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, 2003     
|OR        
|o          | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period
from            to

Commission file number: 1-5738

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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:

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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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TABLE OF CONTENTS

|THE COMPANY                                               |                                                                                                    | 3  
|--------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ---
|                                                          | Global Consumer                                                                                    |    
|                                                          | Global Corporate and Investment Bank                                                               |    
|                                                          | Global Investment Management                                                                       |    
|                                                          | Proprietary Investment Activities                                                                  |    
|                                                          | Corporate/Other                                                                                    |    
|MANAGEMENT'S DISCUSSION AND ANALYSIS                      |                                                                                                    | 5  
|SUMMARY OF SELECTED FINANCIAL DATA                        |                                                                                                    | 5  
|EVENTS IN 2003                                            |                                                                                                    | 5  
|EVENTS IN 2002                                            |                                                                                                    | 7  
|SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES |                                                                                                    | 8  
|                                                          | Accounting Changes and Future Application of Accounting Standards                                  |    
|BUSINESS FOCUS                                            |                                                                                                    | 12 
|                                                          | Citicorp Net IncomeProduct View                                                                   |    
|RESULTS OF OPERATIONS                                     |                                                                                                    | 12 
|GLOBAL CONSUMER                                           |                                                                                                    | 14 
|                                                          | Cards                                                                                              |    
|                                                          | Consumer Finance                                                                                   |    
|                                                          | Retail Banking                                                                                     |    
|                                                          | Other Consumer                                                                                     |    
|                                                          | Global Consumer Outlook                                                                            |    
|GLOBAL CORPORATE AND INVESTMENT BANK                      |                                                                                                    | 19 
|                                                          | Capital Markets and Banking                                                                        |    
|                                                          | Transaction Services                                                                               |    
|                                                          | Global Corporate and Investment Bank Outlook                                                       |    
|GLOBAL INVESTMENT MANAGEMENT                              |                                                                                                    | 21 
|                                                          | Life Insurance and Annuities                                                                       |    
|                                                          | Private Bank                                                                                       |    
|                                                          | 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 Sensitivity to Changes in Interest Rates                                       |    
|                                                          | Market Risk Management Process                                                                     |    
|                                                          | Operational Risk Management Process                                                                |    
|                                                          | Country and Cross-Border Risk Management Process                                                   |    
|CAPITAL RESOURCES AND LIQUIDITY                           |                                                                                                    | 40 
|                                                          | Capital Resources                                                                                  |    
|                                                          | Liquidity                                                                                          |    
|                                                          | Off-Balance Sheet Arrangements                                                                     |    
|CORPORATE GOVERNANCE AND CONTROLS AND PROCEDURES          |                                                                                                    | 47 
|FORWARD-LOOKING STATEMENTS                                |                                                                                                    | 47 
|INDEPENDENT AUDITORS' REPORT                              |                                                                                                    | 48 
|CONSOLIDATED FINANCIAL STATEMENTS                         |                                                                                                    | 49 
|                                                          | 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                |                                                                                                    | 54 
|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                                |                                                                                                    | 101
|CORPORATE INFORMATION                                     |                                                                                                    | 102
|                                                          | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                   |    

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 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, 2003, the Company had approximately 93,100 full-time and 5,300 part-time employees in the United States and approximately 114,000
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, 2003 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 World Wide Web. The Global Consumer businesses serve individual consumers as well as
small businesses. Global Consumer includesCards,Consumer FinanceandRetail
Banking.

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

Consumer Financeprovides community-based lending services through branch networks, regional sales offices and cross-selling initiatives
with other Citigroup businesses. The business of CitiFinancial is included in North America Consumer Finance. As of December 31, 2003, North America Consumer Finance maintained 2,328 offices,
including 2,082 CitiFinancial offices in the U.S. and Canada, while International Consumer Finance maintained 875 offices, including 552 in Japan.Consumer
Financeoffers real-estate-secured loans, unsecured and partially secured personal loans, auto loans and loans to finance consumer-goods purchases. In addition,
CitiFinancial, through certain subsidiaries and third parties, makes available various credit-related and other insurance products to its U.S. customers.

