 million due under the compensation notes was received in August 2003. Additional payments under the compensation notes totaling $119 million
and $61 million were received when due in 2004 and February 2005, respectively. In 2003, the Company also recognized a $13 million impairment charge on its government Patriotic
Bonds. Payments required under bank deposit Amparos (judicial orders requiring previously dollar-denominated deposits that had been re-denominated at government rates to be immediately
repaid at market exchange rates) were down significantly from 2002; losses recorded in 2003, net of the $40 million reserve release, were $2 million; and losses recorded in 2004, net of
a $6 million reserve release, were $25 million.

The
Global Investment Management businesses in Argentina recorded pretax charges of $208 million in 2003. These charges were comprised of: $124 million in write-downs
resulting from the mandatory exchange of Argentine Government Promissory Notes (GPNs) for Argentine government bonds denominated in U.S. dollars; a $44 million write-off of impaired
Deferred Acquisition Costs reflecting changes in underlying cash flow estimates for the business; $20 million of losses related to the restructuring of voluntary customer annuity liability
balances; and $20 million of losses related to a premium deficiency in the death and disability insurance business. Additional write-offs of impaired Deferred Acquisition Costs of
$11 million were taken in 2004.

8

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SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

The Notes to the Consolidated Financial Statements contain a summary of Citicorp's significant accounting policies, including a discussion of recently issued
accounting pronouncements. Certain of these policies as well as estimates made by management are considered to be important to the portrayal of the Company's financial condition, since they require
management to make difficult, complex or subjective judgments and estimates, some of which may relate to matters that are inherently uncertain. Additional information about these policies can be found
in Note 1 to the Consolidated Financial Statements.

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 46.

Valuations of Financial Instruments

Investments and trading account assets and liabilities, held by the Global Corporate and Investment Bank, Global Investment Management and Proprietary Investment
Activities segments, include fixed maturity and equity securities, derivatives, investments in private equity and other financial instruments. Citicorp carries its investments and trading account
assets and liabilities at fair value if they are considered to be available-for-sale or trading securities. For a substantial majority of the Company's investments and trading
account assets and liabilities, fair values are determined based upon quoted prices or validated models with externally verifiable model inputs. Changes in values of
available-for-sale securities are recognized in a component of stockholders' equity net of taxes, unless the value is impaired and the impairment is not considered to be
temporary. Impairment losses that are not considered temporary are recognized in earnings. The Company conducts regular reviews to assess whether other-than-temporary
impairment exists. Changing economic conditions, including global and regional conditions, and conditions related to specific issuers or industries, could adversely affect these values. Changes in the
fair values of trading account assets and liabilities are recognized in earnings. Private equity subsidiaries also carry their investments at fair value with changes in value recognized in earnings.

If
available, quoted market prices provide the best indication of fair value. If quoted market prices are not available for fixed maturity securities, equity securities, derivatives or
commodities, the Company discounts the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. Alternatively, matrix or model pricing may
be used to determine an appropriate fair value. It is Citicorp's policy that all models used to produce valuations for the published financial statements be validated by qualified personnel
independent from those who created the models. The determination of market or fair value considers various factors, including time value and volatility factors, underlying options, warrants and
derivatives; price activity for equivalent synthetic instruments; counterparty credit quality; the potential impact on market prices or fair value of liquidating the Company's positions in an orderly
manner over a reasonable period of time under current market conditions; and derivative transaction maintenance costs during the period. For derivative transactions, trading profit at inception is
recognized when the fair value of that derivative is obtained from a quoted market price, supported by comparison to other observable market transactions, or based upon a valuation technique
incorporating observable market data. The Company defers trade-date gains or losses on derivative transactions where the fair value is not determined based upon observable market
transactions and market data. The deferral is recognized in income when the market data become observable or over the life of the transaction. Changes in assumptions could affect the fair values of
investments and trading account assets and liabilities.

For
our available-for-sale and trading portfolios amounting to assets of $246.4 billion and $206.3 billion and liabilities of $56.9 billion
and $53.5 billion at December 31, 2004 and 2003, respectively, fair values were determined in the following ways: externally verified via
comparison to quoted market prices or third-party broker quotations; by using models that were validated by qualified personnel independent of the area that created the model and inputs that were
verified by comparison to third-party broker quotations or other third-party sources; or by using alternative procedures such as comparison to comparable securities and/or subsequent liquidation
prices. At December 31, 2004 and 2003, respectively, approximately 93.3% and 98.8% of the available-for-sale and trading portfolios' gross assets and liabilities (prior
to netting positions pursuant to FIN 39) are considered verified and approximately 6.7% and 1.2% are considered unverified. Of the unverified assets, at December 31, 2004 and 2003,
respectively, approximately 61.0% and 49.0% consist of cash products, where independent quotes were not available and/or alternative procedures were not feasible, and 39.0% and 51.0% consist of
derivative products where either the model was not validated and/or the inputs were not verified due to the lack of appropriate market quotations. Such values are actively reviewed by management.

In
determining the fair values of our securities portfolios, management also reviews the length of time trading positions have been held to identify aged inventory. During 2004, the
monthly average aged inventory designated as available-for-immediate-sale was approximately $494 million compared with $141 million in 2003. Inventory
positions that are both aged and whose values are unverified amounted to $110 million and less than $48 million at December 31, 2004 and 2003, respectively. The fair value of
aged-inventory is actively monitored and, where appropriate, is discounted to reflect the implied illiquidity for positions that have been
available-for-immediate-sale for longer than 90 days. At December 31, 2004 and 2003, such valuation adjustments amounted to $6 million and
$4 million, respectively.

Citicorp's
private equity subsidiaries include subsidiaries registered as Small Business Investment Companies and other subsidiaries that engage exclusively in venture capital
activities. Investments held by private equity subsidiaries related to the Company's venture capital activities amounted to $4.8 billion and $4.4 billion at December 31, 2004 and
2003, respectively. For investments in publicly traded securities held by private equity subsidiaries amounting to five positions with a fair value of approximately $0.4 billion and five
positions with a fair value of approximately $0.9 billion at December 31, 2004 and 2003, respectively, fair value is based upon quoted market prices. These publicly traded securities
include thinly traded securities, large block holdings, restricted shares or other special situations, and the quoted market price is discounted to produce an estimate of the attainable fair value for
the securities. To determine the amount of the discount, the Company uses a valuation methodology that is based on the British Venture Capital Association's guidelines. Such discounts ranged from 10%
to 40% of the investments' quoted prices in 2004 and from 10% to 50% in 2003. For investments that are not publicly traded and are held by private equity subsidiaries amounting to approximately
$3.5 billion for each of the years ended December 31, 2004 and 2003, estimates of fair value are made periodically by management based upon relevant third-party arm's length
transactions, current and subsequent financings and comparisons to similar companies for which quoted market prices are available.

9

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Independent
consultants may be used to provide valuations periodically for certain investments that are not publicly traded, or the valuations may be done internally. Internal valuations are reviewed
by personnel independent of the investing entity.

See
the discussion of trading account assets and liabilities and investments in Summary of Significant Accounting Policies in Note 1 to the Consolidated Financial Statements. For
additional information regarding the sensitivity of these instruments, see "Market Risk Management Process" on page 35.

Allowance for Credit Losses

The allowance for credit losses represents management's estimate of probable losses inherent in the lending portfolio. This evaluation process is subject to
numerous estimates and judgments. The frequency of default, risk ratings, and the loss recovery rates, among other things, are considered in making this evaluation, as are the size and diversity of
individual large credits. Changes in these estimates could have a direct impact on the credit costs in any quarter and could result in a change in the allowance. At December 31, 2004 and 2003,
respectively, the total allowance for credit losses, which includes reserves for unfunded lending commitments and letters of credit, totaled $3.490 billion and $4.155 billion for the
Corporate loan portfolio and $8.379 billion and $9.088 billion for the Consumer loan portfolio. Attribution of the allowance is made for analytic purposes only, and the entire allowance
of $11.869 billion and $13.243 billion at December 31, 2004 and 2003, respectively, is available to absorb probable credit losses inherent in the portfolio, including letters of
credit and unfunded commitments.

During
2004, Corporate cash-basis loans decreased $1.496 billion from $3.402 billion in 2003 to $1.906 billion, and net credit losses decreased from
$1.210 billion in 2003 to $131 million, reflecting overall improvement in the credit quality of the portfolio. The Company also completed the implementation of Citigroup's internal
credit risk-rating standards for the Banamex loan portfolio. All of these factors resulted in a decline in the Corporate allowance, with the release during 2004 of $900 million in
reserves. Although the 2004 credit environment led to benefits from loan loss releases and declines in cash-basis loans, it is unlikely these benefits will repeat in 2005.

Consumer
net credit losses increased from $7.555 billion in 2003 to $8.471 billion in 2004. This increase was due to the net credit losses related to the Sears and Home
Depot portfolios, which were acquired during 2003. Excluding these two portfolios, the Consumer net credit losses declined from $7.176 billion in 2003 to $5.985 billion in 2004. In
addition, Consumer loans on which accrual of interest has been suspended decreased from $6.085 billion to $5.463 billion. The improvement in the overall credit performance of the
Consumer portfolio resulted in a decrease of the Consumer allowance, with the net release during 2004 of $1.104 billion in reserves.

Consumer
credit loss ratios for 2005 are expected to remain relatively constant to the fourth quarter 2004 levels, with some slight improvement in the North America Cards and Consumer
Finance portfolios. Full-year loss ratios for 2005 are expected to improve against prior-year levels due to credit loss rates that declined during 2004.

The
allowance for credit losses attributed to the Corporate portfolio is established through a process that begins with statistical estimates of probable losses inherent in the portfolio
for all performing loans plus certainde minimisnon-performing loans less than $10 million. These estimates are based upon:
(1) Citigroup's internal system of credit risk ratings, which are analogous to the risk ratings of the major rating agencies; (2) the Corporate portfolio database; and
(3) historical default and loss data, including rating agency information regarding default rates from 1983 to 2003, and internal data, dating to the early 1970s, on severity of losses in the
event of default. This statistical process generates an estimate for losses inherent in the portfolio as well as a one-standard-deviation confidence interval around the estimate.

The
statistical estimate for losses inherent in the portfolio is based on historical average default rates and historical average write-off rates. The
one-standard-deviation confidence interval reflects the historical fluctuation of default rates over the credit cycle, the historical variability of loss severity among defaulted loans,
and the degree to which there are large obligor concentrations in the global portfolio.

Next,
larger-balance, non-performing, non-homogeneous exposures representing significant individual credit exposures are evaluated based upon the borrower's
overall financial condition, resources and payment record; the prospects for support from any financially responsible guarantors; and, if appropriate, the realizable value of any collateral. For these
loans, which are deemed impaired, reserves are then calculated based upon an estimate of probable losses. Consideration is given to all available evidence, including, as appropriate, the present value
of expected future cash flows discounted at the loan's contractual effective rate, the secondary market value of the loan, and the fair value of collateral less disposal costs.

The
sum of the estimated losses inherent in the total portfolio and the reserves for significant individual non-performing credit exposures are then adjusted by management
after considering environmental factors and trends in portfolio indicators, including cash-basis loans, historical and forecasted write-offs, and portfolio concentrations. In
addition, management considers the current business strategy and credit process, including credit limit setting and compliance, credit approvals, loan underwriting criteria and loan workout
procedures.

A
similar approach is used for determining the credit loss reserve related to unfunded lending commitments and letters of credit.

Based
on this process, the allowance for credit losses attributable to the Corporate portfolio was set at $3.490 billion as of December 31, 2004, compared with
$4.155 billion in 2003. These balances include the reserve for unfunded commitments and letters of credit of $600 million for both 2004 and 2003, which are included in other liabilities
on the balance sheet.

For
the Consumer portfolios (excluding Commercial Business and KorAm), which consist of smaller-balance, homogeneous loans, including consumer mortgages, installment loans, and revolving
credit cards, the loans within each portfolio are collectively evaluated for impairment in order to provide an allowance sufficient to cover all loans within that portfolio that have shown evidence of
impairment as of the balance sheet date. The foundation for assessing the adequacy of the allowance for credit losses for Consumer loans is a methodology that estimates the losses inherent in the
portfolio at the balance sheet date based on historical delinquency flow rates, charge-off statistics and loss severity. This methodology is applied separately for each individual product
within each different geographic region in which the product is offered.

Under
this method, the portfolio of loans is aged and separated into groups based upon the aging of the loan balances (current, 1 to 29 days past due, 30 to 59 days past
due, etc.). The result is a base calculation of inherent losses in the loan portfolio for each applicable business within the Global Consumer segment. Management then evaluates the adequacy of the
allowance for credit losses for each business relative to its base calculation after adjusting this base for factors such as economic trends, competitive factors, seasonality, portfolio acquisitions,
solicitation of new loans, changes in lending policies and procedures, geographical, product, and other

10

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environmental
factors, changes in bankruptcy laws, and evolving regulatory standards.

Citigroup
has well-established credit loss recognition criteria for its various consumer loan products. These credit loss recognition criteria are based on contractual
delinquency status, consistently applied from period to period and in compliance with the Federal Financial Institutions Examination Council (FFIEC) guidelines (excluding recent acquisitions for which
we obtained temporary waivers), including bankruptcy loss recognition. The provision for credit losses is highly dependent on both bankruptcy loss recognition and the time it takes for loans to move
through the delinquency buckets and eventually to write-off (flow rates). An increase in the Company's share of bankruptcy losses would generally result in a corresponding increase in net
credit losses. For example, a 10% increase in the Company's portion of bankruptcy losses would generally result in a similar increase in net credit losses. In addition, an acceleration of flow rates
would also result in a corresponding increase to the provision for credit losses. The precise impact that an acceleration of flow rates would have on the provision for credit losses would depend upon
the product and geography mix that comprises the flow rate acceleration.

For
the Commercial Business loan portfolio within Consumer, a statistical model, similar to the one used for the Corporate portfolio, was implemented in 2004 for evaluating the adequacy
of the allowance for credit losses. Larger-balance, non-performing, non-homogeneous exposures deemed impaired are evaluated individually while the remaining Commercial Business
loan portfolio is evaluated statistically by using internal credit risk ratings and historical default and loss data.    Like the Corporate loan portfolio model, this estimate may be
adjusted by management after considering other factors such as the portfolio trends and relevant economic indicators.

Prior
to 2004, the credit loss allowance for the Commercial Business portfolio was established based upon an estimate of probable losses inherent in the portfolio for individual loans
and leases deemed impaired, and the application of annualized weighted average credit loss ratio to the remaining portfolio. The annualized weighted average credit loss ratio reflects both historical
and projected losses. Additional reserves were established to provide for imprecision caused by the use of estimated loss data.

Based
on these methodologies, the allowance for credit losses related to the Consumer portfolios (including Commercial Business) was set at $8.379 billion and
$9.088 billion as of December 31, 2004 and 2003, respectively.

The
evaluation of the total allowance includes an assessment of the ability of borrowers with foreign currency obligations to obtain the foreign currency necessary for orderly debt
servicing.

See
the discussions of "Consumer Credit Risk" and "Corporate Credit Risk" on pages 30 and 32, respectively, for additional information.

Securitizations

Securitization is a process by which a legal entity issues certain securities to investors, which securities pay a return based on the principal and interest cash
flows from a pool of loans or other financial assets. Citicorp securitizes credit card receivables, mortgages, and other loans that it originated and/or purchased and certain other financial assets.
After securitization of credit card receivables, the Company continues to maintain account relationships with customers. Citicorp also assists its clients in securitizing the clients' financial assets
and packages and securitizes financial assets purchased in the financial markets. Citicorp may provide administrative, asset management, underwriting, liquidity facilities and/or other services to the
resulting securitization entities, and may continue to service the financial assets sold to the securitization entity.

There
are two key accounting determinations that must be made relating to securitizations. In the case where Citicorp originated or previously owned the financial assets transferred to
the securitization entity, a decision must be made as to whether that transfer would be considered a sale under generally accepted accounting principles, resulting in the transferred assets being
removed from the Company's Consolidated Balance Sheet with a gain or loss recognized. Alternatively, the transfer would be considered a financing, resulting in recognition of a liability in the
Company's Consolidated Balance Sheet. The second key determination to be made is whether the securitization entity must be consolidated by the Company and be included in the Company's Consolidated
Financial Statements or whether the entity is sufficiently independent that it does not need to be consolidated.

If
the securitization entity's activities are sufficiently restricted to meet certain accounting requirements to be considered a qualifying special-purpose entity (QSPE), the
securitization entity is not consolidated by the seller of the transferred assets. In January 2003, the Financial Accounting Standards Board (FASB) issued a new interpretation on consolidation
accounting that was adopted by the Company on July 1, 2003. Under this interpretation, FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), if
securitization entities other than QSPEs meet the definition of a variable interest entity (VIE), the Company must evaluate whether it is the primary beneficiary of the entity and, if so, must
consolidate it. The entity would be considered a VIE if it requires additional subordinated financial support or if the equity investors lack certain characteristics of a controlling financial
interest. In December 2003, FASB issued a revised version of FIN 46 (FIN 46-R), which the Company implemented in January 2004. This revision included substantial changes from
the original FIN 46, including changes in the calculation of the expected losses and expected residual returns. Its impact on the Company's Financial Statements was an increase to assets and
liabilities of approximately $1.1 billion. However, most of the Company's securitization transactions continued to meet the criteria for sale accounting and non-consolidation.

The
Company participates in securitization transactions, structured investment vehicles, and other investment funds with its own and with clients' assets totaling $655.9 billion
at December 31, 2004 and $419.2 billion at December 31, 2003.

Global
Consumer primarily uses QSPEs to conduct its securitization activities, including credit card receivables, mortgage loans, student loans and auto loans. Securitizations completed
by Global Consumer are for the Company's own account. QSPEs are qualifying special-purpose entities established in accordance with SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (SFAS 140). The Company is the transferor of assets to these QSPEs and, accordingly, does not consolidate these QSPEs. At
December 31, 2004 and 2003, respectively, Global Consumer was involved with special-purpose entities (SPEs) with assets of $396.9 billion and $251.3 billion, including QSPEs with
assets of $376.4 billion and $226.4 billion.

GCIB's
securitization activities are conducted on behalf of the Company's clients and generate revenues for services provided to the SPEs. GCIB uses SPEs to securitize mortgage-backed
securities and clients' trade receivables, to create investment opportunities for clients through collateralized debt obligations (CDOs), and to meet other client needs through structured financing
and leasing transactions. Many of the mortgage-backed securities transactions use QSPEs, as do certain CDOs and structured financing transactions. At December 31, 2004 and 2003, respectively,
GCIB was involved with SPEs with assets of

11

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$147.8 billion
and $66.1 billion, including QSPEs with assets amounting to $3.0 billion and $1.5 billion.

Global
Investment Management uses SPEs to create investment opportunities for clients through mutual and money market funds, unit investment trusts, and hedge funds, substantially all of
which were not consolidated by the Company at December 31, 2004 and 2003. At December 31, 2004 and 2003, respectively, Global Investment Management was involved with SPEs with assets of
$53.3 billion and $40.9 billion.

Global
Wealth Management uses SPEs to structure investment vehicles in order to provide clients with investment alternatives and capital market solutions, substantially all of which were
consolidated by the Company at December 31, 2004 and 2003. At December 31, 2004 and 2003, respectively, Global Wealth Management was involved with SPEs with assets of $3.5 billion
and $4.5 billion.

Proprietary
Investment Activities invests in various funds as part of its activities on behalf of the Company and also uses SPEs in creating investment opportunities and alternative
investment structures. At December 31, 2004 and 2003, respectively, Proprietary Investment Activities was involved with SPEs with assets of $54.4 billion and $56.4 billion.

VIEs
with total assets of approximately $29.4 billion and $27.1 billion were consolidated at December 31, 2004 and 2003, respectively. Additional information on the
Company's securitization activities and VIEs can be found in "Off-Balance Sheet Arrangements" on page 44 and in Note 9 to the Consolidated Financial Statements.

Income Taxes

The Company is subject to the income tax laws of the U.S., its states and municipalities and those of the foreign jurisdictions in which the Company operates.
These tax laws are complex and subject to different interpretations by the taxpayer and the relevant Governmental taxing authorities. In establishing a provision for income tax expense, the Company
must make judgments and interpretations about the application of these inherently complex tax laws. The Company must also make estimates about when in the future certain items will affect taxable
income in the various tax jurisdictions, both domestic and foreign.

Disputes
over interpretations of the tax laws may be subject to review/adjudication by the court systems of the various tax jurisdictions or may be settled with the taxing authority upon
examination or audit.

The
Company reviews these balances quarterly and as new information becomes available, the balances are adjusted, as appropriate.

SFAS
No. 109, "Accounting for Income Taxes" (SFAS 109), requires companies to make adjustments to their financial statements in the quarter that new tax legislation is
enacted. In the 2004 fourth quarter, the U.S. Congress passed, and the President signed, into law a new tax bill, "The American Jobs Creation Act of 2004." The Homeland Investment Act (HIA) provision
of the American Jobs Creation Act of 2004 is intended to provide companies with a one-time 85% reduction in the U.S. net tax liability on cash dividends paid by foreign subsidiaries in
2005, to the extent that they exceed a baseline level of dividends paid in prior years. The provisions of the Act are complicated, and companies, including Citicorp, are awaiting clarification of
several provisions from the Treasury Department. The Company is still evaluating the provision and the effects it would have on the financing of the Company's foreign operations. In accordance with
FASB Staff Position FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004" (FSP
FAS 109-2), the Company has not recognized any income tax effects of the repatriation provisions of the Act in its 2004 financial statements and will not do so until the above
issues are resolved, sometime in 2005. The reasonably possible amounts that may be repatriated in 2005 that would be subject to the provision of the Act range from $0 to $3.1 billion. The
related potential income tax effects range from a tax benefit of $0 to a tax benefit of $50 million, under current law. There is a Technical Corrections Bill pending in the U.S. Congress that
would amend the computation of the HIA benefit. If this bill is enacted, the range of potential tax benefits would be from a benefit of $0 to a benefit of $150 million, net of the impact of
remitting income earned in 2005 that would otherwise have been indefinitely invested overseas.

See
Note 14 to the Consolidated Financial Statements for a further description of the Company's provision for Income Taxes and related income tax assets and liabilities.

Legal Reserves

The Company is subject to legal, regulatory and other proceedings and claims arising from conduct in the ordinary course of business. These proceedings include
actions brought against the Company in its various roles, including acting as a lender, underwriter, broker/dealer or investment advisor. Reserves are established for legal and regulatory claims based
upon the probability and estimability of losses and to fairly present, in conjunction with the disclosures of these matters in the Company's financial statements and SEC filings, management's view of
the Company's exposure. The Company reviews outstanding claims with internal as well as external counsel to assess probability and estimates of loss. The risk of loss is reassessed as new information
becomes available and reserves are adjusted, as appropriate. The actual cost of resolving a claim may be substantially higher than the amount of the recorded reserve. See Note 22 to the
Consolidated Financial Statements and the discussion of "Legal Proceedings" beginning on page 100.

ACCOUNTING CHANGES AND FUTURE APPLICATION OF ACCOUNTING STANDARDS

See Note 1 to the Consolidated Financial Statements for a discussion of Accounting Changes and the Future Application of Accounting Standards.

12

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BUSINESS FOCUS

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

CITICORP NET INCOMEPRODUCT VIEW

|In millions of dollars               |                                            | 2004 |        | 2003(1) |  
|------------------------------------ | ------------------------------------------ | ---- | ------ | ------- | -
|Global Consumer                      |                                            |      |        |         |  
|                                     | Cards                                      |      | $      | 4,700   |  
|                                     | Consumer Finance                           |      |        | 2,388   |  
|                                     | Retail Banking                             |      |        | 4,084   |  
|                                     | Other(2)                                   |      |        | 95      |  
|                                     |                                            |      |       
|                                     | Total Global Consumer                      |      |        | 11,267  |  
|                                     |                                            |      |       
|Global Corporate and Investment Bank |                                            |      |        |         |  
|                                     | Capital Markets and Banking(3)             |      |        | 3,112   |  
|                                     | Transaction Services                       |      |        | 1,041   |  
|                                     |                                            |      |       
|                                     | Total Global Corporate and Investment Bank |      |        | 4,153   |  
|                                     |                                            |      |       
|Global Wealth Management             |                                            |      |        |         |  
|                                     | Private Bank(4)                            |      |        | 318     |  
|                                     |                                            |      |       
|Global Investment Management         |                                            |      |        |         |  
|                                     | Life Insurance and Annuities               |      |        | 193     |  
|                                     | Asset Management                           |      |        | 105     |  
|                                     |                                            |      |       
|                                     | Total Global Investment Management         |      |        | 298     |  
|                                     |                                            |      |       
|Proprietary Investment Activities    |                                            |      | 669    |         |  
|Corporate/Other                      |                                            |      | 203    |         |  
|Total Net Income                     |                                            | $    | 16,908 |         | $
|                                     |                                            |      |       

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13

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RESULTS OF OPERATIONS

Net Income

Citicorp reported net income of $16.908 billion in 2004, up $3.4 billion or 25% from $13.541 billion in 2003. Return on average common equity
was 19.3% compared to 17.6% in 2003.

Global
Consumer net income in 2004 increased $2.3 billion or 26% compared to 2003, while the Global Corporate and Investment Bank (GCIB) increased $773 million or 23%.
Global Wealth Management net income decreased $233 million or 42% from 2003. Global Investment Management grew $236 million and Proprietary Investment Activities increased
$393 million from the previous year. See individual segment and product discussions on pages 15  25 for additional discussion and analysis of the Company's results of
operations.

Revenues, Net of Interest Expense

Total revenues, net of interest expense, of $62.9 billion in 2004 were up $7.7 billion or 14% from 2003. Global Consumer revenues in 2004 were up
$6.2 billion or 16% from 2003. The increase was led by a $3.7 billion or 25% increase inCardsfrom 2003, reflecting the results of the
acquisitions of the Sears and Home Depot portfolios.Consumer Financerevenues increased $678 million or 7% from 2003, primarily reflecting the WMF
acquisition, and growth in average loans, receivables and higher volumes.Retail Bankingrevenues increased $1.4 billion or 10% from 2003, due
primarily to growth in loans, deposits and increased investment product sales.

GCIB
revenues of $12.3 billion in 2004 increased $1.2 billion or 11% from 2003.Capital Markets and Bankingrevenues increased
$751 million or 10% from 2003, reflecting increased revenues in fixed income and lending due to higher debt trading. There was an increase of $478 million or 13% in Transaction Servicesfrom
2003, primarily due to increases in securities services and the impact of recent acquisitions.

Global
Wealth Management noted revenues of $2.0 billion in 2004, up $48 million or 2% from 2003 in thePrivate Bankdue to
strong growth in banking and increased client transaction activity.

Global
Investment Management revenues were $1.5 billion in 2004, up $338 million or 29% from 2003.Life Insurance and
Annuitiesrevenues increased $308 million or 48% from 2003, primarily related to record high volumes.Asset Managementnoted
an increase of $30 million or 6% from 2003.

Revenues
from Proprietary Investment Activities in 2004 increased $455 million or 46% from 2003 due to market fluctuations.

Selected Revenue Items

Net interest revenue of $37.6 billion in 2004 increased $3.8 billion or 11% from 2003, primarily reflecting the impact of acquisitions, a changing
rate environment and business volume growth in certain markets.

Total
fees and commissions of $12.9 billion increased by $866 million or 7% from 2003, primarily driven by positive market action and higher transactional volume. Foreign
exchange revenues of $1.9 billion in 2004 were down $1.7 billion or 47% compared to a year ago, primarily reflecting decreased volatility and lower FX trading. Trading account gains
increased $1.5 billion from 2003 due primarily to interest rate fluctuation and prior-year weakness in interest rate products. Investment transactions of $676 million were up
$422 million from 2003. Other revenue of $8.9 billion increased $2.8 billion
or 47% from 2003, primarily reflecting the $1.2 billion gain on the sale of Samba, increased securitization gains and activities and improved investment results.

Operating Expenses

Total operating expenses were $31.7 billion, up $4.8 billion or 18% from 2003. The increases primarily reflected the $1.4 billion Litigation
Reserve Charge taken in the second quarter of 2004, the impact of acquisitions and the $400 million Private Bank Japan Exit Charge.

Global
Consumer expenses were up 17% from 2003, driven by acquisitions as well as increased marketing and advertising costs. Operating expenses in the GCIB increased 30% due to the
Litigation Reserve Charge taken in the second quarter of 2004. Global Wealth Management noted a 39% increase from 2003 inPrivate Bank. Global Investment
Management noted a 6% increase from 2003, and Proprietary Investment Activities noted a 21% increase from the previous year.

Benefits, Claims, and Credit Losses

Benefits, claims, and credit losses were $6.8 billion, down $1.8 billion or 21% from 2003.

Global
Consumer provisions for benefits, claims, and credit losses of $7.4 billion was down 2% from 2003, reflecting the impact of acquisitions, partially offset by an improved
credit environment which resulted in credit reserve releases.

GCIB
provision for credit losses of ($975) million in 2004 decreased $1.7 billion from the year-ago level, due to loan loss reserve releases resulting from the overall
improvement in the credit environment.

Corporate
cash-basis loans at December 31, 2004 and 2003 were $1.9 billion and $3.4 billion, respectively, while the corporate Other Real Estate Owned
(OREO) portfolio totaled $33 million in the current year and $59 million in the prior year. Corporate cash-basis loans decreased $1.5 billion from the prior year,
reflecting improved credit quality, write-offs against previously established reserves, as well as repayments.

Income Taxes

The Company's effective tax rate of 29.9% in 2004 decreased 20 basis points from 2003, and included a $206 million benefit for the release of a valuation
allowance relating to the utilization of foreign tax credits, the release of $101 million and $147 million due to the closing of tax audits, and a $47 million tax benefit due to
an IRS tax ruling relating to Argentina. The effective tax rate also reflected the tax benefits for not providing U.S. income taxes on the earnings of certain foreign subsidiaries that are
indefinitely invested.

The
Company's effective tax rate was 29.7% in 2003. See additional discussion on page 12 and in Note 14 to the Consolidated Financial Statements.

Regulatory Capital

Total capital (Tier 1 and Tier 2) was $87.1 billion or 12.59% of net risk-adjusted assets, and Tier 1 Capital was $60.1 billion or
8.69% of net risk-adjusted assets at December 31, 2004, compared to $76.2 billion or 12.68% and $50.7 billion or 8.44%, respectively, at December 31, 2003.

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Certain amounts in prior years have been reclassified to conform to the current year's presentation.

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14

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GLOBAL CONSUMER

|In millions of dollars                             |  | 2004 |        | 2003
|-------------------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense                  |  | $    | 45,126 |     
|Operating expenses                                 |  |      | 21,164 |     
|Provisions for benefits, claims, and credit losses |  |      | 7,366  |     
|                                                   |  |     
|Income before taxes and minority interest          |  |      | 16,596 |     
|Income taxes                                       |  |      | 5,270  |     
|Minority interest, after-tax                       |  |      | 59     |     
|                                                   |  |     
|Net income                                         |  | $    | 11,267 |     
|                                                   |  |     

Global Consumerreported net income of $11.267 billion in 2004, up $2.322 billion or 26% from 2003, driven by double-digit
growth across all products and a $378 million after-tax gain on the sale of Samba. Cardsnet income increased $1.110 billion or
31% in 2004 mainly reflecting improved credit costs, including the impact of credit reserve releases, the addition of the Sears, Home Depot and KorAm portfolios, growth in international receivables,
and the benefit of certain one-time tax credits.Retail Bankingnet income increased $584 million or 17% in 2004 primarily due to the
impact of improved credit costs, including the impact of credit reserve releases, led by the Commercial Business in North America, and strong international growth led by Asia. Consumer Financenet
income increased $409 million or 21% in 2004 primarily due to a higher net interest margin in North America, lower credit
costs, the impact of the Washington Mutual Finance (WMF) acquisition, and growth in Latin America and Asia, partially offset by weakness in Japan and EMEA.

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
WMF, which added $3.8 billion in average loans and 427 loan offices. In November 2003, Citigroup completed the acquisition of Sears, which added $15.4 billion of private-label
card receivables, $13.2 billion of bankcard receivables and 32 million accounts. In July 2003, Citigroup completed the acquisition of the Home Depot portfolio, which added
$6 billion in receivables and 12 million accounts. In July 2003, Citigroup also acquired the remaining stake in Diners Club Europe, adding one million accounts and
$0.6 billion of receivables.

Global
Consumer has divested several non-strategic businesses and portfolios as opportunities to exit became available. Certain divestitures include Global Consumer's share
of Citigroup's 20% equity investment in Samba and a $900 million vendor finance leasing business in Europe in 2004, the sales of the $1.2 billion Fleet Services portfolio in the North
American Commercial Business and of $1.7 billion of credit card portfolios in 2003.

CARDS

|In millions of dollars                    |  | 2004 |        | 2003 |  
|----------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense         |  | $    | 18,321 |      | $
|Operating expenses                        |  |      | 8,089  |      |  
|Provision for credit losses               |  |      | 3,396  |      |  
|                                          |  |      |       
|Income before taxes and minority interest |  |      | 6,836  |      |  
|Income taxes                              |  |      | 2,133  |      |  
|Minority interest, after-tax              |  |      | 3      |      |  
|                                          |  |      |       
|Net income                                |  | $    | 4,700  |      | $
|                                          |  |      |       
|Average assets(in billions of dollars)    |  | $    | 95     |      | $
|Return on assets                          |  |      | 4.95   | %    |  
|                                          |  |      |       

Cardsreported net income of $4.700 billion in 2004, up $1.110 billion or 31% from 2003. North America Cards reported net
income of $3.939 billion, up 27% over 2003, reflecting improved credit costs, including the benefit of credit reserve releases, and the impact of the Sears and Home Depot acquisitions.
International Cards income increased by 53% over 2003 to $761 million in 2004, reflecting higher revenues from receivables growth, improved credit costs, including the benefit of credit reserve
releases, a lower effective tax rate, including the benefit of certain one-time tax credits, a gain on the sale of Orbitall (Credicard processing company in Brazil) and the addition of
KorAm.

As
shown in the following table, average managed loans grew 19% in 2004, reflecting growth of 18% in North America and 26% in International Cards. In North America, the addition of the
Home Depot and Sears portfolios was partially offset by the impact of higher payment rates seen throughout the industry. The increase in International Cards reflected the benefit of strengthening
currencies and growth in both Asia and EMEA, and the addition of KorAm. Sales in 2004 were $354.7 billion, up 22% from 2003. North America sales were up 20% to $301.9 billion in 2004,
with the impact of acquisitions and improved purchase sales. International Cards sales grew 33%, reflecting growth in Asia, Latin America and Japan, the addition of KorAm, and the benefit of
strengthening currencies.

|In billions of dollars               |  | 2004 |       | 2003
|------------------------------------ |  | ---- | ----- | ----
|Sales                                |  |      |       |     
|North America                        |  | $    | 301.9 |     
|International                        |  |      | 52.8  |     
|                                     |  |     
|Total sales                          |  | $    | 354.7 |     
|                                     |  |     
|Average managed loans                |  |      |       |     
|North America                        |  | $    | 139.6 |     
|International                        |  |      | 15.7  |     
|                                     |  |     
|Total average managed loans          |  | $    | 155.3 |     
|                                     |  |     
|Total on-balance sheet average loans |  | $    | 74.3  |     
|                                     |  |     

Revenues,
net of interest expense, of $18.321 billion in 2004 increased $3.711 billion or 25% from 2003, reflecting growth in North America of $3.128 billion or 26%
and in International Cards of $583 million or 22%. Revenue growth in North America reflected the impact of acquisitions, higher net interest margin and the benefit of increased purchase sales,
partially offset by higher payment rates resulting from the overall improved economy, and lower securitization-related gains. In 2004 and 2003, revenues included net securitization gains of
$234 million and $342 million, respectively, with the 2003 gains primarily resulting from changes in estimates related to the timing of revenue recognition on securitized portfolios.
Revenue growth in International Cards reflected growth in all regions and includes the

15

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addition
of KorAm and Diners Club Europe, the benefit of foreign currency translation, and the gain on the sale of Orbitall.

Operating
expenses of $8.089 billion in 2004 were up $1.862 billion or 30% from 2003, reflecting increases in North America of $1.456 billion or 30% and in
International Cards of $406 million or 30%. Expense increases in North America primarily reflected the full year impact of the Home Depot and Sears acquisitions and increased advertising and
marketing expenses. Expense growth in International Cards reflected increases in all regions and included the impact of the Diners Club Europe and KorAm acquisitions, the net effect of foreign
currency translation and increased advertising and marketing expenses.

The
provision for credit losses in 2004 was $3.396 billion, compared to $2.935 billion in 2003. The increase in the provision for credit losses in 2004 reflects the full
year impact of acquisitions and increased presence in the private label card market in North America, partially offset by lower net credit losses and higher credit reserve releases of
$735 million, resulting from an improved credit environment, as well as the impact of increased levels of securitized receivables.

The
securitization of credit card receivables is limited to the Citi Cards business within North America. At December 31, 2004, securitized credit card receivables were
$85.3 billion compared to $76.1 billion at December 31, 2003. There were $2.5 billion in credit card receivables held-for-sale at
December 31, 2004, compared to zero credit card receivables held-for-sale at December 31, 2003. 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, Citicorp 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.

Including
securitized receivables and receivables held-for-sale, managed net credit losses were $9.219 billion in 2004 with a related loss ratio of 5.94%
compared to $7.694 billion and 5.90% in 2003. The increase in the ratio from the prior year was primarily driven by the impact of acquisitions and the related expansion of the private label
portfolio, partially offset by the continued improvement in the credit environments in both the North America and international markets that began in 2003. Loans delinquent 90 days or more were
$2.944 billion or 1.78% at December 31, 2004, compared with $3.392 billion or 2.14% at December 31, 2003. The decrease in delinquent loans in 2004 was primarily
attributable to overall improved credit conditions in the Citi Cards business, offset slightly by the addition of the Sears portfolio. A summary of delinquency and net credit loss experience related
to the on-balance sheet loan portfolio is included in the table on page 31.

CONSUMER FINANCE

|In millions of dollars                             |  | 2004 |        | 2003 |  
|-------------------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense                  |  | $    | 10,761 |      | $
|Operating expenses                                 |  |      | 3,600  |      |  
|Provisions for benefits, claims, and credit losses |  |      | 3,506  |      |  
|                                                   |  |      |       
|Income before taxes                                |  |      | 3,655  |      |  
|Income taxes                                       |  |      | 1,267  |      |  
|                                                   |  |      |       
|Net income                                         |  | $    | 2,388  |      | $
|                                                   |  |      |       
|Average assets(in billions of dollars)             |  | $    | 113    |      | $
|Return on assets                                   |  |      | 2.11   | %    |  
|                                                   |  |      |       

Consumer Financereported net income of $2.388 billion in 2004, up $409 million or 21% from 2003, reflecting an increase in
North America of $405 million or 28% and an increase in International Consumer Finance of $4 million or 1%. The increase in North America primarily resulted from a higher net interest
margin due to higher loan volumes and a lower cost of funds, the benefit of lower credit costs due to an improved credit environment and the successful integration of WMF in 2004. The increase in
International Consumer Finance primarily resulted from increases in Latin America and Asia, partially offset by declines in Japan and EMEA.

|In billions of dollars    |  | 2004 |       | 2003
|------------------------- |  | ---- | ----- | ----
|Average loans             |  |      |       |     
|Real-estate-secured loans |  | $    | 58.2  |     
|Personal                  |  |      | 24.8  |     
|Auto                      |  |      | 11.6  |     
|Sales finance and other   |  |      | 5.4   |     
|                          |  |     
|Total average loans       |  | $    | 100.0 |     
|                          |  |     

As
shown in the preceding table, average loans grew $9.3 billion or 10% in 2004 compared to 2003, reflecting growth in North America of $8.5 billion or 12% and
International Consumer Finance of $0.8 billion or 4%. North American growth reflected the addition of WMF, which contributed $3.6 billion in average loans, and growth in all products
driven by real-estate-secured and auto loans. Growth in real-estate-secured loans mainly reflected portfolio acquisitions, partially offset by a decline in cross selling of
products through Primerica. Growth in the international markets was mainly driven by increases in the real-estate-secured and personal loan portfolios in both EMEA and Asia, and included
the impact of strengthening currencies, partially offset by a decline in EMEA auto loans. In Japan, average loans declined by 6% from 2003 as the benefit of foreign currency translation was more than
offset by the impact of higher pay-downs, reduced loan demand and tighter underwriting standards.

As
shown in the following table, the average net interest margin ratio of 9.95% in 2004 declined 22 basis points from 2003, reflecting compression in both the North American and
international markets. In North America, higher volumes and the benefit of lower cost of funds were more than offset by lower yields reflecting the lower interest rate environment and the
repositioning of portfolios towards higher credit quality. The average net interest margin ratio for International Consumer Finance was 15.80% in 2004, declining 23 basis points from the prior year,
primarily driven by a mix shift to lower yielding products in EMEA and lower receivables in Japan, partially offset by a change in recording adjustments and refunds of interest in Japan. From the 2003
second quarter 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 other periods

16

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presented,
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 would have been 16.07% in 2004 and 16.49% in 2003.

|                                  |  | 2004  |   | 2003  |  
|--------------------------------- |  | ----- | - | ----- | -
|Average net interest margin ratio |  |       |   |       |  
|North America                     |  | 8.34  | % | 8.43  | %
|International                     |  | 15.80 | % | 16.03 | %
|Total                             |  | 9.95  | % | 10.17 | %
|                                  |  |       |   |       |  

Revenues,
net of interest expense, of $10.761 billion in 2004 increased $678 million or 7% from 2003. The increase in revenues, net of interest expense, reflected growth of
$622 million or 9% in North America, and growth of $56 million or 2% in International Consumer Finance. Revenue growth in North America was primarily driven by the WMF acquisition,
growth in receivables and a lower cost of funds, partially offset by the impact of lower yields and declines in insurance related revenues. The increase in revenue for International Consumer Finance
was primarily due to the benefit of foreign exchange and higher volumes in all regions excluding Japan. A decline in Japan revenues was driven by lower personal and real estate loan volumes, as well
as a decline in yields.