Retail Bankingprovides banking, lending, investment and insurance services to customers through retail branches and electronic delivery
systems. In North America,Retail Bankingincludes the operations of Citibanking North America, Consumer Assets, CitiCapital, and Mexico Retail Banking.
Citibanking North America delivers banking, lending, investment and insurance services through 779 branches in the U.S. and Puerto Rico and through Citibank Online, an Internet banking site on the
World Wide Web. The Consumer Assets business originates and services mortgages and student loans for customers across the U.S. The CitiCapital business provides leasing and equipment financing
products to small- and middle-market businesses. Mexico Retail Banking consists of the branch banking operations of Banamex. International Retail Banking provides full-service banking and
investment services in EMEA, Japan, Asia, and Latin America. The Commercial Markets Group is included inRetail Bankingand consists of the operations of
CitiCapital, as well as middle-market lending operations in North America and the international regions.

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 composed 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 services to investors such as insurance companies and pension funds,
clearing services to intermediaries such as broker/dealers and depository and agency/trust services to multinational corporations and governments globally.

GLOBAL INVESTMENT MANAGEMENT

Global Investment Management (GIM)offers a broad range of life insurance, annuity, asset management and personalized
wealth management products and services distributed to institutional, high-net-worth and retail clients. Global Investment Management includesLife
Insurance and Annuities,Private BankandAsset Management.

Life Insurance and Annuitiesincludes 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.

Private Bankprovides personalized wealth management services for high-net-worth clients through 126 offices in 37
countries and territories, generating fee and interest income from investment funds

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management,
client trading activity, trust and fiduciary services, custody services, and traditional banking and lending activities. Through its Private Bankers and Product Specialists, Private Bankleverages its
extensive experience with clients' needs and its access to Citigroup to provide clients with comprehensive investment and
banking services.

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

PROPRIETARY INVESTMENT ACTIVITIES

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

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MANAGEMENT'S DISCUSSION AND ANALYSIS

SUMMARY OF SELECTED FINANCIAL DATA  Citicorp and Subsidiaries

|In millions of dollars                           |  | 2003 |        | 2002(1) |  
|------------------------------------------------ |  | ---- | ------ | ------- | -
|Revenues, net of interest expense(2)             |  | $    | 55,176 |         | $
|Operating expenses                               |  |      | 26,940 |         |  
|Benefits, claims, and credit losses(2)           |  |      | 8,590  |         |  
|                                                 |  |      |        |         |  
|Income before income taxes and minority interest |  |      | 19,646 |         |  
|Income taxes                                     |  |      | 5,827  |         |  
|Minority interest, after-tax                     |  |      | 278    |         |  
|                                                 |  |      |        |         |  
|Net Income                                       |  | $    | 13,541 |         | $
|                                                 |  |      |        |         |  
|Return on average total stockholder's equity     |  |      | 17.6   | %       |  
|Total assets(in billions)                        |  | $    | 820.1  |         | $
|Total equity(in billions)                        |  | $    | 81.8   |         | $
|Tier 1 Capital                                   |  |      | 8.44   | %       |  
|Total Capital Ratio                              |  |      | 12.68  | %       |  
|                                                 |  |      |        |         |  

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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 8th 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. $5.8 billion of intangible assets and goodwill have been recorded as a result of this transaction. In addition, the companies signed a multi-year marketing
and servicing agreement across a range of each company's businesses, products and services. The results of Sears are included in the Consolidated Financial Statements from November 2003
forward. The operations of Sears were integrated into the businesses of Citicorp.

Acquisition of The Home Depot's Private-Label Portfolio

In July 2003, Citigroup completed the acquisition of The Home Depot private-label portfolio (Home Depot), which added $6 billion in receivables and
12 million accounts. The results of Home Depot are included 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 resolve on a civil basis their investigations into Citigroup's structured finance work for
Enron. Citigroup also announced that its settlement agreement with the SEC concludes 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. Citicorp and certain other Citigroup subsidiaries have paid from previously established reserves an aggregate amount of $145.5 million in connection
with these settlements.

Impact from Argentina's Economic Changes

During 2003, the GCIB and Global Consumer franchises in Argentina began to emerge from the economic crisis, while the Global Investment Management franchise
endured another challenging year.