Operating
expenses of $3.600 billion in 2004 increased $112 million or 3% from 2003, reflecting increases of $91 million or 4% in North America and
$21 million or 2% in International Consumer Finance. The increase in operating expenses in North America was due to the addition of the WMF portfolio, while the increase in International
Consumer Finance reflected the impact of foreign currency translation in Japan and EMEA. Excluding foreign currency translation, a decline in expenses was driven by expense savings from branch
closings and headcount reductions which occurred during 2003 in Japan, partially offset by higher 2004 investment expenses including branch expansion in Asia (primarily India) and EMEA.

The
provisions for benefits, claims, and credit losses were $3.506 billion in 2004, down from $3.727 billion in 2003, primarily reflecting lower net credit losses in North
America and Japan, and higher credit reserve releases of $89 million, partially offset by the WMF acquisition. The decline in North American credit losses excluding the impact of WMF was driven
by the overall improvement in the credit environment, while the decline in Japan was driven by lower bankruptcy losses. Net credit losses and the related loss ratio were $3.431 billion and
3.43% in 2004, compared to $3.517 billion and 3.88% in 2003. In North America, net credit losses were $2.065 billion and the related loss ratio was 2.63% in 2004, compared to
$2.059 billion and 2.94% in 2003. The decrease in the net credit loss ratio in 2004 was driven by improvements in all products, the result of better overall credit conditions in the market and
the shift to better credit quality portfolios, partially offset by the impact of WMF. Net credit losses in International Consumer Finance were $1.366 billion and the related loss ratio was
6.32% in 2004, compared to $1.458 billion and 7.02% in 2003. The decrease in the net credit loss ratio in 2004 was driven by improved credit conditions, including lower bankruptcy losses in
Japan, partially offset by higher personal loan losses in EMEA. Adjusting the net credit loss ratios for the change in treatment of adjustments and refunds of interest in Japan, as discussed above,
would have resulted in International Consumer Finance net credit loss ratios of 6.60% and 7.48% in 2004 and 2003, respectively.

Loans
delinquent 90 days or more were $2.014 billion or 1.90% of loans at December 31, 2004, compared to $2.221 billion or 2.36% at December 31, 2003.
The decrease in the delinquency ratio in 2004 was due to improvements in all regions.

RETAIL BANKING

|In millions of dollars                             |  | 2004 |        | 2003 |  
|-------------------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense                  |  | $    | 15,528 |      | $
|Operating expenses                                 |  |      | 9,123  |      |  
|Provisions for benefits, claims, and credit losses |  |      | 464    |      |  
|                                                   |  |      |        |      |  
|Income before taxes and minority interest          |  |      | 5,941  |      |  
|Income taxes                                       |  |      | 1,801  |      |  
|Minority interest, after-tax                       |  |      | 56     |      |  
|Net income                                         |  | $    | 4,084  |      | $
|                                                   |  |      |        |      |  
|Average assets (in billions of dollars)            |  | $    | 255    |      | $
|Return on assets                                   |  |      | 1.60   | %    |  
|                                                   |  |      |        |      |  

Retail Bankingreported net income of $4.084 billion in 2004, up $584 million or 17% from 2003. The increase in Retail Banking
reflected growth in both North America and International Retail Banking net income of $231 million or 10% and $353 million or 29%, respectively. Growth in North America was driven by
improved credit costs, including higher credit reserve releases, and higher revenues due to growth in customer volumes, partially offset by a decline in net servicing revenues in Prime Home Finance,
higher expenses due to increased investment spending and the impact of the continued liquidation of non-core portfolios in the Commercial Business. The increase in International Retail
Banking income primarily reflected growth in Asia, which included the impact of the KorAm acquisition, the benefit of strengthening currencies and a lower effective tax rate partially due to
non-recurring tax benefits.

|In billions of dollars           |                           | 2004                |       | 2003 
|-------------------------------- | ------------------------- | ------------------- | ----- | -----
|Average customer deposits        |                           |                     |       |      
|North America                    |                           | $                   | 115.7 |      
|Bank Deposit Program balances(1) |                           |                     | 41.6  |      
|                                 |                           | Total North America |       |      
|                                 |                           | International       |       |      
|                                 |                           |                     |       |      
|Total average customer deposits  |                           | $                   | 260.5 |      
|                                 |                           |                     |       |      
|Average loans                    |                           |                     |       |      
|                                 | North America             |                     | $     | 131.8
|                                 | North AmericaLiquidating |                     |       | 5.7  
|                                 | International             |                     |       | 47.1 
|                                 |                           |                     |       |      
|Total average loans              |                           | $                   | 184.6 |      
|                                 |                           |                     |       |      

---

As
shown in the preceding table,Retail Bankinggrew average customer deposits and average loans in 2004. Average customer deposit growth of
3% in North America primarily reflected increases in higher-margin demand accounts in Retail Distribution, the Commercial Business and Mexico, and money market accounts in Retail Distribution,
partially offset by declines in Retail Distribution time deposits, Prime Home Finance mortgage escrow deposits and the impact of a weakening peso in Mexico. Average loan growth of 12% in North America
reflected increases in Prime Home Finance, Student Loans, Retail Distribution and Mexico, partially offset by a decline in the Commercial Business that was led by a continued reduction in the
liquidating portfolios, including the sale of the $1.2 billion Fleet Services portfolio at the end of the 2003 third quarter. In the international markets, average customer deposits grew 20%
from the prior year, primarily driven by growth in Asia and EMEA, which

17

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included
the benefits of the KorAm acquisition and foreign currency translation. Average loans in International Retail Banking grew 31% primarily due to the impact of the KorAm acquisition and
positive foreign currency translation.

As
shown in the following table, revenues, net of interest expense, of $15.528 billion in 2004 increased $1.398 billion or 10% from 2003. Revenues in North America grew
$365 million or 4% in 2004, primarily due to the impact of loan and deposit growth and increased investment product sales, partially offset by a decline in net servicing revenues in Prime Home
Finance, the impact of the liquidation of non-core portfolios in the Commercial Business and lower net funding spreads. Retail Distribution revenues grew $105 million or 4% due to
the impact of higher loan and deposit volumes, partially offset by lower net funding spreads. The Commercial Business revenues grew $268 million or 13% due to the reclassification of operating
leases from loans to other assets and the related operating lease depreciation expense from revenue to expense, and was partially offset by the impact of the liquidation of non-core
portfolios, including the prior-year sale of the $1.2 billion Fleet Services portfolio. The reclassification increased both revenues and expenses by $403 million pretax in
2004. Prime Home Finance revenues decreased $366 million or 20% mainly due to lower net servicing revenues and lower securitization revenues. The decline in net servicing revenues was driven by
lower hedge-related revenues, that were the result of higher hedging costs, and the impact of losses on mortgage servicing hedge ineffectiveness resulting from the volatile rate environment. The lower
securitization revenues included a one-time decrease in revenues of $35 million from the adoption of SAB 105. These declines were partially offset by the impact of higher loan
volumes and the impact of the PRMI acquisition. Student loan revenues grew $125 million or 26% due to the impact of higher net interest revenue, driven by growth in average loans and
originations, higher securitization-related gains and the absence of a prior-year write-down of the purchase premium of certain student loans. Revenues in Mexico increased
$233 million or 13% driven by the impact of
higher loans and deposits, and the gain on sale of a mortgage portfolio, partially offset by the negative impact of foreign currency translation. The comparison to the prior year was also impacted by
the absence of an $85 million write-down in 2003 of the Fobaproa investment security and revised estimates of reserves related to certain investments. International Retail Banking
revenues increased $1.033 billion or 21%, primarily reflecting the positive impact of foreign currency translation, the addition of KorAm and growth in Asia and EMEA. Excluding foreign currency
translation and KorAm, growth in both Asia and EMEA was driven by increased investment product sales, and higher deposit and lending revenues.

|In millions of dollars                  |  | 2004 |        | 2003
|--------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense       |  |      |        |     
|Retail Distribution                     |  | $    | 3,066  |     
|Commercial Business                     |  |      | 2,295  |     
|Prime Home Finance                      |  |      | 1,507  |     
|Student Loans                           |  |      | 612    |     
|Mexico                                  |  |      | 2,025  |     
|                                        |  |      |        |     
|North America                           |  |      | 9,505  |     
|                                        |  |      |        |     
|EMEA                                    |  |      | 2,857  |     
|Japan                                   |  |      | 471    |     
|Asia                                    |  |      | 2,164  |     
|Latin America                           |  |      | 531    |     
|                                        |  |      |        |     
|International                           |  |      | 6,023  |     
|                                        |  |      |        |     
|Total revenues, net of interest expense |  | $    | 15,528 |     
|                                        |  |      |        |     

Operating
expenses of $9.123 billion in 2004 increased $989 million or 12% from 2003, reflecting increases of $602 million or 11% in North America and
$387 million or 14% in International Retail Banking. In North America, growth was mainly driven by the impact of the operating lease reclassification in the Commercial Business of
$403 million, higher volume-related expenses and increased investment spending in Retail Distribution, higher staff-related and legal costs in Mexico and the impact of the PRMI acquisition. The
increase in International Retail Banking expenses reflects the impact of foreign currency translation, the addition of KorAm in Asia, higher sales commissions and increased investment spending,
including costs associated with branch and sales-force expansion.

The
provisions for benefits, claims, and credit losses were $464 million in 2004, down from $843 million in 2003, reflecting a lower provision for credit losses. Higher
credit reserve releases reflected improvement in credit experience in all regions except EMEA, which increased credit reserves, primarily driven by Germany. The decrease in net credit losses in 2004
was mainly due to lower credit costs in the North America Commercial Business excluding Mexico, which benefited from the liquidation of non-core portfolios; Latin America, which benefited
from the absence of an $87 million write-down of an Argentine compensation note in the prior year (which was written down against previously established reserves); North America
(excluding Mexico) and Asia. These declines were partially offset by higher credit losses in EMEA, primarily due to Germany, and the absence of a prior-year $64 million credit
recovery in Mexico. Net credit losses (excluding the Commercial Business) were $693 million and the related loss ratio was 0.48% in 2004, compared to $614 million and 0.52% in 2003. The
improvement in the net credit loss ratio (excluding the Commercial Business) in 2004 was mainly due to an improved credit environment, which resulted in lower net credit losses in North America
(excluding Mexico) and Asia and the absence of the $87 million write-down of the Argentina compensation note in 2003. An increase in EMEA was primarily due to Germany. Commercial
Business net credit losses were $214 million and the related loss ratio was 0.53% in 2004, compared to $462 million and 1.09% in 2003. The decline in Commercial Business net credit
losses was mainly due to improvements in North America (excluding Mexico).

Loans
delinquent 90 days or more (excluding the Commercial Business) were $4.094 billion or 2.47% of loans at December 31, 2004, compared to $3.802 billion or
3.07% at December 31, 2003. The increase in delinquent loans in 2004 primarily resulted from increases in Prime Home Finance, reflecting the impact of a GNMA portfolio that was purchased in the
PRMI acquisition, and increases in Germany including the impact of foreign currency translation. The decline in the 90 days delinquency ratio was driven by improved credit conditions across all
markets except Japan.

18

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Cash-basis
loans in the Commercial Business were $735 million or 1.78% of loans at December 31, 2004, compared to $1.350 billion or 3.38% at
December 31, 2003. Cash-basis loans improved in 2004 primarily due to broad-based declines in all products and regions, led by North America (excluding Mexico), where the business
continued to work through the liquidation of non-core portfolios.

Average
assets of $255 billion in 2004 increased $31 billion or 14% from 2003. The increase in 2004 primarily reflected growth in average loans in the Prime Home Finance
and Student Loan businesses, 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 and sales of non-core portfolios.

OTHER CONSUMER

|In millions of dollars            |  | 2004 |     | 2003 |  
|--------------------------------- |  | ---- | --- | ---- | -
|Revenues, net of interest expense |  | $    | 516 |      | $
|Operating expenses                |  |      | 352 |      |  
|                                  |  |      |     |      |  
|Income before tax benefits        |  |      | 164 |      |  
|Income tax benefits               |  |      | 69  |      |  
|                                  |  |      |     |      |  
|Net income (loss)                 |  | $    | 95  |      | $
|                                  |  |      |     |      |  

Other Consumerwhich includes certain treasury and other unallocated staff functions, global marketing and other
programsreported income of $95 million in 2004 and losses of $124 million in 2003. Included in the 2004 results were the gain
on sale of Samba of $378 million after-tax and a $22 million after-tax release of reserves related to unused travelers checks in a non-core business,
partially offset by a $14 million after-tax write-down of assets in a non-core business. Excluding these items, the increase in losses in 2004 was primarily
due to lower treasury results, including the impact of higher capital funding costs, and higher staff-related, global marketing and legal costs.

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

GLOBAL CONSUMER OUTLOOK

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 46.

During
2005, the Global Consumer businesses will continue to focus on tight expense control and productivity improvements. While the businesses will also focus on expanding the base of
stable and recurring revenues and managing credit risk, revenue and credit performance will also be impacted by U.S. and global economic conditions, including the level of interest rates, bankruptcy
filings and unemployment rates, as well as political policies and developments around the world. The Company remains diversified across a number of geographies, product groups, and customer segments
and continues to monitor the economic situation in all of the countries in which it operates.

CardsIn 2004,Cardsreported record income of $4.7 billion, an increase of
31% over 2003, while benefiting from the 2003 acquisitions of the Home Depot and Sears and the 2004 acquisition of KorAm. In 2005,Cardsexpects to
deliver strong earnings growth as managed receivables continue to grow and expenses remain controlled through improved productivity levels and scale opportunities. In 2005, Citi Cards expects
continued income and managed receivables growth through continued brand development, private-label expansion, new product launches, and organic growth, despite the continuation of a challenging
competitive environment. Consistent with changes in industry practice based on regulatory guidance, during 2005, Citi Cards will change the minimum payment calculation for its credit card accounts.
This change is likely to result in an increase in delinquencies and credit loss experience. In Mexico, the Company will continue to leverage the expertise and experience of the global Cards franchise,
with increased sales and loan volumes and productivity improvements. InternationalCardsis also expecting strong earnings growth in 2005 with a focus on
expanding the revenue base through growth in sales, receivables, and accounts while continuing to invest in both new and existing markets.

Consumer FinanceIn 2004, Consumer Finance reported record income of $2.4 billion, an improvement of 21% from 2003,
largely reflecting organic growth, the 2004 acquisition of the Washington Mutual Finance Corporation portfolio, and strong international growth outside of Japan. In North America, CitiFinancial
expects to deliver income growth through growth in receivables by expanding customer reach and a continued focus on expense management. In the international markets, growth in 2005 will continue to be
impacted by the challenging operating environment in Japan. The Japan business regained stability in 2004, as loss rates improved, expenses were reduced through repositioning, and the pressure on loan
volumes eased. In 2005, Japan is expected to continue to improve, as loss rates and expenses remain well controlled, and customer volumes show moderate growth. In other international markets,
important growth opportunities are anticipated as we continue to focus on gaining market share through branch expansion and other organic activities in both new and established markets including
India, Mexico, Poland, Brazil, South Korea, Indonesia, and Thailand.

Retail BankingIn 2004, Retail Banking reported record income of $4.1 billion, an increase of 17% from 2003, reflecting
strong customer volumes, improved loss rates, and the acquisition of KorAm, partially offset by reduced earnings in the North America Prime Home Finance business in line with market conditions. In
2005, Retail Banking expects to deliver growth in core businesses driven by the benefits of investment spending, continuing to expand our footprint through branch expansion, the 2005 acquisition of
First American Bank, which is pending regulatory approval, and by penetration into select markets, such as the growing Hispanic banking market.

In
2005, Retail Distribution will continue to enhance its franchise by emphasizing increased sales productivity in the financial centers, deeper customer relationships through
cross-selling and wealth management initiatives, and further investments in technology that drive cost efficiencies and improve customer satisfaction. The Commercial Business will continue to expand
in serving the needs of small businesses and professionals, through lending, banking, and leasing activities. Prime Home Finance is expected to achieve growth by continuing to leverage Citigroup
distribution channels while aligning the cost structure of the business to reflect lower mortgage origination volumes. The Student Loans business will continue to benefit from the strong Citi brand
and best-in-class sales platforms and technology. The Retail Banking business in Mexico expects to drive growth through new loan, deposit, and investment products while
continuing to improve operating margins. The international markets are expected to build upon the investments in both new and established markets and deliver strong results through a continued focus
on distribution channels, product innovation, and customer support.

19

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GLOBAL CORPORATE
AND INVESTMENT BANK

|In millions of dollars                    |  | 2004 |        | 2003
|----------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense         |  | $    | 12,259 |     
|Operating expenses                        |  |      | 7,464  |     
|Provision for credit losses               |  |      | (975   | )   
|                                          |  |      |        |     
|Income before taxes and minority interest |  |      | 5,770  |     
|Income taxes                              |  |      | 1,571  |     
|Minority interest, after-tax              |  |      | 46     |     
|                                          |  |      |        |     
|Net income                                |  | $    | 4,153  |     
|                                          |  |      |        |     

Global Corporate and Investment Bank (GCIB)reported net income of $4.153 billion and $3.380 billion in 2004 and 2003
respectively reflecting increases of $477 million or 18% inCapital Markets and Bankingand $296 million or 40% in Transaction Services.

Capital Markets and Bankingnet income of $3.112 billion in 2004 increased $477 million or 18% compared to 2003, primarily due
to a lower provision for credit losses as well as an increase in Lending and Fixed Income. The increase in expenses was driven by higher incentive compensation, the impact of recent acquisitions,
higher legal reserves, and increased investment spending on strategic growth initiatives.

Transaction Servicesnet income of $1.041 billion in 2004 increased $296 million or 40% from 2003, primarily due to higher
revenue reflecting growth in assets under custody and liability balances, improved spreads, a benefit from foreign currency translation and the impact of KorAm, and a lower provision for credit
losses, partially offset by higher expenses.

CAPITAL MARKETS AND BANKING

|In millions of dollars                    |  | 2004 |       | 2003
|----------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense         |  | $    | 8,193 |     
|Operating expenses                        |  |      | 4,623 |     
|Provision for credit losses               |  |      | (777  | )   
|                                          |  |      |       |     
|Income before taxes and minority interest |  |      | 4,347 |     
|Income taxes                              |  |      | 1,193 |     
|Minority interest, after-tax              |  |      | 42    |     
|                                          |  |      |       |     
|Net income                                |  | $    | 3,112 |     
|                                          |  |      |       |     

Capital Markets and Bankingreported net income of $3.112 billion in 2004, an increase of $477 million or 18% from 2003,
primarily due to a lower provision for credit losses as well as an increase in Lending and Fixed Income.

Revenues,
net of interest expense, of $8.193 billion in 2004 increased $751 million or 10% from 2003, primarily driven by increases in Lending and Fixed Income. Lending
increased primarily due to the absence of prior-year losses in credit derivatives (which serve as an economic hedge for the loan portfolio) and the acquisition of KorAm. Fixed Income
Markets increased primarily due to higher commodities, distressed debt and mortgage trading, partially offset by declines in interest rate and foreign exchange trading.

Operating
expenses of $4.623 billion in 2004 increased $1.456 billion or 46% from 2003, primarily due to higher compensation and benefits expense (primarily reflecting a
higher incentive compensation accrual), increased legal reserves, increased investment spending on strategic growth initiatives and the acquisition of KorAm.

The
provision for credit losses was ($777) million in 2004, down $1.517 billion from 2003, primarily due to lower credit losses in the power and energy industry, in Argentina and
in Brazil, and due to prior-year losses on Parmalat, as well as loan loss reserve releases as a result of improving credit quality globally.

Cash-basis
loans were $1.794 billion and $3.246 billion at December 31, 2004 and 2003, respectively. Cash-basis loans net of
write-offs decreased $1.452 billion from December 31, 2003, primarily due to decreases related to borrowers in the telecommunications and power and energy industries and
charge-offs against reserves as well as paydowns from corporate borrowers in Argentina, Mexico, Australia, Hong Kong, and New Zealand, partially offset by increases in Korea reflecting the
acquisition of KorAm.

TRANSACTION SERVICES

|In millions of dollars                    |  | 2004 |       | 2003 |  
|----------------------------------------- |  | ---- | ----- | ---- | -
|Revenues, net of interest expense         |  | $    | 4,066 |      | $
|Operating expenses                        |  |      | 2,841 |      |  
|Provision for credit losses               |  |      | (198  | )    |  
|                                          |  |      |       |      |  
|Income before taxes and minority interest |  |      | 1,423 |      |  
|Income taxes                              |  |      | 378   |      |  
|Minority interest, after-tax              |  |      | 4     |      |  
|                                          |  |      |       |      |  
|Net income                                |  | $    | 1,041 |      | $
|                                          |  |      |       |      |  

Transaction Servicesreported net income of $1.041 billion in 2004, up $296 million or 40% from 2003, primarily due to higher
revenue reflecting growth in liability balances, assets under custody and fees, improved spreads, a benefit from foreign currency translation and the impact of KorAm, and a lower provision for credit
losses, partially offset by higher expenses.

As
shown in the following table, average liability balances of $121 billion grew 21% compared to 2003, primarily due to increases in Asia and Europe reflecting positive flow and
the impact of the KorAm acquisition. Assets under custody reached $7.9 trillion, an increase of $1.5 trillion or 23% compared to 2003, primarily reflecting market appreciation, a benefit from foreign
currency translation, and incremental net sales.

|                                        |  | 2004 |     | 2003
|--------------------------------------- |  | ---- | --- | ----
|Liability balances(average in billions) |  | $    | 121 |     
|Assets under custody(EOP in trillions)  |  | $    | 7.9 |     
|                                        |  |      |     |     

Revenues,
net of interest expense, increased $478 million or 13% to $4.066 billion in 2004, reflecting growth in Cash and Global Securities Services, offset by declines in
Trade. Revenue in Cash Management increased $309 million or 15% from 2003, mainly due to growth in liability balances, improved spreads, the impact of the KorAm acquisition and a benefit from
foreign currency translation and increased fees. Revenue in Global Securities Services increased $186 million or 19% from 2003, primarily reflecting higher assets under custody and fees and the
impact of acquisitions, partially offset by a prior-year gain on the sale of interest in a European market exchange. Trade revenue decreased $15 million or 3% from 2003, primarily
due to lower spreads. The 2003 and 2004 periods included gains on the early termination of intracompany deposits (which were offset inCapital Markets and
Banking).

Operating
expenses increased $285 million or 11% in 2004 to $2.841 billion, 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.

20

---



The
provision for credit losses was ($198) million and ($6) million in 2004 and 2003, respectively. The provision for credit losses decreased by $192 million from 2003, primarily
due to loan loss reserve releases of $163 million in 2004 as a result of 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 $112 million
and $156 million at December 31, 2004 and 2003, respectively. The decrease in cash-basis loans of $44 million in 2004 was primarily due to charge-offs in
Argentina and Poland.

GLOBAL CORPORATE AND INVESTMENT BANK
OUTLOOK

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 46.

GCIB
is 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 and credit performance of
the businesses.

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.

Limited
staff reductions will be made in the Global Corporate and Investment Bank in early 2005. The reductions will affect an estimated 900 staff and will result in an approximately
$125 million pre-tax charge during the 2005 first quarter.

Capital Markets and Bankingin 2004 reported strong Lending and Fixed Income Markets results driven by improving credit trends and a
favorable interest rate environment. Additionally, our international business platform benefited from the acquisition of KorAm in Asia.

In
2005, ourCapital Markets and Bankinginitiatives will continue to focus on product offerings that target client segments with strong
growth and profitability prospects.

Transaction Serviceshas demonstrated significant growth over the past year and will continue to invest in its Funds Services business.
Deals such as Forum Financial and ABN Amro's custody business have increased Citicorp's ability to service its hedge fund and mutual fund clients and significantly broadened its Funds Services
business. The Company has an initiative to launch its correspondent clearing in the North American market by leveraging its existing infrastructure to service client needs.

21

---



GLOBAL WEALTH MANAGEMENT

PRIVATE BANK

|In millions of dollars                                           |  | 2004 |       | 2003
|---------------------------------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense                                |  | $    | 2,044 |     
|Operating expenses                                               |  |      | 1,650 |     
|Provision for credit losses                                      |  |      | (5    | )   
|                                                                 |  |      |       |     
|Income before taxes                                              |  |      | 399   |     
|Income taxes                                                     |  |      | 81    |     
|                                                                 |  |      |       |     
|Net income                                                       |  | $    | 318   |     
|                                                                 |  |      |       |     
|Client business volumes under management(in billions of dollars) |  | $    | 224   |     
|                                                                 |  |      |       |     

Global Wealth Managementis comprised solely ofPrivate Bankand excludes the results of the
Citigroup Inc.Smith BarneyPrivate Client and Global Equity Research businesses.

Private Bankreported net income of $318 million in 2004, down $233 million or 42% from 2003, reflecting a $288 million
decline in Japan. The decline in Japan reflected a $244 million after-tax charge associated with the closure of thePrivate Bankoperations in Japan, as well as a decline in transactional revenue
(see below). Excluding Japan, income grew $55 million or 12% driven by growth in recurring
fee-based and net interest revenues, a lower effective tax rate and improved credit costs which were partially offset by higher incentive compensation costs.

|In billions of dollars at year end      |  | 2004 |     | 2003
|--------------------------------------- |  | ---- | --- | ----
|Client Business Volumes:                |  |      |     |     
|Proprietary Managed Assets              |  | $    | 44  |     
|Other Assets under Fee-Based Management |  |      | 8   |     
|Banking and Fiduciary Deposits          |  |      | 49  |     
|Investment Finance                      |  |      | 42  |     
|Other, principally Custody Accounts     |  |      | 81  |     
|                                        |  |      |     |     
|Total                                   |  | $    | 224 |     
|                                        |  |      |     |     

Client
business volumes were $224 billion at the end of the year, up $29 billion or 15% from $195 billion at the end of 2003. Double-digit growth in client business
volumes was led by an increase in custody assets, which were higher in all regions except Japan. Proprietary managed assets increased $9 billion or 26% predominantly in the U.S., reflecting the
impact of positive net flows. Investment finance volumes, which include loans, letters of credit, and commitments, increased $5 billion or 14%, reflecting growth in
real-estate-secured loans in the U.S. and increased margin lending in the international business, excluding Japan. Banking and fiduciary deposits grew $4 billion or 9%, with
double-digit growth in the U.S. and EMEA, partially offset by a $1 billion or 19% decline in Japan.

Revenues,
net of interest expense, were $2.044 billion in 2004, up $48 million or 2% from 2003 as combined growth of $112 million or 6% in Asia, North America
(including Mexico), EMEA and Latin America was partially offset by a $64 million or 24% decline in Japan. In Asia, revenue increased $34 million or 9%, reflecting broad-based increases
in recurring fee-based and net interest revenue that were partially offset by a decline in client transactional activity and lower performance fees. Revenue in North America increased
$32 million or 4%, primarily driven by strong growth in banking and lending volumes in the U.S. and increased client transaction activity in Mexico, combined with growth in fee income from
discretionary, custody and trust assets in both the U.S. and Mexico. Growth in North America was negatively impacted by net interest margin compression as increased funding costs, including lower
revenue from treasury activities, was partially offset by the benefit of changes in the mix of deposits and liabilities. In EMEA, revenue grew $31 million or 12%, primarily driven by growth in
fee income from discretionary and trust assets as well as increased transactional revenue.

Revenue
growth of $15 million or 7% in Latin America primarily reflected growth in banking and lending volumes. In Japan, revenue declined $64 million or 24% mainly due to
lower transactional revenues.

Operating
expenses of $1.650 billion in 2004 were up $467 million or 39% from 2003. Operating expenses in 2004 included the $400 million exit plan charge in Japan.
Excluding the exit plan charge, expenses increased $67 million or 6%, primarily reflecting increases in incentive compensation resulting from corresponding increases in revenue, as well as
higher staff costs that were driven by investments in bankers and product specialists. Offsetting the growth in expenses was the absence of prior-year repositioning costs in Europe.

The
provision for credit losses reflected net recoveries of $5 million in 2004 compared to a net provision of $11 million in 2003. The improvement in 2004 reflected net
recoveries in Japan, Asia, the U.S., and Europe. Net credit write-offs / (recoveries) in 2004 were (0.02%) of average loans outstanding compared with 0.05% in 2003. Loans 90 days or
more past due at year-end 2004 were $127 million or 0.33% of total loans outstanding, compared with $121 million or 0.35% at the end of 2003.

The
decline in the effective tax rate in 2004 as compared to the prior year was primarily driven by the impact of the $400 million pretax ($244 million
after-tax) Japan exit plan implementation charge.

GLOBAL WEALTH MANAGEMENT OUTLOOK

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 46.

The
strategy ofPrivate Bankconsists of four major components: integrated client solutions, innovative product capabilities, a focus on key
markets worldwide, and a leveraging of the global reach of Citigroup. These components have enabledPrivate Bankto offer top-tier
capabilities and investment solutions to the wealthiest families around the world by drawing upon the vast resources of Citigroup's businesses. During uncertain and complex economic and geopolitical
times, the stability, globality, balance sheet strength and broad product capabilities of Citigroup provide thePrivate Bankwith a competitive and
sustainable advantage over its peer group.

Exiting
the private banking operations in Japan will impact the operating and financial performance of thePrivate Bankin 2005. Costs will
continue to be incurred in connection with implementing the exit plan and additional charges may be taken. ThePrivate Bankwill continue to focus on
expansion in geographic markets including India, South Korea and select cities in North America; build-out new product capabilities; maintain and expand successful partnerships with other
Citigroup entities worldwide; and develop and attract a talented sales force that will focus on expanding our client base and strengthening relationships with existing clients. Private Bankexpects its
market-leading regions to continue their strong performance in 2005.

22

---



GLOBAL INVESTMENT MANAGEMENT

|In millions of dollars                             |  | 2004 |       | 2003
|-------------------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense                  |  | $    | 1,507 |     
|Operating expenses                                 |  |      | 792   |     
|Provisions for benefits, claims, and credit losses |  |      | 371   |     
|                                                   |  |      |       |     
|Income before taxes and minority interest          |  |      | 344   |     
|Income taxes                                       |  |      | 36    |     
|Minority interest, after-tax                       |  |      | 10    |     
|                                                   |  |      |       |     
|Net income                                         |  | $    | 298   |     
|                                                   |  |      |       |     

Global Investment Managementreported net income of $298 million in 2004, which was up $236 million from 2003. Life Insurance
and Annuities net income of $193 million in 2004 increased $194 million compared to 2003, reflecting increased International Insurance Manufacturing (IIM) results of $184 million
driven by the absence of realized investment losses and other actions taken in Argentina in the 2003 third quarter and a tax ruling confirming the deductibility of those losses in the 2004 third
quarter, as well as earnings from higher business volumes. Asset Management net income of $105 million in 2004 was up $42 million or 67% from 2003, primarily reflecting the absence of
impairments of a DAC asset relating to the retirement services business in Argentina of $42 million and of Argentina GPNs of $9 million and the absence of a loss on the sale of an El
Salvador Retirement business of $10 million, partially offset by a higher effective tax rate in Mexico.

LIFE INSURANCE AND ANNUITIES

|In millions of dollars            |  | 2004 |     | 2003 |  
|--------------------------------- |  | ---- | --- | ---- | -
|Revenues, net of interest expense |  | $    | 954 |      | $
|Provision for benefits and claims |  |      | 371 |      |  
|Operating expenses                |  |      | 378 |      |  
|                                  |  |      |     |      |  
|Income before taxes               |  |      | 205 |      |  
|Income taxes                      |  |      | 12  |      |  
|                                  |  |      |     |      |  
|Net income (loss)                 |  | $    | 193 |      | $
|                                  |  |      |     |      |  

Life Insurance and Annuitiesreported net income of $193 million in 2004, an increase of $194 million from 2003. The
$194 million increase primarily resulted from an increase of $184 million in IIM (driven by increases in Latin America of $184 million and Japan of $16 million, partially
offset by a decrease in Asia of $16 million) and an increase in CIG of $10 million. The $184 million increase in Latin America primarily reflects the absence of certain asset
impairments and other actions taken in Argentina in the 2003 third quarter of $134 million and a tax ruling confirming the deductibility of those losses in the 2004 third quarter of
$47 million. See "Impact from Argentina's Economic Changes" on page 8 and "Argentina" on page 7 for a further discussion of these actions. Earnings from higher business volumes in IIM
operations in Japan and Asia were partially offset by the absence of an $18 million tax benefit arising from the application of APB 23 indefinite investment criteria in Asia as well as a
$13 million dividend from a non-strategic equity investment in the prior year. IIM's net income included earnings from operations in Mexico of $54 million in both 2004 and
2003. The increase in income in CIG of $10 million primarily reflects lower capital funding costs.

Revenues,
net of interest expense, of $954 million in 2004 increased $308 million from 2003, primarily driven by the absence of realized investment losses and other actions
taken in Argentina in 2003, higher business volumes in Japan, Asia and Mexico and the impact of foreign exchange rates. Operating expenses of $378 million in 2004 increased $94 million
from 2003, primarily driven by higher business volumes, DAC amortization and the impact of foreign exchange rates.

ASSET MANAGEMENT

|In millions of dollars                             |  | 2004 |     | 2003 |  
|-------------------------------------------------- |  | ---- | --- | ---- | -
|Revenues, net of interest expense                  |  | $    | 553 |      | $
|Operating expenses                                 |  |      | 414 |      |  
|                                                   |  |      |     |      |  
|Income before taxes and minority interest          |  |      | 139 |      |  
|Income taxes (benefits)                            |  |      | 24  |      |  
|Minority interest, after-tax                       |  |      | 10  |      |  
|                                                   |  |      |     |      |  
|Net income                                         |  | $    | 105 |      | $
|                                                   |  |      |     |      |  
|Assets under management(in billions of dollars)(1) |  | $    | 180 |      | $
|                                                   |  |      |     |      |  

---

Asset Managementreported net income of $105 million in 2004, an increase of $42 million or 67% compared to 2003, primarily
reflecting the absence of impairments of a DAC asset relating to the retirement services business in Argentina of $42 million and of Argentina GPNs of $9 million and the absence of a
loss on the sale of an El Salvador Retirement business of $10 million (after-tax), partially offset by a higher effective tax rate in Mexico.

Assets
under management of $180 billion as of December 31, 2004, increased $13 billion or 8% from 2003.

Revenues,
net of interest expense, of $553 million in 2004 increased $30 million or 6% primarily reflecting the absence of a loss on the sale of an El Salvador Retirement
business of $15 million and the absence of Argentina GPN impairments of $9 million, as well as higher business volumes and higher returns on locally invested capital in Mexico, partially
offset by lower revenue in the Citibank Global Asset Management business.

Operating
expenses of $414 million in 2004 declined $48 million or 10% from 2003, primarily reflecting the absence of the DAC impairment in Argentina of $42 million.

Minority
interest, after-tax, of $10 million in 2004 and $11 million in 2003 was primarily due to the impact of consolidating certain assets under FIN
46-R.

GLOBAL INVESTMENT MANAGEMENT OUTLOOK

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 46.

Life Insurance and AnnuitiesSee discussion on the announced sale of substantially all of the Life Insurance and Annuities
business on page 7.

Asset ManagementTheAsset Managementbusiness experienced an increase in net
income in 2004. The global economic outlook and equity market levels will continue to affect the level of assets under management and revenues in the asset management businesses in the
near-term, but underlying demand for asset management services remains strong. Overall, demographic trends remain favorable: aging populations and insufficient retirement savings will
continue to drive growth in the industry across the retail/high-net-worth, institutional, and retirement services markets. Competition will continue to increase as open
architecture distribution expands and major global financial services firms focus on opportunities in asset management.

23

---



For
2005, the business will focus on leveraging the full breadth of its global investment capabilities, continuing to capture the economic value of Citicorp's global distribution
network, the expansion of third-party distribution in key geographies, and an emphasis on penetration of the institutional pension segment.

Federal
and state regulators have focused on, and continue to devote substantial attention to, the mutual fund and variable insurance product industries. As a result of publicity
relating to widespread perceptions of industry abuses, there have been numerous proposals for legislative and regulatory reforms,
including mutual fund governance, new disclosure requirements concerning mutual fund share classes, commission breakpoints, revenue sharing, advisory fees, market timing, late trading, portfolio
pricing, annuity products, hedge funds, and other issues. It is difficult to predict at this time whether changes resulting from new laws and regulations will affect the industries or our investment
management businesses, and, if so, to what degree.

PROPRIETARY INVESTMENT ACTIVITIES

|In millions of dollars                    |  | 2004 |       | 2003
|----------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense         |  | $    | 1,437 |     
|Operating expenses                        |  |      | 340   |     
|Provision for credit losses               |  |      | (1    | )   
|                                          |  |      |       |     
|Income before taxes and minority interest |  |      | 1,098 |     
|Income taxes                              |  |      | 356   |     
|Minority interest, after-tax              |  |      | 73    |     
|                                          |  |      |       |     
|Net income                                |  | $    | 669   |     
|                                          |  |      |       |     

Proprietary Investment Activitiesreported revenues, net of interest expense, of $1.437 billion in 2004, which increased
$455 million or 46% from 2003, reflecting higher Private Equity results of $468 million and lower Other Investment Activities revenues of $13 million. The higher Private Equity
results were primarily due to net unrealized gains from investments in Citigroup Venture Capital (CVC) Equity Partners Fund and investments in Europe, as compared to net unrealized losses in 2003, as
well as higher net realized gains, partially offset by lower mark-to-market gains on public securities.

Operating
expenses of $340 million in 2004 increased $58 million or 21% from 2003, primarily reflecting higher formulaic incentive compensation within Emerging Markets and
CAI.

Minority
interest, after-tax, of $73 million in 2004 decreased $102 million from 2003, primarily due to the absence of prior year dividends and a
mark-to-market valuation on the recapitalization of an investment held within the CVC Equity Partners Fund.

See
Note 4 to the Consolidated Financial Statements for additional information on investments in fixed maturity and equity securities.

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

Private Equityincludes equity and mezzanine debt financing on both a direct and an indirect basis, in companies primarily located in the
United States and Western Europe, including investments made by CVC Equity Partners Fund, investments in companies located in developing economies, CVC/Opportunity Equity Partners, LP (Opportunity),
and the investment portfolio related to the Banamex acquisition in August 2001. Opportunity is a third-party managed fund investing in companies that were privatized by the government of Brazil
in the mid-1990s. The remaining investments in the Banamex portfolio were liquidated during 2003.

Private
equity investments held in investment company subsidiaries and Opportunity 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.

As
of December 31, 2004 and 2003, Private Equity included assets of $5.820 billion and $5.470 billion respectively, with the portfolio primarily invested in
industrial, consumer goods, communication, and technology companies. The increase in the portfolio of $350 million from 2003 relates primarily to the impact of net unrealized gains in 2004. On
a regional basis as of December 31, 2004, Private Equity included assets of $2.626 billion in North America (including Mexico), $2.010 billion in EMEA, $892 million in
Latin America, $287 million in Asia, and $5 million in Japan.

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

|In millions of dollars            |  | 2004 |       | 2003 |  
|--------------------------------- |  | ---- | ----- | ---- | -
|Net realized gains(1)             |  | $    | 452   |      | $
|Public mark-to-market             |  |      | (44   | )    |  
|Net unrealized gains (losses)(2)  |  |      | 517   |      |  
|Other(3)                          |  |      | 400   |      |  
|                                  |  |      |       |      |  
|Revenues, net of interest expense |  | $    | 1,325 |      | $
|                                  |  |      |       |      |  

---

Revenues,
net of interest expense, of $1.325 billion in 2004 increased $468 million from 2003, primarily reflecting higher net unrealized gains of $761 million and
higher net realized gains of $64 million, partially offset by lower public mark-to-market results of $302 million and lower other revenues of $55 million
resulting from decreased dividends and fees. The higher net unrealized gains were driven by lower net impairments in emerging market investments, higher net valuations in CVC Equity Partners Fund,
Emerging Markets and Europe. The increase in the CVC Equity Partners Fund was due to a valuation adjustment in an underlying German investment. The Emerging Markets improvements were primarily from
the Opportunity Fund investment, offsetting losses in 2003, and in an Asian private equity fund. The Europe results reflect better performance in many of the underlying investments, an improving
European private equity market, and the impact of foreign exchange. The lower public mark-to-market results were primarily due to an investment in an Indian software company
reflecting a general decline in public market values in the Indian software sector. The lower other revenues were primarily driven by lower dividends and fees in CVC Equity Partners Fund.

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

Other
Investment Activities investments are primarily carried at fair value, with impairment write-downs recognized in income for "other than temporary" declines in value. As of
December 31, 2004, Other Investment Activities included assets of $1.170 billion, including $868 million in hedge funds, the majority of which represents money managed for St.
Paul Travelers Companies (formerly TPC), $163 million in the LDC Debt/Refinancing portfolios and $139 million in other assets.

24

---



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

|In millions of dollars            |  | 2004 |     | 2003
|--------------------------------- |  | ---- | --- | ----
|LDC Debt/Refinancing portfolios   |  | $    | 1   |     
|Hedge fund investments            |  |      | 8   |     
|Other(1)                          |  |      | 103 |     
|                                  |  |      |     |     
|Revenues, net of interest expense |  | $    | 112 |     
|                                  |  |      |     |     

---

Revenues,
net of interest expense of $112 million in 2004 decreased $13 million from 2003, primarily relating to lower hedge fund results of $67 million and lower
revenue from LDC Debt/Refinancing portfolios of $6 million, partially offset by higher other revenues of $60 million. The higher other revenues were primarily due to a $44 million
increase in CAI revenues and higher revenues from real estate investments of $16 million.

Proprietary
Investment Activities results may fluctuate in the future as a result of market and asset-specific factors.