The
Government began to permit loan restructurings and loan repayments resulting in minimal cost of credit for the GCIB for the year. As a result of an improving consumer credit
environment, the Global Consumer allowance for credit losses was reduced by $100 million in the third quarter. On the negative side, 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, and the second payment of approximately $59 million was received when due in February 2004. 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 and losses recorded in 2003, net of the $40 million reserve
release, were $2 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;

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$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.

The
restructuring of customer annuity liabilities was approved by the Argentine Ministry of Insurance on July 3, 2003. An insurance subsidiary of the Company offered the plan to
its voluntary annuity holders. The election period expired on January 31, 2004, at which time 70% of the voluntary annuity
customers elected to participate. During the 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. Additional capital totaling $17 million was contributed during the 2004 first quarter to maintain required regulatory capital and to fund ongoing operating
expenses.

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

The
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.

The
above paragraphs contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

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EVENTS IN 2002

Impact from Argentina's Economic Changes

Throughout 2002, Argentina experienced significant political and economic changes including severe recessionary conditions, high inflation and political
uncertainty. The government of Argentina implemented substantial economic changes, including abandoning the country's fixed U.S. dollar-to-peso exchange rate and asymmetrically
redenominating substantially all of the banking industry's loans, deposits (which were also restricted) and other assets and liabilities previously denominated in U.S. dollars into pesos at different
rates. As a result of the impact of these government actions, the Company changed its functional currency in Argentina from the U.S. dollar to the Argentine peso. Additionally, the government issued
certain compensation instruments to financial institutions to compensate them in part for losses incurred as a result of the redenomination events. The government also announced a 180-day
moratorium against creditors filing foreclosures or bankruptcy proceedings against borrowers. Later in the year, the government modified the terms of certain of their Patriotic Bonds, making them less
valuable. The government actions, combined with the severe recessionary economic situation and the devaluation of the peso, adversely impacted Citicorp's business in Argentina.

During
2002, Citicorp recorded a total of $1.704 billion in net pretax charges, as follows: $1,018 million in net provisions for credit losses; $284 million in
investment write-downs; $232 million in losses relating to Amparos (representing judicial orders requiring previously dollar-denominated deposits and insurance contracts that had been
redenominated at government rates to be immediately repaid at market exchange rates); $98 million of write-downs of Patriotic Bonds; a $42 million restructuring charge; and a
$30 million net charge for currency redenomination and other foreign currency items that includes a benefit from compensation instruments issued in 2002.

In
addition, the impact of the devaluation of the peso during 2002 produced foreign currency translation losses that reduced Citicorp's equity by $595 million, net of tax.

Charge for Regulatory and Legal Matters

During the 2002 fourth quarter, the Company recorded a $460 million after-tax charge related to the establishment of reserves for regulatory
settlements and related civil litigation.

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 price of Citigroup shares,
as adjusted for the effect of the August 2002 distribution by Citigroup to its shareholders of a majority portion of its ownership interest
in Travelers Property Casualty Corp. (TPC), for the two trading days before and after May 21, 2002, the date the terms of the acquisition were agreed to and announced. The results of GSB are
included from November 2002 forward. The operations of GSB were integrated into the businesses of Citicorp.

Sale of 399 Park Avenue

During 2002, the Company sold its 399 Park Avenue, New York City headquarters building. The Company is currently the lessee of approximately 40% of the building
with terms averaging 15 years. The sale for $1.06 billion resulted in a pretax gain of $830 million, with $527 million ($323 million after-tax)
recognized in 2002 representing the gain on the portion of the building the Company does not occupy, and the remainder to be recognized over the term of Citicorp's lease agreements. During 2003, the
Company recognized $20 million ($12 million after-tax) of the deferred portion of the gain.

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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 47.