CORPORATE/OTHER

|In millions of dollars                             |  | 2004 |     | 2003 |  
|-------------------------------------------------- |  | ---- | --- | ---- | -
|Revenues, net of interest expense                  |  | $    | 529 |      | $
|Operating expenses                                 |  |      | 329 |      |  
|Provisions for benefits, claims, and credit losses |  |      | 2   |      |  
|                                                   |  |      |     |      |  
|Income before taxes and minority interest          |  |      | 198 |      |  
|Income tax benefits                                |  |      | (20 | )    |  
|Minority interest, after-tax                       |  |      | 15  |      |  
|                                                   |  |      |     |      |  
|Net income                                         |  | $    | 203 |      | $
|                                                   |  |      |     |      |  

Corporate/Otherreported net income of $203 million in 2004, which decreased $124 million from 2003, primarily due to lower
net treasury results and higher taxes held at the Corporate level, partially offset by 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 $529 million decreased $588 million from 2003, primarily due to lower net treasury results, intersegment eliminations and the absence
of prior-year EFS revenues, partially offset by the gain on the sale of EFS.

Operating
expenses of $329 million decreased $572 million from 2003, primarily due to lower intersegment eliminations, the absence of prior-year operating
expenses in EFS and the absence of a $50 million pretax expense for the contribution of appreciated venture capital securities to the Citigroup Foundation. The Citigroup Foundation
contributions had minimal impact on Citicorp's earnings after related tax benefits.

Income
tax benefits of $20 million in 2004 included the impact of a $147 million tax reserve release due to the closing of a tax audit, while the 2003 benefit of
$127 million included the impact of a tax reserve release of $200 million that had been held at the legacy Associates' businesses and was deemed to be in excess of expected tax
liabilities.

25

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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 regularly reviewed with the independent business-level risk managers, the Citigroup senior business managers, and as appropriate, the
Citigroup Board of Directors.

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

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

CREDIT RISK MANAGEMENT PROCESS

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

26

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LOANS OUTSTANDING

|In millions of dollars at year end                                 |                                          | 2004 |         | 2003    |   | 2002    |         | 2001 |         | 2000    |  
|------------------------------------------------------------------ | ---------------------------------------- | ---- | ------- | ------- | - | ------- | ------- | ---- | ------- | ------- | -
|Consumer loans                                                     |                                          |      |         |         |   |         |         |      |         |         |  
|In U.S. offices:                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   | Mortgage and real estate                 |      | $       | 161,832 |   | $       | 129,507 |      | $       | 121,178 |  
|                                                                   | Installment, revolving credit, and other |      |         | 134,784 |   |         | 136,725 |      |         | 113,620 |  
|                                                                   | Lease financing                          |      |         | 6,030   |   |         | 8,523   |      |         | 12,027  |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 302,646 |         |   | 274,755 |         |      | 246,825 |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|In offices outside the U.S.:                                       |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   | Mortgage and real estate                 |      |         | 39,601  |   |         | 28,743  |      |         | 26,564  |  
|                                                                   | Installment, revolving credit, and other |      |         | 93,523  |   |         | 76,718  |      |         | 65,343  |  
|                                                                   | Lease financing                          |      |         | 1,619   |   |         | 2,216   |      |         | 2,123   |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 134,743 |         |   | 107,677 |         |      | 94,030  |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 437,389 |         |   | 382,432 |         |      | 340,855 |         |  
|Unearned income                                                    |                                          |      | (2,163  | )       |   | (2,500  | )       |      | (3,174  | )       |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Consumer loansnet                                                 |                                          |      | 435,226 |         |   | 379,932 |         |      | 337,681 |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Corporate loans                                                    |                                          |      |         |         |   |         |         |      |         |         |  
|In U.S. offices:                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   | Commercial and industrial                |      |         | 14,624  |   |         | 15,791  |      |         | 21,279  |  
|                                                                   | Lease financing                          |      |         | 1,879   |   |         | 2,010   |      |         | 2,017   |  
|                                                                   | Mortgage and real estate                 |      |         | 100     |   |         | 95      |      |         | 588     |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 16,603  |         |   | 17,896  |         |      | 23,884  |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|In offices outside the U.S.:                                       |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   | Commercial and industrial                |      |         | 77,053  |   |         | 62,886  |      |         | 67,456  |  
|                                                                   | Mortgage and real estate                 |      |         | 3,928   |   |         | 1,751   |      |         | 1,885   |  
|                                                                   | Loans to financial institutions          |      |         | 13,360  |   |         | 12,440  |      |         | 8,621   |  
|                                                                   | Lease financing                          |      |         | 2,485   |   |         | 2,859   |      |         | 2,784   |  
|                                                                   | Governments and official institutions    |      |         | 1,100   |   |         | 1,496   |      |         | 3,081   |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 97,926  |         |   | 81,432  |         |      | 83,827  |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|                                                                   |                                          |      | 114,529 |         |   | 99,328  |         |      | 107,711 |         |  
|Unearned income                                                    |                                          |      | (299    | )       |   | (291    | )       |      | (296    | )       |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Corporate loansnet                                                |                                          |      | 114,230 |         |   | 99,037  |         |      | 107,415 |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Total loansnet of unearned income                                 |                                          |      | 549,456 |         |   | 478,969 |         |      | 445,096 |         |  
|Allowance for credit losseson drawn exposures                     |                                          |      | (11,269 | )       |   | (12,643 | )       |      | (11,101 | )       |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Total loansnet of unearned income and allowance for credit losses |                                          | $    | 538,187 |         | $ | 466,326 |         | $    | 433,995 |         | $
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|OTHER REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS               |                                         
|
|Other real estate owned(1)                                         |                                          |      |         |         |   |         |         |      |         |         |  
|Consumer                                                           |                                          | $    | 320     |         | $ | 437     |         | $    | 495     |         | $
|Corporate                                                          |                                          |      | 33      |         |   | 59      |         |      | 53      |         |  
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Total other real estate owned                                      |                                          | $    | 353     |         | $ | 496     |         | $    | 548     |         | $
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  
|Other repossessed assets(2)                                        |                                          | $    | 93      |         | $ | 151     |         | $    | 230     |         | $
|                                                                   |                                          |      |         |         |   |         |         |      |         |         |  

---

27

---



DETAILS OF CREDIT LOSS EXPERIENCE

|In millions of dollars                                              |                             | 2004 |        | 2003  |   | 2002   |       | 2001 |        | 2000  |  
|------------------------------------------------------------------- | --------------------------- | ---- | ------ | ----- | - | ------ | ----- | ---- | ------ | ----- | -
|Allowance for credit losses at beginning of year                    |                             | $    | 12,643 |       | $ | 11,101 |       | $    | 9,688  |       | $
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Provision for credit losses                                         |                             |      |        |       |   |        |       |      |        |       |  
|Consumer                                                            |                             |      | 7,205  |       |   | 7,316  |       |      | 7,714  |       |  
|Corporate                                                           |                             |      | (971   | )     |   | 729    |       |      | 2,281  |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    |                             |      | 6,234  |       |   | 8,045  |       |      | 9,995  |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Gross credit losses                                                 |                             |      |        |       |   |        |       |      |        |       |  
|Consumer(1)                                                         |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 6,937 |   |        | 5,783 |      |        | 5,826 |  
|                                                                    | In offices outside the U.S. |      |        | 3,304 |   |        | 3,270 |      |        | 2,865 |  
|Corporate                                                           |                             |      |        |       |   |        |       |      |        |       |  
|Mortgage and real estate                                            |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        |      |   |        |      |      |        | 5     |  
|                                                                    | In offices outside the U.S. |      |        | 6     |   |        | 27    |      |        | 23    |  
|Governments and official institutions outside the U.S.              |                             |      |       |       |   | 111    |       |      |       |       |  
|Loans to financial institutions                                     |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        |      |   |        |      |      |        |      |  
|                                                                    | In offices outside the U.S. |      |        | 3     |   |        | 13    |      |        | 4     |  
|Commercial and industrial                                           |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 52    |   |        | 381   |      |        | 819   |  
|                                                                    | In offices outside the U.S. |      |        | 571   |   |        | 939   |      |        | 1,018 |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    |                             |      | 10,873 |       |   | 10,524 |       |      | 10,560 |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Credit recoveries                                                   |                             |      |        |       |   |        |       |      |        |       |  
|Consumer(1)                                                         |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 1,079 |   |        | 763   |      |        | 729   |  
|                                                                    | In offices outside the U.S. |      |        | 691   |   |        | 735   |      |        | 510   |  
|Corporate(2)                                                        |                             |      |        |       |   |        |       |      |        |       |  
|Mortgage and real estate                                            |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        |      |   |        |      |      |        | 1     |  
|                                                                    | In offices outside the U.S. |      |        | 3     |   |        | 1     |      |        |      |  
|Governments and official institutions outside the U.S.              |                             |      | 1      |       |   |       |       |      | 2      |       |  
|Loans to financial institutions                                     |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 6     |   |        |      |      |        |      |  
|                                                                    | In offices outside the U.S. |      |        | 35    |   |        | 12    |      |        | 6     |  
|Commercial and industrial                                           |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 98    |   |        | 33    |      |        | 147   |  
|                                                                    | In offices outside the U.S. |      |        | 358   |   |        | 215   |      |        | 168   |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    |                             |      | 2,271  |       |   | 1,759  |       |      | 1,563  |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Net credit losses                                                   |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    | In U.S. offices             |      |        | 5,806 |   |        | 5,368 |      |        | 5,773 |  
|                                                                    | In offices outside the U.S. |      |        | 2,796 |   |        | 3,397 |      |        | 3,224 |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|                                                                    |                             |      | 8,602  |       |   | 8,765  |       |      | 8,997  |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Othernet(3)                                                        |                             |      | 994    |       |   | 2,262  |       |      | 415    |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Allowance for credit losses at end of year                          |                             | $    | 11,269 |       | $ | 12,643 |       | $    | 11,101 |       | $
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Allowance for unfunded lending commitments(4)                       |                             |      | 600    |       |   | 600    |       |      | 567    |       |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Total allowance for loans, leases, and unfunded lending commitments |                             | $    | 11,869 |       | $ | 13,243 |       | $    | 11,668 |       | $
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Net consumer credit losses                                          |                             | $    | 8,471  |       | $ | 7,555  |       | $    | 7,452  |       | $
|As a percentage of average consumer loans                           |                             |      | 2.13   | %     |   | 2.22   | %     |      | 2.55   | %     |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  
|Net corporate credit losses                                         |                             | $    | 131    |       | $ | 1,210  |       | $    | 1,545  |       | $
|As a percentage of average corporate loans                          |                             |      | 0.11   | %     |   | 1.18   | %     |      | 1.45   | %     |  
|                                                                    |                             |      |        |       |   |        |       |      |        |       |  

---

28

---



CASH-BASIS, RENEGOTIATED, AND PAST DUE LOANS

|In millions of dollars at year end                                |  | 2004 |       | 2003 |   | 2002  |  | 2001 |       | 2000
|----------------------------------------------------------------- |  | ---- | ----- | ---- | - | ----- |  | ---- | ----- | ----
|Corporate cash-basis loans                                        |  |      |       |      |   |       |  |      |       |     
|Collateral dependent (at lower of cost or collateral value)(1)    |  | $    | 7     |      | $ | 8     |  | $    | 64    |     
|Other(2)                                                          |  |      | 1,899 |      |   | 3,394 |  |      | 3,902 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Total                                                             |  | $    | 1,906 |      | $ | 3,402 |  | $    | 3,966 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Corporate cash-basis loans(2)(3)                                  |  |      |       |      |   |       |  |      |       |     
|In U.S. offices                                                   |  | $    | 254   |      | $ | 623   |  | $    | 858   |     
|In offices outside the U.S.                                       |  |      | 1,652 |      |   | 2,779 |  |      | 3,108 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Total                                                             |  | $    | 1,906 |      | $ | 3,402 |  | $    | 3,966 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Corporate renegotiated loans(4)                                   |  |      |       |      |   |       |  |      |       |     
|In U.S. offices                                                   |  | $    | 63    |      | $ | 107   |  | $    | 115   |     
|In offices outside the U.S.                                       |  |      | 20    |      |   | 33    |  |      | 55    |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Total                                                             |  | $    | 83    |      | $ | 140   |  | $    | 170   |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Consumer loans on which accrual of interest had been suspended(2) |  |      |       |      |   |       |  |      |       |     
|In U.S. offices                                                   |  | $    | 2,485 |      | $ | 3,127 |  | $    | 3,114 |     
|In offices outside the U.S.                                       |  |      | 2,978 |      |   | 2,958 |  |      | 2,792 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Total                                                             |  | $    | 5,463 |      | $ | 6,085 |  | $    | 5,906 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Accruing loans 90 or more days delinquent(5)(6)                   |  |      |       |      |   |       |  |      |       |     
|In U.S. offices                                                   |  | $    | 3,153 |      | $ | 3,298 |  | $    | 2,639 |     
|In offices outside the U.S.                                       |  |      | 401   |      |   | 576   |  |      | 447   |     
|                                                                  |  |      |       |      |   |       |  |      |       |     
|Total                                                             |  | $    | 3,554 |      | $ | 3,874 |  | $    | 3,086 |     
|                                                                  |  |      |       |      |   |       |  |      |       |     

---

FOREGONE INTEREST REVENUE ON LOANS(1)

|In millions of dollars                                                         |  | In U.S.
offices |     | In non-U.S.
offices |   | 2004
Total
|------------------------------------------------------------------------------ |  | --------------- | --- | ------------------- | - | ----------
|Interest revenue that would have been accrued at original contractual rates(2) |  | $               | 416 |                     | $ | 576       
|Amount recognized as interest revenue(2)                                       |  |                 | 57  |                     |   | 211       
|                                                                               |  |                 |     |                     |   |           
|Foregone interest revenue                                                      |  | $               | 359 |                     | $ | 365       
|                                                                               |  |                 |     |                     |   |           

---

29

---



CONSUMER CREDIT RISK

Within Global Consumer, business-specific credit risk policies and procedures are derived from the following risk management framework:



CONSUMER PORTFOLIO REVIEW

Citicorp's consumer loan portfolio is well diversified by both customer and product. Consumer loans comprise 79% of the total loan portfolio. These loans represent
thousands of borrowers with relatively small individual balances. The loans are diversified with respect to the location of the borrower, with 70% originated in the United States and 30% originated
from offices outside the United States. Mortgage and real estate loans constitute 46% of the total consumer loan portfolio; and installment, revolving credit and other consumer loans and leases
constitute 54% of the portfolio.

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 are set according to loan product and country (see Note 1 to the Consolidated Financial Statements).

Commercial
Business, which is included withinRetail Banking, includes loans and leases made principally to small- and middle-market
businesses. Commercial Business loans, which comprise 9% of the total consumer loan portfolio, 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 cards (together, their managed portfolio), when determining compensation, capital allocation and general
management decisions. Furthermore, investors utilize information about the credit quality of the entire managed portfolio, as the results of both the held and securitized portfolios impact the overall
performance of theCardsbusiness. For a further discussion of managed basis reporting, see theCardsbusiness on page 15 and Note 9 to the
Consolidated Financial Statements.

30

---



Consumer Loan Delinquency Amounts, Net Credit Losses, and Ratios

|                                                       |       | Total
Loans                    |       | 90 Days or More Past Due(1) |       | Average
Loans |      |       |        |      |      
|------------------------------------------------------ | ----- | ------------------------------ | ----- | --------------------------- | ----- | ------------- | ---- | ----- | ------ | ---- | -----
|
|
|
|Cards                                                  |       | $                              | 165.7 |                             | $     | 2,944         |      | $     | 3,392  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 1.78 | %     |        | 2.14 | %    
|                                                       |       | North America Cards            |       |                             | 147.8 |               |      | 2,667 |        |      | 3,133
|                                                       |       |                                | Ratio |                             |       |               |      |       | 1.80   | %    |      
|                                                       |       | International Cards            |       |                             | 17.9  |               |      | 277   |        |      | 259  
|                                                       |       |                                | Ratio |                             |       |               |      |       | 1.55   | %    |      
|Consumer Finance                                       |       |                                | 105.8 |                             |       | 2,014         |      |       | 2,221  |      |      
|                                                       | Ratio |                                |       |                             |       |               | 1.90 | %     |        | 2.36 | %    
|                                                       |       | North America Consumer Finance |       |                             | 82.8  |               |      | 1,525 |        |      | 1,683
|                                                       |       |                                | Ratio |                             |       |               |      |       | 1.84   | %    |      
|                                                       |       | International Consumer Finance |       |                             | 23.0  |               |      | 489   |        |      | 538  
|                                                       |       |                                | Ratio |                             |       |               |      |       | 2.13   | %    |      
|Retail Banking                                         |       |                                | 165.5 |                             |       | 4,094         |      |       | 3,802  |      |      
|                                                       | Ratio |                                |       |                             |       |               | 2.47 | %     |        | 3.07 | %    
|                                                       |       | North America Retail Banking   |       |                             | 115.4 |               |      | 2,515 |        |      | 2,299
|                                                       |       |                                | Ratio |                             |       |               |      |       | 2.18   | %    |      
|                                                       |       | International Retail Banking   |       |                             | 50.1  |               |      | 1,579 |        |      | 1,503
|                                                       |       |                                | Ratio |                             |       |               |      |       | 3.15   | %    |      
|Private Bank(2)                                        |       |                                | 39.0  |                             |       | 127           |      |       | 121    |      |      
|                                                       | Ratio |                                |       |                             |       |               | 0.33 | %     |        | 0.35 | %    
|Other Consumer                                         |       |                                | 1.3   |                             |       |              |      |       |       |      |      
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|Managed loans
(excluding Commercial Business)(3)       |       | $                              | 477.3 |                             | $     | 9,179         |      | $     | 9,536  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 1.92 | %     |        | 2.31 | %    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|Securitized receivables (all in North America Cards)   |       |                                | (85.3 | )                           |       | (1,296        | )    |       | (1,421 | )    |      
|Credit card receivables held-for-sale(4)               |       |                                | (2.5  | )                           |       | (32           | )    |       |       |      |      
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|On-balance sheet loans (excluding Commercial Business) |       | $                              | 389.5 |                             | $     | 7,851         |      | $     | 8,115  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 2.02 | %     |        | 2.42 | %    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|
|Commercial Business Groups(5)                          |       | $                              | 41.2  |                             | $     | 735           |      | $     | 1,350  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 1.78 | %     |        | 3.38 | %    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|Total Consumer Loans(6)                                |       | $                              | 430.7 |                             |       |               |      |       |        |      | $    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|Regional View:                                         |       |                                |       |                             |       |               |      |       |        |      |      
|North America (excluding Mexico)                       |       | $                              | 360.7 |                             | $     | 6,327         |      | $     | 6,794  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 1.75 | %     |        | 2.14 | %    
|Mexico                                                 |       |                                | 8.8   |                             |       | 433           |      |       | 388    |      |      
|                                                       | Ratio |                                |       |                             |       |               | 4.93 | %     |        | 5.65 | %    
|EMEA                                                   |       |                                | 39.3  |                             |       | 1,781         |      |       | 1,669  |      |      
|                                                       | Ratio |                                |       |                             |       |               | 4.53 | %     |        | 4.90 | %    
|Japan                                                  |       |                                | 16.1  |                             |       | 308           |      |       | 355    |      |      
|                                                       | Ratio |                                |       |                             |       |               | 1.91 | %     |        | 2.04 | %    
|Asia (excluding Japan)                                 |       |                                | 49.1  |                             |       | 299           |      |       | 286    |      |      
|                                                       | Ratio |                                |       |                             |       |               | 0.61 | %     |        | 0.86 | %    
|Latin America                                          |       |                                | 3.3   |                             |       | 31            |      |       | 44     |      |      
|                                                       | Ratio |                                |       |                             |       |               | 0.93 | %     |        | 1.50 | %    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      
|Managed loans
(excluding Commercial Business)(3)       |       | $                              | 477.3 |                             | $     | 9,179         |      | $     | 9,536  |      | $    
|                                                       | Ratio |                                |       |                             |       |               | 1.92 | %     |        | 2.31 | %    
|                                                       |       |                                |       |                             |       |               |      |       |        |      |      

---

31

---



Consumer Loan Balances, Net of Unearned Income

|                                                     |  | End of Period |       | Average |  
|---------------------------------------------------- |  | ------------- | ----- | ------- | -
|
|
|Total managed(1) (including the Commercial Business) |  | $             | 518.5 |         | $
|Securitized receivables (all in North America Cards) |  |               | (85.3 | )       |  
|Credit card receivables held-for-sale(2)             |  |               | (2.5  | )       |  
|                                                     |  |               |       |         |  
|On-balance sheet(3) (including Commercial Business)  |  | $             | 430.7 |         | $
|                                                     |  |               |       |         |  

---

Total
delinquencies 90 days or more past due (excluding the Commercial Business) in the managed portfolio were $9.179 billion or 1.92% of loans at December 31, 2004,
compared to $9.536 billion or 2.31% at December 31, 2003. Total cash-basis loans in the Commercial Business were $735 million or 1.78% of loans at December 31,
2004, compared to $1.350 billion or 3.38% at December 31, 2003. Total managed net credit losses (excluding the Commercial Business) in 2004 were $13.336 billion and the related
loss ratio was 3.05%, compared to $11.843 billion and 3.18% in 2003. In the Commercial Business, total net credit losses were $214 million and the related loss ratio was 0.53% in 2004,
compared to $462 million and 1.09% in 2003. For a discussion of trends by business, see business discussions on pages 15 to 19 and page 22.

Citicorp's
total allowance for loans, leases and unfunded lending commitments of $11.869 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 $8.379 billion at December 31, 2004 and $9.088 billion
at December 31, 2003. The decrease in the allowance for credit losses from 2003 was primarily due to the impact of reserve releases of $1.182 billion in 2004 related to improving credit
conditions in North America, Latin America, Asia and Japan. Offsetting this decrease in the allowance for credit losses were additions of $274 million and $148 million associated with
the acquisitions of KorAm and WMF, respectively, the impact of reserve builds of $78 million, primarily related to Germany; and the impact of foreign currency translation.

On-balance
sheet consumer loans of $430.7 billion increased $54.8 billion or 15% from December 31, 2003, primarily driven by growth in mortgage and other
real-estate-secured loans in Prime Home Finance,Consumer FinanceandPrivate Bank, the addition
of the KorAm and WMF portfolios, and the impact of strengthening currencies. Growth in student loans in North America and margin lending inPrivate Bankalso contributed to the growth in consumer loans. Credit card receivables declined, primarily due to the impact of higher securitization levels and higher payment rates by customers. In the North
America Commercial Business (excluding Mexico), loans continued to decline in 2004, reflecting the continued liquidation of non-core portfolios and a $2.0 billion reclassification
of operating leases from loans to other assets in 2004. 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.

Consumer
credit loss ratios for 2005 are expected to remain relatively constant to the fourth quarter 2004 levels. Full-year loss ratios for 2005 are expected to improve
against prior-year levels due to credit loss rates that declined during 2004. This paragraph contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act. See "Forward-Looking Statements" on page 46.

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:



32

---





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.

The
following table presents the corporate credit portfolio, before consideration of collateral, by maturity at December 31, 2004. The Corporate portfolio is broken out by direct
outstandings, which include drawn loans, overdrafts, interbank placements, banker's acceptances, certain investment securities and leases, and unfunded commitments which include unused commitments to
lend, letters of credit and financial guarantees.

|In billions of dollars |  | Within 1
Year |     | Greater
than 1
Year but
Within 5 |   | Greater
than 5
Years |  | Total
Exposure
|---------------------- |  | ------------- | --- | -------------------------------- | - | -------------------- |  | --------------
|Direct outstandings    |  | $             | 131 |                                  | $ | 41                   |  | $             
|Unfunded commitments   |  |               | 148 |                                  |   | 99                   |  |               
|                       |  |               |     |                                  |   |                      |  |               
|Total                  |  | $             | 279 |                                  | $ | 140                  |  | $             
|                       |  |               |     |                                  |   |                      |  |               

Portfolio Mix

The corporate credit portfolio is geographically diverse by region. The following table shows direct outstandings and unfunded commitments by region:

Dec. 31,
2004

Dec. 31,
2003North America

42
%
41
%EMEA

29
%
30
%Japan

3
%
3
%Asia

15
%
14
%Latin America

4
%
5
%Mexico

7
%
7
%Total

100
%
100
%


It
is corporate credit policy to maintain accurate and consistent risk ratings across the corporate credit portfolio. This facilitates the comparison of credit exposures across all lines
of business, geographic region and product. All internal risk ratings must be derived in accordance with the applicable Business' Risk Rating Policy. Independent Risk Management must approve any
exception to the policy. The Risk Rating Policy establishes standards for the derivation of obligor and facility risk ratings that are generally consistent with the approaches used by the major rating
agencies.

Obligor
risk ratings reflect an estimated probability of default for an obligor, and are derived primarily through the use of statistical models, which are validated periodically,
external rating agencies (under defined circumstances), or approved scoring or judgmental methodologies. Facility risk ratings are assigned, using the obligor risk rating, and then taken into
consideration are factors that affect the loss-given-default of the facility such as parent support, collateral, or structure.

Internal
obligor ratings equivalent to BBB and above are considered investment-grade. Ratings below the equivalent of BBB are considered non-investment-grade.

The
following table presents the corporate credit portfolio by facility risk rating at December 31, 2004 and 2003, as a percentage of the total portfolio:

Direct
Outstandings
and Unfunded
Commitments2004

2003AAA/AA/A

54
%
54
%BBB

29
%
27
%BB/B

15
%
16
%CCC or below

1
%
2
%Unrated

1
%
1
%100
%
100
%


The
corporate credit portfolio is diversified by industry with a concentration only to the financial sector which includes banks, other financial institutions, investment banks, and
government and central banks. The following table shows the allocation of direct outstandings and unfunded commitments to industries as a percentage of the total Corporate portfolio:

Direct
Outstandings
and Unfunded
Commitments2004

2003Government and central banks

10
%
14
%Other financial institutions

8
%
9
%Banks

7
%
6
%Investment banks

6
%
5
%Utilities

5
%
5
%Insurance

4
%
5
%Agricultural and food preparation

4
%
4
%Telephone and cable

4
%
4
%Petroleum

4
%
3
%Industrial machinery and equipment

3
%
3
%Autos

2
%
3
%Freight transportation

2
%
2
%Global information technology

2
%
2
%Chemicals

2
%
2
%Retail

2
%
2
%Metals

2
%
2
%Other industries(1)

33
%
29
%Total

100
%
100
%


---

33

---



GLOBAL CORPORATE PORTFOLIO REVIEW

Corporate loans are identified as impaired and 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. 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

2004

2003Corporate cash-basis loansCapital Markets and Banking

$
1,794

$
3,246Transaction Services


112


156Total corporate cash-basis loans

$
1,906

$
3,402Net credit lossesCapital Markets and Banking

$
149

$
1,190Transaction Services


(18
)

23Investment Activities(1)





(3
)Total net credit losses

$
131

$
1,210Corporate allowance for credit losses

$
2,890

$
3,555Corporate allowance for credit losses on unfunded lending commitments(2)


600


600Total corporate allowance for loans, leases and unfunded lending commitments

$
3,490

$
4,155As a percentage of total corporate loans(3)


2.53
%

3.59
%


---

Corporate
cash-basis loans were $1.906 billion and $3.402 billion at December 31, 2004 and 2003, respectively. Cash-basis loans decreased
$1.496 billion from December 31, 2003 due to a $1.452 billion decrease inCapital Markets and Bankingand a $44 million
decrease inTransaction Services.Capital Markets and Bankingdecreased primarily due to
charge-offs in North America, Argentina and Mexico, partially offset by the addition of KorAm.Transaction Servicesdecreased primarily due to
decreases in corporate borrowers in Poland and Argentina.

Total
corporate Other Real Estate Owned (OREO) was $33 million and $59 million at December 31, 2004 and 2003, respectively.

Total
corporate loans outstanding at December 31, 2004 were $114 billion as compared to $99 billion at December 31, 2003.

Total
corporate net credit losses of $131 million in 2004 decreased $1.079 billion compared to 2003, primarily due to improvements in the overall credit environment, and
the absence of exposure to Parmalat.

Citicorp's
allowance for credit losses for loans, leases and lending commitments of $11.869 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 $3.490 billion at December 31, 2004, compared to
$4.155 billion at December 31, 2003. The allowance attributed to corporate loans and leases as a percentage of corporate loans was 2.53% at December 31, 2004, as compared to 3.59%
at December 31, 2003. The $665 million decrease in the total allowance at December 31, 2004 from December 31, 2003 primarily reflects reserve releases of
$900 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. Although the 2004 credit environment led to benefits from loan loss releases and declines
in cash-basis loans, it is unlikely these benefits will repeat in 2005. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act.
See "Forward-Looking Statements" on page 46.

LOAN MATURITIES AND FIXED/VARIABLE PRICING

|In millions of dollars at year end                                                              |                                 | Due
Within 1
Year |        | Over 1 Year
but Within
5 Years |   | Over 5
Years |       | Total
|----------------------------------------------------------------------------------------------- | ------------------------------- | ----------------- | ------ | ------------------------------ | - | ------------ | ----- | -----
|Corporate maturities of the corporate loan portfolio                                            |                                 |                   |        |                                |   |              |       |      
|In U.S. offices                                                                                 |                                 |                   |        |                                |   |              |       |      
|                                                                                                | Commercial and Industrial loans |                   | $      | 4,827                          |   | $            | 7,115 |      
|                                                                                                | Mortgage and real estate        |                   |        | 33                             |   |              | 49    |      
|                                                                                                | Lease financing                 |                   |        | 620                            |   |              | 914   |      
|In offices outside the U.S.                                                                     |                                 |                   | 63,300 |                                |   | 27,829       |       |      
|                                                                                                |                                 |                   |        |                                |   |              |       |      
|Total corporate loans                                                                           |                                 | $                 | 68,780 |                                | $ | 35,907       |       | $    
|                                                                                                |                                 |                   |        |                                |   |              |       |      
|Fixed/variable pricing of corporate loans with maturities due after one year with maturities(1) |                                 |                   |        |                                |   |              |       |      
|Loans at fixed interest rates                                                                   |                                 |                   |        |                                | $ | 11,077       |       | $    
|Loans at floating or adjustable interest rates                                                  |                                 |                   |        |                                |   | 24,830       |       |      
|                                                                                                |                                 |                   |        |                                |   |              |       |      
|Total                                                                                           |                                 |                   |        |                                | $ | 35,907       |       | $    
|                                                                                                |                                 |                   |        |                                |   |              |       |      

---

34

---



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.

Businesses,
working in conjunction with independent Market Risk Management, must ensure that market risks are independently measured, monitored, and reported to ensure transparency in
risk-taking activities and integrity in risk reports. In all cases, the businesses are ultimately responsible for the market risks that they take and for remaining within their defined
limits.

Market
risk encompasses liquidity risk and price risk, both of which arise in the normal course of business of a global financial intermediary. Liquidity risk is the risk that some
entity, in some location and in some currency, may be unable to meet a financial commitment to a customer, creditor, or investor when due. Liquidity risk is discussed in the "Capital Resources and
Liquidity" section on page 13. Price risk is the risk to earnings that arises from changes in interest rates, foreign exchange rates, equity and commodity prices, and in their implied volatilities.
Price risk arises in non-trading portfolios, as well as in trading portfolios.

Non-Trading Portfolios

Citicorp's market risk management process for its non-trading portfolios is consolidated within Citigroup's market risk management process as described
below.

Interest
rate risk in non-trading portfolios is inherent in many client-related activities, primarily lending and deposit taking to both corporations and individuals.
Interest rate risk arises from these client activities as a function of a number of factors. These include the timing of rate resetting and maturity between assets and liabilities, the change in the
profile for those assets and liabilities whose maturity changes in response to changes in market interest rates, changes in the shape of the yield curve and changes in the spread between various
market rate indices among other factors.

The
exposure generated by client-related activities is actively managed by business treasury units throughout Citigroup. The treasury units manage exposure to the key factors within
limits approved by independent risk management, primarily by altering the repricing characteristics of the portfolio either directly through on-balance sheet instruments or through the use
of off-balance sheet instruments including derivatives and by modifying product pricing strategies.

To
ensure consistency across businesses, Citigroup's non-trading portfolios are managed under a single set of standards for defining, measuring, limiting and reporting market
risk. While business risk management is directly responsible for employing appropriate risk management techniques that are appropriate for each specific portfolio, there are a number of
Citigroup-wide reporting metrics, both earnings-based and valuation-based, that are common to all business units.

The
principal earnings measure is Interest Rate Exposure (IRE). IRE is calculated for all non-trading portfolios for all currencies where Citigroup has significant interest
rate exposure. IRE is calculated as the pretax earnings impact of an instantaneous, parallel increase or decrease in the yield curve. In order to stress test the portfolios, IRE is calculated for
+/-50 basis points (bps), +/-100 bps and +/-200 bps rate shocks for each currency. IRE is supplemented with additional measurements, including stress testing the
impact on earnings and equity for non-linear interest rate movements, and analysis of portfolio duration, basis risk, spread risk, volatility risk, and
cost-to-close.

IRE
is interpreted as the potential change in income that would result from the instantaneous change in rates on a static portfolio at a point in time. This is a measure of exposure, not
a simulation of income or forecasted income. It assumes no additional changes in rates or positions, although in practice, business treasurers may react to a change or expected change in rates by
altering their portfolio mix, repricing characteristics, hedge positions and customer pricing which could significantly impact reported earnings. IRE is used as an indicative measure of exposure to a
severe rate change, and not as a predictor of changes in reported earnings.

The
table below illustrates the impact to Citicorp's pretax earnings over a one-year and five-year time horizon from an instantaneous 100 bps increase and a 100
bps decrease in the yield curves applicable to the U.S. dollar and Mexican peso. The five-year horizon amounts are discounted back to current amounts.

Citicorp Interest Rate Exposure (Impact on Pretax Earnings)

|                       |  | December 31, 2004 |      | December 31, 2003 |  
|---------------------- |  | ----------------- | ---- | ----------------- | -
|
|
|U.S. dollar            |  |                   |      |                   |  
|Twelve months and less |  | $                 | (379 | )                 | $
|Discounted five year   |  | $                 | 773  |                   | $
|                       |  |                   |      |                   |  
|Mexican peso           |  |                   |      |                   |  
|Twelve months and less |  | $                 | 46   |                   | $
|Discounted five year   |  | $                 | 206  |                   | $
|                       |  |                   |      |                   |  

The
changes in U.S. dollar Interest Rate Exposure from the prior year reflect changes in the aggregate asset/liability mix, changes in actual and projected pre-payments for
mortgages and mortgage-related investments, the impact on stockholder's equity of retained earnings net of the Litigation Reserve Charge, as well as Citigroup's view of prevailing interest rates.

Trading Portfolios

Citicorp's market risk management process for its trading portfolios is consolidated within Citigroup's market risk management process as described below.

Price
risk in trading portfolios is measured through a complementary set of tools, including factor sensitivities, Value-at-Risk, and stress testing. Each trading
portfolio has its own market risk limit framework, encompassing these measures and other controls, including permitted product lists and a new product approval process for complex products,
established by the business and approved by independent market risk management.

Factor
sensitivities are defined as the change in the value of a position for a defined change in a market risk factor (e.g., the change in the value of a Treasury bill for a 1 basis
point change in interest rates). It is the responsibility of independent market risk management to ensure that factor sensitivities are calculated, monitored and, in most cases, limited, for all
relevant risks taken in a trading portfolio.

Value-at-Risk
estimates the potential decline in the value of a position or a portfolio, under normal market conditions, over a one-day holding
period, at a 99% confidence level. The Value-at-Risk method incorporates the factor sensitivities of the trading portfolio with the volatilities and correlations of those
factors. Citicorp's Value-at-Risk is based on the volatilities of, and correlations between, approximately 250,000 market risk factors, including factors that track the
specific issuer risk in debt and equity securities.

35

---



Stress
testing is performed on trading portfolios on a regular basis, to estimate the impact of extreme market movements. Stress testing is performed on individual trading portfolios, as
well as on aggregations of portfolios and businesses, as appropriate. It is the responsibility of independent market risk management, in conjunction with the businesses, to develop stress scenarios,
review the output of periodic stress testing exercises, and utilize the information to make judgments as to the ongoing appropriateness of exposure levels and limits.

Risk
capital for market risk in trading portfolios is based on an annualized Value-at-Risk figure, with adjustments for intra-day trading activity.

Extensive
back testing of many hypothetical test portfolios is performed as one check on the accuracy of its Value-at-Risk (VAR). Back testing is the process in
which the daily Value-at-Risk of a test portfolio is compared to the ex-post daily change in the market value of its transactions. Back testing is conducted to
ascertain if in fact we are measuring potential market loss at the 99% confidence level. A daily market value loss in excess of a 99% confidence level Value-at-Risk should
occur, on average, only 1% of the time. The VAR calculation for the hypothetical test portfolios, with different degrees of risk concentration, meets this statistical criteria.

New
and/or complex products in the global corporate and investment banking business are required to be reviewed and approved by the Capital Markets Approval Committee (CMAC). The CMAC is
responsible for ensuring that relevant risks are identified and understood, and can be measured, managed and reported in accordance with applicable business policies and practices. The CMAC is made up
of senior representatives from market and credit risk management, legal, accounting, operations, and other support areas.

The
level of price risk exposure at any given point in time depends on the market environment and expectations of future price and market movements, and will vary from period to period.

For
Citicorp's major trading centers, the aggregate pretax Value-at-Risk in the trading portfolios was $80 million at December 31, 2004 and
$42 million at December 31, 2003. Daily exposures averaged $61 million in 2004 and ranged from $41 million to $119 million.

The
following table summarizes Value-at-Risk in the trading portfolios as of December 31, 2004 and 2003, along with the averages:

|In millions of dollars                                             |  | Dec. 31,
2004 |     | 2004
Average |   | Dec. 31,
2003 |   | 2003
Average |    
|------------------------------------------------------------------ |  | ------------- | --- | ------------ | - | ------------- | - | ------------ | ---
|Interest rate                                                      |  | $             | 71  |              | $ | 53            |   | $            | 36 
|Foreign exchange                                                   |  |               | 8   |              |   | 15            |   |              | 11 
|Equity                                                             |  |               | 23  |              |   | 24            |   |              | 19 
|Commodity                                                          |  |               | 6   |              |   | 4             |   |              | 9  
|Covariance adjustment                                              |  |               | (28 | )            |   | (35           | ) |              | (33
|                                                                   |  |               |     |              |   |               |   |              |    
|TotalAll market risk factors, including general and specific risk |  | $             | 80  |              | $ | 61            |   | $            | 42 
|                                                                   |  |               |     |              |   |               |   |              |    
|Specific risk component                                            |  | $             | 6   |              | $ | 7             |   | $            | 4  
|                                                                   |  |               |     |              |   |               |   |              |    
|TotalGeneral market factors only                                  |  | $             | 74  |              | $ | 54            |   | $            | 38 
|                                                                   |  |               |     |              |   |               |   |              |    

The
specific risk component represents the level of issuer-specific risk embedded in the Value-at-Risk, arising from both debt and equity securities. Citicorp's
specific risk model conforms with the 4x multiplier treatment approved by the Federal Reserve and is subject to extensive hypothetical back testing (performed on an annual basis), including many
portfolios with position concentrations.

The
table below provides the range of Value-at-Risk in the trading portfolios that was experienced during 2004 and 2003:

|                 |  | 2004 |    | 2003
|---------------- |  | ---- | -- | ----
|
|
|Interest rate    |  | $    | 29 |     
|Foreign exchange |  |      | 5  |     
|Equity           |  |      | 10 |     
|Commodity        |  |      | 1  |     
|                 |  |      |    |     

36

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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 Citigroup may undertake with respect to activities in a fiduciary role, as principal, as well as agent, or through a special-purpose vehicle.

The
management of operational risk is continuing to evolve into a distinct discipline with its own risk management structure, tools, and process, much like credit and market risk. The
Citigroup Self-Assessment and Operational Risk Framework (the Framework) includes the Citigroup Risk and Control Self-Assessment Policy and the Citigroup Operational Risk
Policy, which define Citigroup's approach to operational risk management. The Citigroup Operational Risk Policy (the Policy) codifies the core governing principles for operational risk management and
provides the framework to identify, evaluate, control, measure, monitor, and report operational risks in a consistent manner across Citigroup. The Framework requires each business to identify its
operational risks as well as the controls established to mitigate those risks and to ensure compliance with laws, regulations, regulatory administrative actions, and Citigroup policies. It also
requires that all businesses report their operational risk losses in accordance with Policy definitions into a standardized database.

Citigroup's
Framework includes the following core operational risk principles, which apply to all of Citigroup's businesses (certain newly acquired businesses are granted temporary
exemptions to this policy):



The
Policy and its requirements facilitate the aggregation of operational risks across products and businesses and promote effective communication of those risks to management.
Information about the businesses' operational risks and losses is reported regularly to Senior Management and to the Citigroup Board of Directors. This includes information about the allocation of
risk capital for operational risk to each business. Risk capital is calculated based on an estimate of the operational loss potential for each major line of business adjusted for the quality of its
control environment. Citigroup's methodologies for calculating capital continue to evolve to accommodate use of the increasing amounts of data that are becoming available as a product of the
Framework. Citigroup's Framework facilitates the Company's response to the requirements of emerging regulatory guidance on operational risk, including those related to Basel 2 capital calculations.

Risk and Control Self-Assessment

A formal governance structure has been established through the Risk and Control Self-Assessment Policy (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 an RCSA that includes documentation of the control
environment and policies, assessing the risks and controls, testing commensurate with risk level, corrective action tracking for control breakdowns or deficiencies and periodic reporting, including
reporting to Senior Management and the Audit 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
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.

During
2004, 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.

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.

37

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

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

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

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

|            |  | December 31, 2004 |     | December 31, 2003
|----------- |  | ----------------- | --- | -----------------
|
|
|
|Germany     |  | $                 | 9.7 |                  
|Korea       |  |                   | 0.4 |                  
|Netherlands |  |                   | 2.7 |                  
|Canada      |  |                   | 0.8 |                  
|Spain       |  |                   | 0.5 |                  
|Italy       |  |                   | 0.6 |                  
|France      |  |                   | 2.0 |                  
|Mexico      |  |                   | 0.1 |                  
|Australia   |  |                   | 0.5 |                  
|            |  |                   |     |                  

---

38

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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 a "well capitalized" position during both 2004 and 2003. See also Note 15 to the Consolidated Financial Statements.