Valuations of Financial Instruments

Investments and trading account assets and liabilities, held by the Global Corporate and Investment Bank 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, global, regional, or
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 $206.3 billion and $161.9 billion and liabilities of $53.5 billion
and $26.4 billion at December 31, 2003 and 2002, 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, 2003 and
2002, respectively, approximately 98.8% and 99% of the available-for-sale and trading portfolios' gross assets and liabilities are considered verified and approximately 1.2%
and 1% are considered unverified. Of the unverified assets, at December 31, 2003 and 2002, respectively, approximately 49% and 35% consist of cash products, where independent quotes were not
available and/or alternative procedures were not feasible, and 51% and 65% 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 2003, the
monthly average aged inventory designated as available-for-immediate-sale was approximately $141 million compared with $106 million in 2002. Inventory
positions that are both aged and whose values are unverified amounted to less than $48 million and $55 million at December 31, 2003 and 2002, 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, 2003 and 2002, such valuation adjustments amounted to $4 million and $1.2 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 $4.4 billion and $4.7 billion at December 31, 2003 and
2002, respectively. For investments in publicly traded securities held by private equity subsidiaries amounting to 5 positions with a fair value of approximately $0.9 billion and 13 positions
with a fair value of approximately $0.9 billion at December 31, 2003 and 2002, 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 adjusted to produce an estimate of the attainable fair value for the
securities. To determine the amount of the adjustment, the Company uses a model that is based on option theory. The model is validated periodically by an independent valuation consulting firm. Such
adjustments ranged from 10% to 50% of the investments' quoted prices in 2003 and from 5% to 30% in 2002. For investments that are not publicly traded that are held by private equity subsidiaries
amounting to approximately $3.5 billion and $3.8 billion at December 31, 2003 and 2002, respectively, 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. Independent consultants may be used
to provide valuations periodically for certain investments that are not publicly

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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 36.

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, 2003 and 2002,
respectively, the total allowance for credit losses, which includes reserves for letters of credit and unfunded commitments, totaled $4.155 billion and $4.647 billion for the corporate
loan portfolio and $9.088 billion and $7.021 billion for the consumer portfolio. Attribution of the allowance is made for analytic purposes only, and the entire allowance of
$13.243 billion and $11.668 billion at December 31, 2003 and 2002, respectively, is available to absorb probable credit losses inherent in the portfolio, including letters of
credit and unfunded commitments.

During
2003, corporate cash-basis loans decreased $564 million from $3.966 billion to $3.402 billion, and net credit losses decreased from
$1.545 billion in 2002 to $1.210 billion, reflecting overall improvement in the credit quality of the portfolio as well as reduced exposure in the energy and telecommunications
industries. Management expects the 2004 loss experience for the corporate portfolio to be improved from that of 2003.

Consumer
net credit losses, excluding CitiCapital, increased from $6.797 billion in 2002 to $7.096 billion in 2003. Consumer loans on which accrual of interest has been
suspended, excluding Commercial Markets, increased from $4.607 billion to $4.735 billion. The consumer allowance, excluding CitiCapital, rose from $6.410 billion to
$8.530 billion from December 31, 2002 to December 31, 2003, including $2.1 billion associated with the acquisition of Sears. The level of the consumer allowance was
impacted by increased bankruptcies in Germany and in theConsumer Financeportfolio in Japan. Consumer credit loss rates are expected to rise due to the
addition of the Sears and Home Depot portfolios. Excluding the impact of Sears and Home Depot, management expects that 2004 consumer credit loss rates will be comparable to 2003.

In
the corporate loan portfolio, 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 based upon an estimate of probable losses for individual larger-balance, non-homogeneous loans deemed impaired, a statistical model of expected losses on the performing
portfolio, as well as management's detailed knowledge of the portfolio and current conditions. When reserves for individual loans that are deemed to be impaired are established, 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
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. These estimates are based upon: (1) Citicorp'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 2002 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 width of the 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.

The
statistical estimate of losses inherent in the portfolio may then be adjusted, both for management's estimate of probable losses on specific exposures, as well as for other
considerations, such as 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.

For
December 31, 2003, the statistical estimate for inherent losses in the total corporate portfolio was $2.820 billion, with a standard deviation of $646 million,
compared with $3.434 billion and $785 million at December 31, 2002. This analysis included all corporate loans, commitments and unfunded letters of credit. Management then
identified those exposures for which name-specific loss estimates were required, and replaced the statistical estimate of losses with management's estimate of losses. Management made
adjustments for other considerations, including portfolio trends and economic indicators. As a result of these adjustments, at December 31, 2003, the allowance for credit losses attributable to
the corporate portfolio was set at $4.155 billion compared with $4.647 billion in 2002, which includes the reserve for unfunded commitments and letters of credit of $600 million
in 2003 and $567 million in 2002 that is included in other liabilities on the balance sheet.