Citicorp Regulatory Capital Ratios

|At year end                       |  | 2004  |   | 2003  |  
|--------------------------------- |  | ----- | - | ----- | -
|Tier 1 Capital                    |  | 8.69  | % | 8.44  | %
|Total Capital (Tier 1 and Tier 2) |  | 12.59 | % | 12.68 | %
|Leverage(1)                       |  | 6.74  | % | 6.70  | %
|Common stockholder's equity       |  | 9.93  | % | 9.97  | %
|                                  |  |       |   |       |  

---

Components of Capital Under Regulatory Guidelines

|In millions of dollars at year end                                |                                    | 2004 |         | 2003    |  
|----------------------------------------------------------------- | ---------------------------------- | ---- | ------- | ------- | -
|Tier 1 Capital                                                    |                                    |      |         |         |  
|Common stockholder's equity                                       |                                    | $    | 94,678  |         | $
|Qualifying mandatorily redeemable securities of subsidiary trusts |                                    |      | 823     |         |  
|Minority interest                                                 |                                    |      | 960     |         |  
|Less: Net unrealized gains on securities available-for-sale(1)    |                                    |      | (124    | )       |  
|Accumulated net gains on cash flow hedges, net of tax             |                                    |      | (706    | )       |  
|Intangible assets:(2)                                             |                                    |      |         |         |  
|                                                                  | Goodwill                           |      |         | (29,330 | )
|                                                                  | Other disallowed intangible assets |      |         | (5,866  | )
|Other                                                             |                                    |      | (322    | )       |  
|                                                                  |                                    |      |         |         |  
|Total Tier 1 Capital                                              |                                    |      | 60,113  |         |  
|                                                                  |                                    |      |         |         |  
|Tier 2 Capital                                                    |                                    |      |         |         |  
|Allowance for credit losses(3)                                    |                                    |      | 8,820   |         |  
|Qualifying debt(4)                                                |                                    |      | 18,050  |         |  
|Unrealized marketable equity securities gains(1)                  |                                    |      | 135     |         |  
|                                                                  |                                    |      |         |         |  
|Total Tier 2 Capital                                              |                                    |      | 27,005  |         |  
|                                                                  |                                    |      |         |         |  
|Total Capital (Tier 1 and Tier 2)                                 |                                    | $    | 87,118  |         | $
|                                                                  |                                    |      |         |         |  
|Risk-adjusted assets(5)                                           |                                    | $    | 692,138 |         | $
|                                                                  |                                    |      |         |         |  

---

Stockholder's
equity increased $12.9 billion during the year to $94.7 billion at December 31, 2004, representing 9.93% of assets, compared to $81.8 billion
and 9.97% at year-end 2003. The increase in stockholder's equity during the year reflected net income of $16.9 billion, employee benefits and other activity of $0.4 billion,
and net changes in equity from nonowner sources of $0.2. These increases were offset by dividends paid of $4.6 billion. The decrease in the stockholder's equity ratio during the year reflected
the above items and the 16% increase in assets.

39

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Total
mandatorily redeemable securities of subsidiary trusts (trust preferred securities), which qualify as Tier 1 Capital, at December 31, 2004 and December 31, 2003 were
$823 million and $840 million, respectively. During the 2004 first quarter, the Company deconsolidated the subsidiary issuer trusts in accordance with FIN 46-R.

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" below.

On
July 20, 2004, the federal banking and thrift regulatory agencies issued the final rule on capital requirements for asset-backed commercial paper (ABCP) programs. The final
rule, which generally became effective September 30, 2004, increased the capital requirement on most short-term liquidity facilities that provide support to ABCP programs by
imposing a 10% credit conversion factor on such facilities. Additionally, the final rule permanently excludes ABCP program assets consolidated under FIN 46-R and any minority interests
from the calculation of risk-weighted assets and Tier 1 Capital, respectively. The denominator of the leverage ratio calculation remains unaffected by the final rule, as the
risk-based capital treatment does not alter the reporting of the on-balance sheet assets under GAAP guidelines. The impact of adopting the final rule on Citicorp's Tier 1
Capital ratio was approximately 5 basis points.

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 December 31, 2004, all of Citicorp's subsidiary depository institutions were "well capitalized" under the federal regulatory agencies' definitions.

Citibank, N.A. Ratios

|At year end                       |  | 2004  |   | 2003  |  
|--------------------------------- |  | ----- | - | ----- | -
|Tier 1 Capital                    |  | 8.42  | % | 8.40  | %
|Total Capital (Tier 1 and Tier 2) |  | 12.51 | % | 12.56 | %
|Leverage(1)                       |  | 6.28  | % | 6.57  | %
|Common stockholder's equity       |  | 7.51  | % | 7.56  | %
|                                  |  |       |   |       |  

---

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

|In billions of dollars at year end |  | 2004 |      | 2003
|---------------------------------- |  | ---- | ---- | ----
|Tier 1 Capital                     |  | $    | 41.7 |     
|Total Capital (Tier 1 and Tier 2)  |  | $    | 62.0 |     
|                                   |  |      |      |     

Citibank
(a wholly owned subsidiary of Citicorp) had net income for 2004 amounting to $9.4 billion. During 2004, Citibank paid dividends of $3.0 billion.

During
2004, Citibank issued an additional $1.6 billion 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 December 31, 2004 and included in Citibank's Tier 2 capital amounted to $13.9 billion.

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, that would retain 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 46.

40

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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, independent Senior Treasury Risk Officer, Head of Risk Architecture and the
senior corporate and business treasurers and business chief financial officers. One of the objectives of the Global ALCO is to monitor and review the overall liquidity and balance sheet positions of
Citigroup and its principal subsidiaries and to address corporate-wide policies and make recommendations back to senior management and the business units. Similarly, ALCOs are also
established for each country and/or major line of business.

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

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

A
series of standard corporate-wide liquidity ratios have been established to monitor the structural elements of Citigroup's liquidity. For bank entities, these include cash
capital (defined as core deposits, long-term liabilities, and capital compared 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 independent Senior Treasury Risk Officer and are discussed with the Global ALCO. Appropriate market triggers are also established and monitored for each
major operating subsidiary and/or country as part of the funding and liquidity plans. Local triggers are reviewed with the local country or business ALCO and independent risk management.

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

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

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.

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 46.

Funding

As a financial holding company with no significant operating activities of its own, 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

41

---



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 December 31, 2004, Citicorp's national and state-chartered bank subsidiaries can declare dividends to their respective parent companies, without regulatory approval, of
approximately $11.6 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 December 31, 2004, its bank subsidiaries can directly or through their parent holding
company distribute dividends to Citicorp of approximately $10.6 billion of the available $11.6 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 46.

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
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
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 $566 billion. Citicorp's deposit represents 59% of total funding at December 31, 2004 and 2003.
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. While Citicorp is a separately rated entity, it did not access external markets for any long-term debt or equity issuance in 2004. Citicorp continues to issue commercial paper
and other short-term debt instruments within board-established limits and certain management guidelines. 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 of
CitiFinancial Credit Company, each an indirect subsidiary of Citicorp. Other significant elements of long-term debt in the Consolidated Balance Sheet include advances from the Federal Home
Loan Bank system, asset-backed outstandings related to the purchase of Sears, and debt of foreign subsidiaries.

Citigroup
and Citicorp, both of which are bank holding companies, maintain combined liquidity reserves of cash and securities to support their combined outstanding commercial paper. See
Note 10 to the Consolidated Financial Statements for outstandings under the Citicorp commercial paper program.

Some
of Citicorp's affiliates have credit facilities outstanding. Details of these facilities can be found in Notes 10 and 24 to the Consolidated Financial Statements.

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 parent, 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.

Contractual Obligations

The following table includes aggregated information about Citicorp's contractual obligations. These contractual obligations impact the Company's short- and
long-term liquidity and capital resource needs. The table includes information about payments due under specified contractual obligations, aggregated by type of contractual obligation,
including the maturity profile of the Company's consolidated long-term debt, operating leases and other long-term liabilities reported on the Company's Consolidated Balance
Sheet at December 31, 2004. The Company's capital lease obligations are not material and are included within purchase obligations in the table.

Citicorp's
contractual obligations include purchase obligations that are enforceable and legally binding on the Company. For the purposes of the table below, purchase obligations are
included through the termination date specified in the respective agreements, even if the contract is renewable. Many of the purchase agreements for goods or services include clauses that would allow
the Company to cancel the agreement prior to the expiration of the contract
within a specified notice period; however, the table includes the Company's obligations without regard to such termination clauses (unless actual notice of the Company's intention to terminate the
agreement has been communicated to the counterparty).

In
the following table, other liabilities reflected on the Company's Consolidated Balance Sheet include obligations for goods and services which have already been received and litigation
settlements, as well as other long-term liabilities that have already been incurred and will ultimately be paid in cash. The table excludes deposit liabilities, as a majority of the
deposits are payable on demand or within one year.

Citicorp
employees participate in the Citigroup Pension Plan. Citigroup's funding policy for U.S. and non-U.S. pension plans is generally to fund to the amounts of
accumulated benefit obligations.

42

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At
December 31, 2004, there were no minimum required contributions and no discretionary or non-cash contributions are currently planned for U.S. pension plans. Accordingly, no
amounts have been included in the table below for future contributions to the U.S. pension plan. For the non-U.S. plans, discretionary contributions in 2005 are anticipated to be
approximately $173 million and this amount has been included within purchase obligations in the table below. The estimated pension plan contributions are subject to change since contribution
decisions are affected by various factors such as market performance, regulatory and legal requirements, and management's ability to change funding policy. For additional information regarding the
Company's retirement benefit obligations see Note 17 to the Consolidated Financial Statements.

|                                                                           |  | Contractual Obligations by Year
|-------------------------------------------------------------------------- |  | -------------------------------
|
|
|Long-term debt obligations(1)                                              |  | $                              
|Operating lease obligations                                                |  |                                
|Purchase obligations(2)                                                    |  |                                
|Other liabilities reflected on the Company's Consolidated Balance Sheet(3) |  |                                
|                                                                           |  |                                
|Total                                                                      |  | $                              
|                                                                           |  |                                

---

43

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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.

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
December 31, 2004 and 2003, total assets in the credit card trusts were $101 billion and $89 billion, respectively. Of those amounts at December 31, 2004
and 2003, $82 billion and $76 billion, respectively, has been sold to investors via trust-issued securities, and of the remaining seller's interest, $15.8 billion and
$11.9 billion, respectively, is recorded in Citicorp's Consolidated Balance Sheet as Consumer Loans. Additional retained securities issued by the trusts totaling $2.9 billion and
$1.1 billion at December 31, 2004 and 2003, respectively, 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 $1.3 billion and $1.1 billion, respectively, at December 31, 2004 and 2003. The Company also recognized an interest-only strip of
$1.1 billion and $836 million at December 31, 2004 and 2003, respectively, that arose from the calculation of gain or loss at the time assets were sold to the QSPE. In 2004, the
Company recorded net gains of $234 million and, in 2003, recorded net gains of $342 million, primarily related to the securitization of credit card receivables as a result of changes in
estimates in the timing of revenue recognition on securitizations.

Mortgages and Other Assets

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

44

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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 $226 million, $582 million, and $302 million in 2004, 2003, and 2002, respectively.

Securitizations of Client Assets

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

The
Company administers several third-party owned, special purpose, multi-seller finance companies that purchase pools of trade receivables, credit cards, and other financial assets from
third-party clients of the Company. As administrator, the Company provides accounting, funding, and operations services to these conduits. The Company has no ownership interest in the conduits.
Generally, the clients continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. Clients absorb the first
losses of the conduits by providing collateral in the form of excess assets or residual interest. The Company, along with other financial institutions, provides liquidity facilities, such as
commercial paper backstop lines of credit to the conduits. The Company also provides loss 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 December 31, 2004 and 2003, total assets and liabilities in the unconsolidated conduits were $51 billion and $44 billion, respectively. One
conduit with assets of $656 million is consolidated at December 31, 2004, compared with $823 million consolidated at December 31, 2003. For 2004 and 2003, the Company's
revenues for these activities amounted to $197 million and $217 million, and estimated expenses before taxes were $34 million and $37 million. Expenses have been estimated
based upon a percentage of product revenues to business revenues.

Creation of Other Investment and Financing Products

In addition to securitizations of mortgage loans originated by the Company, the Company also securitizes purchased mortgage loans, creating collateralized mortgage
obligations (CMOs) and other mortgage-backed securities (MBSs) and distributes them to investors.

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. Further details are included in the footnotes.

|In millions of dollars at year end                                             |  | 2004 |           | 2003
|------------------------------------------------------------------------------ |  | ---- | --------- | ----
|Financial standby letters of credit and foreign office guarantees              |  | $    | 45,878    |     
|Performance standby letters of credit and foreign office guarantees            |  |      | 9,145     |     
|Commercial and similar letters of credit                                       |  |      | 5,811     |     
|One- to four-family residential mortgages                                      |  |      | 4,558     |     
|Revolving open-end loans secured by one- to four-family residential properties |  |      | 15,705    |     
|Commercial real estate, construction and land development                      |  |      | 1,871     |     
|Credit card lines(1)                                                           |  |      | 776,281   |     
|Commercial and other consumer loan commitments(2)                              |  |      | 269,579   |     
|                                                                               |  |      |           |     
|Total                                                                          |  | $    | 1,128,828 |     
|                                                                               |  |      |           |     

---

See
Note 21 to the Consolidated Financial Statements for additional information on credit commitments and lines of credit.

45

---



CORPORATE GOVERNANCE AND CONTROLS AND PROCEDURES

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

Citigroup
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 Citigroup in connection with its external disclosures. Citigroup has a Code of Conduct that expresses the values that drive employee behavior and maintains Citigroup's
commitment to the highest standards of conduct. Citigroup has established an ethics hotline for employees. In addition, the Company adopted Citigroup's Code of Ethics for Financial Professionals that
applies to all finance, accounting, treasury, tax and investor relations professionals worldwide and that supplements the Citigroup-wide Code of Conduct. Both the Code of Conduct and the
Code of Ethics for Financial Professionals can be found on the Citigroup Web site at www.citigroup.com by clicking on the "Corporate Governance" page. Citigroup's Corporate Governance Guidelines and
the charters for the Audit and Risk Management Committee, the Nomination and Governance Committee, the Personnel and Compensation Committee, and the Public Affairs Committee of the Board are available
free of charge on the Citigroup Web site under the "Corporate Governance" page or by writing to Citigroup Inc., Corporate Governance, 425 Park Avenue, 2nd floor, New York, New York 10043.

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 ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.

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; changes in assumptions underlying the fair value of investments and trading account assets and liabilities; changes in management's
estimates of probable losses inherent in the lending portfolio; costs associated with the implementation of the Japan Private Bank Exit Plan; the ability of Cardsto continue brand development,
private-label expansion, new product launches, and organic growth; the effect of Citi Cards raising minimum required
payments; the ability ofRetail Bankingto continue to expand into select markets; the ability of Prime Home Finance to continue leveraging Citigroup
distribution channels; the ability of theAsset Managementbusiness to leverage its global investment capabilities; possible legislative and regulatory
reforms in the mutual fund industry; the credit performance of the portfolios, portfolio growth and seasonal factors; 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; the ability of states to adopt more extensive consumer
privacy protections through legislation or regulation; and the resolution of legal and regulatory proceedings and related matters.

46

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors and Stockholder
        Citicorp:

We
have audited the accompanying consolidated balance sheets of Citicorp and subsidiaries (the "Company" or "Citicorp") as of December 31, 2004 and 2003, and the related
consolidated statements of income, changes in stockholder's equity and cash flows for each of the years in the three-year period ended December 31, 2004, and the related
consolidated balance sheets of Citibank, N.A. and subsidiaries as of December 31, 2004 and 2003. These consolidated financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Citicorp as of December 31, 2004 and
2003, the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2004, and the financial position of Citibank, N.A. and
subsidiaries as of December 31, 2004 and 2003, in conformity with U.S. generally accepted accounting principles.

As
discussed in Note 1 to the consolidated financial statements, in 2003 the Company changed its methods of accounting for variable interest entities and stock-based compensation
and in 2002 the Company changed its methods of accounting for goodwill and intangible assets and accounting for the impairment or disposal of long-lived assets.

/s/
KPMG LLP
New York, New York
March 18, 2005

47

---



CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF INCOME
Citicorp and Subsidiaries

|                                                                       |  | Year Ended December 31, |       
|---------------------------------------------------------------------- |  | ----------------------- | ------
|
|
|Interest revenue                                                       |  |                         |       
|Loans, including fees                                                  |  | $                       | 43,823
|Deposits with banks                                                    |  |                         | 532   
|Federal funds sold and securities purchased under agreements to resell |  |                         | 429   
|Investments, including dividends                                       |  |                         | 5,682 
|Trading account assets                                                 |  |                         | 1,948 
|Loans held-for-sale                                                    |  |                         | 1,014 
|                                                                       |  |                         |       
|                                                                       |  |                         | 53,428
|                                                                       |  |                         |       
|Interest expense                                                       |  |                         |       
|Deposits                                                               |  |                         | 9,112 
|Trading account liabilities                                            |  |                         | 98    
|Purchased funds and other borrowings                                   |  |                         | 2,363 
|Long-term debt                                                         |  |                         | 4,283 
|                                                                       |  |                         |       
|                                                                       |  |                         | 15,856
|                                                                       |  |                         |       
|Net interest revenue                                                   |  |                         | 37,572
|Benefits, claims and credit losses                                     |  |                         |       
|Policyholder benefits and claims                                       |  |                         | 524   
|Provision for credit losses                                            |  |                         | 6,234 
|                                                                       |  |                         |       
|Total benefits, claims and credit losses                               |  |                         | 6,758 
|                                                                       |  |                         |       
|Net interest revenue after benefits, claims and credit losses          |  |                         | 30,814
|                                                                       |  |                         |       
|Fees, commissions and other revenue                                    |  |                         |       
|Fees and commissions                                                   |  |                         | 12,914
|Foreign exchange                                                       |  |                         | 1,857 
|Trading account                                                        |  |                         | 952   
|Investment transactions                                                |  |                         | 676   
|Other revenue                                                          |  |                         | 8,931 
|                                                                       |  |                         |       
|                                                                       |  |                         | 25,330
|                                                                       |  |                         |       
|Operating expense                                                      |  |                         |       
|Salaries                                                               |  |                         | 11,621
|Employee benefits                                                      |  |                         | 2,691 
|                                                                       |  |                         |       
|Total employee-related expenses                                        |  |                         | 14,312
|Net premises and equipment                                             |  |                         | 4,241 
|Restructuring-related items                                            |  |                         | (5    
|Other expense                                                          |  |                         | 13,191
|                                                                       |  |                         |       
|                                                                       |  |                         | 31,739
|                                                                       |  |                         |       
|Income before income taxes and minority interest                       |  |                         | 24,405
|Income taxes                                                           |  |                         | 7,294 
|Minority interest, net of income taxes                                 |  |                         | 203   
|                                                                       |  |                         |       
|Net Income                                                             |  | $                       | 16,908
|                                                                       |  |                         |       

See
Notes to the Consolidated Financial Statements.

48

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CONSOLIDATED BALANCE SHEET

Citicorp and Subsidiaries

|In millions of dollars                                                                                                             |                             | December 31, 2004 |         | December 31, 2003 |  
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ----------------- | ------- | ----------------- | -
|Assets                                                                                                                             |                             |                   |         |                   |  
|Cash and due from banks                                                                                                            |                             | $                 | 17,453  |                   | $
|Deposits at interest with banks                                                                                                    |                             |                   | 23,889  |                   |  
|Federal funds sold and securities purchased under agreements to resell                                                             |                             |                   | 14,151  |                   |  
|Trading account assets (including $2,278 and $2,078 pledged to creditors at December 31, 2004 and December 31, 2003, respectively) |                             |                   | 102,686 |                   |  
|Investments (including $13,468 and $10,126 pledged to creditors at December 31, 2004 and December 31, 2003, respectively)          |                             |                   | 147,630 |                   |  
|Loans held-for-sale                                                                                                                |                             |                   | 11,379  |                   |  
|Loans, net of unearned income                                                                                                      |                             |                   |         |                   |  
|                                                                                                                                   | Consumer                    |                   |         | 435,226           |  
|                                                                                                                                   | Corporate                   |                   |         | 114,230           |  
|                                                                                                                                   |                             |                   |         |                   |  
|Loans, net of unearned income                                                                                                      |                             |                   | 549,456 |                   |  
|                                                                                                                                   | Allowance for credit losses |                   |         | (11,269           | )
|                                                                                                                                   |                             |                   |         |                   |  
|Total loans, net                                                                                                                   |                             |                   | 538,187 |                   |  
|Goodwill                                                                                                                           |                             |                   | 29,330  |                   |  
|Intangible assets                                                                                                                  |                             |                   | 14,275  |                   |  
|Premises and equipment, net                                                                                                        |                             |                   | 9,096   |                   |  
|Interest and fees receivable                                                                                                       |                             |                   | 6,351   |                   |  
|Other assets                                                                                                                       |                             |                   | 39,177  |                   |  
|                                                                                                                                   |                             |                   |         |                   |  
|Total assets                                                                                                                       |                             | $                 | 953,604 |                   | $
|                                                                                                                                   |                             |                   |         |                   |  
|Liabilities                                                                                                                        |                             |                   |         |                   |  
|Non-interest-bearing deposits in U.S. offices                                                                                      |                             | $                 | 31,913  |                   | $
|Interest-bearing deposits in U.S. offices                                                                                          |                             |                   | 161,113 |                   |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                          |                             |                   | 28,597  |                   |  
|Interest-bearing deposits in offices outside the U.S.                                                                              |                             |                   | 344,486 |                   |  
|                                                                                                                                   |                             |                   |         |                   |  
|Total deposits                                                                                                                     |                             |                   | 566,109 |                   |  
|Trading account liabilities                                                                                                        |                             |                   | 56,936  |                   |  
|Purchased funds and other borrowings                                                                                               |                             |                   | 70,460  |                   |  
|Accrued taxes and other expense                                                                                                    |                             |                   | 14,556  |                   |  
|Long-term debt                                                                                                                     |                             |                   | 116,319 |                   |  
|Other liabilities                                                                                                                  |                             |                   | 34,546  |                   |  
|Stockholder's equity                                                                                                               |                             |                   |         |                   |  
|Common stock: ($0.01 par value) issued shares: 1,000 in each period                                                                |                             |                   |        |                   |  
|Surplus                                                                                                                            |                             |                   | 40,601  |                   |  
|Retained earnings                                                                                                                  |                             |                   | 56,276  |                   |  
|Accumulated other changes in equity from nonowner sources                                                                          |                             |                   | (2,199  | )                 |  
|                                                                                                                                   |                             |                   |         |                   |  
|Total stockholder's equity                                                                                                         |                             |                   | 94,678  |                   |  
|                                                                                                                                   |                             |                   |         |                   |  
|Total liabilities and stockholder's equity                                                                                         |                             | $                 | 953,604 |                   | $
|                                                                                                                                   |                             |                   |         |                   |  

See
Notes to the Consolidated Financial Statements.

49

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY

Citicorp and Subsidiaries

|                                                                                                  |  | Year Ended December 31, |       
|------------------------------------------------------------------------------------------------- |  | ----------------------- | ------
|
|
|Common stock ($0.01 par value)                                                                    |  |                         |       
|Balance, beginning of yearShares: 1,000 in 2004, in 2003 and in 2002                             |  | $                       |      
|                                                                                                  |  |                         |       
|Balance, end of yearShares: 1,000 in 2004, in 2003, and in 2002                                  |  | $                       |      
|                                                                                                  |  |                         |       
|Surplus                                                                                           |  |                         |       
|Balance, beginning of year                                                                        |  | $                       | 40,203
|Capital contribution from Citigroup(1)                                                            |  |                         |      
|Employee benefit plans                                                                            |  |                         | 264   
|Other(2)                                                                                          |  |                         | 134   
|                                                                                                  |  |                         |       
|Balance, end of year                                                                              |  | $                       | 40,601
|                                                                                                  |  |                         |       
|Retained earnings                                                                                 |  |                         |       
|Balance, beginning of year                                                                        |  | $                       | 43,998
|Net income                                                                                        |  |                         | 16,908
|Dividends paid                                                                                    |  |                         | (4,630
|                                                                                                  |  |                         |       
|Balance, end of year                                                                              |  | $                       | 56,276
|                                                                                                  |  |                         |       
|Accumulated other changes in equity from nonowner sources                                         |  |                         |       
|Balance, beginning of year                                                                        |  | $                       | (2,407
|Net change in unrealized gains and losses on investment securities available-for-sale, net of tax |  |                         | (242  
|Net change in foreign currency translation adjustment, net of tax                                 |  |                         | 1,205 
|Net change for cash flow hedges, net of tax                                                       |  |                         | (755  
|                                                                                                  |  |                         |       
|Balance, end of year                                                                              |  | $                       | (2,199
|                                                                                                  |  |                         |       
|Total stockholder's equity                                                                        |  |                         |       
|Balance, beginning of year                                                                        |  | $                       | 81,794
|Changes during the year, net                                                                      |  |                         | 12,884
|                                                                                                  |  |                         |       
|Balance, end of year                                                                              |  | $                       | 94,678
|                                                                                                  |  |                         |       
|Summary of changes in equity from nonowner sources                                                |  |                         |       
|Net income                                                                                        |  | $                       | 16,908
|Other changes in equity from nonowner sources, net of tax                                         |  |                         | 208   
|                                                                                                  |  |                         |       
|Total changes in equity from nonowner sources                                                     |  | $                       | 17,116
|                                                                                                  |  |                         |       

---

See
Notes to the Consolidated Financial Statements.

50

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CONSOLIDATED STATEMENT OF CASH FLOWS

Citicorp and Subsidiaries

|                                                                                                         |                                                         | Year Ended December 31, |        
|-------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------------- | -------
|
|
|Cash flows from operating activities                                                                     |                                                         |                         |        
|Net income                                                                                               |                                                         | $                       | 16,908 
|Adjustments to reconcile net income to net cash provided by operating activities:                        |                                                         |                         |        
|                                                                                                         | Provision for credit losses                             |                         |        
|                                                                                                         | Depreciation and amortization of premises and equipment |                         |        
|                                                                                                         | Provision (benefit) for deferred taxes                  |                         |        
|                                                                                                         | Restructuring-related items                             |                         |        
|                                                                                                         | Venture capital activity                                |                         |        
|                                                                                                         | Net (gain) loss on sale of securities                   |                         |        
|                                                                                                         | Changes in accruals and other, net                      |                         |        
|                                                                                                         | Net decrease (increase) in loans held-for-sale          |                         |        
|                                                                                                         | Net increase in trading account assets                  |                         |        
|                                                                                                         | Net increase in trading account liabilities             |                         |        
|                                                                                                         |                                                         |                         |        
|Total adjustments                                                                                        |                                                         |                         | (10,020
|                                                                                                         |                                                         |                         |        
|Net cash provided by operating activities                                                                |                                                         |                         | 6,888  
|                                                                                                         |                                                         |                         |        
|Cash flows from investing activities                                                                     |                                                         |                         |        
|Net (increase) decrease in deposits at interest with banks                                               |                                                         |                         | (2,175 
|Investments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           |                                                         |                         | 5,080  
|Net increase in loans                                                                                    |                                                         |                         | (68,115
|Proceeds from sales of loans                                                                             |                                                         |                         | 15,121 
|Business acquisitions                                                                                    |                                                         |                         | (3,677 
|Capital expenditures on premises and equipment                                                           |                                                         |                         | (2,539 
|Proceeds from sales of premises and equipment, subsidiaries and affiliates, and other repossessed assets |                                                         |                         | 2,925  
|                                                                                                         |                                                         |                         |        
|Net cash used in investing activities                                                                    |                                                         |                         | (66,465
|                                                                                                         |                                                         |                         |        
|Cash flows from financing activities                                                                     |                                                         |                         |        
|Net increase in deposits                                                                                 |                                                         |                         | 65,367 
|Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements       |                                                         |                         | 2,911  
|Net (decrease) increase in commercial paper and funds borrowed                                           |                                                         |                         | (7,478 
|Proceeds from issuance of long-term debt                                                                 |                                                         |                         | 21,402 
|Repayment of long-term debt                                                                              |                                                         |                         | (17,980
|Dividends paid                                                                                           |                                                         |                         | (4,630 
|                                                                                                         |                                                         |                         |        
|Net cash provided by financing activities                                                                |                                                         |                         | 59,592 
|                                                                                                         |                                                         |                         |        
|Effect of exchange rate changes on cash and due from banks                                               |                                                         |                         | 731    
|                                                                                                         |                                                         |                         |        
|Net increase in cash and due from banks                                                                  |                                                         |                         | 746    
|Cash and due from banks at beginning of year                                                             |                                                         |                         | 16,707 
|                                                                                                         |                                                         |                         |        
|Cash and due from banks at end of year                                                                   |                                                         | $                       | 17,453 
|                                                                                                         |                                                         |                         |        
|Supplemental disclosure of cash flow information                                                         |                                                         |                         |        
|Cash paid during the year for:                                                                           |                                                         |                         |        
|                                                                                                         | Interest                                                |                         | $      
|                                                                                                         | Income taxes                                            |                         |        
|Non-cash investing activitiestransfers to repossessed assets                                            |                                                         |                         | 957    
|Non-cash financing activities:                                                                           |                                                         |                         |        
|Dividends                                                                                                |                                                         |                         |       
|Contribution from Citigroup                                                                              |                                                         |                         |       
|                                                                                                         |                                                         |                         |        

See
Notes to the Consolidated Financial Statements.

51

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CONSOLIDATED BALANCE SHEET

Citibank, N.A. and Subsidiaries

|In millions of dollars                                                                                                         |  | December 31, 2004 |         | December 31, 2003 |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | ----------------- | -
|Assets                                                                                                                         |  |                   |         |                   |  
|Cash and due from banks                                                                                                        |  | $                 | 13,354  |                   | $
|Deposits at interest with banks                                                                                                |  |                   | 21,756  |                   |  
|Federal funds sold and securities purchased under agreements to resell                                                         |  |                   | 15,637  |                   |  
|Trading account assets (including $389 and $258 pledged to creditors at December 31, 2004 and December 31, 2003, respectively) |  |                   | 97,697  |                   |  
|Investments (including $2,484 and $1,043 pledged to creditors at December 31, 2004 and December 31, 2003, respectively)        |  |                   | 108,780 |                   |  
|Loans held-for-sale                                                                                                            |  |                   | 3,580   |                   |  
|Loans, net of unearned income                                                                                                  |  |                   | 378,100 |                   |  
|Allowance for credit losses                                                                                                    |  |                   | (7,897  | )                 |  
|                                                                                                                               |  |                   |         |                   |  
|Total loans, net                                                                                                               |  |                   | 370,203 |                   |  
|Goodwill                                                                                                                       |  |                   | 9,593   |                   |  
|Intangible assets                                                                                                              |  |                   | 10,557  |                   |  
|Premises and equipment, net                                                                                                    |  |                   | 6,288   |                   |  
|Interest and fees receivable                                                                                                   |  |                   | 5,250   |                   |  
|Other assets                                                                                                                   |  |                   | 31,834  |                   |  
|                                                                                                                               |  |                   |         |                   |  
|Total assets                                                                                                                   |  | $                 | 694,529 |                   | $
|                                                                                                                               |  |                   |         |                   |  
|Liabilities                                                                                                                    |  |                   |         |                   |  
|Non-interest-bearing deposits in U.S. offices                                                                                  |  | $                 | 22,399  |                   | $
|Interest-bearing deposits in U.S. offices                                                                                      |  |                   | 102,376 |                   |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                      |  |                   | 24,443  |                   |  
|Interest-bearing deposits in offices outside the U.S.                                                                          |  |                   | 309,784 |                   |  
|                                                                                                                               |  |                   |         |                   |  
|Total deposits                                                                                                                 |  |                   | 459,002 |                   |  
|Trading account liabilities                                                                                                    |  |                   | 56,630  |                   |  
|Purchased funds and other borrowings                                                                                           |  |                   | 47,160  |                   |  
|Accrued taxes and other expense                                                                                                |  |                   | 10,970  |                   |  
|Long-term debt and subordinated notes                                                                                          |  |                   | 41,038  |                   |  
|Other liabilities                                                                                                              |  |                   | 25,588  |                   |  
|Stockholder's equity                                                                                                           |  |                   |         |                   |  
|Preferred stock ($100 par value)                                                                                               |  |                   | 1,950   |                   |  
|Capital stock ($20 par value) outstanding shares: 37,534,553 in each period                                                    |  |                   | 751     |                   |  
|Surplus                                                                                                                        |  |                   | 25,972  |                   |  
|Retained earnings                                                                                                              |  |                   | 25,935  |                   |  
|Accumulated other changes in equity from nonowner sources(1)                                                                   |  |                   | (467    | )                 |  
|                                                                                                                               |  |                   |         |                   |  
|Total stockholder's equity                                                                                                     |  |                   | 54,141  |                   |  
|                                                                                                                               |  |                   |         |                   |  
|Total liabilities and stockholder's equity                                                                                     |  | $                 | 694,529 |                   | $
|                                                                                                                               |  |                   |         |                   |  

---

See
Notes to the Consolidated Financial Statements.

52

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Citicorp and Subsidiaries

1.    Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Citicorp and its subsidiaries (the Company). Citicorp is an indirect, wholly owned subsidiary of
Citigroup Inc. (Citigroup). The Company consolidates subsidiaries in which it holds, directly or indirectly, more than 50% of the voting rights or where it exercises control. Entities where the
Company holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence, other than investments of designated venture capital subsidiaries, are accounted for under the
equity method, and the pro rata share of their income (loss) is included in other income. Income from investments in less than 20%-owned companies is recognized when dividends are received. Citicorp
consolidates entities deemed to be variable interest entities (VIEs) when Citicorp is determined to be the primary beneficiary under FASB Interpretation No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities" (FIN 46-R). Gains and losses on disposition of branches, subsidiaries, affiliates, buildings, and other investments and charges for
management's estimate of impairment in their value that is other than temporary, such that recovery of the carrying amount is deemed unlikely, are included in other income.

The
Company recognizes a gain or loss in the Consolidated Statement of Income when a subsidiary issues its own stock to a third party at a price higher or lower than the Company's
proportionate carrying amount.

Certain
amounts in prior years have been reclassified to conform to the current year's presentation.

Foreign Currency Translation

Assets and liabilities denominated in non-U.S. dollar currencies are translated into U.S. dollar equivalents using year-end spot foreign
exchange rates. Revenues and expenses are translated monthly at amounts that approximate weighted average exchange rates, with resulting gains and losses included in income. The effects of translating
operations with a functional currency other than the U.S. dollar are included in stockholder's equity along with related hedge and tax effects. The effects of translating operations with the U.S.
dollar as the functional currency, including those in highly inflationary environments, are included in other income along with related hedge effects. Hedges of foreign currency exposures include
forward currency contracts and designated issues of non-U.S. dollar debt.

Use of Estimates

The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Cash Flows

Cash equivalents are defined as those amounts included in cash and due from banks. Cash flows from risk management activities are classified in the same category
as the related assets and liabilities.

Investments

Investments include fixed maturity and equity securities. Fixed maturities include bonds, notes and redeemable preferred stocks, as well as certain
loan-backed and structured securities subject to prepayment risk. Equity securities include common and non-redeemable preferred stocks. Fixed maturities classified as "held to
maturity" represent securities that the Company has both the ability and the intent to hold until maturity and are carried at amortized cost. Fixed maturity securities and marketable equity securities
classified as "available-for-sale" are carried at fair value, which is determined based on quoted market prices when available, or if quoted market prices are not available, on
discounted expected cash flows using market rates commensurate with the credit quality and maturity of the investment, with unrealized gains and losses and related hedge effects reported in a separate
component of stockholders' equity, net of applicable income taxes. Declines in fair value that are determined to be other than temporary are charged to earnings. Accrual of income is suspended on
fixed maturities that are in default, or on which it is likely that future interest payments will not be made as scheduled. Fixed maturities subject to prepayment risk are accounted for using the
retrospective method, where the principal amortization and effective yield are recalculated each period based on actual historical and projected future cash flows. Realized gains and losses on sales
of investments are included in earnings on a specific identified cost basis.

Citicorp's
private equity subsidiaries include subsidiaries registered as Small Business Investment Companies and other subsidiaries that engage exclusively in venture capital
activities. Venture capital investments are carried at fair value, with changes in fair value recognized in other income. The fair values of publicly traded securities held by these subsidiaries are
generally based upon quoted market prices. In certain situations, including thinly traded securities, large block holdings, restricted shares, or other special situations, the quoted market price is
adjusted to produce an estimate of the attainable fair value for the securities. For securities held by these subsidiaries that are not publicly traded, estimates of fair value are made based upon
review of the investee's financial results, condition, and prospects, together with comparisons to similar companies for which quoted market prices are available.

Repurchase and Resale Agreements

Repurchase and resale agreements are treated as collateralized financing transactions and are carried at the amounts at which the securities will be subsequently
reacquired or resold, including accrued interest, as specified in the respective agreements. The Company's policy is to take possession of securities purchased under agreements to resell. The market
value of securities to be repurchased and resold is monitored, and additional collateral is obtained where appropriate to protect against credit exposure.

Trading Account Assets and Liabilities

Trading Account Assets and Liabilities, including securities, commodities, and derivatives, are carried at fair value, which is determined based upon quoted prices
when available, or under an alternative approach such as matrix or model pricing when market prices are not readily available. If quoted market prices are not available for fixed maturity securities,
derivatives, or commodities, the Company discounts the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment.

53

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Obligations
to deliver securities sold, not yet purchased are also carried at fair value and included in trading account liabilities. The determination of fair value considers various factors,
including: closing exchange or over-the-counter market price quotations; time value and
volatility factors underlying options, warrants, and derivatives; price activity for equivalent or synthetic instruments; counterparty credit quality; the potential impact on market prices or fair
value of liquidating the Company's positions in an orderly manner over a reasonable period of time under current market conditions; and derivatives transaction maintenance costs during that period.
The fair value of aged inventory is actively monitored and, where appropriate, is discounted to reflect the implied illiquidity for positions that have been
available-for-immediate-sale for longer than 90 days. Changes in fair value of trading account assets and liabilities are recognized in earnings. Interest
expense on trading account liabilities is reported as a reduction of interest revenues.

Commodities
include physical quantities of commodities involving future settlement or delivery, and related gains or losses are reported as principal transactions.

Derivatives
used for trading purposes include interest rate, currency, equity, credit, and commodity swap agreements, options, caps and floors, warrants, and financial and commodity
futures and forward contracts. The fair value of derivatives is determined based upon liquid market prices evidenced by exchange traded prices, broker/dealer quotations, or prices of other
transactions with similarly rated counterparties. The fair value includes an adjustment for individual counterparty credit risk and other adjustments, as appropriate, to reflect liquidity and ongoing
servicing costs. The fair values of derivative contracts reflect cash the Company has paid or received (for example, option premiums and cash margin in connection with credit support agreements).
Derivatives in a net receivable position, as well as options owned and warrants held, are reported as trading account assets. Similarly, derivatives in a net payable position, as well as options
written and warrants issued, are reported as trading account liabilities. Revenues generated from derivative instruments used for trading purposes are reported as principal transactions and include
realized gains and losses, as well as unrealized gains and losses resulting from changes in the fair value of such instruments. During the fourth quarter of 2002, the Company adopted Emerging Issues
Task Force (EITF) Issue No. 02-3, "Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management
Activities" (EITF 02-3). Under EITF 02-3, recognition of a trading profit at inception of a derivative transaction is prohibited unless the fair value of that derivative is
obtained from a quoted market price, supported by comparison to other observable market transactions, or based upon a valuation technique incorporating observable market data. The Company defers trade
date gains or losses on derivative transactions where the fair value is not determined based upon observable market transactions and market data. The deferral is recognized in income when the market
data becomes observable or over the life of the transaction.

Consumer Loans

Consumer Loans include loans and leases managed by the Global Consumer business andPrivate Bank. As a general rule,
for open-end revolving and closed-end installment and real estate loans, interest accrual ceases when payments are no later than 90 days contractually past due, except
for certain open-end revolving products (e.g., credit cards), where the Company accrues interest until payments are 180 days contractually past due and reverse the interest and fees
earned, but not collected.

As
a general rule, unsecured closed-end installment loans that become 120 days contractually past due and unsecured open-end (revolving) loans that become
180 days contractually past due are charged-off. Loans secured with non-real-estate collateral are written down to the estimated value of the collateral,
less costs to sell, at 120 days past due. Real-estate secured loans (both open- and closed-end) are written down to the estimated value of the property, less
costs to sell, no later than 180 days past due.

In
certainConsumer Financebusinesses in North America, secured real estate loans are written down to the estimated value of the property,
less costs to sell, at the earlier of receipt of title or 12 months in foreclosure (which process must commence when payments are no later than 120 days contractually past due).
Closed-end loans secured by non-real-estate collateral are written down to the estimated value of the collateral, less costs to sell, when payments are no later
than 180 days contractually past due. Unsecured loans (both open- and closed-end) are charged-off when the loan becomes 180 days contractually past
due and 180 days from the last payment, but in no event can these loans exceed 360 days contractually past due.

Certain
Western European businesses have exceptions to these charge-off policies due to the local environment in which these businesses operate.

Unsecured
loans in bankruptcy are charged-off within 30 days of notification of filing by the bankruptcy court or within the contractual write-off periods,
whichever occurs earlier. In the North AmericanConsumer Financebusiness, unsecured loans in bankruptcy are charged-off when they are
30 days contractually past due.

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.

Corporate Loans

Corporate Loans represent loans and leases managed by Global Corporate and Investment Bank (GCIB). Corporate loans are identified as impaired and placed on a cash
(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. Any interest accrued on impaired corporate loans and leases is reversed at 90 days and charged against current
earnings, and interest is thereafter included in earnings only to the extent actually received in cash. When there is doubt regarding the ultimate collectibility of principal, all cash receipts are
thereafter applied to reduce the recorded investment in the loan. Impaired corporate loans and leases are written down to the extent that principal is judged to be uncollectible. Impaired
collateral-dependent loans and leases where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment are
written down to the lower of cost or collateral value. Cash-basis loans are returned to an accrual status when all contractual principal and interest amounts are reasonably assured of
repayment and there is a sustained period of repayment performance in accordance with the contractual terms.

54

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Lease Financing Transactions

Loans include the Company's share of aggregate rentals on lease financing transactions and residual values net of related unearned income. Lease financing
transactions represent direct financing leases and also include leveraged leases. Unearned income is amortized under a method that results in an approximate level rate of return when related to the
unrecovered lease investment. Gains and losses from sales of residual values of leased equipment are included in other income.

Loans Held-for-Sale

Credit card and other receivables and mortgage loans originated for sale are classified as loans held-for-sale, which are accounted for at
the lower of cost or market value and reported in other assets with net credit losses charged to other income.

Allowance for Credit Losses

Allowance for Credit Losses represents management's estimate of probable losses inherent in the portfolio. Attribution of the allowance is made for analytical
purposes only, and the entire allowance is available to absorb probable credit losses inherent in the portfolio. Additions to the allowance are made by means of the provision for credit losses. Credit
losses are deducted from the allowance, and subsequent recoveries are added. Securities received in exchange for loan claims in debt restructurings are initially recorded at fair value, with any gain
or loss reflected as a recovery or charge-off to the allowance, and are subsequently accounted for as securities available-for-sale.

In
the Corporate and Commercial Business portfolios, larger-balance, non-homogeneous exposures representing significant individual credit exposures are evaluated based upon
the borrower's overall financial condition, resources, and payment record; the prospects for support from any financially responsible guarantors; and, if appropriate, the realizable value of any
collateral. Reserves are established for these loans based upon an estimate of probable losses for individual larger-balance, non-homogeneous loans deemed to be impaired. This estimate
considers all available evidence including, as appropriate, the present value of the expected future cash flows discounted at the loan's contractual effective rate, the secondary market value of the
loan and the fair value of collateral less disposal costs. The allowance for credit losses attributed to the remaining portfolio is established via a process that estimates the probable loss inherent
in the portfolio based upon various analyses. These analyses consider historical and projected default rates and loss severities; internal risk ratings; and geographic, industry, and other
environmental factors. Management also considers overall portfolio indicators including trends in internally risk-rated exposures, classified exposures, cash-basis loans,
historical and forecasted write-offs, and a review of industry, geographic, and portfolio concentrations, including current developments within those segments. In addition, management
considers the current business strategy and credit process, including credit limit setting and compliance, credit approvals, loan underwriting criteria, and loan workout procedures.

A
similar approach is also used for calculating a reserve for the expected losses related to unfunded loan commitments and standby letters of credit. This reserve is classified on the
balance sheet with other liabilities.

For
Consumer, each portfolio of smaller-balance, homogeneous loans, including consumer mortgage, installment, revolving credit, and most other consumer loans, is collectively evaluated
for impairment. The allowance for credit losses attributed to these loans is established via a process that estimates the probable losses inherent in the portfolio, based upon various analyses. These
include migration analysis, in which historical delinquency and credit loss experience is applied to the current aging of the portfolio, together with analyses that reflect current trends and
conditions. Management also considers
overall portfolio indicators including historical credit losses; delinquent, non-performing, and classified loans; trends in volumes and terms of loans; an evaluation of overall credit
quality; the credit process, including lending policies and procedures; and economic, geographical, product, and other environmental factors.

This
evaluation includes an assessment of the ability of borrowers with foreign currency obligations to obtain the foreign currency necessary for orderly debt servicing.

Transfers of Financial Assets

For a transfer of financial assets to be considered a sale, financial assets transferred by the Company must have been isolated from the seller, even in bankruptcy
or other receivership; the purchaser must have the right to sell the assets transferred, or the purchaser must be a qualifying special purpose entity meeting certain significant restrictions on its
activities, whose investors have the right to sell their ownership interests in the entity; and the seller does not continue to control the assets transferred through an agreement to repurchase them
or have a right to cause the assets to be returned (known as a call option). A transfer of financial assets that meets the sale requirements is removed from the Company's Consolidated Balance Sheet.
If the conditions for sale are not met, the transfer is considered to be a secured borrowing, and the assets remain on the Company's Consolidated Balance Sheet and the proceeds are recognized as the
Company's liability.

In
determining whether financial assets transferred have, in fact, been isolated from the Company, an opinion of legal counsel is generally obtained for complex transactions or where the
Company has continuing involvement with the assets transferred or with the securitization entity. For sale treatment to be appropriate, those opinions must state that the asset transfer would be
considered a sale and that the assets transferred would not be consolidated with the Company's other assets in the event of the Company's insolvency.

See
Note 9 to the Consolidated Financial Statements.

Securitizations

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

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

Interest
in the securitized and sold loans may be retained in the form of subordinated interest-only strips, subordinated tranches, spread accounts, and servicing rights. The
Company retains a seller's interest in the credit card receivables transferred to the trust, which is not in securitized form. Accordingly, the seller's interest is carried on a historical cost basis
and classified as consumer loans. Retained interests in securitized mortgage loans are classified as trading account assets. Other retained interests are primarily recorded as
available-for-sale investments. Gains or losses on securitization and sale depend in

55

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part
on the previous carrying amount of the loans involved in the transfer and are allocated between the loans sold and the retained interests based on their relative fair values at the date of sale.
Gains are recognized at the time of securitization and are reported in other income.

The
Company values its securitized retained interests at fair value using either financial models, quoted market prices, or sales of similar assets. Where quoted market prices are not
available, the Company estimates the fair value of these retained interests by determining the present value of expected future cash flows using modeling techniques that incorporate management's best
estimates of key assumptions, including prepayment speeds, credit losses, and discount rates.

For
each securitization entity with which the Company is involved, the Company makes a determination of whether the entity should be considered a subsidiary of the Company and be
included in the Company's Consolidated Financial Statements or whether the entity is sufficiently independent that it does not need to be consolidated. If the securitization entity's activities are
sufficiently restricted to meet certain accounting requirements to be a qualifying special purpose entity, the securitization entity is not consolidated by Citicorp as seller of the transferred
assets. If the securitization entity is determined to be a VIE, the Company consolidates the VIE if it is the primary beneficiary.

For
all other securitization entities determined not to be VIEs in which Citicorp participates, a consolidation decision is made by evaluating several factors, including how much of the
entity's ownership is in the hands of third-party investors, who controls the securitization entity, and who reaps the rewards and bears the risks of the entity. Only securitization entities
controlled by Citicorp are consolidated.

Variable Interest Entities

An entity is subject to FIN 46-R and is called a VIE if it has (1) equity that is insufficient to permit the entity to finance its activities
without additional subordinated financial support from other parties, or (2) equity investors that cannot make significant decisions about the entity's operations, or that do not absorb the
expected losses or receive the expected returns of the entity. All other entities are evaluated for consolidation under SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries" (SFAS
94). A VIE is consolidated by its primary beneficiary, which is the party involved with the VIE that has a majority of the expected losses or a majority of the expected residual returns or both.

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), many structured finance transactions, and various investment
funds.

Mortgage Servicing Rights (MSRs)

Mortgage Servicing Rights (MSRs), which are included within intangible assets on the Consolidated Balance Sheet, are recognized as assets when purchased or when
the Company sells or securitizes loans acquired through purchase or origination and retains the right to service the loans. Servicing rights retained in the securitization of mortgage loans are
measured by allocating the carrying value of the loans between the assets sold and the interests retained, based on the relative fair values at the date of securitization. The fair values are
determined using internally developed assumptions comparable to quoted market prices. MSRs are amortized using a proportionate cash flow method over the period of the related net positive servicing
income to be generated from the various portfolios purchased or loans originated. The Company estimates the fair value of MSRs by discounting projected net servicing cash flows of the remaining
servicing portfolio considering market loan prepayment predictions and other economic factors. Impairment of MSRs is evaluated on a disaggregated basis by type (i.e., fixed rate or adjustable rate)
and by interest rate band, which are believed to be the predominant risk characteristics of the Company's servicing portfolio. Any excess of the carrying value of the capitalized servicing rights over
the fair value by stratum is recognized through a valuation allowance for each stratum and charged to the provision for impairment on MSRs.

Goodwill

Goodwill represents an acquired company's acquisition cost less the fair value of net tangible and intangible assets. Effective January 1, 2002, the Company
no longer amortizes goodwill. Goodwill is subject to annual impairment tests whereby goodwill is allocated to the Company's reporting units and an impairment is deemed to exist if the carrying value
of a reporting unit exceeds its estimated fair value. Furthermore, on any business dispositions, goodwill is allocated to the business disposed of based on the ratio of the fair value of the business
disposed of to the fair value of the reporting unit.

Intangible Assets

Intangible Assets, including MSRs, core deposit intangibles, purchased credit card relationships, other customer relationships, and other intangible assets, are
amortized over their estimated useful lives unless they are deemed to have indefinite useful lives. Upon the adoption of SFAS 142, intangible assets deemed to have indefinite useful lives,
primarily certain asset management contracts and trade names, are not amortized and are subject to annual impairment tests. An impairment exists if the carrying value of the indefinite-lived
intangible asset exceeds its fair value. For other intangible assets subject to amortization, an impairment is recognized if the carrying amount is not recoverable and the carrying amount exceeds the
fair value of the intangible asset.

Repossessed Assets

Upon repossession, loans are adjusted, if necessary, to the estimated fair value of the underlying collateral and transferred to Repossessed Assets, which is
reported in other assets net of a valuation allowance for selling costs and net declines in value as appropriate.

Risk Management ActivitiesDerivatives Used for Non-Trading Purposes

The Company manages its exposures to market rate movements outside its trading activities by modifying the asset and liability mix, either directly or through the
use of derivative financial products, including interest rate swaps, futures, forwards, and purchased option positions such as interest rate caps, floors, and collars as well as foreign exchange
contracts. These end-user derivatives are carried at fair value in other assets or other liabilities.

To
qualify as a hedge, a derivative must be highly effective in offsetting the risk designated as being hedged. The hedge relationship must also be formally documented at inception
detailing the particular risk management objective and strategy for the hedge, which includes the item and risk that is being hedged and the derivative that is being used, as well as how effectiveness
will be assessed and ineffectiveness measured. The effectiveness of these hedging relationships is evaluated on a retrospective and prospective basis, typically using quantitative measures of
correlation with hedge ineffectiveness measured and recorded in current earnings. If a hedge relationship is

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found
to be ineffective, it no longer qualifies as a hedge and any excess gains or losses attributable to such ineffectiveness, as well as subsequent changes in fair value, are recognized in other
income.

The
foregoing criteria are applied on a decentralized basis, consistent with the level at which market risk is managed, but are subject to various limits and controls. The underlying
asset, liability, firm commitment, or forecasted transaction may be an individual item or a portfolio of similar items.

For
fair value hedges, in which derivatives hedge the fair value of assets, liabilities, or firm commitments, changes in the fair value of derivatives are reflected in other income,
together with changes in the fair value of the related hedged item. The net amount, representing hedge ineffectiveness, is reflected in current earnings. Citicorp's fair value hedges are primarily the
hedges of fixed-rate long-term debt, loans, and available-for-sale securities.

For
cash flow hedges, in which derivatives hedge the variability of cash flows related to floating rate assets, liabilities, or forecasted transactions, the accounting treatment depends
on the effectiveness of the hedge. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives' fair value will not be included in
current earnings but are reported as other changes in stockholders' equity from nonowner sources. These changes in fair value will be included in earnings of future periods when earnings are also
affected by the variability of the hedged cash flows. To the extent these derivatives are not effective, changes in their fair values are immediately included in other income. Citicorp's cash flow
hedges primarily include hedges of loans, rollovers of short-term liabilities, and foreign currency denominated funding. Cash flow hedges also include hedges of certain forecasted
transactions up to a maximum term of 30 years, although a substantial majority of the maturities is under five years.

For
net investment hedges, in which derivatives hedge the foreign currency exposure of a net investment in a foreign operation, the accounting treatment will similarly depend on the
effectiveness of the hedge. The effective portion of the change in fair value of the derivative, including any forward premium or discount, is reflected in other changes in stockholders' equity from
nonowner sources as part of the foreign currency translation adjustment.

End-user
derivatives that are economic hedges rather than qualifying for hedge accounting purposes are also carried at fair value with changes in value included in trading
account income or other income. Citicorp often utilizes economic hedges when qualifying for hedge accounting would be too complex or operationally burdensome, such as hedges of the credit risk
component of commercial loans and loan commitments. Citicorp periodically evaluates its hedging strategies in other areas, such as mortgage servicing rights, and may designate either a qualifying
hedge or an economic hedge, after considering the relative cost and benefits. Economic hedges are also utilized when the hedged item itself is marked to market through current earnings, such as hedges
of one-to-four family mortgage loan commitments and non-U.S. dollar debt.

For
those hedge relationships that are terminated or when hedge designations are removed, the hedge accounting treatment described in the paragraphs above is no longer applied. The
end-user derivative is terminated or transferred to the trading account. For fair value hedges, any changes in the fair value of the hedged item remain as part of the basis of the asset or
liability and are ultimately reflected as an element of the yield. For cash flow hedges, any changes in fair value of the end-user derivative remain in other changes in stockholders'
equity from nonowner sources and are
included in earnings of future periods when earnings are also affected by the variability of the hedged cash flows. However, if the forecasted transaction is no longer likely to occur, any changes in
fair value of the end-user derivative are immediately reflected in other income.

Employee Benefits Expense

Employee Benefits Expense includes prior and current service costs of pension and other postretirement benefit plans, which are accrued on a current basis,
contributions and unrestricted awards under other employee plans, the amortization of restricted stock awards, and costs of other employee benefits.

Stock-Based Compensation

Prior to January 1, 2003, Citicorp accounted for stock-based compensation plans under Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25), and related interpretations. Under APB 25, there is generally no charge to earnings for employee stock option awards because the options granted under these plans
have an exercise price equal to the market value of the underlying common stock on the grant date. Alternatively, SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS 123),
allows companies to recognize compensation expense over the related service period based on the grant-date fair value of the stock award. Under both methods, upon issuance of previously
unissued shares under employee plans, proceeds received in excess of par value are credited to additional paid-in capital. Upon issuance of treasury shares, the difference between the
proceeds received and the average cost of treasury shares is recorded in additional paid-in capital. On January 1, 2003, the Company adopted the fair value provision of
SFAS 123. See "Accounting Changes" on page 58.

Had
the Company applied SFAS 123 prior to 2003 in accounting for all the Company's stock option plans, including the Citigroup 2003 Stock Purchase Program, net income and net
income per share would have been the pro forma amounts indicated below:

|In millions of dollars                                         |             | 2004 |   | 2003   |  | 2002
|-------------------------------------------------------------- | ----------- | ---- | - | ------ |  | ----
|Compensation expense related to stock option plans, net of tax |             |      |   |        |  |     
|                                                               | As reported |      | $ | 93     |  | $   
|                                                               | Pro forma   |      |   | 175    |  |     
|                                                               |             |      |   |        |  |     
|Net income                                                     |             |      |   |        |  |     
|                                                               | As reported |      | $ | 16,908 |  | $   
|                                                               | Pro forma   |      |   | 16,826 |  |     
|                                                               |             |      |   |        |  |     

Income Taxes

Deferred taxes are recorded for the future tax consequences of events that have been recognized in the financial statements or tax returns, based upon enacted tax
laws and rates. Deferred tax assets are recognized subject to management's judgment that realization is more likely than not. The Company and its wholly owned domestic subsidiaries file a
consolidated federal income tax return.

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Accounting Changes

Consolidation of Variable Interest Entities

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

For
any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities, and noncontrolling interests of the VIE are initially
measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an
accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46 first applies may be used to measure the assets, liabilities, and noncontrolling interests of
the VIE. In October 2003, the FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to
February 1, 2003. With the exception of the deferral related to certain investment company subsidiaries, Citicorp elected to implement the remaining provisions of FIN 46 in the 2003 third
quarter, resulting in the consolidation of VIEs increasing both total assets and total liabilities by approximately $955 million. The implementation of FIN 46 encompassed a review of thousands
of entities to determine the impact of adoption, and considerable judgment was used in evaluating whether or not a VIE should be consolidated.

The
Company administers several third-party owned, special purpose, multi-seller finance companies (the "conduits") that purchase pools of trade receivables, credit cards, and other
financial assets from third-party clients of the Company. The Company has no ownership interest in the conduits, but as administrator provides them with accounting, funding, and operations services.
Generally, the clients continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. Clients absorb the first
losses of the conduits by providing collateral in the form of excess assets or residual interest. The Company, along with other financial institutions, provides liquidity facilities, such as
commercial paper backstop lines of credit to the conduits. The Company also provides loss protection in the form of letters of credit and other guarantees. During 2003, to comply with FIN
46-R, 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.

Some
of the Company's private equity subsidiaries may invest in venture capital entities that may also be subject to FIN 46-R. The Company accounts for its venture capital
activities in accordance with the Investment Company Audit Guide (Audit Guide). The FASB deferred adoption of FIN 46-R for non-registered investment companies that apply the
Audit Guide. The FASB permitted nonregistered investment companies to defer consolidation of VIEs with which they are involved until a Statement of Position on the scope of the Audit Guide is
finalized, which is expected before the end of the first quarter of 2005. Following issuance of the Statement of Position, the FASB will consider further modification to FIN 46-R to
provide an exception for companies that qualify to apply the revised Audit Guide. Following issuance of the revised Audit Guide, the Company will assess the effect of such guidance on its private
equity business.

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

See
Note 9 to the Consolidated Financial Statements.

Postretirement Benefits

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

Under
FSP FAS 106-1, the Company elected to defer the accounting for the effects of the Act. However, Citicorp believes that our plans are eligible for the subsidy and
decided to adopt FSP FAS 106-2 in the third quarter of 2004 retroactive to January 1, 2004. The effect of adopting FAS 106-2 is included in Note 17 to the company's
Consolidated Financial Statements.

Accounting for Loan Commitments Accounted For As Derivatives

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

Profit Recognition on Bifurcated Hybrid Instruments

On January 1, 2004, Citicorp revised the application of Derivatives Implementation Group (DIG) Issue B6, "Embedded Derivatives: Allocating the Basis of a
Hybrid Instrument to the Host Contract and the Embedded Derivative." In December 2003, the SEC staff gave a speech that clarified the accounting for derivatives embedded in financial
instruments ("hybrid instruments") to preclude the recognition of any profit on the trade date for hybrid instruments that must be bifurcated for accounting purposes. The trade-date
revenue must instead be amortized over the life of the hybrid instrument. The impact of this change in application was approximately $80 million pretax reduction in revenue, net of

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amortization,
across all of the Company's businesses during 2004. This revenue will be recognized over the life of the transactions, which on average is approximately five years.

Adoption of SFAS 132-R

In December 2003, the FASB issued SFAS No.132 (Revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits"
(SFAS 132-R), which retains the disclosure requirements contained in SFAS 132 and requires additional disclosure in financial statements about the assets, obligations, cash
flows, and net periodic benefit cost of domestic defined benefit pension plans and other domestic defined benefit postretirement plans for periods ending after December 15, 2003, except for the
disclosure of expected future benefit payments, which must be disclosed for fiscal years ending after June 15, 2004. The new disclosure requirements for foreign retirement plans apply to fiscal
years ending after June 15, 2004. However, the Company elected to adopt SFAS 132-R for its foreign plans as of December 31, 2003. Certain disclosures required by this
Statement are effective for interim periods beginning after December 15, 2003. The new annual disclosures are included in Note 17 to the Consolidated Financial Statements.

Costs Associated with Exit or Disposal Activities

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

Derivative Instruments and Hedging Activities

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

Liabilities and Equity

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

Stock-Based Compensation

On January 1, 2003, the Company adopted the fair value recognition provisions of SFAS 123, prospectively for all awards granted, modified, or settled
after December 31, 2002. The prospective method is one of the adoption methods provided for under SFAS No. 148, "Accounting for Stock-Based CompensationTransition and
Disclosure" (SFAS 148) issued in December 2002. SFAS 123 requires that compensation cost for all stock awards be calculated and recognized over the service period (generally equal
to the vesting period). This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the grant date. Similar to APB 25, the alternative method
of accounting, under SFAS 123, an offsetting increase to stockholders' equity is recorded equal to the amount of compensation expense charged.

The
impact of this change in 2003 and 2004 is disclosed on page 57. During the first quarter of 2004, the Company changed its option valuation from the Black-Scholes model to the
binomial method, which did not have a material impact on the Company's Consolidated Financial Statements.

The
Company has made changes to various stock-based compensation plan provisions for future awards. For example, the vesting period and the term of stock options granted in 2003 and 2004
are three and six years, respectively. In addition, the sale of underlying shares acquired through the exercise of options granted after December 31, 2002 is restricted for a
two-year period. The existing stock ownership commitment for senior executives will continue, under which such executives must retain 75% of the shares they own and acquire from the
Company over the term of their employment. Original option grants in 2003 and thereafter do not have a reload feature; however, previously granted options retain that feature.

In
January 2005, the Company largely moved from granting stock options as incentive compensation to granting restricted and deferred stock awards. See Note 17 to the
Consolidated Financial Statements.

Guarantees and Indemnifications

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45), which requires that, for guarantees within the scope of FIN 45 issued or amended after December 31, 2002, a liability for the fair value of the
obligation undertaken in issuing the guarantee be recognized. On January 1, 2003, the Company adopted the
recognition and measurement provisions of FIN 45. The impact of adopting FIN 45 was not material. FIN 45 also requires additional disclosures in financial statements for periods ending after
December 15, 2002. Accordingly, these disclosures are included in Note 21 to the Consolidated Financial Statements.

Acquisitions of Certain Financial Institutions

In the fourth quarter of 2002, the Company adopted SFAS No. 147, "Acquisitions of Certain Financial Institutions" (SFAS 147). SFAS 147
requires that business combinations involving depository financial institutions within its scope, except for combinations between mutual institutions, be accounted for under SFAS 141.
Previously, generally accepted accounting principles for acquisitions of financial institutions provided for recognition of the excess of the fair value of liabilities assumed over the fair value of
tangible and identifiable intangible assets acquired as an unidentifiable intangible asset. Under SFAS 147, such excess is accounted for as goodwill. The impact of

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adopting
SFAS 147 did not materially affect the Consolidated Financial Statements.

Adoption of EITF 02-3

During the fourth quarter of 2002, the Company adopted EITF Issue No. 02-3, "Issues Involved in Accounting for Derivative Contracts Held for
Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities" (EITF 02-3). Under EITF 02-3, recognition of a trading profit at inception of a
derivative transaction is prohibited unless the fair value of that derivative is obtained from a quoted market price, supported by comparison to other observable market transactions, or based upon a
valuation technique incorporating observable market data. The initial adoption and ongoing effects of EITF 02-3 are not material to the Company's Consolidated Financial Statements.

Impairment or Disposal of Long-Lived Assets

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

Business Combinations, Goodwill and Other Intangible Assets

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

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

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 is effective for interim and annual reporting periods beginning after June 15, 2005. The Company will adopt SFAS 123-R
on July 1, 2005 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 approximately $12 million and $10 million additional expense in the third and fourth quarters of 2005,
respectively. In addition, approximately $23 million additional compensation expense will be disclosed as the impact in both the first and second quarters of 2005, respectively, as if the
standard had been adopted as of January 1, 2005, but will not be recognized in earnings. 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 4 to the Consolidated Financial Statements.

Accounting for Certain Loans or Debt Securities Acquired in a Transfer

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

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

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2.    Business Developments

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 $4.4 billion. The sale, which was completed on January 31, 2005, resulted in an
after-tax gain of approximately $100 million. The Transportation Finance business is part of the Company's Global Consumer Retail Banking, which provides financing, leasing, and
asset-based lending to the commercial trucking industry.

Acquisition of First American Bank

On August 24, 2004, Citigroup announced it will acquire First American Bank in Texas (FAB). The transaction is expected to close in the first quarter of
2005. The transaction will establish Citigroup's retail banking presence in Texas, giving Citigroup more than 100 branches, $3.5 billion in assets and approximately 120,000 new customers in the
state. The operations of FAB will be integrated into the businesses of Citicorp.

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 GCIB.

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 99.8% 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), 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 guaranteed
outstanding unsecured indebtedness of WMF in connection with this transaction. The results of WMF are included in the Consolidated Financial Statements from January 2004 forward. The operations
of WMF were integrated into the businesses of Citicorp.

Acquisition of Sears' Credit Card and Financial Products Business

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

Acquisition of The Home Depot's Private-Label Portfolio

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

Acquisition of Golden State Bancorp

On November 6, 2002, Citigroup completed its acquisition of 100% of Golden State Bancorp (GSB) in a transaction in which Citigroup paid approximately
$2.3 billion in cash and issued 79.5 million Citigroup common shares. The total transaction value of approximately $5.8 billion was based on the average prices of Citigroup
shares, as adjusted for the effect of the TPC distribution. GSB was the parent company of California Federal Bank, the second-largest thrift in the U.S. and, through its First Nationwide Mortgage
business, the eighth-largest mortgage servicer. The results of GSB are included in the Consolidated Financial Statements from November 2002 forward. The operations of GSB were integrated into
the businesses of Citicorp.

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3.     Business Segment Information

Citicorp is a diversified bank holding company whose businesses provide a broad range of financial services to consumer and corporate customers around the world.
The Company's activities are conducted through the Global Consumer, Global Corporate and Investment Bank, Global Wealth Management, Global Investment Management, and Proprietary Investment Activities
business segments. These segments reflect the characteristics of their products and services and the clients to which those products or services are delivered.

The
Global Consumer segment includes a global, full-service consumer franchise delivering a wide array of banking, lending, insurance and investment services through a
network of local branches, offices, and electronic delivery systems.

The
businesses included in the Company's Global Corporate and Investment Bank segment provide corporations, governments, institutions, and investors in approximately 100 countries with a
broad range of banking and financial products and services.

The
Global Wealth Management segment provides financial planning and personalized wealth management to affluent individuals.

The
Global Investment Management segment offers a broad range of life insurance, annuity, and asset management products and services distributed to institutional and retail clients.

The
Proprietary Investment Activities segment includes the Company's venture capital activities, the Alternative Investment business, results from certain proprietary investments, and
the results of certain investments in countries that refinanced debt under the 1989 Brady Plan or plans of a similar nature.

Corporate/Other
includes net treasury results, corporate staff and other corporate expenses, certain intersegment eliminations, and taxes not allocated to the other business segments.
The accounting policies of these reportable segments are the same as those disclosed in Note 1 to the Consolidated Financial Statements.

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

|                                     |  | Revenues, Net of Interest Expense(1)(2) |        | Provision (Benefit) for
Income Taxes(1) |   |        |  |   |        |  |   | Identifiable Assets at Year End(1)
|------------------------------------ |  | --------------------------------------- | ------ | --------------------------------------- | - | ------ |  | - | ------ |  | - | ----------------------------------
|
|
|
|Global Consumer                      |  | $                                       | 45,126 |                                         | $ | 38,882 |  | $ | 35,712 |  | $ | 5,270                             
|Global Corporate and Investment Bank |  |                                         | 12,259 |                                         |   | 11,030 |  |   | 11,556 |  |   | 1,571                             
|Global Wealth Management             |  |                                         | 2,044  |                                         |   | 1,996  |  |   | 1,701  |  |   | 81                                
|Global Investment Management         |  |                                         | 1,507  |                                         |   | 1,169  |  |   | 1,088  |  |   | 36                                
|Proprietary Investment Activities    |  |                                         | 1,437  |                                         |   | 982    |  |   | 184    |  |   | 356                               
|Corporate/Other                      |  |                                         | 529    |                                         |   | 1,117  |  |   | 1,081  |  |   | (20                               
|                                     |  |                                         |        |                                         |   |        |  |   |        |  |   |                                   
|Total                                |  | $                                       | 62,902 |                                         | $ | 55,176 |  | $ | 51,322 |  | $ | 7,294                             
|                                     |  |                                         |        |                                         |   |        |  |   |        |  |   |                                   

---

62

---



4.     Investments

|In millions of dollars at year end                                   |  | 2004 |         | 2003
|-------------------------------------------------------------------- |  | ---- | ------- | ----
|Fixed maturities, substantially all available-for-sale at fair value |  | $    | 136,947 |     
|Equity securities                                                    |  |      | 6,620   |     
|Venture capital, at fair value                                       |  |      | 3,806   |     
|Short-term and other                                                 |  |      | 257     |     
|                                                                     |  |      |         |     
|Total                                                                |  | $    | 147,630 |     
|                                                                     |  |      |         |     

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

|                                              |  | 2004 |         | 2003
|--------------------------------------------- |  | ---- | ------- | ----
|
|Fixed maturity securities held to maturity(1) |  | $    | 89      |     
|                                              |  |      |         |     
|Fixed maturity securities available-for-sale  |  |      |         |     
|U.S. Treasury and federal agencies(2)         |  |      | 35,131  |     
|State and municipal                           |  |      | 8,463   |     
|Foreign government                            |  |      | 63,388  |     
|U.S. corporate                                |  |      | 13,779  |     
|Other debt securities                         |  |      | 15,273  |     
|                                              |  |      |         |     
|                                              |  |      | 136,034 |     
|                                              |  |      |         |     
|Total fixed maturities                        |  | $    | 136,123 |     
|                                              |  |      |         |     
|Equity securities(3)                          |  | $    | 6,320   |     
|                                              |  |      |         |     

---

At
December 31, 2004, the cost of approximately 5,300 investments in equity and fixed maturity securities exceeded their fair value by $844 million. Of the
$844 million, the gross unrealized loss on equity securities was $2 million. Of the remainder, $380 million represents fixed maturity investments that have been in a gross
unrealized loss position for less than a year, and of these 96% are rated investment grade; and $462 million represents fixed maturity investments that have been in a gross unrealized loss
position for a year or more, and of these 89% are rated investment grade.

The
fixed maturity investments that have been in a gross unrealized loss position for a year or more include 23 related investment grade asset-backed securities, within U.S. Corporate in
the following table, with a gross unrealized loss of $256 million. These asset-backed securities were acquired between 1994 and 1999 and have maturities ranging from 2005 through 2021. The
unrealized loss on these asset-backed securities is due solely to the current interest rate environment, i.e., the unrealized loss is unrelated to the credit of the securities. These 23 related
asset-backed securities are accounted for similarly to debt securities and are classified as available-for-sale under FASB Statement No. 115, pursuant to
paragraph 14 of FASB Statement No. 140, and any other-than-temporary impairment of the securities is recognized in current income in accordance with EITF Issue
No. 96-12. The Company has entered into hedges of these investments that qualify for cash flow hedge accounting under SFAS 133. The changes in fair value of the asset-backed
securities and the changes in fair value of the hedging instruments are reported in other comprehensive income (a component of equity). Any other-than-temporary impairment
recognized in current income on the asset-backed securities would be offset by the reclassification of an amount from other comprehensive income into current income related to the hedging instrument.

Management
has determined that the unrealized losses on the Company's investments in equity and fixed maturity securities at December 31, 2004 are temporary in nature. The Company
conducts a periodic review to identify and evaluate investments that have indications of possible impairment. An investment in a debt or equity security is impaired if its fair value falls below its
cost and the decline is considered other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which fair value
has been below cost; the financial condition and near-term prospects of the issuer; and the Company's ability and intent to hold the investment for a period of time sufficient to allow for
any anticipated recovery. The Company's review for impairment generally entails:



63

---





The
table below shows the fair value of investments in fixed maturity and equity securities that are available-for-sale, and that have been in an unrealized loss position for
less than 12 months, or for 12 months or longer as of December 31, 2004 and 2003:

|                                             |  | Less Than 12 Months |        | 12 Months Or Longer |   | Total
|-------------------------------------------- |  | ------------------- | ------ | ------------------- | - | -----
|
|2004:                                        |  |                     |        |                     |   |      
|Fixed maturity securities available-for-sale |  |                     |        |                     |   |      
|U.S. Treasury and federal agencies(1)        |  | $                   | 23,863 |                     | $ | 310  
|State and municipal                          |  |                     | 686    |                     |   | 8    
|Foreign government                           |  |                     | 8,373  |                     |   | 42   
|U.S. corporate                               |  |                     | 517    |                     |   | 10   
|Other debt securities                        |  |                     | 1,293  |                     |   | 10   
|                                             |  |                     |        |                     |   |      
|Total fixed maturities available-for-sale    |  | $                   | 34,732 |                     | $ | 380  
|                                             |  |                     |        |                     |   |      
|Equity securities                            |  | $                   | 7      |                     | $ |     
|                                             |  |                     |        |                     |   |      
|2003:                                        |  |                     |        |                     |   |      
|Fixed maturity securities available-for-sale |  |                     |        |                     |   |      
|U.S. Treasury and federal agencies(1)        |  | $                   | 3,186  |                     | $ | 104  
|State and municipal                          |  |                     | 23     |                     |   | 1    
|Foreign government                           |  |                     | 4,968  |                     |   | 67   
|U.S. corporate                               |  |                     | 350    |                     |   | 66   
|Other debt securities                        |  |                     | 1,197  |                     |   | 18   
|                                             |  |                     |        |                     |   |      
|Total fixed maturities available-for-sale    |  | $                   | 9,724  |                     | $ | 256  
|                                             |  |                     |        |                     |   |      
|Equity securities                            |  | $                   | 27     |                     | $ | 3    
|                                             |  |                     |        |                     |   |      

---

The
following table presents the amortized cost, fair value, and average yield on amortized cost of fixed maturity securities by contractual maturity dates as of December 31,
2004:

|In millions of dollars                |  | Amortized
Cost |         | Fair
Value |   | Yield  
|------------------------------------- |  | -------------- | ------- | ---------- | - | -------
|U.S. Treasury and federal agencies(1) |  |                |         |            |   |        
|Due within 1 year                     |  | $              | 5,070   |            | $ | 5,044  
|After 1 but within 5 years            |  |                | 17,951  |            |   | 17,726 
|After 5 but within 10 years           |  |                | 739     |            |   | 743    
|After 10 years(2)                     |  |                | 11,371  |            |   | 11,395 
|                                      |  |                |         |            |   |        
|Total                                 |  | $              | 35,131  |            | $ | 34,908 
|                                      |  |                |         |            |   |        
|State and municipal                   |  |                |         |            |   |        
|Due within 1 year                     |  | $              | 97      |            | $ | 98     
|After 1 but within 5 years            |  |                | 421     |            |   | 431    
|After 5 but within 10 years           |  |                | 1,045   |            |   | 1,100  
|After 10 years(2)                     |  |                | 6,900   |            |   | 7,377  
|                                      |  |                |         |            |   |        
|Total                                 |  | $              | 8,463   |            | $ | 9,006  
|                                      |  |                |         |            |   |        
|All other(3)                          |  |                |         |            |   |        
|Due within 1 year                     |  | $              | 28,344  |            | $ | 28,594 
|After 1 but within 5 years            |  |                | 42,332  |            |   | 42,568 
|After 5 but within 10 years           |  |                | 11,992  |            |   | 12,103 
|After 10 years(2)                     |  |                | 9,861   |            |   | 9,768  
|Total                                 |  | $              | 92,529  |            | $ | 93,033 
|                                      |  |                |         |            |   |        
|Total fixed maturities                |  | $              | 136,123 |            | $ | 136,947
|                                      |  |                |         |            |   |        

---

The
following table presents interest and dividends on investments:

|In millions of dollars                       |  | 2004 |       | 2003 |   | 2002 
|-------------------------------------------- |  | ---- | ----- | ---- | - | -----
|Taxable interest                             |  | $    | 5,083 |      | $ | 4,039
|Interest exempt from U.S. federal income tax |  |      | 410   |      |   | 364  
|Dividends                                    |  |      | 189   |      |   | 357  
|                                             |  |      |       |      |   |      
|Total interest and dividends                 |  | $    | 5,682 |      | $ | 4,760
|                                             |  |      |       |      |   |      

The
following table presents realized gains and losses on investments:

|In millions of dollars             |  | 2004 |      | 2003 |   | 2002 |  
|---------------------------------- |  | ---- | ---- | ---- | - | ---- | -
|Gross realized investment gains    |  | $    | 935  |      | $ | 913  |  
|Gross realized investment (losses) |  |      | (259 | )    |   | (659 | )
|                                   |  |      |      |      |   |      |  
|Net realized gains/(losses)        |  | $    | 676  |      | $ | 254  |  
|                                   |  |      |      |      |   |      |  

The
following table presents venture capital investment gains and losses:

|In millions of dollars                     |  | 2004 |      | 2003 |   | 2002 |  
|------------------------------------------ |  | ---- | ---- | ---- | - | ---- | -
|Net realized investment gains/(losses)     |  | $    | (14  | )    | $ | 406  |  
|Gross unrealized gains                     |  |      | 945  |      |   | 737  |  
|Gross unrealized (losses)                  |  |      | (377 | )    |   | (440 | )
|                                           |  |      |      |      |   |      |  
|Net realized and unrealized gains/(losses) |  | $    | 554  |      | $ | 703  |  
|                                           |  |      |      |      |   |      |  

64

---



5.     Trading Account Assets and Liabilities

Trading account assets and liabilities, at market value, consisted of the following at December 31:

|In millions of dollars                                        |  | 2004 |         | 2003
|------------------------------------------------------------- |  | ---- | ------- | ----
|Trading account assets                                        |  |      |         |     
|U.S. Treasury and federal agency securities                   |  | $    | 2,580   |     
|Foreign government securities, corporate and other securities |  |      | 36,260  |     
|Equity securities                                             |  |      | 14,896  |     
|Derivative and other(1)                                       |  |      | 48,950  |     
|                                                              |  |      |         |     
|Total trading account assets                                  |  | $    | 102,686 |     
|                                                              |  |      |         |     
|Trading account liabilities                                   |  |      |         |     
|Securities sold, not yet purchased                            |  | $    | 10,188  |     
|Derivative and other contractual commitments(1)               |  |      | 46,748  |     
|                                                              |  |      |         |     
|Total trading account liabilities                             |  | $    | 56,936  |     
|                                                              |  |      |         |     

---

6.     Foreign Exchange and Trading Account Revenue

Foreign exchange and trading account revenues consist of realized and unrealized gains and losses from trading activities. Not included in the table below is the
impact of net interest revenue related to trading activities. The following table presents foreign exchange and trading account revenues for the years ended December 31:

|In millions of dollars                             |  | 2004 |       | 2003(1) |   | 2002(1)
|-------------------------------------------------- |  | ---- | ----- | ------- | - | -------
|Fixed income(2)                                    |  | $    | 803   |         | $ | (500   
|Equities(3)                                        |  |      | 218   |         |   | 46     
|Foreign exchange(4)                                |  |      | 1,857 |         |   | 3,530  
|Other                                              |  |      | (69   | )       |   | (92    
|                                                   |  |      |       |         |   |        
|Total foreign exchange and trading account revenue |  | $    | 2,809 |         | $ | 2,984  
|                                                   |  |      |       |         |   |        

---

7.     Loans

|In millions of dollars at year end      |                                          | 2004 |         | 2003    |  
|--------------------------------------- | ---------------------------------------- | ---- | ------- | ------- | -
|Consumer                                |                                          |      |         |         |  
|In U.S. offices                         |                                          |      |         |         |  
|                                        | Mortgage and real estate(1)              |      | $       | 161,832 |  
|                                        | Installment, revolving credit, and other |      |         | 134,784 |  
|                                        | Lease financing                          |      |         | 6,030   |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 302,646 |         |  
|                                        |                                          |      |         |         |  
|In offices outside the U.S.             |                                          |      |         |         |  
|                                        | Mortgage and real estate(1)              |      |         | 39,601  |  
|                                        | Installment, revolving credit, and other |      |         | 93,523  |  
|                                        | Lease financing                          |      |         | 1,619   |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 134,743 |         |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 437,389 |         |  
|Net unearned income                     |                                          |      | (2,163  | )       |  
|                                        |                                          |      |         |         |  
|Consumer loans, net of unearned income  |                                          | $    | 435,226 |         | $
|                                        |                                          |      |         |         |  
|Corporate                               |                                          |      |         |         |  
|In U.S. offices                         |                                          |      |         |         |  
|                                        | Commercial and industrial(2)             |      | $       | 14,624  |  
|                                        | Lease financing                          |      |         | 1,879   |  
|                                        | Mortgage and real estate(1)              |      |         | 100     |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 16,603  |         |  
|                                        |                                          |      |         |         |  
|In offices outside the U.S.             |                                          |      |         |         |  
|                                        | Commercial and industrial(2)             |      |         | 77,053  |  
|                                        | Mortgage and real estate(1)              |      |         | 3,928   |  
|                                        | Loans to financial institutions          |      |         | 13,360  |  
|                                        | Lease financing                          |      |         | 2,485   |  
|Governments and official institutions   |                                          |      | 1,100   |         |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 97,926  |         |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 114,529 |         |  
|Net unearned income                     |                                          |      | (299    | )       |  
|                                        |                                          |      |         |         |  
|Corporate loans, net of unearned income |                                          | $    | 114,230 |         | $
|                                        |                                          |      |         |         |  

---

Impaired
loans are those on which Citicorp believes it is not probable that it will be able to collect all amounts due according to the contractual terms of the loan, excluding
smaller-balance homogeneous loans that are evaluated collectively for impairment, and are carried on a cash basis. Valuation allowances for these loans are estimated considering all available evidence
including, as appropriate, the present value of the expected future cash flows discounted at the loan's contractual effective rate, the secondary market value of the loan and the fair value of
collateral less disposal costs. The following table presents information about impaired loans:

|In millions of dollars at year end           |  | 2004 |       | 2003 |   | 2002 
|-------------------------------------------- |  | ---- | ----- | ---- | - | -----
|Impaired corporate loans                     |  | $    | 1,854 |      | $ | 3,284
|Other impaired loans(1)                      |  |      | 934   |      |   | 986  
|                                             |  |      |       |      |   |      
|Total impaired loans(2)                      |  |      | 2,788 |      | $ | 4,270
|                                             |  |      |       |      |   |      
|Impaired loans with valuation allowances     |  | $    | 1,847 |      | $ | 3,277
|Total valuation allowances(3)                |  |      | 431   |      |   | 561  
|                                             |  |      |       |      |   |      
|During the year                              |  |      |       |      |   |      
|Average balance of impaired loans            |  | $    | 2,310 |      | $ | 3,432
|Interest income recognized on impaired loans |  |      | 173   |      |   | 98   
|                                             |  |      |       |      |   |      

---

65

---



8.     Allowance for Credit Losses

|In millions of dollars                                              |                                       | 2004 |        | 2003   |   | 2002   |       
|------------------------------------------------------------------- | ------------------------------------- | ---- | ------ | ------ | - | ------ | ------
|Allowance for credit losses at beginning of year                    |                                       | $    | 12,643 |        | $ | 11,101 |       
|Additions                                                           |                                       |      |        |        |   |        |       
|                                                                    | Consumer provision for credit losses  |      |        | 7,205  |   |        | 7,316 
|                                                                    | Corporate provision for credit losses |      |        | (971   | ) |        | 729   
|                                                                    |                                       |      |        |        |   |        |       
|Total provision for credit losses                                   |                                       |      | 6,234  |        |   | 8,045  |       
|                                                                    |                                       |      |        |        |   |        |       
|Deductions                                                          |                                       |      |        |        |   |        |       
|                                                                    | Consumer credit losses                |      |        | 10,241 |   |        | 9,053 
|                                                                    | Consumer credit recoveries            |      |        | (1,770 | ) |        | (1,498
|                                                                    |                                       |      |        |        |   |        |       
|Net consumer credit losses                                          |                                       |      | 8,471  |        |   | 7,555  |       
|                                                                    |                                       |      |        |        |   |        |       
|                                                                    | Corporate credit losses               |      |        | 632    |   |        | 1,471 
|                                                                    | Corporate credit recoveries(1)        |      |        | (501   | ) |        | (261  
|                                                                    |                                       |      |        |        |   |        |       
|Net corporate credit losses                                         |                                       |      | 131    |        |   | 1,210  |       
|                                                                    |                                       |      |        |        |   |        |       
|Other, net(2)                                                       |                                       |      | 994    |        |   | 2,262  |       
|                                                                    |                                       |      |        |        |   |        |       
|Allowance for credit losses at end of year                          |                                       |      | 11,269 |        |   | 12,643 |       
|Allowance for credit losses on unfunded lending commitments(3)      |                                       |      | 600    |        |   | 600    |       
|                                                                    |                                       |      |        |        |   |        |       
|Total allowance for loans, leases, and unfunded lending commitments |                                       | $    | 11,869 |        | $ | 13,243 |       
|                                                                    |                                       |      |        |        |   |        |       

---

9.     Securitizations and Variable Interest Entities

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

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

The
Company provides a wide range of mortgage and other loan products to a diverse customer base. In connection with the securitization of these loans, the Company may retain servicing
rights which entitle the Company to a future stream of cash flows based on the outstanding principal balances of the loans and the contractual servicing fee. Failure to service the loans in accordance
with contractual 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 are less than the outstanding principal balance and
accrued interest of the loan and the cost of holding and disposing of the underlying property.