CitiCapital's
allowance is 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 are
established to provide for imprecision caused by the use of estimated loss data.

At
December 31, 2003, the CitiCapital allowance totaled $558 million, down from $611 million in 2002. The allowance was composed of $58 million and
$40 million as of December 31, 2003 and 2002, respectively, of reserves on impaired loans, $420 million and $511 million provided for probable credit losses in the
performing portfolio, and $80 million and $60 million reflecting imprecision caused by the use of historical data and projected loss data. The reserve was $53 million lower than a
year ago due to the smaller portfolio balance at December 31, 2003. The December 31, 2003 and 2002 reserves for probable credit losses reflect 1.95% and 1.87% annualized weighted average
loss ratios on the performing portfolio, respectively. A 0.50% change in the weighted average loss ratio would increase or decrease the December 31, 2003 allowance by $109 million,
whereas a 0.50% change would have increased or decreased the allowance by $137 million at December 31, 2002.

9

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Each
portfolio of smaller-balance, homogeneous loans, including consumer mortgage, installment, revolving credit and most other consumer loans, primarily in the Global Consumer segment,
is collectively evaluated for impairment in order to provide an allowance sufficient to cover all loans 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 statistical 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. The statistical methodology is applied separately for each individual product within each different geographic
region in which the product is offered.

Under
this statistical 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 statistical methodology results in a base calculation of inherent losses in the loan portfolio for each business within the Global Consumer segment. Management
evaluates the adequacy of the allowance for credit losses for each business relative to a range around its base calculation. In general, each business must maintain an allowance for credit losses that
is within the specified range. However, management also considers the following factors in evaluating the adequacy of the allowance for credit losses: economic trends, competitive factors,
seasonality, portfolio acquisitions, solicitation of new loans, changes in lending policies and procedures, geographical, product, and other environmental factors, changes in bankruptcy laws, and
evolving regulatory standards.

Citicorp
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 FFIEC guidelines (excluding recent acquisitions for which we obtained temporary waivers), including bankruptcy
loss recognition. The allowance for credit losses is replenished through a charge to the provision for credit losses for all net credit losses incurred during the relevant accounting period and
adjusted to reflect current economic trends and the results of the statistical methodology. 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 the provision for credit losses. For example, a 10% increase in the Company's portion of bankruptcy losses would generally result in a similar increase in the provision for
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.

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 33, 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-R, which the Company will adopt in the first quarter of 2004. This revised interpretation may change certain of
the consolidation determinations reached under FIN 46. Most of the Company's securitization transactions meet the existing 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 $419.2 billion
at December 31, 2003 and $435.1 billion at December 31, 2002.

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, 2003 and 2002, respectively, Global Consumer was involved with special-purpose entities (SPEs) with assets of $251.3 billion and $252.2 billion, including QSPEs with
assets of $226.4 billion and $248.2 billion.

10

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GCIB's
securitization activities are conducted on behalf of the Company's clients and to 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. All the mortgage-backed securities transactions use QSPEs, as do certain CDOs and structured financing transactions. At December 31, 2003 and 2002, respectively, GCIB
was involved with SPEs with assets of $66.1 billion and $75.1 billion, including QSPEs with assets amounting to $1.5 billion and $2.3 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, 2003 and 2002. At December 31, 2003 and 2002, respectively, Global Investment Management was involved with SPEs with assets of
$45.4 billion and $42.6 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, 2003 and 2002, respectively, Proprietary Investment Activities was involved with SPEs with assets of $56.4 billion and $65.2 billion.

VIEs
with total assets of approximately $27.1 billion and $13.1 billion were consolidated at December 31, 2003 and 2002, respectively. Additional information on the
Company's securitization activities and VIEs can be found in "Off-Balance Sheet Arrangements" on page 45 and in Note 9 to the Consolidated Financial Statements.

Argentina

The carrying value of assets and exposures to loss related to the Company's operations in Argentina represents management's estimates based on current economic,
legal and political conditions. While these conditions continue to be closely monitored, they remain fluid, and future actions by the Argentine government or further deterioration of its economy could
result in changes to those estimates.