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

The
following table summarizes certain cash flows received from and paid to securitization trusts during 2004, 2003, and 2002:

|                                                                   |  | 2004 |       | 2003 |   | 2002
|------------------------------------------------------------------ |  | ---- | ----- | ---- | - | ----
|
|
|Proceeds from new securitizations                                  |  | $    | 20.2  |      | $ | 57.7
|Proceeds from collections reinvested in new receivables            |  |      | 171.1 |      |   | 0.8 
|Servicing fees received                                            |  |      | 1.5   |      |   | 0.7 
|Cash flows received on retained interests and other net cash flows |  |      | 5.3   |      |   |    
|                                                                   |  |      |       |      |   |     

---

66

---



The
Company recognized gains on securitizations of mortgages of $133 million, $530 million, and $267 million for 2004, 2003, and 2002, respectively. In 2004, the
Company recorded net gains of $234 million and, in 2003 and 2002, recorded net gains of $342 million and $425 million, respectively, related to the securitization of credit card
receivables including the impact of changes in estimates in the timing of revenue recognition on securitizations. Gains recognized on the securitization of other assets during 2004, 2003 and 2002 were
$93 million, $52 million and $35 million, respectively.

Key
assumptions used for credit cards, mortgages, and other assets during 2004 and 2003 in measuring the fair value of retained interests at the date of sale or securitization follow:

|                              |  | 2004           |  | 2003         
|----------------------------- |  | -------------- |  | -------------
|
|Discount rate                 |  | 10.0% to 15.6% |  | 9.8% to 12.6%
|Constant prepayment rate      |  | 14.0% to 17.7% |  | 4.6% to 11.9%
|Anticipated net credit losses |  | 5.5% to 12.2%  |  | 0.0% to 8.1% 
|                              |  |                |  |              

---

The
2003 to 2004 increase in the credit card discount rate and anticipated net credit loss assumptions, as well as the decline in the prepayment assumptions, are primarily driven by the
increased securitization of cards and private label credit card receivables, including the Home Depot and Sears receivables, during 2004.

As
required by SFAS 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
December 31, 2004, the key assumptions used to value retained interests and the sensitivity of the fair value to adverse changes of 10% and 20% in each of the key assumptions
were as follows:

|Key assumptions at December 31, 2004 |  | Discount
Rate  |  | Constant
Prepayment
Rate |  | Anticipated
Net Credit
Losses
|------------------------------------ |  | -------------- |  | ------------------------ |  | -----------------------------
|Mortgages and other(1)               |  | 10.0% to 10.9% |  | 5.0% to 16.0%            |  | 0.0% to 5.6%                 
|Credit cards                         |  | 10.0% to 15.6% |  | 14.0% to 17.7%           |  | 4.8% to 8.0%                 

---

|In millions of dollars               |     | December 31, 2004 |      
|------------------------------------ | --- | ----------------- | -----
|Carrying value of retained interests |     | $                 | 7,438
|                                     |     |                   |      
|Discount rate                        |     |                   |      
|                                     | 10% |                   | ($   
|                                     | 20% |                   | ($   
|                                     |     |                   |      
|Constant prepayment rate             |     |                   |      
|                                     | 10% |                   | ($   
|                                     | 20% |                   | ($   
|                                     |     |                   |      
|Anticipated net credit losses        |     |                   |      
|                                     | 10% |                   | ($   
|                                     | 20% |                   | ($   
|                                     |     |                   |      

Managed Loans

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

Managed Credit Card Receivables

|In millions of dollars, except loans in billions |                     | 2004 |       | 2003   |  
|------------------------------------------------ | ------------------- | ---- | ----- | ------ | -
|Principal amounts, at period end                 |                     |      |       |        |  
|                                                 | Total managed       |      | $     | 165.7  |  
|                                                 | Securitized amounts |      |       | (85.3  | )
|                                                 | Loans held-for-sale |      |       | (2.5   | )
|                                                 |                     |      |       |        |  
|On-balance sheet                                 |                     | $    | 77.9  |        | $
|                                                 |                     |      |       |        |  
|Delinquencies, at period end                     |                     |      |       |        |  
|                                                 | Total managed       |      | $     | 2,944  |  
|                                                 | Securitized amounts |      |       | (1,296 | )
|                                                 | Loans held-for-sale |      |       | (32    | )
|                                                 |                     |      |       |        |  
|On-balance sheet                                 |                     | $    | 1,616 |        | $
|                                                 |                     |      |       |        |  

|Credit losses, net of recoveries, for the year ended December 31 |  | 2004 |        | 2003 |   | 2002   |  
|---------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|Total managed                                                    |  | $    | 9,219  |      | $ | 7,694  |  
|Securitized amounts                                              |  |      | (4,865 | )    |   | (4,529 | )
|Loans held-for-sale                                              |  |      | (214   | )    |   | (221   | )
|                                                                 |  |      |        |      |   |        |  
|On-balance sheet                                                 |  | $    | 4,140  |      | $ | 2,944  |  
|                                                                 |  |      |        |      |   |        |  

67

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Servicing Rights

The fair value of capitalized mortgage loan servicing rights was $4.1 billion and $2.0 billion at December 31, 2004 and 2003, respectively.
The following table summarizes the changes in capitalized mortgage servicing rights (MSR):

|In millions of dollars                    |  | 2004 |       | 2003 |  
|----------------------------------------- |  | ---- | ----- | ---- | -
|Balance, beginning of period              |  | $    | 1,980 |      | $
|Originations                              |  |      | 769   |      |  
|Purchases                                 |  |      | 2,559 |      |  
|Amortization                              |  |      | (628  | )    |  
|Gain (loss) on change in value of MSRs(1) |  |      | (16   | )    |  
|Provision for impairment(2) (3)           |  |      | (515  | )    |  
|                                          |  |      |       |      |  
|Balance, end of period                    |  | $    | 4,149 |      | $
|                                          |  |      |       |      |  

---

Variable Interest Entities

The following table summarizes all the Company's involvement in VIEs by business segment at December 31, 2004 and 2003 both as direct participant or
structurer:

Business Segments

|In millions of dollars               |                                | 2004
Assets |         | 2003(1)
Assets
|------------------------------------ | ------------------------------ | ----------- | ------- | --------------
|Global Consumer                      |                                |             |         |               
|                                     | Credit cards                   |             | $       | 11,564        
|                                     | Leasing                        |             |         |              
|                                     | Mortgages                      |             |         | 1,847         
|                                     | Other                          |             |         | 7,066         
|                                     |                                |             |         |               
|                                     | Total                          |             | $       | 20,477        
|                                     |                                |             |         |               
|Global Corporate and Investment Bank |                                |             |         |               
|                                     | Commercial paper conduits      |             | $       | 47,415        
|                                     | Mortgage-backed securities     |             |         | 542           
|                                     | CDOs                           |             |         | 10,443        
|                                     | Structured finance             |             |         | 69,662        
|                                     | Other                          |             |         | 16,702        
|                                     |                                |             |         |               
|                                     | Total                          |             | $       | 144,764       
|                                     |                                |             |         |               
|Global Investment Management         |                                |             |         |               
|                                     | Investment funds               |             | $       | 16,822        
|                                     |                                |             |         |               
|                                     | Total                          |             | $       | 16,822        
|                                     |                                |             |         |               
|Global Wealth Management             |                                |             |         |               
|                                     | Structured Investment Vehicles |             | $       | 3,546         
|                                     |                                |             |         |               
|                                     | Total                          |             | $       | 3,546         
|                                     |                                |             |         |               
|Proprietary Investment Activities    |                                |             |         |               
|                                     | Structured investment vehicles |             | $       | 50,968        
|                                     | Investment funds               |             |         | 3,443         
|                                     |                                |             |         |               
|                                     | Total                          |             | $       | 54,411        
|                                     |                                |             |         |               
|Total Citicorp                       |                                | $           | 240,020 |               
|                                     |                                |             |         |               

---

Some
of the Company's private equity subsidiaries may invest in venture capital entities that may also be subject to FIN 46-R and are not included in the table above showing
our VIE involvement. The Company accounts for its venture capital activities in accordance with the Investment Company Audit Guide (Audit Guide). The FASB deferred adoption of FIN 46-R for
nonregistered investment companies that apply the Audit Guide. The FASB permitted nonregistered investment companies to defer consolidation of VIEs with which they are involved until a Statement of
Position on the scope of the Audit Guide is finalized, which is expected in the first quarter of 2005. Following issuance of the Statement of Position, the FASB will consider further modification to
FIN 46-R to provide an exception for companies that qualify to apply the revised Audit Guide. Following issuance of the revised Audit Guide and further modification, if any, to FIN
46-R, the Company will assess the effect of such guidance on its private equity business.

The
Company may provide administrative, trustee and/or investment management services to numerous personal estate trusts, which are considered VIEs under FIN 46-R, but not
consolidated. These trusts are excluded from the table summarizing the Company's involvement in VIEs.

68

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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            |  | December 31,
2004 |      | December 31,
2003
|--------------------------------- |  | ----------------- | ---- | -----------------
|Cash                              |  | $                 | 0.3  |                  
|Trading account assets            |  |                   | 13.2 |                  
|Investments                       |  |                   | 5.5  |                  
|Loans                             |  |                   | 10.3 |                  
|Other assets                      |  |                   | 0.1  |                  
|                                  |  |                   |      |                  
|Total assets of consolidated VIEs |  | $                 | 29.4 |                  
|                                  |  |                   |      |                  

The
consolidated VIEs included in the table above represent hundreds of separate entities with which the Company is involved and includes approximately $1.1 billion related to
VIEs newly consolidated as a result of adopting FIN 46-R as of January 1, 2004, and $0.1 billion related to VIEs newly consolidated as a result of adopting FIN 46 at
July 1, 2003. Of the $29.4 billion and $27.1 billion of total assets of VIEs consolidated by the Company at December 31, 2004 and 2003, respectively, $22.8 billion
and $20.1 billion represent structured transactions where the Company packages and securitizes assets purchased in the financial markets or from clients in order to create new security
offerings and financing opportunities for clients, $4.5 billion and $5.6 billion represent investment vehicles that were established to provide a return to the investors in the vehicles,
and $2.1 billion and $0.6 billion represent vehicles that hold lease receivables and equipment as collateral to issue debt securities, thus obtaining secured financing at favorable
interest rates. The December 31, 2003 consolidated VIE balance includes $0.8 billion of trust preferred securities, which are a source of funding and regulatory capital for the Company.
As a result of adopting FIN 46-R as of March 31, 2004, the trust preferred securities were deconsolidated, and the December 31, 2004 total asset balance of consolidated VIEs
therefore excludes trust preferred securities.

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, which were deconsolidated
during the first quarter of 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 conduits by providing collateral in the form of excess assets. The Company along with other financial institutions provides liquidity facilities, such as commercial paper backstop lines
of credit to the conduits. The Company also provides loss enhancement in the form of letters of credit and other guarantees. 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 December 31, 2004 and 2003, total assets in unconsolidated conduits were $51.0 billion and
$44.3 billion, respectively. One conduit with assets of $656 million and $823 million is consolidated at December 31, 2004 and 2003, respectively.

The
Company packages and securitizes assets purchased in the financial markets or from clients in order to create new security offerings and financing opportunities for institutional and
private bank clients as well as retail customers, including hedge funds, mutual funds, unit investment trusts, and other investment funds that match the clients' investment needs and preferences. The
funds may be credit-enhanced by excess assets in the investment pool or by third-party insurers assuming the risks of the underlying assets, thus reducing the credit risk assumed by the investors and
diversifying investors' risk to a pool of assets as compared with investments in individual assets. In a limited number of cases, the Company may guarantee the return of principal to investors. The
Company typically manages the funds for market-rate fees. In addition, the Company may be one of several liquidity providers to the funds and may place the securities with investors. Many
investment funds are organized as registered investment companies (RICs), corporations or partnerships with sufficient capital to fund their operations without additional credit support.

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

In
addition to the conduits discussed above, the total assets of unconsolidated VIEs where the Company has significant involvement is $47.9 billion and $65.5 billion at
December 31, 2004 and 2003, respectively, including $7.4 billion and $6.4 billion in investment-related transactions, $0.1 billion and $0.4 billion in
mortgage-related transactions, $0.5 billion and $0.5 billion in CDO-type transactions,

69

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and
$39.1 billion and $58.2 billion in structured finance and other transactions, respectively. Also included in the total unconsolidated VIEs were $0.8 billion in trust preferred
securities at December 31, 2004.

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 billion and $41 billion at December 31, 2004 and 2003, respectively. 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 21 to the
Consolidated Financial Statements.

10.   Purchased Funds and Other Borrowings(1)

|In millions of dollars                                                     |  | 2004 |        | 2003
|-------------------------------------------------------------------------- |  | ---- | ------ | ----
|Federal funds purchased and securities sold under agreements to repurchase |  | $    | 34,835 |     
|Commercial paper                                                           |  |      | 8,270  |     
|Other funds borrowed                                                       |  |      | 27,355 |     
|                                                                           |  |      |        |     
|Total                                                                      |  | $    | 70,460 |     
|                                                                           |  |      |        |     

---

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.

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates, had an unutilized credit facility of Canadian $1.0 billion as of December 31, 2004 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 December 31, 2004, this requirement was exceeded by approximately $76.5 billion. Citicorp has also guaranteed various other debt obligations of Associates and
CitiFinancial Credit Company, each an indirect subsidiary of Citicorp.

11.   Long-Term Debt(1)

|In millions of dollars                                           |  | Weighted
Average
Coupon |  | Maturities |  | 2004 |         | 2003
|---------------------------------------------------------------- |  | ----------------------- |  | ---------- |  | ---- | ------- | ----
|Citicorp Parent Company                                          |  |                         |  |            |  |      |         |     
|Senior notes                                                     |  | 4.13%                   |  | 2005-2033  |  | $    | 26,788  |     
|Subordinated notes                                               |  | 6.45%                   |  | 2005-2033  |  |      | 20,487  |     
|Junior Subordinated notes relating to trust preferred securities |  | 7.98%                   |  | 2027       |  |      | 846     |     
|Subsidiaries(2)                                                  |  |                         |  |            |  |      |         |     
|Senior notes                                                     |  | 4.40%                   |  | 2005-2037  |  |      | 67,677  |     
|Subordinated notes                                               |  | 7.74%                   |  | 2005-2033  |  |      | 521     |     
|                                                                 |  |                         |  |            |  |      |         |     
|Total                                                            |  |                         |  |            |  | $    | 116,319 |     
|                                                                 |  |                         |  |            |  |      |         |     
|Senior notes                                                     |  |                         |  |            |  | $    | 94,465  |     
|Subordinated notes                                               |  |                         |  |            |  |      | 21,008  |     
|Junior Subordinated notes relating to trust preferred securities |  |                         |  |            |  |      | 846     |     
|                                                                 |  |                         |  |            |  |      |         |     
|Total                                                            |  |                         |  |            |  | $    | 116,319 |     
|                                                                 |  |                         |  |            |  |      |         |     

---

Long-term
debt is denominated in various currencies with both fixed and floating interest rates. Certain agreements under which long-term debt obligations were
issued prohibit Citicorp, under certain conditions, from paying dividends in shares of Citibank capital stock and from creating encumbrances on such shares. Floating rates are determined periodically
by formulas based on certain money market rates or, in certain instances, by minimum rates as specified in the governing agreements. A portion of Citicorp Parent Company and Subsidiaries debt
represents local currency borrowings where prevailing rates may vary significantly from rates in the United States.

At
December 31, 2004 the Company's subsidiary trusts include $750 million of guaranteed beneficial interests in Citicorp subordinated debt issued by Citicorp Capital I and
II, wholly owned trusts whose sole assets are $309 million of 7.933% and $464 million of 8.015%, respectively, of Junior Subordinated Deferrable Interest Debentures of Citicorp both due
2027.

Citicorp
utilizes derivative contracts, primarily interest-rate swaps, to effectively convert a portion of its fixed rate debt to variable debt, and variable debt to fixed.
The maturity structure of the derivatives generally corresponds with the maturity structure of the debt being hedged. At year-end 2004, Citicorp's overall weighted average rate for
long-term debt was 4.74% on a contractual basis and 4.55% including the effects of derivative contracts. In addition, Citicorp utilizes other derivative contracts to manage the foreign
exchange impact of certain debt issuances.

70

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Aggregate annual maturities on long-term debt obligations (based on final maturity dates) are as follows:

|In millions of dollars  |  | 2005 |        | 2006 |   | 2007   |  | 2008 |        | 2009 |   | Thereafter
|----------------------- |  | ---- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ----------
|Citicorp Parent Company |  | $    | 1,146  |      | $ | 884    |  | $    | 666    |      | $ | 978       
|Subsidiaries            |  |      | 17,024 |      |   | 17,147 |  |      | 13,055 |      |   | 7,245     
|                        |  |      |        |      |   |        |  |      |        |      |   |           
|Total                   |  | $    | 18,170 |      | $ | 18,031 |  | $    | 13,721 |      | $ | 8,223     
|                        |  |      |        |      |   |        |  |      |        |      |   |           

12.   Goodwill and Intangible Assets

During
2004 and 2003, no goodwill was impaired or written off. During the third quarter of 2004, the Company recorded approximately $102 million of goodwill in connection with the acquisition
of Principal Residential Mortgage, Inc. During the second quarter of 2004, the Company recorded approximately $2.2 billion of goodwill in connection with the acquisition of KorAm. During
the first quarter of 2004, the Company recorded approximately $890 million of goodwill in connection with the acquisition of WMF. Subsequently, $130 million of the WMF goodwill was
reclassified during the 2004 second quarter to
establish a deferred tax asset. The Company recorded goodwill of approximately $780 million during the fourth quarter of 2003, primarily related to the acquisition of Sears. During the 2003
third quarter, the Company recorded goodwill of approximately $170 million in connection with the acquisition of the remaining ownership interest in Diners Club Europe and reduced goodwill by
$25 million in connection with the sale of a business in the Consumer segment.

The
changes in goodwill during 2004 and 2003 were as follows:

|In millions of dollars          |  | Global
Consumer |        | Global
Corporate and
Investment Bank |   | Global
Wealth
Management |   | Global
Investment
Management |    | Total |  
|------------------------------- |  | --------------- | ------ | ------------------------------------ | - | ------------------------ | - | ---------------------------- | -- | ----- | -
|Balance at January 1, 2003(1)   |  | $               | 18,602 |                                      | $ | 3,177                    |   | $                            | 4  |       | $
|Goodwill acquired during 2003   |  |                 | 890    |                                      |   | 60                       |   |                              |   |       |  
|Other(2)                        |  |                 | 39     |                                      |   | (159                     | ) |                              | (1 | )     |  
|                                |  |                 |        |                                      |   |                          |   |                              |    |       |  
|Balance at December 31, 2003(1) |  | $               | 19,531 |                                      | $ | 3,078                    |   | $                            | 3  |       | $
|Goodwill acquired during 2004   |  |                 | 2,072  |                                      |   | 990                      |   |                              |   |       |  
|Other(2)                        |  |                 | 607    |                                      |   | 342                      |   |                              | 3  |       |  
|                                |  |                 |        |                                      |   |                          |   |                              |    |       |  
|Balance at December 31, 2004    |  | $               | 22,210 |                                      | $ | 4,410                    |   | $                            | 6  |       | $
|                                |  |                 |        |                                      |   |                          |   |                              |    |       |  

---

The
components of intangible assets were as follows:

|                                    |  | December 31, 2004 |        | December 31, 2003
|----------------------------------- |  | ----------------- | ------ | -----------------
|
|Purchased credit card relationships |  | $                 | 7,040  |                  
|Mortgage servicing rights(1)        |  |                   | 8,099  |                  
|Core deposit intangibles            |  |                   | 1,158  |                  
|Other customer relationships        |  |                   | 1,089  |                  
|Other(2)                            |  |                   | 4,248  |                  
|                                    |  |                   |        |                  
|Total amortizing intangible assets  |  | $                 | 21,634 |                  
|Indefinite-lived intangible assets  |  |                   |        |                  
|                                    |  |                   |        |                  
|Total intangible assets             |  |                   |        |                  
|                                    |  |                   |        |                  

---

71

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At
December 31, 2004 and 2003, $410 million and $405 million of the Company's trade names were considered to be indefinite-lived and not subject to amortization. All
other acquired intangible assets are subject to amortization.

The
intangible assets recorded during 2004 and their respective amortization periods were as follows:

|In millions of dollars                                               |  | 2004 |       | Weighted-Average
Amortization Period
in Years
|-------------------------------------------------------------------- |  | ---- | ----- | ---------------------------------------------
|Mortgage servicing rights                                            |  | $    | 3,328 |                                              
|Purchased credit card relationships and other customer relationships |  |      | 310   |                                              
|Other intangibles                                                    |  |      | 272   |                                              
|                                                                     |  |      |       |                                              
|Total intangible assets recorded during the period(1)                |  | $    | 3,910 |                                              
|                                                                     |  |      |       |                                              

---

During
the third quarter of 2004, the Company recorded approximately $2.2 billion in mortgage servicing right intangibles in connection with the acquisition of Principal
Residential Mortgage, Inc. During the second quarter of 2004, the Company recorded approximately $170 million of customer relationship intangibles, $81 million of core deposit
intangibles and $41 million of other intangibles in connection with the KorAm acquisition. During the first quarter of 2004, the Company recorded approximately $140 million of customer
relationship intangibles for the WMF acquisition. The Company also recorded in the first quarter of 2004 approximately $150 million of intangibles representing the present value of future
profits associated with an acquired insurance portfolio.

Intangible
assets amortization expense was $1,477 million, $1,149 million and $803 million for 2004, 2003 and 2002, respectively. Intangible assets amortization
expense is estimated to be $1,788 million in 2005, $1,748 million in 2006, $1,619 million in 2007, $1,493 million in 2008, and $1,339 million in 2009.

13.   Restructuring-Related Items

The
status of the 2004, 2003, and 2002 restructuring initiatives are summarized in the following table:

Restructuring Reserve Activity

|                                                      |      | Restructuring Initiatives |    
|----------------------------------------------------- | ---- | ------------------------- | ---
|
|
|Restructuring-related charges                         |      | $                         | 1  
|                                                      |      |                           |    
|Purchase price allocations related to acquisitions(1) |      |                           | 71 
|                                                      |      |                           |    
|Utilization during:(2)                                |      |                           |    
|                                                      | 2004 |                           |    
|                                                      | 2003 |                           |    
|                                                      | 2002 |                           |    
|                                                      |      |                           |    
|                                                      |      |                           | (25
|                                                      |      |                           |    
|Other(3)                                              |      |                           | (28
|                                                      |      |                           |    
|Balance at December 31, 2004                          |      | $                         | 19 
|                                                      |      |                           |    

---

During
2004, Citicorp recognized $1 million of restructuring charges for the WMF acquisition and $71 million in the purchase price allocation for integration of operations
relating to the acquisitions of WMF, KorAm, and PRMI.

Of
the $71 million, $21 million was recognized as a liability in the purchase price allocation related to WMF ($4 million for employee severance and
$17 million for existing leasehold and other contractual obligations), $33 million related to KorAm ($26 million for employee severance and $7 million for leasehold and
other contractual obligations), and $17 million related to PRMI ($9 million for employee severance and $8 million for leasehold and other contractual obligations).

Through
December 31, 2004, $25 million of the 2004 restructuring reserve has been utilized, of which $7 million for severance and $5 million for leasehold and
other exit costs have been paid in cash, while $13 million is for other specifically identified contractual obligations. Approximately 125 and 250 staff positions have been eliminated in
connection with the WMF and PRMI acquisitions, respectively.

During
2003, Citicorp recorded a restructuring reserve of $82 million in the purchase price allocation of Sears for the integration of its operations and operating platforms
within the Global Consumer business. Of the $82 million, $47 million related to employee severance and $35 million related to exiting leasehold and other contractual obligations.

Through
December 31, 2004, $55 million of the 2003 restructuring reserve has been utilized, of which $31 million for severance and $3 million for leasehold
and other exit costs have been paid in cash, while $21 million is for other specifically identified contractual obligations. Approximately 2,600 staff positions have been eliminated under this
program.

During
2002, Citicorp recorded restructuring charges of $65 million, of which $42 million related to the downsizing of Global Consumer and GCIB operations in Argentina, and
$23 million related to the acquisition of GSB and the integration of its operations within the Global Consumer business. These restructuring charges were expensed and are included in
"Restructuring-related items" in the Consolidated Statement of Income. In addition, a restructuring reserve of $186 million was also recognized as a liability in the purchase price allocation
of GSB for the integration of operations and operating platforms. The 2002 reserves included $150 million related to employee severance and $101 million related to exiting leasehold and
other contractual obligations.

Through
December 31, 2004, $241 million of the 2002 restructuring reserve has been utilized, of which $128 million for employee severance and $77 million for
leasehold and other exit costs have been paid in cash, while $36 million is for other specifically identified contractual obligations. Approximately 4,650 staff positions

72

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have
been eliminated under these programs, including approximately 2,600 staff positions in connection with the GSB acquisition.

Restructuring-related
items included in the Consolidated Statement of Income for the years ended December 31, 2004, 2003 and 2002 were as follows:

|In millions of dollars            |  | 2004 |    | 2003 |   | 2002 |  
|--------------------------------- |  | ---- | -- | ---- | - | ---- | -
|Restructuring charges             |  | $    | 1  |      | $ |     |  
|Changes in estimates              |  |      | (6 | )    |   | (45  | )
|Accelerated depreciation          |  |      |   |      |   |     |  
|                                  |  |      |    |      |   |      |  
|Total restructuring-related items |  | $    | (5 | )    | $ | (45  | )
|                                  |  |      |    |      |   |      |  

Changes
in estimates are attributable to facts and circumstances arising subsequent to an original restructuring charge. Changes in estimates attributable to lower than anticipated costs
of implementing certain projects and a reduction in the scope of certain initiatives during 2004 resulted in reducing the reserve for 2004 and 2003 restructuring initiatives by $28 million and
$6 million, respectively, both of which were recorded as adjustments to the liability in the purchase price allocations. In addition, a $5 million reduction for 2002 restructuring
initiatives and a $1 million reduction in the reserve for prior years' restructuring initiatives were recorded in the line "Restructuring-related items" in the Consolidated Statement of Income.

During
2003, changes in estimates resulted in reducing the reserve for 2002 restructuring initiatives by $13 million and the reserve for prior years' restructuring initiatives by
$32 million. During 2002, changes in estimates resulted in the reduction of the reserve for 2002 restructuring initiatives by $2 million and the reserve for prior years' restructuring
initiatives by $77 million.

The
implementation of these restructuring initiatives also caused certain related premises and equipment assets to become redundant. The remaining depreciable lives of these assets were
shortened, and accelerated depreciation charges (in addition to normal scheduled depreciation on those assets) were recognized. There were no accelerated depreciation charges recognized in both 2004
and 2003, while an $8 million charge was recognized in 2002.

14.   Income Taxes

|In millions of dollars                                                    |                               | 2004 |       | 2003 |   | 2002  |     
|------------------------------------------------------------------------- | ----------------------------- | ---- | ----- | ---- | - | ----- | ----
|Current                                                                   |                               |      |       |      |   |       |     
|Federal                                                                   |                               | $    | 2,872 |      | $ | 2,384 |     
|Foreign                                                                   |                               |      | 2,853 |      |   | 2,642 |     
|State                                                                     |                               |      | 524   |      |   | 203   |     
|                                                                          |                               |      |       |      |   |       |     
|Total current income taxes                                                |                               |      | 6,249 |      |   | 5,229 |     
|                                                                          |                               |      |       |      |   |       |     
|Deferred                                                                  |                               |      |       |      |   |       |     
|Federal                                                                   |                               |      | 570   |      |   | 266   |     
|Foreign                                                                   |                               |      | 421   |      |   | 294   |     
|State                                                                     |                               |      | 54    |      |   | 38    |     
|                                                                          |                               |      |       |      |   |       |     
|Total deferred income taxes                                               |                               |      | 1,045 |      |   | 598   |     
|                                                                          |                               |      |       |      |   |       |     
|Provision for income tax on income before minority interest(1)            |                               |      | 7,294 |      |   | 5,827 |     
|Income tax expense (benefit) reported in Stockholder's equity related to: |                               |      |       |      |   |       |     
|                                                                          | Foreign currency translation  |      |       | 38   |   |       | (244
|                                                                          | Securities available-for-sale |      |       | 79   |   |       | (28 
|                                                                          | Employee stock plans          |      |       | (33  | ) |       | (16 
|                                                                          | Cash flow hedges              |      |       | (357 | ) |       | (199
|                                                                          |                               |      |       |      |   |       |     
|Income taxes before minority interest                                     |                               | $    | 7,021 |      | $ | 5,340 |     
|                                                                          |                               |      |       |      |   |       |     

---

The
reconciliation of the federal statutory income tax rate to the Company's effective income tax rate applicable to income from continuing operations (before minority interest and the
cumulative effect of accounting changes) for the years ended December 31 was as follows:

|                                           |  | 2004 |    | 2003 |    | 2002 |   
|------------------------------------------ |  | ---- | -- | ---- | -- | ---- | --
|Federal statutory rate                     |  | 35.0 | %  | 35.0 | %  | 35.0 | % 
|State income taxes, net of federal benefit |  | 1.5  | %  | 0.8  | %  | 1.0  | % 
|Foreign income tax rate differential       |  | (3.0 | )% | (4.1 | )% | (2.7 | )%
|Other, net                                 |  | (3.6 | )% | (2.0 | )% | (0.2 | )%
|                                           |  |      |    |      |    |      |   
|Effective income tax rate                  |  | 29.9 | %  | 29.7 | %  | 33.1 | % 
|                                           |  |      |    |      |    |      |   

Deferred
income taxes at December 31 related to the following:

|In millions of dollars                        |  | 2004 |        | 2003 |  
|--------------------------------------------- |  | ---- | ------ | ---- | -
|Deferred tax assets                           |  |      |        |      |  
|Credit loss deduction                         |  | $    | 2,890  |      | $
|Deferred compensation                         |  |      | 240    |      |  
|Employee benefits                             |  |      | 448    |      |  
|Restructuring and settlement reserves         |  |      | 759    |      |  
|Interest-related items                        |  |      | 571    |      |  
|Foreign and state loss carryforwards          |  |      | 16     |      |  
|Other deferred tax assets                     |  |      | 1,410  |      |  
|                                              |  |      |        |      |  
|Gross deferred tax assets                     |  |      | 6,334  |      |  
|Valuation allowance                           |  |      | 16     |      |  
|                                              |  |      |        |      |  
|Deferred tax assets after valuation allowance |  |      | 6,318  |      |  
|                                              |  |      |        |      |  
|Deferred tax liabilities                      |  |      |        |      |  
|Investments                                   |  |      | (1,275 | )    |  
|Unremitted foreign earnings                   |  |      | (940   | )    |  
|Leases                                        |  |      | (2,752 | )    |  
|Fixed assets                                  |  |      | (659   | )    |  
|Intangibles                                   |  |      | (493   | )    |  
|Other deferred tax liabilities                |  |      | (361   | )    |  
|                                              |  |      |        |      |  
|Gross deferred tax liabilities                |  |      | (6,480 | )    |  
|                                              |  |      |        |      |  
|Net deferred tax asset (liability)            |  | $    | (162   | )    | $
|                                              |  |      |        |      |  

Foreign
pretax earnings approximated $10.6 billion in 2004, $8.1 billion in 2003, and $8.4 billion in 2002. As a U.S. corporation, Citicorp and its U.S. subsidiaries
are subject to U.S. taxation currently on all foreign pretax earnings earned by a foreign branch. Pretax earnings of a foreign subsidiary or affiliate are subject to U.S. taxation when effectively
repatriated. The Company provides income taxes on the undistributed earnings of non-U.S. subsidiaries except to the extent that such earnings are indefinitely invested outside the United
States. At December 31, 2004, $8.4 billion of accumulated undistributed earnings of non-U.S. subsidiaries were indefinitely invested. At the existing U.S. federal income tax
rate, additional taxes of $2.2 billion would have to be provided if such earnings were remitted currently. The current year's effect on the income tax expense from continuing operations is
included in the reconciliation of the federal statutory rate to the Company's effective income tax rate.

The
Homeland Investment Act provision of the American Jobs Creation Act of 2004 ("2004 Tax Act") is intended to provide companies with a one time 85% reduction in the U.S. net tax
liability on cash dividends paid by foreign subsidiaries in 2005, to the extent that they exceed a baseline level of dividends paid in prior years. The provisions of the Act are complicated and
companies, including Citicorp, are awaiting clarification of several provisions from the Treasury Department. The Company is still evaluating the provision and the effects it would have on the
financing of the Company's foreign operations. In accordance with FASB Staff Position FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision
within the American Jobs Creation Act of

73

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2004,"
the Company has not recognized any income tax effects of the repatriation provisions of the Act in its 2004 financial statements and will not do so until the above issues are resolved, sometime
in 2005. The reasonably possible amounts that may be repatriated in 2005 that would be subject to the provision of the Act range from $0 to $3.1 billion. The related potential income tax
effects range from a tax benefit of $0 to a tax benefit of $50 million, under current law.

Income
taxes are not provided for on the Company's "savings bank base year bad debt reserves" because under current U.S. tax rules such taxes will become payable only to the extent such
amounts are distributed in excess of limits prescribed by federal law. At December 31, 2004, the amount of the base year reserves totaled approximately $358 million (subject to a tax of
$125 million).

The
2004 net change in the valuation allowance related to deferred tax assets was a decrease of $286 million, primarily relating to a release of $206 million as a result of
changes to the foreign tax credit rules contained in the 2004 Tax Act. The valuation allowance of $16 million at December 31, 2004 relates to state tax loss carryforwards.

15.   Stockholder's Equity

Regulatory Capital

Citicorp is subject to risk-based capital and leverage guidelines issued by the Board of Governors of the Federal Reserve System (FRB), and its U.S.
insured depository institution subsidiaries, including Citibank, N.A., are subject to similar guidelines issued by their respective primary regulators. These guidelines are used to evaluate capital
adequacy and include the required minimums shown in the following table.

The
regulatory agencies are required by law to take specific prompt actions with respect to institutions that do not meet minimum capital standards. As of December 31, 2004 and
2003, all of Citicorp's U.S. insured subsidiary depository institutions were "well capitalized."

At
December 31, 2004, regulatory capital as set forth in guidelines issued by the U.S. federal bank regulators is as follows:

|In millions of dollars |  | Required
Minimum |  | Well
Capitalized
Minimum |     | Citicorp |        | Citibank,
N.A.
|---------------------- |  | ---------------- |  | ------------------------ | --- | -------- | ------ | --------------
|Tier 1 Capital         |  |                  |  |                          |     | $        | 60,113 |               
|Total Capital(1)       |  |                  |  |                          |     |          | 87,118 |               
|Tier 1 Capital Ratio   |  | 4.0%             |  | 6.0%                     |     |          | 8.69%  |               
|Total Capital Ratio(1) |  | 8.0%             |  | 10.0%                    |     |          | 12.59% |               
|Leverage Ratio(2)      |  | 3.0%             |  | 5.0%                     | (3) |          | 6.74%  |               

---

There
are various legal limitations on the extent to which Citicorp's banking subsidiaries may pay dividends to their parents. Citicorp's national and state-chartered bank subsidiaries
can declare dividends to their respective parent companies in 2005, without regulatory approval, of approximately $11.6 billion adjusted by the effect of their net income (loss) for 2005 up to
the date of any such dividend declaration. 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 its bank subsidiaries can directly or through their parent holding company distribute dividends to
Citicorp of approximately $10.6 billion of the available $11.6 billion, adjusted by the effect of their net income (loss) up to the date of any such dividend declaration.

74

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16.   Changes in Equity from Nonowner Sources

Changes
in each component of "Accumulated Other Changes in Equity from Nonowner Sources" for the three-year period ended December 31, 2004 are as follows:

|In millions of dollars                                                         |  | Net Unrealized
Gains on
Investment
Securities |      | Foreign Currency
Translation
Adjustment |   | Cash Flow Hedges |   | Accumulated Other
Changes in Equity
from Nonowner
Sources |      
|------------------------------------------------------------------------------ |  | --------------------------------------------- | ---- | --------------------------------------- | - | ---------------- | - | --------------------------------------------------------- | -----
|Balance, January 1, 2002                                                       |  | $                                             | 219  |                                         | $ | (1,892           | ) | $                                                         | 312  
|Increase in net unrealized gains on investment securities, net of tax          |  |                                               | 345  |                                         |   |                 |   |                                                           |     
|Add: Reclassification adjustment for losses included in net income, net of tax |  |                                               | 250  |                                         |   |                 |   |                                                           |     
|Foreign currency translation adjustment, net of tax                            |  |                                               |     |                                         |   | (1,469           | ) |                                                           |     
|Cash flow hedges, net of tax                                                   |  |                                               |     |                                         |   |                 |   |                                                           | 1,142
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Change                                                                         |  |                                               | 595  |                                         |   | (1,469           | ) |                                                           | 1,142
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2002                                                     |  |                                               | 814  |                                         |   | (3,361           | ) |                                                           | 1,454
|Increase in net unrealized gains on investment securities, net of tax          |  |                                               | 299  |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, net of tax |  |                                               | (165 | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, net of tax                            |  |                                               |     |                                         |   | (873             | ) |                                                           |     
|Cash flow hedges, net of tax                                                   |  |                                               |     |                                         |   |                 |   |                                                           | (575 
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Change                                                                         |  |                                               | 134  |                                         |   | (873             | ) |                                                           | (575 
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2003                                                     |  |                                               | 948  |                                         |   | (4,234           | ) |                                                           | 879  
|Increase in net unrealized gains on investment securities, net of tax          |  |                                               | 198  |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, net of tax |  |                                               | (440 | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, net of tax                            |  |                                               |     |                                         |   | 1,205            |   |                                                           |     
|Cash flow hedges, net of tax                                                   |  |                                               |     |                                         |   |                 |   |                                                           | (755 
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Current period change                                                          |  |                                               | (242 | )                                       |   | 1,205            |   |                                                           | (755 
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2004                                                     |  | $                                             | 706  |                                         | $ | (3,029           | ) | $                                                         | 124  
|                                                                               |  |                                               |      |                                         |   |                  |   |                                                           |      

17.   Employee Benefits and Incentive Plans

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 $196 million, $101 million and $24 million in
2004, 2003, and 2002, respectively. Citicorp's allocated share of the net expense was $110 million, $53 million, and $11 million for 2004, 2003, and 2002, respectively.

The
Company also has various defined benefit pension and termination indemnity plans covering employees outside the United States which resulted in net expense of $159 million,
$137 million and $119 million in 2004, 2003, and 2002, respectively.