The
carrying values of certain assets, including the compensation note, government-guaranteed promissory notes (GPNs) and government Patriotic Bonds, are based on management's estimates
of default, recovery rates, and any collateral features. These instruments continue to be monitored and have been written down to represent management's estimate of their collectibility, which could
change as economic conditions in Argentina either stabilize or worsen.

At
December 31, 2003, the carrying values of the compensation notes, GPNs, and Patriotic Bonds were $233 million, $107 million, and $47 million, respectively.

Management
continues to monitor the potential impact that government actions may have on the Company's pension and insurance businesses in Argentina. These actions may include
redollarization of certain liabilities and forced exchanges of customer assets. At the present time, the potential impact of such actions cannot be determined and additional losses may be incurred in
the future.

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, 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 99.

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.

11

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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               |                                            | 2003 |        | 2002(1) |  
|------------------------------------ | ------------------------------------------ | ---- | ------ | ------- | -
|Global Consumer                      |                                            |      |        |         |  
|                                     | Cards                                      |      | $      | 3,631   |  
|                                     | Consumer Finance                           |      |        | 1,928   |  
|                                     | Retail Banking                             |      |        | 3,609   |  
|                                     | Other                                      |      |        | (87     | )
|                                     |                                            |      |        |         |  
|                                     | Total Global Consumer                      |      |        | 9,081   |  
|                                     |                                            |      |        |         |  
|Global Corporate and Investment Bank |                                            |      |        |         |  
|                                     | Capital Markets and Banking(2)             |      |        | 2,793   |  
|                                     | Transaction Services                       |      |        | 770     |  
|                                     |                                            |      |        |         |  
|                                     | Total Global Corporate and Investment Bank |      |        | 3,563   |  
|                                     |                                            |      |        |         |  
|Global Investment Management         |                                            |      |        |         |  
|                                     | Life Insurance and Annuities               |      |        | (10     | )
|                                     | Private Bank                               |      |        | 551     |  
|                                     | Asset Management                           |      |        | 134     |  
|                                     |                                            |      |        |         |  
|                                     | Total Global Investment Management         |      |        | 675     |  
|                                     |                                            |      |        |         |  
|Proprietary Investment Activities    |                                            |      | 156    |         |  
|Corporate/Other                      |                                            |      | 66     |         |  
|                                     |                                            |      |        |         |  
|Net Income                           |                                            | $    | 13,541 |         | $
|                                     |                                            |      |        |         |  

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RESULTS OF OPERATIONS

Net Income

Citicorp reported net income of $13.541 billion in 2003, up 26% from $10.709 billion in 2002. Return on common equity was 17.6% and 15.9% in 2003 and
2002, respectively.

Global
Consumer net income in 2003 increased $1.4 billion or 18% compared to 2002. Global Corporate and Investment Bank (GCIB) increased $1.1 billion or 42% compared to
2002. Global Investment Management grew $6 million or 1% from 2002, while Proprietary Investment Activities increased $403 million from 2002. See individual segment and product
discussions on pages 14 to 25 for additional discussion and analysis of the Company's results and operations.

Selected Revenue Items

Net interest revenue was $33.8 billion in 2003, up $2.2 billion or 7% from 2002, reflecting the positive impact of a changing rate environment and
business volume growth in most markets, resulting from organic growth combined with the impact of acquisitions during the year.

Total
fees and commissions of $12.0 billion were up $1.2 billion or 11% in 2003, primarily reflecting improved global equity markets and continued strong investment banking
results. Foreign exchange revenues of $3.5 billion increased $1.4 billion or 63% from 2002. Trading account revenues of ($546) million decreased $2.3 billion from 2002, primarily
reflecting lower trading results due to mark-to-market losses on credit derivatives as credit spreads tightened and foreign exchange volatility predominantly in emerging market
countries. Other revenue of $6.1 billion in 2003 increased
$754 million from 2002, reflecting higher securitization gains and activities and stronger Private Equity results. The 2002 results include the gain on the sale of 399 Park Avenue in the third
quarter.

Operating Expenses

Operating expenses grew $2.3 billion or 9% to $26.9 billion in 2003. Expense growth during 2003 included investments made relating to acquisitions
during the year, increased spending on marketing and advertising and new business initiatives to support organic growth, higher pension and insurance expense, and the cost of expensing options.
Expenses in 2002 included the charge for the establishment of reserves for regulatory settlements and related civil litigation, which was partially offset by lower compensation and benefits, expense
rationalization initiatives, and a benefit of $610 million from the absence of goodwill and other indefinite-lived intangible asset amortizations.

12

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Benefits, Claims, and Credit Losses

Benefits, claims, and credit losses were $8.6 billion and $10.5 billion in 2003 and 2002, respectively. Policyholder benefits and claims in 2003
decreased $1 million from 2002. The provision for credit losses decreased $1.9 billion or 20% from 2002 to $8.0 billion in 2003, reflecting improved credit quality in both
consumer and corporate businesses, partially offset by the impact of acquisitions.

Global
Consumer provisions for benefits, claims, and credit losses of $7.5 billion in 2003 were down $428 million or 5% from 2002, reflecting decreases in CardsandRetail
Banking, partially offset by increases inConsumer
Finance. Total net credit losses (excluding Commercial Markets) were $7.093 billion and the related loss ratio was 2.38% in 2003, as compared to $6.740 billion and
2.67% in 2002. The consumer loan delinquency ratio (90 days or more past due) increased to 2.42% at December 31, 2003 from 2.40% at December 31, 2002. See page 30 for a
reconciliation of total consumer credit information.

The
GCIB provision for credit losses of $734 million in 2003 decreased $1.5 billion or 67% from 2002 reflecting the improving credit environment contrasted with
prior-year provisions for Argentina and exposures in the telecommunications and energy industries.

Corporate
cash-basis loans at December 31, 2003 and 2002 were $3.402 billion and $3.966 billion, respectively. The decrease in cash-basis
loans from 2002 reflects improved credit quality, write-offs against previously established reserves, as well as repayments.

Income Taxes

The Company's effective tax rate of 29.7% in 2003 decreased 340 basis points, primarily representing benefits for not providing U.S. income taxes on the earnings
of certain foreign subsidiaries that are indefinitely invested, a $200 million release of a tax reserve that had been held at the legacy Associates' businesses and was deemed to be in excess of
expected tax liabilities, and a $94 million release of a tax reserve in Japan related to a settlement with the authorities. The Company's effective tax rate was 33.1% in 2002.

Regulatory Capital

Total capital (Tier 1 and Tier 2) was $76.2 billion or 12.68% of net risk-adjusted assets, and Tier 1 capital was $50.7 billion or
8.44% at December 31, 2003, compared to $68.7 billion or 12.31% and $45.3 billion or 8.11%, respectively, at December 31, 2002.

---

Certain amounts in prior years have been reclassified to conform to the current year's presentation. Business segment and product reclassifications include the
reclassification of CitiCapital fromCapital Markets and BankingtoRetail Banking; the allocation of
Citicorp Electronic Financial Services, Inc. from Other Consumer to Corporate/Other; and the reallocation of certain Treasury functions in Mexico fromRetail Banking toCapital Markets and Banking.

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13

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GLOBAL CONSUMER

|In millions of dollars                             |  | 2003 |        | 2002
|-------------------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense                  |  | $    | 39,074 |     
|Operating expenses                                 |  |      | 18,105 |     
|Provisions for benefits, claims, and credit losses |  |      | 7,505  |     
|                                                   |  |      |        |     
|Income before taxes and minority interest          |  |      | 13,464 |     
|Income taxes                                       |  |      | 4,332  |     
|Minority interest, after-tax                       |  |      | 51     |     
|                                                   |  |      |        |     
|Net income                                         |  | $    | 9,081  |     
|                                                   |  |      |        |     

Global Consumerreported net income of $9.081 billion in 2003, up $1.366 billion or 18% from 2002, driven by double-digit
growth inRetail BankingandCards, that was partially offset by a decline in Consumer Finance.Retail Bankingnet income increased $1.115 billion or 45% in 2003 primarily due to
the impact of the Golden State Bancorp (GSB) acquisition and strong international growth including improvement in Argentina.Cardsnet income increased
$550 million or 18% in 2003 mainly reflecting the addition of the Sears and Home Depot portfolios, growth in Citi Cards and Asia, and lower credit losses in Latin America. Consumer Financenet
income decreased $271 million or 12% in 2003 primarily due to continued weakness in Japan, partially offset by growth in North
America, including the acquisition of GSB, and in EMEA.