At
December 31, 2004, the Citigroup U.S. plans' projected benefit obligations were $10.9 billion, the accumulated benefit obligations were $10.6 billion and plan
assets were $10.4 billion based upon a discount rate of 5.75%, and a rate of return of 8.0%. Projected benefit obligations, accumulated benefit obligations and plan assets for Citicorp's
non-U.S. plans were $3.8 billion, $3.4 billion and $3.6 billion, respectively, at December 31, 2004.

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 $51 million, $70 million and $75 million for 2004,
2003, and 2002, respectively.

In
December 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the "Act") was enacted. The Act established a prescription drug benefit under Medicare
known as "Medicare Part D," and a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The
Company believes that benefits provided to certain participants will be at least actuarially equivalent to Medicare Part D, and accordingly, the Company will be entitled to a subsidy.

The
Company adopted FSP FAS 106-2 retroactive to the beginning of 2004. The expected subsidy reduced the accumulated postretirement benefit obligation (APBO) as of
January 1, 2004 by $58 million, and the net periodic expense for 2004 by $7 million.

Citigroup 401(k)

Under the Citigroup 401(k) plan, eligible employees receive matching contributions of up to 3% of compensation, subject to an annual maximum of $1,500, invested in
the Citigroup common stock fund. Citicorp's allocated share of the pretax expense associated with this plan amounted to approximately $52 million in 2004, $44 million in 2003, and
$38 million in 2002.

Incentive Plans

The Company participates in a number of equity compensation plans sponsored by Citigroup that provide for stock options, restricted/deferred stock and stock
purchase programs to attract, retain and motivate officers and employees, to compensate them for their contributions to the growth and profits of Citigroup, and to encourage employee stock ownership.
All of the plans are administered by the Personnel and Compensation Committee of the Citigroup Board of Directors, which is comprised entirely of independent non-employee directors. At
December 31, 2004, approximately 438 million shares were authorized for grant under Citigroup's stock incentive plans.

75

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Stock Option Programs and Stock Purchase Program

The Company participates in a number of stock option programs sponsored by Citigroup that provide for the granting of stock options in Citigroup common stock to
officers and employees. Options are granted on Citigroup common stock at the market value at the time of grant. Options granted in 2004 and 2003 typically vest 33% each year for three years, with the
first vesting date occurring 17 months after the grant date. The options granted in 2004 and 2003 have a term of six years. Also, the sale of underlying shares acquired through the exercise of
options granted in 2004 and 2003 is restricted for a two-year period. Prior to 2003, options were granted for a period of ten years. Generally, prior to 2003, Citigroup options, including
options granted under Travelers predecessor plans and options granted since the date of the merger of Citicorp and Travelers Group Inc., vest at a rate of 20% per year, with the first vesting
date generally occurring 12 to 18 months following the grant date. Generally, 50% of the options granted under Citicorp predecessor plans prior to the merger were exercisable beginning on the
third anniversary and 50% beginning on the fourth anniversary of the date of grant. Options granted under Associates predecessor plans vested in 2001 at the time of the merger with Citigroup. Certain
options, mostly granted prior to January 1, 2003, permit an employee exercising an option under certain conditions to be granted new options (reload options) in an amount equal to the number of
common shares used to satisfy the exercise price and the withholding taxes due upon exercise. The reload options are granted for the remaining term of the related original option and vest after six
months.

To
further encourage employee stock ownership, the Company's eligible employees participate in the Citigroup Ownership Program and the Citibuilder stock option program. Options granted
under the Citigroup Ownership program in 2002 vest over a five-year period, whereas options granted under the CitiBuilder program vest after five years. These options do not have a reload
feature. Beginning in 2003, new options are no longer being granted under these plans.

The
Company redesigned its equity incentive programs for the 2004 compensation year. In January 2005, equity incentive awards were granted to eligible employees in the form of
restricted or deferred stock under the Capital Accumulation Program (CAP), and stock options are only granted to CAP participants who elect to receive them. The stock options carry the same vesting
period as the restricted or deferred stock awards, have a six-year term and an exercise price equal to 100% of fair market value on the grant date.

The
Citigroup 2003 Stock Purchase Program, which is administered under the Citigroup 2000 Stock Purchase Plan, as amended, allows eligible employees of Citigroup to enter into fixed
subscription agreements to purchase shares in the future at the lesser of the offering price on the first day of the offering period or the closing price at the end of the offering period. For the
June 15, 2003 offering only, subject to certain limits, enrolled employees are permitted to make one purchase prior to the expiration date. The purchase price of the shares is paid with
accumulated payroll deductions plus interest. Shares of Citigroup's common stock delivered under the Citigroup 2003 Stock Purchase Program may be sourced from authorized and unissued or treasury
shares. The offering under the Citigroup 2003 Stock Purchase Program was made on June 15, 2003. In June 2004, an additional offering was made to new employees. The program ends in
July 2005. The original offering under the Citigroup Stock Purchase Program was in August 2000. Under this offering, eligible employees of Citigroup were able to enter into fixed
subscription agreements to purchase shares in the future at the market value on the date of the agreements. In 2001, three additional offerings were made to new employees in April, August, and
November 2001. In March 2002, an additional offering was made to new employees.

Stock Award Programs

Citicorp, primarily through its Capital Accumulation Program (CAP), issues shares of Citigroup common stock in the form of restricted or deferred stock to
participating Citicorp officers and employees. The restricted or deferred stock generally vests after a two- or three-year vesting period, during which time the stock cannot be
sold or transferred by the participant, and is subject to total or partial cancellation if the participant's employment is terminated. CAP participants may elect to receive part of their awards in CAP
stock and part in stock options. Unearned compensation expense associated with the stock grants represents the market value of Citigroup common stock at the date of grant and is recognized as a charge
to income ratably over the vesting period. Recipients of deferred stock awards receive dividend equivalents and cannot vote.

In
2003, special equity awards were issued to certain employees in the Global Corporate and Investment Bank and Citigroup International businesses. The awards are not discounted and vest
over a three-year term beginning on July 12, 2003 with one-sixth of the award vesting every six months. Until the shares vest, a recipient may not transfer the shares.
After they vest, the shares become freely transferable (subject to the stock ownership commitment). From the date of award, the recipient can direct the vote on the shares and receive regular
dividends.

During
2004 and 2003, Citigroup granted shares under the Citigroup Ownership Program (COP) to eligible employees. This program replaces the CitiBuilder and Citigroup Ownership stock
option programs. Employees are issued either restricted or deferred shares of Citigroup common stock which vest after three years, during which time the stock cannot be sold or transferred by the
participant. Unearned compensation expense associated with the stock grants represents the market value of Citigroup common stock at the date of grant and is recognized as a charge to income ratably
over the vesting period.

The
after-tax compensation cost charged to earnings for stock awards was $247 million in 2004, $158 million in 2003, and $84 million in 2002.

Pro Forma Impact of SFAS 123

Prior to January 1, 2003, Citicorp applied APB 25 in accounting for its stock-based compensation plans. Under APB 25, there is generally no charge to
earnings for employee stock option awards because the options granted under these plans have an exercise price equal to the market value of the underlying common stock on the grant date.
Alternatively, SFAS 123 allows companies to recognize compensation expense over the related service period based on the grant-date fair value of the stock award. Refer to
Note 1 for a further description of these accounting standards and a presentation of the effect on net income had the Company applied SFAS 123 in accounting for all of the Company's
stock option plans. The pro forma adjustments in that table relate to stock options granted from 1995 through 2002, for which a fair value on the date of grant was determined using a Black-Scholes
option pricing model. During the 2004 first quarter, the Company changed its option valuation from the Black-Scholes model to the binomial method, which did not have a material impact on the Company's
Consolidated Financial Statements. In accordance with SFAS 123, no effect has been given to options granted prior to 1995. The fair values of stock-based awards are based on assumptions that
were determined at the grant date.

76

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18.   Derivatives and Other Activities

Citicorp
enters into derivative and foreign exchange futures, forwards, options and swaps, which enable customers to transfer, modify or reduce their interest rate, foreign exchange and other market
risks, and also trades these products for its own account. In addition, Citicorp uses derivatives and other instruments, primarily interest rate products, as an end-user in connection with
its risk management activities. Derivatives are used to manage interest rate risk relating to specific groups of on-balance sheet assets and liabilities, including investments, corporate,
commercial and consumer loans, deposit liabilities, long-term debt and other interest-sensitive assets and liabilities, as well as credit card securitizations, redemptions and sales. In
addition, foreign exchange contracts are used to hedge non-U.S. dollar denominated debt, net capital exposures and foreign exchange transactions.

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 that 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 that, if excluded, are recognized in current earnings.

The
following table summarizes certain information related to the Company's hedging activities for the years ended December 31, 2004, 2003, and 2002:

|In millions of dollars |                                                                                                                                      | 2004 |   | 2003(1) |   | 2002(1) |       
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | ---- | - | ------- | - | ------- | ------
|Fair value hedges      |                                                                                                                                      |      |   |         |   |         |       
|                       | Hedge ineffectiveness recognized in earnings                                                                                         |      | $ | (128    | ) | $       | 12    
|                       | Net gain (loss) excluded from assessment of effectiveness(2)                                                                         |      |   | 530     |   |         | (75   
|Cash flow hedges       |                                                                                                                                      |      |   |         |   |         |       
|                       | Hedge ineffectiveness recognized in earnings                                                                                         |      |   | 12      |   |         | (18   
|                       | Net gain excluded from assessment of effectiveness(2)                                                                                |      |   |        |   |         | 2     
|Net investment hedges  |                                                                                                                                      |      |   |         |   |         |       
|                       | Net gain (loss) included in foreign currency translation adjustment within accumulated other changes in equity from nonowner sources |      | $ | (1,084  | ) | $       | (2,115
|                       |                                                                                                                                      |      |   |         |   |         |       

---

For
cash flow hedges, any changes in the fair value of the end-user derivative remain in accumulated other changes in equity from nonowner sources on the Consolidated Balance
Sheet and are generally included in earnings of future periods when earnings are also affected by the variability of the hedged cash flow. The net gains associated with cash flow hedges expected to be
reclassified from accumulated other changes in equity from nonowner sources within 12 months of December 31, 2004 are $313 million.

The
accumulated other changes in equity from nonowner sources from cash flow hedges for 2004, 2003, and 2002 can be summarized as follows (after-tax):

|In millions of dollars                |  | 2004 |      | 2003 |   | 2002  |  
|------------------------------------- |  | ---- | ---- | ---- | - | ----- | -
|Beginning balance                     |  | $    | 879  |      | $ | 1,454 |  
|Net gain (loss) from cash flow hedges |  |      | (417 | )    |   | 159   |  
|Net amounts reclassified to earnings  |  |      | (338 | )    |   | (734  | )
|                                      |  |      |      |      |   |       |  
|Ending balance                        |  | $    | 124  |      | $ | 879   |  
|                                      |  |      |      |      |   |       |  

The
Company enters into various types of derivative transactions in the course of its trading and non-trading activities. Futures and forward contracts are commitments to buy
or sell at a future date a financial instrument, commodity or currency at a contracted price and may be settled in cash or through delivery. Swap contracts are commitments to settle in cash at a
future date or dates which may range from a few days to a number of years, based on differentials between specified financial indices, as applied to a notional principal amount. Option contracts give
the purchaser, for a fee, the right, but not the obligation, to buy or sell within a limited time, a financial instrument or currency at a contracted price that may also be settled in cash, based on
differentials between specified indices.

Citicorp
also sells various financial instruments that have not been purchased (short sales). In order to sell securities short, the securities are borrowed or received as collateral in
conjunction with short-term financing agreements and, at a later date, must be delivered (i.e., replaced) with like or substantially the same financial instruments or commodities to the
parties from which they were originally borrowed.

Derivatives
and short sales may expose Citicorp to market risk or credit risk in excess of the amounts recorded on the Consolidated Balance Sheet. Market risk on a derivative, short sale
or foreign exchange product is the exposure created by potential fluctuations in interest rates, foreign exchange rates and other values, and is a function of the type of product, the volume of
transactions, the tenor and terms of the agreement, and the underlying volatility. Credit risk is the exposure to loss in the event of nonperformance by the other party to the transaction where the
value of collateral held, if any, was not adequate to cover such losses. The recognition in earnings of unrealized gains on these transactions is subject to management's assessment as to
collectibility. Liquidity risk is the potential exposure that arises when the size of the derivative position may not be able to be rapidly adjusted in times of high volatility and financial stress at
a reasonable cost.

77

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19.   Concentrations of Credit Risk

Concentrations
of credit risk exist when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is material in relation to
Citicorp's total credit exposure. Although Citicorp's portfolio of financial instruments is broadly diversified along industry, product, and geographic lines, material transactions are completed with
other financial institutions, particularly in the securities trading, derivatives, and foreign exchange businesses.

In
connection with the Company's efforts to maintain a diversified portfolio, the Company limits its exposure to any one geographic region, country or individual creditor and monitors
this exposure on a continuous basis. At December 31, 2004, Citicorp's most significant concentration of credit risk was with the U.S. Government and its agencies. The Company's exposure, which
primarily results from trading assets and investment securities positions in instruments issued by the U.S. Government and its agencies, including its sponsored agencies, amounted to
$37.5 billion and $48.6 billion at December 31, 2004 and 2003, respectively. After the U.S. Government, the next largest exposure the Company has is to the Mexican Government and
its agencies, which are rated investment grade by both Moody's and S&P. The Company's exposure amounted to $23.8 billion and $21.9 billion at December 31, 2004 and 2003,
respectively, and is composed of investment securities, loans, and trading assets.

20.   Fair Value of Financial Instruments

Estimated Fair Value of Financial Instruments

The table on the following page presents the carrying value and fair value of Citicorp's financial instruments, as defined in accordance with applicable
requirements. Accordingly, as required, the disclosures exclude leases, affiliate investments, and pension and benefit obligations. Also as required, the disclosures exclude the effect of taxes, any
premium or discount that could result from offering for sale at one time the entire holdings of a particular instrument, excess fair value associated with deposits with no fixed maturity and other
expenses that would be incurred in a market transaction. In addition, the table excludes the values of nonfinancial assets and liabilities, as well as a wide range of franchise, relationship, and
intangible values, which are integral to a full assessment of Citicorp's financial position and the value of its net assets.

The
fair value represents management's best estimates based on a range of methodologies and assumptions. The carrying value of short-term financial instruments, as well as
receivables and payables arising in the ordinary course of business, approximates fair value because of the relatively short period of time between their origination and expected realization. Quoted
market prices are used for most investments and for both trading and end-user derivatives, as well as for liabilities, such as long-term debt, with quoted prices. For
performing loans, contractual cash flows are discounted at quoted secondary market rates or estimated market rates if available. Otherwise, sales of comparable loan portfolios or current market
origination rates for loans with similar terms and risk characteristics are used. For loans with doubt as to collectibility, expected cash flows are discounted using an appropriate rate considering
the time of collection and the premium for the uncertainty of the flows. The value of collateral is also considered. For liabilities such as long-term debt without quoted market prices,
market borrowing rates of interest are used to discount contractual cash flows.

|                               |  | 2004 |       | 2003
|------------------------------ |  | ---- | ----- | ----
|
|Assets                         |  |      |       |     
|Investments                    |  | $    | 147.6 |     
|Trading account assets         |  |      | 102.7 |     
|Loans(1)                       |  |      | 526.3 |     
|Other financial assets(2)      |  |      | 96.7  |     
|                               |  |      |       |     
|Liabilities                    |  |      |       |     
|Deposits                       |  |      | 566.1 |     
|Trading account liabilities    |  |      | 56.9  |     
|Long-term debt                 |  |      | 116.3 |     
|Other financial liabilities(3) |  |      | 100.4 |     
|                               |  |      |       |     

---

Fair
values vary from period to period based on changes in a wide range of factors, including interest rates, credit quality, and market perceptions of value, and as existing assets and
liabilities run off and new transactions are entered into.

The
estimated fair values of loans reflect changes in credit status since the loans were made, changes in interest rates in the case of fixed-rate loans, and premium values
at origination of certain loans. The estimated fair values of Citicorp's loans, in the aggregate, exceeded in carrying values (reduced by the allowance for credit losses) by $24.0 billion in
2004 and $19.7 billion in 2003. Within these totals, estimated fair values exceeded carrying values for consumer loans net of the allowance by $16.5 billion, an increase of
$0.2 billion from 2003, and for corporate loans net of the allowance by $7.5 billion, which was an increase of $4.1 billion from 2003. The excess of the estimated fair value of
loans over their carrying value reflects the decline in market interest rates since many of the loans were issued.

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21.   Pledged Assets, Collateral, Commitments and Guarantees

Pledged Assets

At December 31, 2004 and 2003, the approximate market values of securities sold under agreements to repurchase and other assets pledged, excluding the
impact of FIN 39 and FIN 41, were as follows:

|In millions of dollars                                                        |  | 2004 |         | 2003
|----------------------------------------------------------------------------- |  | ---- | ------- | ----
|For securities sold under agreements to repurchase                            |  | $    | 25,492  |     
|As collateral for securities borrowed of approximately equivalent value       |  |      | 11,893  |     
|As collateral on bank loans                                                   |  |      | 41,567  |     
|To clearing organizations or segregated under securities laws and regulations |  |      | 9,198   |     
|For securities loaned                                                         |  |      | 189     |     
|Other                                                                         |  |      | 48,410  |     
|                                                                              |  |      |         |     
|Total                                                                         |  | $    | 136,749 |     
|                                                                              |  |      |         |     

Included
in the Other line in the table above is $10.7 billion and $13.8 billion at December 31, 2004 and 2003, respectively, of consumer loans that were pledged as
collateral in financing transactions.

Collateral

At December 31, 2004 and 2003, the approximate market value of collateral received by the Company that may be sold or repledged by the Company, excluding
amounts netted in accordance with FIN 39 and FIN 41, was $2.227 billion and $785 million, respectively. This collateral was received in connection with resale agreements, securities
borrowings and loans, derivative transactions, and margined broker loans.

At
December 31, 2004 and 2003, $1.794 billion and $483 million, respectively, of the collateral received by the Company had been sold or repledged in connection with
repurchase agreements; securities sold, not yet purchased; securities borrowings and loans; pledges to clearing organizations; segregation requirements under securities laws and regulations;
derivative transactions, and bank loans.

In
addition, at December 31, 2004 and 2003, the Company had pledged $121 billion and $103 billion, respectively, of collateral that may not be sold or repledged by
the secured parties.

Lease Commitments

Rental expense (principally for offices and computer equipment) was $1.3 billion, $1.2 billion, and $1.1 billion for the years ended
December 31, 2004, 2003, and 2002, respectively.

Future
minimum annual rentals under noncancelable leases, net of sublease income, are as follows:

|In millions of dollars |  |  
|---------------------- |  | -
|2005                   |  | $
|2006                   |  |  
|2007                   |  |  
|2008                   |  |  
|2009                   |  |  
|Thereafter             |  |  
|                       |  |  
|Total                  |  | $
|                       |  |  

Loan Commitments

|In millions of dollars at year end                                              |  | 2004 |           | 2003
|------------------------------------------------------------------------------- |  | ---- | --------- | ----
|One- to four-family residential mortgages                                       |  | $    | 4,558     |     
|Revolving open-end loans secured by one- to four- family residential properties |  |      | 15,705    |     
|Commercial real estate, construction and land development                       |  |      | 1,871     |     
|Credit card lines(1)                                                            |  |      | 776,281   |     
|Commercial and other consumer loan commitments(2)                               |  |      | 269,579   |     
|                                                                                |  |      |           |     
|Total                                                                           |  | $    | 1,067,994 |     
|                                                                                |  |      |           |     

---

The
majority of unused commitments are contingent upon customers maintaining specific credit standards. Commercial commitments generally have floating interest rates and fixed expiration
dates and may require payment of fees. Such fees (net of certain direct costs) are deferred and, upon exercise of the commitment, amortized over the life of the loan or, if exercise is deemed remote,
amortized over the commitment period. The table does not include unfunded commercial letters of credit issued on behalf of customers and collateralized by the underlying shipment of goods which
totaled $5.8 billion and $4.4 billion at December 31, 2004 and 2003, respectively.

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 following table summarizes at December 31, 2004 and 2003 all of the Company's guarantees and indemnifications, where Management believes 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.

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

|                                                      |  | Maximum Potential amount of Future Payments |       | 
|----------------------------------------------------- |  | ------------------------------------------- | ----- | 
|
|2004:                                                 |  |                                             |       | 
|Financial standby letters of credit                   |  | $                                           | 34.7  | 
|Performance guarantees                                |  |                                             | 5.0   | 
|Derivative instruments                                |  |                                             | 17.4  | 
|Guarantees of collection of contractual cash flows(1) |  |                                             |      | 
|Loans sold with recourse                              |  |                                             |      | 
|Securities lending indemnifications(1)                |  |                                             | 60.5  | 
|Credit card merchant processing(1)                    |  |                                             | 29.7  | 
|Custody indemnifications(1)                           |  |                                             |      | 
|                                                      |  |                                             |       | 
|Total                                                 |  | $                                           | 147.3 | 
|                                                      |  |                                             |       | 
|2003:                                                 |  |                                             |       | 
|Financial standby letters of credit                   |  | $                                           | 18.3  | 
|Performance guarantees                                |  |                                             | 4.9   | 
|Derivative instruments                                |  |                                             | 20.7  | 
|Guarantees of collection of contractual cash flows(1) |  |                                             |      | 
|Loans sold with recourse                              |  |                                             |      | 
|Securities lending indemnifications(1)                |  |                                             | 55.5  | 
|Credit card merchant processing(1)                    |  |                                             | 22.6  | 
|Custody indemnifications(1)                           |  |                                             |      | 
|                                                      |  |                                             |       | 
|Total                                                 |  | $                                           | 122.0 | 
|                                                      |  |                                             |       | 

---

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 securities 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
December 31, 2004 and 2003, the Company's maximum potential amount of future payments under these guarantees was approximately $405.7 billion and $252.7 billion,
respectively. For this purpose, the maximum potential amount of future payments is considered to be the notional amounts of letters of credit, guarantees, written credit default swaps, written total
return swaps, indemnifications, and recourse provisions of loans sold with recourse; and the fair values of foreign exchange options and other written put options, warrants, caps and floors.

Citicorp's
primary credit card business is the issuance of credit cards to individuals. The Company also provides processing services to various merchants, processing credit card
transactions on their behalf and managing the merchant's cash flow related to their credit card activity. In connection with these services, a contingent liability arises in the event of a billing
dispute between the merchant and a cardholder that is ultimately resolved in the cardholder's favor and generally extends between three and six months after the date the transaction is processed or
the receipt of the product or service, depending on industry practice or statutory requirements. In this situation, the transaction is "charged back" to the merchant and the disputed amount is
credited or otherwise refunded to the cardholder. If the Company is unable to collect this amount from the merchant, it bears the loss for the amount of the refund paid to the cardholder. The risk of
loss is mitigated as the cash flows between the Company and the merchant are settled on a net basis 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 December 31, 2004 and 2003, respectively, the Company held
as collateral approximately $6 million and $26 million, respectively, of merchant escrow deposits and also had $68 million and $109 million, respectively, payable to
merchants, which the Company has the right to set off against amounts due from the individual merchants.

The
Company's maximum potential liability for this contingent merchant processing liability is estimated to be the total volume of credit card transactions that meet the associations'
requirements to be

80

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valid
chargeback transactions at any given time. At December 31, 2004 and 2003, this maximum potential exposure was estimated to be $29.7 billion and $22.6 billion, respectively.
However, the Company believes that the maximum exposure is not representative of the actual potential loss exposure, based on the Company's historical experience. In most cases, this contingent
liability is unlikely to arise, as most products and services are delivered when purchased and amounts are refunded when items are returned to merchants. The Company assesses the probability and
amount of its liability related to merchant processing based on the extent and nature of unresolved chargebacks and its historical loss experience. At December 31, 2004, the estimated losses
incurred and the carrying amount of the Company's obligations related to merchant processing activities are immaterial.

In
addition, the Company, through its credit card business, provides various cardholder protection programs on several of its card products, including programs that provide insurance
coverage for rental cars, coverage for certain losses associated with purchased products, price protection for certain purchases and protection for lost luggage. These guarantees are not included in
the table above since the total outstanding amount of the guarantees and the Company's maximum exposure to loss cannot be quantified. The protection is limited to certain types of purchases and
certain types of losses, and it is not possible to quantify the purchases that would qualify for these benefits at any given time. Actual losses related to these programs were not material during 2004
and 2003. The Company assesses the probability and amount of its potential liability related to these programs based on the extent and nature of its historical loss experience. At December 31,
2004 and 2003, the estimated losses incurred and the carrying value of the Company's obligations related to these programs were 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 December 31, 2004 or 2003, related to these indemnifications and they are not included in the table above.

In
addition, the Company is a member of or shareholder in hundreds of value transfer networks (VTNs) (payment, clearing and settlement systems as well as securities exchanges) around the
world. As a condition of membership, many of these VTNs require that members stand ready to backstop the net effect on the VTNs of a member's default on its obligations. The Company's potential
obligations as a shareholder or member of VTN associations are excluded from the scope of FIN 45, since the shareholders and members represent subordinated classes of investors in the VTNs.
Accordingly, the Company's participation in VTNs is not reported in the table above and there are no amounts reflected on the Consolidated Balance Sheet as of December 31, 2004 or 2003 for
potential obligations that could arise from the Company's involvement with VTN associations.

At
December 31, 2004 and 2003, the carrying amounts of the liabilities related to the guarantees and indemnifications included in the table above amounted to approximately
$13.9 billion and $12.6 billion. The carrying value of derivative instruments is included in either trading liabilities or other liabilities, depending upon whether the derivative was
entered into for trading or non-trading purposes. The carrying value of financial and performance guarantees is included in other liabilities. The carrying value of the guarantees of
contractual cash flows is 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 December 31, 2004 and 2003, other liabilities includes an allowance for credit losses of $600 million for both years 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 $43.3 billion and
$38.3 billion at December 31, 2004 and 2003, respectively. Securities and other marketable assets held as collateral amounted to $31.6 billion and $29.6 billion and letters
of credit in favor of the Company held as collateral amounted to $560 million and $1.5 billion at December 31, 2004 and 2003, respectively. Other property may also be available to
the Company to cover losses under certain guarantees and indemnifications; however, the value of such property has not been determined.

Loans Sold with Credit Enhancements

|In billions of dollars at year end                          |  | 2004 |      | 2003 |   | Form of Credit Enhancement
|----------------------------------------------------------- |  | ---- | ---- | ---- | - | --------------------------
|Residential mortgages and other loans sold with recourse(1) |  | $    | 6.0  |      | $ | 6.2                       
|GNMA sales/servicing agreements(2)                          |  |      | 34.2 |      |   | 21.0                      
|Securitized credit card receivables                         |  |      | 82.3 |      |   | 74.8                      

---

Citicorp
and its subsidiaries are obligated under various credit enhancements related to certain sales of loans or sales of participations in pools of loans, as summarized above.

Net
revenue on securitized credit card receivables is collected over the life of each sale transaction. The net revenue is based upon the sum of finance charges and fees received from
cardholders and interchange revenue earned on cardholder transactions, less the sum of the yield paid to investors, credit losses, transaction costs, and a contractual servicing fee, which is also
retained by certain Citicorp subsidiaries as servicers. As specified in certain of the sale agreements, the net revenue

81

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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
amount contained in these accounts is included in other assets and was $156 million at December 31, 2004 and $90 million at December 31, 2003. Net revenue from securitized
credit card receivables included in other revenue was $3.8 billion, $3.3 billion, and $2.7 billion for the years ended December 31, 2004, 2003, and 2002, respectively.

Financial Guarantees

Financial guarantees are used in various transactions to enhance the credit standing of Citicorp customers. They represent irrevocable assurances, subject to the
satisfaction of certain conditions, that Citicorp will make payment in the event that the customer fails to fulfill its obligations to third parties.

Citicorp
issues financial standby letters of credit, which are obligations to pay a third-party beneficiary when a customer fails to repay an outstanding loan or debt instrument, such as
assuring payments by a foreign reinsurer to a U.S. insurer, to act as a substitute for an escrow account, to provide a payment mechanism for a customer's third-party obligations, and to assure payment
of specified financial obligations of a customer. Fees are recognized ratably over the term of the standby letter of credit. The following table summarizes financial standby letters of credit issued
by Citicorp. The table does not include securities lending indemnifications issued to customers, which are fully collateralized and totaled $60.5 billion at December 31, 2004 and
$55.5 billion at December 31, 2003, and performance standby letters of credit.

|                                          |  |   |      |  |   | 2004 |  | 2003
|----------------------------------------- |  | - | ---- |  | - | ---- |  | ----
|
|Insurance, surety                         |  | $ | 10.1 |  | $ | 2.2  |  | $   
|Options, purchased securities, and escrow |  |   | 0.1  |  |   |     |  |     
|Clean letters of credit                   |  |   | 3.9  |  |   | 2.3  |  |     
|Other debt related                        |  |   | 16.0 |  |   | 5.3  |  |     
|                                          |  |   |      |  |   |      |  |     
|Total(1)                                  |  | $ | 30.1 |  | $ | 9.8  |  | $   
|                                          |  |   |      |  |   |      |  |     

---

22.   Contingencies

As described in the "Legal Proceedings" discussion on page 100, 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, Citigroup 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.

82

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23.   Stockholder's Equity of Citibank, N.A.

Changes in Stockholder's Equity

|In millions of dollars                                                                          |  | 2004 |        | 2003 |   | 2002   |  
|----------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|Balance at beginning of year                                                                    |  | $    | 45,953 |      | $ | 41,309 |  
|Net income                                                                                      |  |      | 9,413  |      |   | 7,919  |  
|Dividends paid                                                                                  |  |      | (2,993 | )    |   | (6,812 | )
|Contributions from parent company                                                               |  |      | 754    |      |   | 1,518  |  
|Distribution to parent company                                                                  |  |      |       |      |   |       |  
|Employee benefit plans                                                                          |  |      | 336    |      |   | 220    |  
|Net change in unrealized gains (losses) on investment securities available-for-sale, net of tax |  |      | 147    |      |   | (207   | )
|Net change in foreign currency translation adjustment, net of tax                               |  |      | 1,148  |      |   | 61     |  
|Net change for cash flow hedges, net of tax                                                     |  |      | (668   | )    |   | (427   | )
|Preferred stock                                                                                 |  |      |       |      |   |       |  
|Other                                                                                           |  |      | 51     |      |   | 2,372  |  
|                                                                                                |  |      |        |      |   |        |  
|Balance at end of year                                                                          |  | $    | 54,141 |      | $ | 45,953 |  
|                                                                                                |  |      |        |      |   |        |  

83

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24.   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 December 31, 2004 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 December 31, 2004, this requirement was exceeded by approximately $76.5 billion.

Condensed Consolidating Statement of Income

|                                                                                           |  | Year Ended December 31, 2003
|------------------------------------------------------------------------------------------ |  | ----------------------------
|
|Revenue                                                                                    |  |                             
|Dividends from subsidiary banks and bank holding companies                                 |  | $                           
|Interest from subsidiaries                                                                 |  |                             
|Interest on loans, including feesthird party                                              |  |                             
|Interest on loans, including feesintercompany                                             |  |                             
|Other interest revenue                                                                     |  |                             
|Fees, commissions and other revenuethird party                                            |  |                             
|Fees, commissions and other revenueintercompany                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Expense                                                                                    |  |                             
|Interest on other borrowed fundsthird party                                               |  |                             
|Interest on other borrowed fundsintercompany                                              |  |                             
|Interest and fees paid to subsidiaries                                                     |  |                             
|Interest on long-term debtthird party                                                     |  |                             
|Interest on long-term debtintercompany                                                    |  |                             
|Interest on deposits                                                                       |  |                             
|Benefits, claims and credit losses                                                         |  |                             
|Other expensethird party                                                                  |  |                             
|Other expenseintercompany                                                                 |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                             
|Income tax (benefit)                                                                       |  |                             
|Minority interest, net of income taxes                                                     |  |                             
|Equity in undistributed income of subsidiaries                                             |  |                             
|                                                                                           |  |                             
|Net income                                                                                 |  | $                           
|                                                                                           |  |                             

---

84

---



Condensed Consolidating Statement of Income

|                                                                                           |  | Year Ended December 31, 2003
|------------------------------------------------------------------------------------------ |  | ----------------------------
|
|Revenue                                                                                    |  |                             
|Dividends from subsidiary banks and bank holding companies                                 |  | $                           
|Interest from subsidiaries                                                                 |  |                             
|Interest on loans, including feesthird party                                              |  |                             
|Interest on loans, including feesintercompany                                             |  |                             
|Other interest revenue                                                                     |  |                             
|Fees, commissions and other revenuethird party                                            |  |                             
|Fees, commissions and other revenueintercompany                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Expense                                                                                    |  |                             
|Interest on other borrowed fundsthird party                                               |  |                             
|Interest on other borrowed fundsintercompany                                              |  |                             
|Interest and fees paid to subsidiaries                                                     |  |                             
|Interest on long-term debtthird party                                                     |  |                             
|Interest on long-term debtintercompany                                                    |  |                             
|Interest on deposits                                                                       |  |                             
|Benefits, claims and credit losses                                                         |  |                             
|Other expensethird party                                                                  |  |                             
|Other expenseintercompany                                                                 |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                             
|Income tax (benefit)                                                                       |  |                             
|Minority interest, net of income taxes                                                     |  |                             
|Equity in undistributed income of subsidiaries                                             |  |                             
|                                                                                           |  |                             
|Net income                                                                                 |  | $                           
|                                                                                           |  |                             

---

85

---



Condensed Consolidating Statement of Income

|                                                                                           |  | Year Ended December 31, 2002
|------------------------------------------------------------------------------------------ |  | ----------------------------
|
|Revenue                                                                                    |  |                             
|Dividends from subsidiary banks and bank holding companies                                 |  | $                           
|Interest from subsidiaries                                                                 |  |                             
|Interest on loans, including feesthird party                                              |  |                             
|Interest on loans, including feesintercompany                                             |  |                             
|Other interest revenue                                                                     |  |                             
|Fees, commissions and other revenuethird party                                            |  |                             
|Fees, commissions and other revenueintercompany                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Expense                                                                                    |  |                             
|Interest on other borrowed fundsthird party                                               |  |                             
|Interest on other borrowed fundsintercompany                                              |  |                             
|Interest and fees paid to subsidiaries                                                     |  |                             
|Interest on long-term debthird party                                                      |  |                             
|Interest on long-term debtintercompany                                                    |  |                             
|Interest on deposits                                                                       |  |                             
|Benefits, claims and credit losses                                                         |  |                             
|Other expensethird party                                                                  |  |                             
|Other expenseintercompany                                                                 |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|                                                                                           |  |                             
|Income before taxes, minority interest, and equity in undistributed income of subsidiaries |  |                             
|Income tax (benefit)                                                                       |  |                             
|Minority interest, net of income taxes                                                     |  |                             
|Equity in undistributed income of subsidiaries                                             |  |                             
|                                                                                           |  |                             
|Net income                                                                                 |  | $                           
|                                                                                           |  |                             

---

86

---



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
|                                                  |  |                   |        

---

87

---



Condensed Consolidating Balance Sheet

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

---

88

---



Condensed Consolidating Statements of Cash Flows

|                                                                          |                     | Year Ended December 31, 2004 |       
|------------------------------------------------------------------------- | ------------------- | ---------------------------- | ------
|
|Net cash provided by operating activities                                 |                     | $                            | 2,422 
|                                                                          |                     |                              |       
|Cash flows from investing activities                                      |                     |                              |       
|Investmentsavailable-for-sale and short-term and other                   |                     |                              |       
|                                                                          | Purchases           |                              |       
|                                                                          | Proceeds from sales |                              |       
|                                                                          | Maturities          |                              |       
|Changes in investments and advances  intercompany                        |                     |                              | 2,295 
|Net increase in loans                                                     |                     |                              |      
|Proceeds from sales of loans                                              |                     |                              |      
|Business acquisitions                                                     |                     |                              |      
|Other investing activities                                                |                     |                              |      
|                                                                          |                     |                              |       
|Net cash provided by (used in) investing activities                       |                     |                              | 2,328 
|                                                                          |                     |                              |       
|Cash flows from financing activities                                      |                     |                              |       
|Net increase in deposits                                                  |                     |                              |      
|Net change in purchased funds and other borrowingsthird party            |                     |                              | (1,463
|Net change in purchased funds, other borrowings and advancesintercompany |                     |                              | (892  
|Proceeds from issuance of long-term debtthird party                      |                     |                              | 2,230 
|Proceeds from issuance of long-term debtIntercompany                     |                     |                              |      
|Dividends paid                                                            |                     |                              | (4,630
|                                                                          |                     |                              |       
|Net cash (used in) provided by financing activities                       |                     |                              | (4,755
|                                                                          |                     |                              |       
|Effect of exchange rate changes on cash and due from banks                |                     |                              |      
|                                                                          |                     |                              |       
|Net (decrease) increase in cash and due from banks                        |                     |                              | (5    
|                                                                          |                     |                              |       
|Cash and due from banks at beginning of year                              |                     |                              | 12    
|Cash and due from banks at end of year                                    |                     | $                            | 7     
|                                                                          |                     |                              |       
|Supplemental disclosure of cash flow information                          |                     |                              |       
|Cash paid during the year for:                                            |                     |                              |       
|Interest                                                                  |                     | $                            | 1,808 
|Income taxes                                                              |                     |                              | 2,453 
|Non-cash investing activities:                                            |                     |                              |       
|Transfers to repossessed assets                                           |                     |                              |      
|Capital contributions to subsidiaries                                     |                     |                              | 430   
|                                                                          |                     |                              |       

89

---



Condensed Consolidating Statements of Cash Flows

|                                                                            |                     | Year Ended December 31, 2003 |       
|--------------------------------------------------------------------------- | ------------------- | ---------------------------- | ------
|
|Net cash provided by operating activities                                   |                     | $                            | 3,181 
|                                                                            |                     |                              |       
|Cash flows from investing activities                                        |                     |                              |       
|Investments  available-for-sale and short-term and other                   |                     |                              |       
|                                                                            | Purchases           |                              |       
|                                                                            | Proceeds from sales |                              |       
|                                                                            | Maturities          |                              |       
|Changes in investments and advances  intercompany                          |                     |                              | (8,121
|Net increase in loans                                                       |                     |                              |      
|Proceeds from sales of loans                                                |                     |                              |      
|Business acquisitions                                                       |                     |                              |      
|Other investing activities                                                  |                     |                              |      
|                                                                            |                     |                              |       
|Net cash used in investing activities                                       |                     |                              | (7,850
|                                                                            |                     |                              |       
|Cash flows from financing activities                                        |                     |                              |       
|Net increase in deposits                                                    |                     |                              |      
|Net change in purchased funds and other borrowings  third party            |                     |                              | (1,813
|Net change in purchased funds, other borrowings and advances  intercompany |                     |                              | (1,490
|Proceeds from (repayments of) long-term debtthird party                    |                     |                              | 12,172
|Proceeds from issuance of long-term debtintercompany                       |                     |                              |      
|Dividends paid                                                              |                     |                              | (4,210
|Contributions from parent company                                           |                     |                              |      
|                                                                            |                     |                              |       
|Net cash provided by (used in) financing activities                         |                     |                              | 4,659 
|                                                                            |                     |                              |       
|Effect of exchange rate changes on cash and due from banks                  |                     |                              |      
|                                                                            |                     |                              |       
|Net (decrease) increase in cash and due from banks                          |                     |                              | (10   
|Cash and due from banks at beginning of year                                |                     |                              | 22    
|                                                                            |                     |                              |       
|Cash and due from banks at end of year                                      |                     | $                            | 12    
|                                                                            |                     |                              |       
|Supplemental disclosure of cash flow information                            |                     |                              |       
|Cash paid during the year for:                                              |                     |                              |       
|Interest                                                                    |                     | $                            | 877   
|Income taxes                                                                |                     |                              | 2,232 
|Non-cash investing activities:                                              |                     |                              |       
|Transfers to repossessed assets                                             |                     |                              |      
|Capital contributions to subsidiaries                                       |                     |                              | 664   
|Non-cash financing activities:                                              |                     |                              |       
|Dividends                                                                   |                     |                              | 664   
|                                                                            |                     |                              |       

---

90

---



Condensed Consolidating Statements of Cash Flows

|                                                                            |                     | Year Ended December 31, 2002 |        
|--------------------------------------------------------------------------- | ------------------- | ---------------------------- | -------
|
|Net cash provided by operating activities                                   |                     | $                            | 7,957  
|                                                                            |                     |                              |        
|Cash flows from investing activities                                        |                     |                              |        
|Investments  available-for-sale and short-term and other                   |                     |                              |        
|                                                                            | Purchases           |                              |        
|                                                                            | Proceeds from sales |                              |        
|                                                                            | Maturities          |                              |        
|Changes in investments and advances  intercompany                          |                     |                              | (10,761
|Net increase in loans                                                       |                     |                              |       
|Proceeds from sales of loans                                                |                     |                              |       
|Business acquisitions                                                       |                     |                              |       
|Other investing activities                                                  |                     |                              | 1,203  
|                                                                            |                     |                              |        
|Net cash used in investing activities                                       |                     |                              | (9,436 
|                                                                            |                     |                              |        
|Cash flows from financing activities                                        |                     |                              |        
|Net increase in deposits                                                    |                     |                              |       
|Net change in purchased funds and other borrowings  third party            |                     |                              | 2,009  
|Net change in purchased funds, other borrowings and advances  intercompany |                     |                              | 3,066  
|Proceeds from (repayments of) long-term debt  third party                  |                     |                              | 3,152  
|Proceeds from issuance of long-term debt  intercompany                     |                     |                              |       
|Dividends paid                                                              |                     |                              | (6,744 
|Contributions from parent company                                           |                     |                              |       
|                                                                            |                     |                              |        
|Net cash provided by (used in) financing activities                         |                     |                              | 1,483  
|                                                                            |                     |                              |        
|Effect of exchange rate changes on cash and due from banks                  |                     |                              |       
|                                                                            |                     |                              |        
|Net increase (decrease) in cash and due from banks                          |                     |                              | 4      
|Cash and due from banks at beginning of year                                |                     |                              | 18     
|                                                                            |                     |                              |        
|Cash and due from banks at end of year                                      |                     | $                            | 22     
|                                                                            |                     |                              |        
|Supplemental disclosure of cash flow information                            |                     |                              |        
|Cash paid during the year for:                                              |                     |                              |        
|Interest                                                                    |                     | $                            | 1,409  
|Income taxes                                                                |                     |                              | 1,465  
|Non-cash investing activities:                                              |                     |                              |        
|Transfers to repossessed assets                                             |                     |                              |       
|Capital contributions to subsidiaries                                       |                     |                              | 3,038  
|Non-cash financing activities:                                              |                     |                              |        
|Contributions from parent company                                           |                     | $                            | 5,832  
|                                                                            |                     |                              |        

---

91

---



25.    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.

26.    Selected Quarterly Financial Data (Unaudited)

|                                                 |  | 2004 |        | 2003
|------------------------------------------------ |  | ---- | ------ | ----
|
|
|Revenues, net of interest expense                |  | $    | 16,007 |     
|Operating expenses                               |  |      | 8,199  |     
|Benefits, claims, and credit losses              |  |      | 1,535  |     
|Income before income taxes and minority interest |  |      | 6,273  |     
|Income taxes                                     |  |      | 1,769  |     
|Minority interest, after-tax                     |  |      | 54     |     
|Net income                                       |  | $    | 4,450  |     

27.    Subsequent Event (Unaudited)

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. 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
Citicorp international insurance businesses being acquired by MetLife as a part of this transaction generated total revenues of $575 million and net income of
$82 million for the twelve months ended December 31, 2004. The businesses had total assets of $5.4 billion at December 31, 2004.

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 second
or third quarter.

92

---



FINANCIAL DATA SUPPLEMENT (Unaudited)

AVERAGE BALANCES AND INTEREST RATES, TAXABLE EQUIVALENT BASIS (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                                                        |                           | $              | 283,659 |                  | $ | 245,013       
|In offices outside the U.S.(5)                                         |                           |                | 117,602 |                  |   | 96,394        
|                                                                       |                           |                |         |                  |   |               
|Total consumer loans                                                   |                           |                | 401,261 |                  |   | 341,407       
|                                                                       |                           |                |         |                  |   |               
|Corporate loans                                                        |                           |                |         |                  |   |               
|In U.S. offices                                                        |                           |                |         |                  |   |               
|                                                                       | Commercial and industrial |                |         | 14,528           |   |               
|                                                                       | Lease financing           |                |         | 1,998            |   |               
|                                                                       | Mortgage and real estate  |                |         | 76               |   |               
|In offices outside the U.S.(5)                                         |                           |                | 91,919  |                  |   | 81,100        
|                                                                       |                           |                |         |                  |   |               
|Total corporate loans                                                  |                           |                | 108,521 |                  |   | 102,140       
|                                                                       |                           |                |         |                  |   |               
|Total loans                                                            |                           |                | 509,782 |                  |   | 443,547       
|                                                                       |                           |                |         |                  |   |               
|Federal funds sold and securities purchased under agreements to resell |                           |                |         |                  |   |               
|In U.S. offices                                                        |                           |                | 6,423   |                  |   | 4,710         
|In offices outside the U.S.(5)                                         |                           |                | 12,078  |                  |   | 8,071         
|                                                                       |                           |                |         |                  |   |               
|Total                                                                  |                           |                | 18,501  |                  |   | 12,781        
|                                                                       |                           |                |         |                  |   |               
|Investments                                                            |                           |                |         |                  |   |               
|In U.S. offices                                                        |                           |                |         |                  |   |               
|Taxable                                                                |                           |                | 54,130  |                  |   | 56,412        
|Exempt from U.S. income tax                                            |                           |                | 8,519   |                  |   | 7,424         
|In offices outside the U.S.(5)                                         |                           |                | 76,673  |                  |   | 60,358        
|                                                                       |                           |                |         |                  |   |               
|Total                                                                  |                           |                | 139,322 |                  |   | 124,194       
|                                                                       |                           |                |         |                  |   |               
|Trading account assets(6)                                              |                           |                |         |                  |   |               
|In U.S. offices                                                        |                           |                | 20,088  |                  |   | 9,424         
|In offices outside the U.S.(5)                                         |                           |                | 22,627  |                  |   | 18,156        
|                                                                       |                           |                |         |                  |   |               
|Total                                                                  |                           |                | 42,715  |                  |   | 27,580        
|                                                                       |                           |                |         |                  |   |               
|Loans held-for-sale, in U.S. offices                                   |                           |                | 12,921  |                  |   | 14,258        
|                                                                       |                           |                |         |                  |   |               
|Deposits at interest with banks(5)                                     |                           |                | 25,990  |                  |   | 19,764        
|                                                                       |                           |                |         |                  |   |               
|Total interest-earning assets                                          |                           |                | 749,231 |                  |   | 642,124       
|                                                                       |                           |                |         |                  |   |               
|Non-interest earning assets(6)                                         |                           |                | 134,054 |                  |   | 117,185       
|                                                                       |                           |                |         |                  |   |               
|Total assets                                                           |                           | $              | 883,285 |                  | $ | 759,309       
|                                                                       |                           |                |         |                  |   |               

---

93

---



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

|                                                                           |                     | Average Volume |         | Interest Expense |   | % Average Rate
|-------------------------------------------------------------------------- | ------------------- | -------------- | ------- | ---------------- | - | --------------
|
|
|Liabilities                                                                |                     |                |         |                  |   |               
|Deposits                                                                   |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                |         |                  |   |               
|                                                                           | Savings deposits(4) |                | $       | 125,659          |   | $             
|                                                                           | Other time deposits |                |         | 30,803           |   |               
|In offices outside the U.S.(5)                                             |                     |                | 311,489 |                  |   | 254,508       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 467,951 |                  |   | 401,249       
|                                                                           |                     |                |         |                  |   |               
|Trading account liabilities(6)                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 6,059   |                  |   | 4,303         
|In offices outside the U.S.(5)                                             |                     |                | 1,651   |                  |   | 1,163         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 7,710   |                  |   | 5,466         
|                                                                           |                     |                |         |                  |   |               
|Purchased funds and other borrowings                                       |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 45,092  |                  |   | 41,787        
|In offices outside the U.S.(5)                                             |                     |                | 28,854  |                  |   | 20,359        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 73,946  |                  |   | 62,146        
|                                                                           |                     |                |         |                  |   |               
|Long-term debt                                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 95,225  |                  |   | 77,785        
|In offices outside the U.S.(5)                                             |                     |                | 15,562  |                  |   | 8,284         
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 110,787 |                  |   | 86,069        
|                                                                           |                     |                |         |                  |   |               
|Total interest-bearing liabilities                                         |                     |                | 660,394 |                  |   | 554,930       
|Demand deposits in U.S. offices                                            |                     |                | 4,348   |                  |   | 7,382         
|Other non-interest bearing liabilities(6)                                  |                     |                | 130,842 |                  |   | 120,206       
|Total stockholder's equity                                                 |                     |                | 87,701  |                  |   | 76,791        
|Total liabilities and stockholder's equity                                 |                     | $              | 883,285 |                  | $ | 759,309       
|Net interest revenue as a percentage of average interest-earning assets(7) |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     | $              | 402,447 |                  | $ | 358,310       
|In offices outside the U.S.                                                |                     |                | 346,784 |                  |   | 283,814       
|Total                                                                      |                     | $              | 749,231 |                  | $ | 642,124       

---

94

---



ANALYSIS OF CHANGES IN NET INTEREST REVENUE, TAXABLE EQUIVALENT BASIS(1)
Citicorp and Subsidiaries

|                                                                       |  | 2004 vs. 2003 |       | 2003 vs. 2002 |   
|---------------------------------------------------------------------- |  | ------------- | ----- | ------------- | --
|
|
|Assets                                                                 |  |               |       |               |   
|Loansconsumer                                                         |  |               |       |               |   
|In U.S. offices                                                        |  | $             | 3,277 |               | ($
|In offices outside the U.S.(3)                                         |  |               | 2,300 |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 5,577 |               |   
|                                                                       |  |               |       |               |   
|Loanscorporate                                                        |  |               |       |               |   
|In U.S. offices                                                        |  |               | (239  | )             |   
|In offices outside the U.S.(3)                                         |  |               | 720   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 481   |               |   
|                                                                       |  |               |       |               |   
|Total loans                                                            |  |               | 6,058 |               |   
|                                                                       |  |               |       |               |   
|Federal funds sold and securities purchased under agreements to resell |  |               |       |               |   
|In U.S. offices                                                        |  |               | 22    |               |   
|In offices outside the U.S.(3)                                         |  |               | 117   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 139   |               |   
|                                                                       |  |               |       |               |   
|Investments                                                            |  |               |       |               |   
|In U.S. offices                                                        |  |               | (42   | )             |   
|In offices outside the U.S.(3)                                         |  |               | 763   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 721   |               |   
|                                                                       |  |               |       |               |   
|Trading account assets                                                 |  |               |       |               |   
|In U.S. offices                                                        |  |               | 516   |               |   
|In offices outside the U.S.(3)                                         |  |               | 217   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 733   |               |   
|                                                                       |  |               |       |               |   
|Loans held-for-sale                                                    |  |               |       |               |   
|In U.S. offices                                                        |  |               | (92   | )             |   
|                                                                       |  |               |       |               |   
|Deposits at interest with banks(3)                                     |  |               | 208   |               |   
|                                                                       |  |               |       |               |   
|Total interest revenue                                                 |  | $             | 7,767 |               | ($
|                                                                       |  |               |       |               |   
|Liabilities                                                            |  |               |       |               |   
|Deposits                                                               |  |               |       |               |   
|In U.S. offices                                                        |  | $             | 112   |               | $ 
|In offices outside the U.S.(3)                                         |  |               | 1,270 |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 1,382 |               |   
|                                                                       |  |               |       |               |   
|Trading account liabilities                                            |  |               |       |               |   
|In U.S. offices                                                        |  |               | 20    |               |   
|In offices outside the U.S.(3)                                         |  |               | 7     |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 27    |               |   
|                                                                       |  |               |       |               |   
|Purchased funds and other borrowings                                   |  |               |       |               |   
|In U.S. offices                                                        |  |               | 52    |               |   
|In offices outside the U.S.(3)                                         |  |               | 380   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 432   |               |   
|                                                                       |  |               |       |               |   
|Long-term debt                                                         |  |               |       |               |   
|In U.S. offices                                                        |  |               | 672   |               |   
|In offices outside the U.S.(3)                                         |  |               | 373   |               |   
|                                                                       |  |               |       |               |   
|Total                                                                  |  |               | 1,045 |               |   
|                                                                       |  |               |       |               |   
|Total interest expense                                                 |  |               | 2,886 |               |   
|                                                                       |  |               |       |               |   
|Net interest revenue                                                   |  | $             | 4,881 |               | ($
|                                                                       |  |               |       |               |   

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95

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RATIOS

|                                                |  | 2004 |   | 2003  |   | 2002  |  
|----------------------------------------------- |  | ---- | - | ----- | - | ----- | -
|Net income to average assets                    |  | 1.91 | % | 1.78  | % | 1.63  | %
|Return on average total stockholder's equity(1) |  | 19.3 | % | 17.6  | % | 15.9  | %
|Total average equity to average assets          |  | 9.93 | % | 10.11 | % | 10.24 | %
|                                                |  |      |   |       |   |       |  

---

AVERAGE DEPOSIT LIABILITIES IN OFFICES OUTSIDE THE U.S.(1)

|                                   |  | 2004 |         | 2003 |      | 2002 |  
|---------------------------------- |  | ---- | ------- | ---- | ---- | ---- | -
|
|Banks(2)                           |  | $    | 32,392  |      | 2.96 | %    | $
|Other demand deposits              |  |      | 122,822 |      | 1.11 | %    |  
|Other time and savings deposits(2) |  |      | 181,740 |      | 2.41 | %    |  
|                                   |  |      |         |      |      |      |  
|Total                              |  | $    | 336,954 |      | 1.99 | %    | $
|                                   |  |      |         |      |      |      |  

---

MATURITY PROFILE OF TIME DEPOSITS ($100,000 OR MORE) IN U.S. OFFICES

|In millions of dollars at year end 2004 |  | Under 3 Months |        | Over
3 to 6 Months |   | Over
6 to 12 Months |  | Over 12 Months
|--------------------------------------- |  | -------------- | ------ | ------------------ | - | ------------------- |  | --------------
|Certificates of deposit                 |  | $              | 4,509  |                    | $ | 840                 |  | $             
|Other time deposits                     |  | $              | 14,006 |                    | $ | 70                  |  | $             
|                                        |  |                |        |                    |   |                     |  |               

SHORT-TERM AND OTHER BORROWINGS(1)

|                                       |  | Federal Funds Purchased
and Securities Sold Under
Agreements to Repurchase(2) |        | Commercial Paper |   | Other Funds Borrowed(2) |  
|-------------------------------------- |  | ----------------------------------------------------------------------------- | ------ | ---------------- | - | ----------------------- | -
|
|Amounts outstanding at year end        |  | $                                                                             | 34,835 |                  | $ | 30,500                  |  
|Average outstanding during the year(5) |  |                                                                               | 38,284 |                  |   | 31,652                  |  
|Maximum month-end outstanding          |  |                                                                               | 42,660 |                  |   | 38,433                  |  
|                                       |  |                                                                               |        |                  |   |                         |  
|Weighted-average interest rate         |  |                                                                               |        |                  |   |                         |  
|During the year(3)                     |  |                                                                               | 3.18   | %                |   | 2.97                    | %
|At year end(4)                         |  |                                                                               | 4.65   | %                |   | 3.12                    | %
|                                       |  |                                                                               |        |                  |   |                         |  

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Regulation and Supervision

Bank Holding Company Regulation

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). The subsidiary depository institutions of the Company (the banking subsidiaries), including its principal bank subsidiary, Citibank, N.A.
(Citibank), are subject to supervision and examination by their respective federal and state banking authorities. The nationally chartered subsidiary banks, including Citibank, are supervised and
examined by the Office of the Comptroller of the Currency (OCC); federal savings association subsidiaries are regulated by the Office of Thrift Supervision (OTS); and state-chartered depository
institutions are supervised by the banking departments within their respective states (California, Delaware, and Utah), as well as the Federal Deposit Insurance Corporation (FDIC). The FDIC also has
back-up enforcement authority with respect to each of the banking subsidiaries, the deposits of which are insured by the FDIC, up to applicable limits. The Company also controls (either
directly or indirectly) overseas banks, branches, and agencies. In general, the Company's overseas activities are regulated by the FRB and OCC, and are also regulated by supervisory authorities of the
host countries.

The
Company's banking subsidiaries are also subject to requirements and restrictions under federal, state, and foreign law, including requirements to maintain reserves against deposits,
restrictions on the types and amounts of loans that may be made and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services
that may be offered. Various consumer laws and regulations also affect the operations of the Company's banking subsidiaries.

The
activities of U.S. bank holding companies are generally limited to the business of banking, managing or controlling banks, and other activities that the FRB determines to be so
closely related to banking or managing or controlling banks as to be a proper incident thereto. In addition, under the Gramm-Leach-Bliley Act (the GLB Act), bank holding companies, such as the
Company, all of whose controlled depository institutions are "well capitalized" and "well managed," as defined in Federal Reserve Regulation Y, and which obtain satisfactory Community
Reinvestment Act ratings, have the ability to declare themselves to be "financial holding companies" and engage in a broader spectrum of activities, including insurance underwriting and brokerage
(including annuities), and underwriting and dealing securities. The Company has declared itself to be a financial holding company. Financial holding companies that do not continue to meet all of the
requirements for such status will, depending on which requirement they fail to meet, face not being able to undertake new activities or acquisitions that are financial in nature, or losing their
ability to continue those activities that are not generally permissible for bank holding companies.

Under
the GLB Act, financial holding companies are able to make acquisitions of companies that engage in activities that are financial in nature, both in the United States and outside of
the United States. No prior approval of the FRB is generally required for such acquisitions except for the acquisition of U.S. depository institutions and, in some cases, foreign banks. In addition,
under merchant banking authority added by the GLB Act, financial holding companies are authorized to invest in companies that engage in activities that are not financial in nature, as long as the
financial holding company makes its investment with the intention of limiting the investment in duration, does not manage the company on a day-to-day basis, and the investee
company does not cross-market with any of the financial holding company's controlled depository institutions. This authority applies to investments both in the United States and outside the United
States. Regulations interpreting and conditioning this authority have been promulgated. Bank holding companies also retain their authority, subject to prior specific or general FRB consent, to acquire
less than 20% of the voting securities of a company that does not do business in the United States, and 20% or more of the voting securities of any such company if the FRB finds by regulation or order
that its activities are usual in connection with banking or finance outside the United States. In general, bank holding companies that are not financial holding companies may engage in a broader range
of activities outside the United States than they may engage in inside the United States, including sponsoring, distributing, and advising open-end mutual funds, and underwriting and
dealing in debt and, to a limited extent, equity securities, subject to local country laws.

Subject
to certain limitations and restrictions, a U.S. bank holding company, with the prior approval of the FRB, may acquire an out-of-state bank. Banks in
states that do not prohibit out-of-state mergers may merge with the approval of the appropriate federal bank regulatory agency. A national or state bank may establish a de novo
branch out of state if such branching is expressly permitted by the other state. A federal savings association is generally permitted to open a de novo branch in any state.

Outside
the U.S., subject to certain requirements for prior FRB consent or notice, the Company may acquire banks and Citibank may establish branches subject to local laws and to U.S.
laws prohibiting companies from doing business in certain countries.

The
Company's earnings and activities are affected by legislation, by actions of its regulators, and by local legislative and administrative bodies and decisions of courts in the foreign
and domestic jurisdictions in which the Company and its subsidiaries conduct business. For example, these include limitations on the ability of certain subsidiaries to pay dividends to their
intermediate holding companies and on the abilities of those holding companies to pay dividends to the Company (see Note 15 to the Consolidated Financial Statements). It is the policy of the
FRB that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the
organization's expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company's
ability to serve as a source of strength to its banking subsidiaries.

Various
federal and state statutory provisions limit the amount of dividends that subsidiary banks and savings associations can pay to their holding companies without regulatory
approval. In addition to these explicit limitations, the federal regulatory agencies are authorized to prohibit a banking subsidiary or bank holding company from engaging in an unsafe or unsound
banking practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

Numerous
other federal and state laws also affect the Company's earnings and activities, including federal and state consumer protection laws. Legislation may be enacted or regulation
imposed in the U.S. or its political subdivisions, or in any other jurisdiction in which the Company does business, to further regulate banking and financial services or to limit finance charges or
other fees or charges earned in such activities. There can be no assurance whether any such legislation or regulation will place additional limitations on the Company's operations or adversely affect
its earnings. The preceding statement is a forward-looking statement within the meaning of the Private

97

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Securities
Litigation Reform Act. See "Forward-Looking Statements" on page 46.

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. Transactions between a banking subsidiary and the holding company or any nonbank subsidiary are limited to
10% of the banking subsidiary's capital stock and surplus and, as to the holding company and all such nonbank subsidiaries in the aggregate, to 20% of the bank's capital stock and surplus.

The
Company's right to participate in the distribution of assets of any subsidiary upon the subsidiary's liquidation or reorganization will be subject to the prior claims of the
subsidiary's creditors. In the event of a liquidation or other resolution of an insured depository institution, the claims of depositors and other general or subordinated creditors are entitled to a
priority of payment over the claims of holders of any obligation of the institution to its stockholders, including any depository institution holding company (such as the Company) or any stockholder
or creditor thereof.

In
the liquidation or other resolution of a failed U.S. insured depository institution, deposits in U.S. offices and certain claims for administrative expenses and employee compensation
are afforded a priority over other general unsecured claims, including deposits in offices outside the U.S., non-deposit claims in all offices, and claims of a parent such as the Company.
Such priority creditors would include the FDIC, which succeeds to the position of insured depositors.

A
financial institution insured by the FDIC that is under common control with a failed or failing FDIC-insured institution can be required to indemnify the FDIC for losses
resulting from the insolvency of the failed institution, even if this causes the affiliated institution also to become insolvent. Any obligations or liability owed by a subsidiary depository
institution to its parent company is subordinate to the subsidiary's cross-guarantee liability with respect to commonly controlled insured depository institutions and to the rights of depositors.

Under
FRB policy, a bank holding company is expected to act as a source of financial strength to each of its banking subsidiaries and commit resources to their support. As a result of
that policy, the Company may be required to commit resources to its subsidiary banks in certain circumstances. However, under the GLB Act, the FRB is not able to compel a bank holding company to
remove capital from its regulated securities or insurance subsidiaries in order to commit such resources to its subsidiary banks.

The
Company and its U.S. insured depository institution subsidiaries are subject to risk-based capital and leverage guidelines issued by U.S. regulators for banks, savings
associations, and bank holding companies. The regulatory agencies are required by law to take specific prompt actions with respect to institutions that do not meet minimum capital standards and have
defined five capital tiers, the highest of which is "well capitalized." As of December 31, 2004, the Company's bank and thrift subsidiaries, including Citibank, were "well-
capitalized." See "Management's Discussion and Analysis" and Note 15 to the Consolidated Financial Statements for capital analysis.

A
bank is not required to repay a deposit at a branch outside the U.S. if the branch cannot repay the deposit due to an act of war, civil strife, or action taken by the government in the
host country, unless the bank has expressly agreed to do so in writing.

The
GLB Act included extensive consumer privacy provisions. These provisions, among other things, require full disclosure of the Company's privacy policy to consumers and mandate
offering consumers the ability to "opt out" of having non-public customer information disclosed to third parties. Pursuant to these provisions, the federal banking regulators and the SEC
and FTC have adopted privacy regulations. In addition, the states are permitted to adopt more extensive privacy protections through legislation or regulation. There can be no assurance whether any
such legislation or regulation will place additional limitations on the Company's operations or adversely affect its earnings. The preceding statement is a forward-looking statement within the meaning
of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 46. A recent amendment to the Fair Credit Reporting Act requires the Company's subsidiaries to give their
customers the opportunity not to receive marketing solicitations that are based on the use of information from another subsidiary of the Company regarding the customer. This requirement is expected to
become effective within six months after pending implementing regulations become effective.

The
earnings of the Company, Citibank, and their subsidiaries and affiliates are affected by general economic conditions and the conduct of monetary and fiscal policy by the U.S.
government and by governments in other countries in which they do business.

Legislation
is from time to time introduced in Congress or in the States that may change banking statutes and the operating environment of the Company and its banking subsidiaries in
substantial and unpredictable ways. The Company cannot determine whether any such proposed legislation will be enacted and, if enacted, the ultimate effect that any such potential legislation or
implementing regulations would have upon the financial condition or results of operations of the Company or its subsidiaries.

Competition

The Company and its subsidiaries are subject to intense competition in all aspects of their businesses from both bank and non-bank institutions that
provide financial services and, in some of their activities, from government agencies.

General Business Factors

In the judgment of the Company, no material part of the business of the Company and its subsidiaries is dependent upon a single customer or group of customers, the
loss of any one of which would have a materially adverse effect on the Company, and no one customer or group of affiliated customers accounts for as much as 10% of the Company's consolidated revenues.

Properties

The Company's executive offices are located at 399 Park Avenue, New York, New York. 399 Park Avenue is a 39-story building that is partially leased by
the Company and certain of its subsidiaries, including the principal offices of Citicorp and Citibank. The Company and certain of its subsidiaries occupy office space in Citigroup Center (153 E.
53rd St., New York, NY) under a long-term lease. Citibank owns a building in Long Island City, New York and leases a building under a long-term lease located at
111 Wall Street in New York City, which are totally occupied by the Company and certain of its subsidiaries.

Associates
maintains its principal offices in Irving, Texas, in facilities which are, in part, owned and, in part, leased by it. Associates has office and branch sites for its business
units throughout the United States, Canada, Asia (Japan, Taiwan, Philippines and Hong Kong), Europe and Latin America. The majority of these sites are leased and, although numerous, none is material
to Associates' operations.

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Banamex
maintains its principal offices in Mexico City in facilities which are, in part, owned and, in part, leased by it. Banamex has office and branch sites throughout Mexico. The
majority of these sites are owned.

Other
offices and certain warehouse space are owned, none of which is material to the Company's financial condition or operations.

The
Company believes its properties are adequate and suitable for its business as presently conducted and are adequately maintained. For further information concerning leases, see
Note 21 to the Consolidated Financial Statements.

99

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Legal Proceedings

Enron Corp.

In April 2002, Citigroup was named as a defendant along with, among others, commercial and/or investment banks, certain current and former Enron officers
and directors, lawyers and accountants in a putative consolidated class action complaint that was filed in the United States District Court for the Southern District of Texas seeking unspecified
damages. The action, brought on behalf of individuals who purchased Enron securities (NEWBY, ET AL. V. ENRON CORP., ET AL.), alleges violations of Sections 11 and 15 of the Securities Act of 1933, as
amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. In May 2003, plaintiffs filed an amended consolidated class action complaint. Citigroup filed a motion
to dismiss in June 2003, which motion was denied in April 2004. Citigroup answered the operative complaint in May 2004. Plaintiffs filed a motion for class certification in
May 2003, which motion remains pending. The parties are engaging in discovery.

Additional
actions have been filed against Citigroup and certain of its affiliates, including Citicorp, along with other parties, including (i) actions brought by a number of
pension and benefit plans, investment funds, mutual funds, and other individual and institutional investors in connection with the purchase of Enron and Enron-related equity and debt securities,
alleging violations of various state and federal securities laws, state unfair competition statutes, common law fraud, misrepresentation, unjust enrichment, breach of fiduciary duty, conspiracy and
other violations of state law; (ii) actions by banks that participated in Enron revolving credit facilities, alleging fraud, gross negligence, breach of implied duties, aiding and abetting and
civil conspiracy in connection with defendants' administration of a credit facility with Enron; (iii) an action brought by several funds in connection with secondary market purchases of Enron
debt securities, alleging violations of the federal securities laws, including Section 11 of the Securities Act of 1933, as amended, and claims for fraud and misrepresentation; (iv) a
series of putative class actions by purchasers of NewPower Holdings common stock, alleging violations of various federal securities laws; the Citigroup defendant (along with all other defendants)
settled all claims without admitting any wrongdoing, and the settlement was preliminarily approved by the United States District Court for the Southern District of New York in September 2004;
(v) an action brought by purchasers in the secondary market of Enron bank debt, alleging claims for common law fraud, conspiracy, gross negligence, negligence and breach of fiduciary duty;
(vi) an action brought by an investment company, alleging that Citigroup and others aided Enron in fraudulently inducing it to enter into a commodity sales contract; (vii) five adversary
proceedings filed by Enron in its chapter 11 bankruptcy proceedings to recover alleged preferential payments and fraudulent transfers involving Citigroup, certain of its affiliates and other entities,
and to disallow or to subordinate claims that Citigroup and other entities have filed against Enron; in one such proceeding, Enron also alleges various common law claims, including a claim for aiding
and abetting of breach of fiduciary duty; (viii) third-party actions brought by former Enron officers and directors, alleging violation of state securities and other laws and a right to
contribution from Citigroup, in connection with claims under state securities and common law brought against the officers and directors; (ix) a purported class action brought on behalf of
Connecticut municipalities, alleging violation of state statutes, conspiracy to commit fraud, aiding and abetting a breach of fiduciary duty and unjust enrichment; (x) actions brought by the
Attorney General of Connecticut in connection with various commercial and investment banking services provided to Enron; (xi) third-party actions brought by Arthur Andersen as a defendant in
Enron-related litigations, alleging a right to contribution from Citigroup; (xii) an action brought by the indenture trustee for the Yosemite and ECLN Trusts and the Yosemite Securities Co.,
alleging fifteen causes of action sounding in tort and contract and relating to the initial notes offerings and the post-bankruptcy settlement of the notes; (xiii) putative class
actions brought by investors that purchased and held Enron and Enron-related securities, alleging negligence, misrepresentation, fraud, breach of fiduciary duty, and aiding and abetting breach of
fiduciary duty; (xiv) actions brought by utilities concerns, alleging that Citigroup and others aided Enron in fraudulently overcharging for electricity; and (xv) adversary proceedings
filed by Enron in its chapter 11 bankruptcy proceedings against entities that purchased Enron bankruptcy claims from Citigroup, seeking to disallow or to subordinate those claims. Several of these
cases have been consolidated or coordinated with the NEWBY action and are stayed, except for certain discovery, pending the Court's decision on the pending motion for class certification in NEWBY.

Dynegy Inc.

On June 6, 2003, the complaint in a pre-existing putative class action pending in the United States District Court for the Southern District of
Texas (IN RE: DYNEGY INC. SECURITIES LITIGATION) brought by purchasers of publicly traded debt and equity securities of Dynegy Inc. was amended to add Citigroup, Citibank and Citigroup
Global Markets Inc. (CGMI) as defendants. The plaintiffs allege violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended, against the Citigroup defendants. The Citigroup defendants filed a motion to dismiss in March 2004, which motion was granted by the District
Court in October 2004. The court denied lead plaintiff's request for leave to appeal.

Parmalat

On July 29, 2004, Enrico Bondi, as extraordinary commissioner of Parmalat and other affiliated entities, filed a lawsuit in New Jersey Superior Court
against Citigroup, Citibank, N.A. and others, alleging that the defendants participated in fraud committed by the officers and directors of Parmalat and seeking unspecified damages. The action alleges
a variety of claims under New Jersey state law, including fraud, negligent misrepresentation, violations of the New Jersey Fraudulent Transfer Act and violations of the New Jersey RICO statute. On
December 20, 2004, defendants filed a motion to dismiss the action. On February 28, 2005, the Court denied that motion.

Citigroup,
Citibank, N.A. and others also are defendants in three class action complaints filed in the United States District Court for the Southern District of New York relating to the
collapse of Parmalat Finanziaria S.P.A. On May 21, 2004, the court issued an order consolidating the complaints under the caption IN RE PARMALAT SECURITIES LITIGATION. The consolidated amended
complaint was filed on October 18, 2004 on behalf of purchasers of Parmalat securities between January 5, 1999 and December 18, 2003. The complaint alleges violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and seeks unspecified damages. On January 10, 2005, the Citigroup defendants filed a motion to dismiss the action. That
motion remains pending.

Adelphia Communications Corporation

On July 6, 2003, an adversary proceeding was filed by the Official Committee of Unsecured Creditors on behalf of Adelphia Communications Corporation against
certain lenders and investment banks, including CGMI, Citibank, N.A., Citicorp USA, Inc., and Citigroup Financial Products, Inc. (together, the Citigroup Parties). The

100

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complaint
alleges that the Citigroup Parties and numerous other defendants committed acts in violation of the Bank Holding Company Act and common law. The complaints seek equitable relief and an
unspecified amount of compensatory and punitive damages. In November 2003, a similar adversary proceeding was filed by the Equity Holders Committee of Adelphia. In June 2004, motions to
dismiss were filed with respect to the complaints of the Official Committee of Unsecured Creditors and the Equity Holders Committee. The motions are currently pending.

In
addition, CGMI is among the underwriters named in numerous civil actions brought to date by investors in Adelphia debt securities in connection with Adelphia securities offerings
between September 1997 and October 2001. Three of the complaints also assert claims against Citigroup Inc. and Citibank, N.A. All of the complaints allege violations of federal
securities laws, and certain of the complaints also allege violations of state securities laws and the common law. The complaint seeks unspecified damages. In December 2003, a second amended
complaint was filed and consolidated before the same judge of the United States District Court for the Southern District of New York. In February 2004, motions to dismiss the class and
individual actions pending in the United States District Court for the Southern District of New York were filed. The motions are currently pending.

Foreign Currency Conversion

Citigroup and certain of its affiliates, including Citibank (South Dakota), N.A., as well as VISA, U.S.A., Inc., VISA International Service Association,
MasterCard International, Incorporated and other banks are defendants in a consolidated class action lawsuit (IN RE CURRENCY CONVERSION FEE ANTITRUST LITIGATION) pending in the United States District
Court for the Southern District of New York, which seeks unspecified damages and injunctive relief. The action, brought on behalf of certain United States holders of VISA, MasterCard and Diners Club
branded general purpose credit cards who used those cards since March 1, 1997 for foreign currency transactions, asserts, among other things, claims for alleged violations of
(i) Section 1 of the Sherman Act, (ii) the federal Truth in Lending Act (TILA), and (iii) as to Citibank (South Dakota), N.A., the South Dakota Deceptive Trade Practices
Act. On October 15, 2004, the Court granted the plaintiffs' motion for class certification of their Sherman Act and TILA claims but denied the motion as to the South Dakota Deceptive Trade
Practices Act claim against Citibank (South Dakota), N.A.

Other

The Securities and Exchange Commission is conducting a non-public investigation, which the Company believes originated with the Company's accounting
treatment regarding its investments and business activities, and loan loss allowances, with respect to Argentina in the 4th quarter of 2001 and the 1st quarter of 2002. The investigation is also
addressing the timing and support documentation for certain accounting entries or adjustments. In connection with these matters, the SEC has subpoenaed witness testimony and certain accounting and
internal controls-related information for the years 20012004. The Company is cooperating with the SEC in its investigation. The Company cannot predict the outcome of the investigation.

Additional
lawsuits containing claims similar to those described above may be filed in the future.

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Principal Accountant Fees and Services

The following is a description of the fees earned by KPMG, independent registered public accounting firm for Citicorp, which include those fees billed to Citicorp
as well as those not yet billed, for services rendered to Citicorp for the years ended December 31, 2004 and 2003:

Audit Fees:Audit fees include fees paid by Citicorp to KPMG in connection with the annual audit of Citicorp's consolidated
financial statements, KPMG's audits of subsidiary financial statements and KPMG's review of Citicorp's interim financial statements. Audit fees also include fees for services performed by KPMG that
are closely related to the audit and in many cases could only be provided by our independent registered public accounting firm. Such services include comfort letters and consents related to SEC
registration statements and other capital raising activities and certain reports relating to Citicorp's regulatory filings, reports on internal control reviews required by regulators, and accounting
advice on completed transactions. The aggregate fees earned by KPMG for audit services rendered to Citicorp and its subsidiaries for the years ended December 31, 2004 and December 31,
2003 totaled approximately $43.1 million and $32.0 million, respectively.

Audit Related Fees:Audit related services include due diligence services related to contemplated mergers and acquisitions,
accounting consultations, internal control reviews not required by regulators, securitization related services, employee benefit plan audits and certain attestation services as well as certain agreed
upon procedures. The aggregate fees earned by KPMG for audit related services rendered to Citicorp and its subsidiaries for the years ended December 31, 2004 and December 31, 2003
totaled approximately $5.7 million and $4.3 million, respectively.

Tax Fees:Tax fees include corporate tax compliance, counsel and advisory services. As noted below, tax counsel and advisory
services will no longer be provided by KPMG. The aggregate fees earned by KPMG for the tax related services rendered to Citicorp and its subsidiaries for the years ended December 31, 2004 and
December 31, 2003 totaled approximately $5.9 million and $7.5 million, respectively.

Of
the $5.9 million of tax fees earned by KPMG in 2004, approximately $5.0 million was related to tax compliance services and the balance, approximately
$0.9 million, was related to tax counsel and advisory services which will mostly be discontinued under the new policy described below. Of the $7.5 million of tax fees earned by KPMG in
2003, approximately $3.9 million was related to tax compliance services, $3.2 million was related to tax counsel and advisory services, and the balance, approximately
$0.4 million, was related to expatriate tax services which were contracted for prior to Citicorp's adoption of its policy prohibiting the engagement of KPMG for such service.

All Other Fees:The aggregate fees earned by KPMG for all other services rendered to Citicorp and its subsidiaries for matters
such as general consulting for the years ended December 31, 2004 and December 31, 2003 both totaled approximately $0.1 million.

Citicorp
has not engaged KPMG for any additional non-audit services other than those permitted under its policy unless such services were individually approved by the
Citigroup Audit and Risk Management Committee.

Approval of Independent Registered Public Accounting Firm Services and Fees

Citigroup's Audit and Risk Management Committee has reviewed and approved all fees charged by Citicorp's independent registered public accounting firm, and
actively monitored the relationship between audit and non-audit services provided. The Audit and Risk Management Committee
has concluded that the provision of services by KPMG was consistent with the maintenance of the external auditors' independence in the conduct of its auditing functions. Effective January 1,
2003, Citicorp adopted a policy that it would no longer engage its primary independent registered public accounting firm for non-audit services other than "audit related services," as
defined by the SEC, certain tax services, and other permissible non-audit services as specifically approved by the chair of the Audit and Risk Management Committee and presented to the
full committee at its next regular meeting. The policy also includes limitations on the hiring of KPMG partners and other professionals to ensure that we satisfy the SEC's auditor independence rules.

During
2004, the following changes were made in Citigroup's policy for approval of audit fees and services. Pre-approval of the Audit and Risk Management Committee is
required for all internal control engagements and, effective December 31, 2004, Citigroup further restricted the scope of tax services that may be provided by KPMG and determined that it will
no longer use KPMG for tax advisory services, including consulting and tax planning, except as related to tax compliance services.

Under
the Citigroup policy approved by the Audit and Risk Management Committee, the committee must pre-approve all services provided by Citicorp's independent registered
public accounting firm and fees charged. The committee annually considers the provision of audit services and, if appropriate, pre-approves certain defined audit fees, audit related fees,
tax fees and other fees with specific dollar value limits for each category of service. During the year, the committee periodically monitors the levels of KPMG fees against the
pre-approved limits. The Audit and Risk Management Committee also considers on a case by case basis and, if appropriate, approves specific engagements that are not otherwise
pre-approved. Beginning in 2004 they also individually reviewed internal control engagements. Any proposed engagement that does not fit within the definition of a pre-approved
service may be presented to the chair of the Audit and Risk Management Committee for approval and to the full Audit and Risk Management Committee at its next regular meeting.

Administration of the policy is centralized in, and monitored by, Citigroup senior corporate financial management, which reports throughout the year to the Audit
and Risk Management Committee.

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10-K CROSS-REFERENCE INDEX

This Annual Report on Form 10-K incorporates the requirements of the accounting profession and the Securities and Exchange Commission, including
a comprehensive explanation of 2004 results.

Form 10-K

|Item Number |  | Page                                                                                                         
|----------- |  | -------------------------------------------------------------------------------------------------------------
|Part I      |  |                                                                                                              
|1.          |  | Business                                                                                                     
|            |  |                                                                                                              
|2.          |  | Properties                                                                                                   
|3.          |  | Legal Proceedings                                                                                            
|4.          |  | Submission of Matters to a Vote of Security Holders                                                          
|Part II     |  |                                                                                                              
|5.          |  | Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
|6.          |  | Selected Financial Data                                                                                      
|7.          |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                        
|7A.         |  | Quantitative and Qualitative Disclosures about Market Risk                                                   
|8.          |  | Financial Statements and Supplementary Data                                                                  
|9.          |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         
|9A.         |  | Controls and Procedures                                                                                      
|9B.         |  | Other Information                                                                                            
|Part III    |  |                                                                                                              
|10.         |  | Directors and Executive Officers of the Registrant                                                           
|11.         |  | Executive Compensation                                                                                       
|12.         |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               
|13.         |  | Certain Relationships and Related Transactions                                                               
|14.         |  | Principal Accountant Fees and Services                                                                       
|Part IV     |  |                                                                                                              
|15.         |  | Exhibits and Financial Statement Schedules                                                                   

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103

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CORPORATE INFORMATION

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following exhibits are either filed herewith or have been previously filed with the Securities and Exchange Commission and are filed herewith by incorporation
by reference:

|Exhibit Index |  |                                                                                                                                                                                                                      
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 (Citicorp's 2002 10-K)).                                
|12.01+        |  | Calculation of Ratio of Income to Fixed Charges.                                                                                                                                                                     
|14.01         |  | Code of Ethics (incorporated by reference to Exhibit 14.01 to Citicorp's 2002 10-K).                                                                                                                                 
|21.01         |  | Subsidiaries of Citicorp. Pursuant to General Instruction I of Form 10-K, the list of subsidiaries of Citicorp is omitted.                                                                                           
|23.01+        |  | Consent of KPMG LLP.                                                                                                                                                                                                 
|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 Citicorp does not exceed 10% of the total assets of
Citicorp and its consolidated subsidiaries. Citicorp will furnish copies of any such instrument to the Securities and Exchange Commission upon request.

Financial Statements

Financial Statements filed for Citicorp and Subsidiaries: see "Consolidated Financial Statements" in the Table of Contents on page 2.

Code of Ethics

The Company has adopted Citigroup's code of ethics for financial professionals which applies to the Company's principal executive officer, principal financial
officer and principal accounting officer.

104

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Signatures

Pursuant to the requirements of Section 13 or 15(d) 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 18th day of March, 2005.

| |  | CITICORP
(REGISTRANT)
| |  | ---------------------
| |  | By:                  

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
indicated on the 18th day of March, 2005.

| |  | Citicorp's Principal Executive Officer: 
| |  | ----------------------------------------
| |  | /s/ROBERT WILLUMSTADRobert Willumstad   
| |  | Citicorp's Principal Financial Officer: 
| |  | /s/SALLIE KRAWCHECKSallie Krawcheck     
| |  | Citicorp's Principal Accounting Officer:
| |  | /s/WILLIAM P. HANNONWilliam P. Hannon   

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 18, 2005 by the Directors of Citicorp.

| |  | /s/WILLIAM R. RHODESWilliam R. Rhodes, Chairman
| |  | -----------------------------------------------
| |  | /s/DAVID C. BUSHNELLDavid C. Bushnell          
| |  | /s/SALLIE KRAWCHECKSallie Krawcheck            
| |  | /s/STEPHEN H. LONGStephen H. Long              
| |  | /s/ALAN S. MACDONALDAlan S. MacDonald          
| |  | /s/MARJORIE MAGNERMarjorie Magner              
| |  | /s/TODD S. THOMSONTodd S. Thomson              
| |  | /s/ROBERT B. WILLUMSTADRobert B. Willumstad    

105

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