In
November 2003, Citigroup completed the acquisition of Sears, which added $15.4 billion of private-label card receivables, $13.2 billion of bankcard receivables
and 32 million accounts. In July 2003, Citigroup completed the acquisition of the Home Depot portfolio, which added $6 billion in receivables and 12 million accounts. In
July 2003, Citigroup also acquired the remaining stake in Diners Club Europe, adding 1 million accounts and $0.6 billion of receivables. In November 2002, Citigroup
completed the acquisition of GSB, which added $25 billion in deposits and $35 billion in loans, including $33 billion inRetail
Bankingand $2 billion inConsumer Finance.In February and May 2002, CitiFinancial Japan acquired the consumer
finance businesses of Taihei Co., Ltd. (Taihei) and Marufuku Co., Ltd. (Marufuku), adding $1.1 billion in loans. These business acquisitions were accounted for as purchases;
therefore, their results are included in the Global Consumer results from the dates of acquisition.

Global
Consumer has divested itself of several non-strategic businesses and portfolios as opportunities to exit became available. Certain divestitures include the sale of the
$1.2 billion CitiCapital Fleet Services portfolio and $1.7 billion of credit card portfolios in 2003 as well as the 2002 sale of the $2.0 billion mortgage portfolio in Japan
Retail Banking.

CARDS

|In millions of dollars                    |  | 2003 |        | 2002 |  
|----------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense         |  | $    | 14,669 |      | $
|Operating expenses                        |  |      | 6,227  |      |  
|Provision for credit losses               |  |      | 2,935  |      |  
|                                          |  |      |        |      |  
|Income before taxes and minority interest |  |      | 5,507  |      |  
|Income taxes                              |  |      | 1,872  |      |  
|Minority interest, after-tax              |  |      | 4      |      |  
|                                          |  |      |        |      |  
|Net income                                |  | $    | 3,631  |      | $
|                                          |  |      |        |      |  
|Average assets(in billions of dollars)    |  | $    | 70     |      | $
|Return on assets                          |  |      | 5.19   | %    |  
|                                          |  |      |        |      |  

Cardsreported net income of $3.631 billion in 2003, up $550 million or 18% from 2002. North America Cards reported net income
of $3.130 billion, up 16% over 2002, reflecting increased spreads and improved credit costs, as well as the Home Depot and Sears acquisitions. International Cards income increased by 33% over
2002 to $501 million in 2003, reflecting a lower provision for credit losses in Argentina and growth in Asia.

As
shown in the following table, average managed loans grew 8% in 2003, reflecting growth of 7% in North America and 17% in International Cards. In North America, growth was led by Citi
Cards where the additions of the Home Depot and Sears portfolios were partially offset by a decline in introductory promotional rate balances that was driven by a change in acquisition marketing
strategies in the current year, as well as by the sale of $1.7 billion of non-strategic portfolios. The increase in International Cards reflected growth in Asia and EMEA, the
addition of Diners Club Europe, and the benefit of strengthening currencies. Sales in 2003 were $291.1 billion, up 5% from 2002. North America sales were up 3% to $251.5 billion in 2003,
as the impact of acquisitions and improved purchase sales were partially offset by the change in acquisition marketing strategies. International Cards sales grew 19%, reflecting growth in EMEA, Asia,
and Japan, as well as the addition of Diners Club Europe.

|In billions of dollars               |               | 2003 |       | 2002 
|------------------------------------ | ------------- | ---- | ----- | -----
|Sales                                |               |      |       |      
|                                     | North America |      | $     | 251.5
|                                     | International |      |       | 39.6 
|                                     |               |      |       |      
|Total sales                          |               | $    | 291.1 |      
|                                     |               |      |       |      
|Average managed loans                |               |      |       |      
|                                     | North America |      | $     | 118.0
|                                     | International |      |       | 12.5 
|                                     |               |      |       |      
|Total average managed loans          |               | $    | 130.5 |      
|                                     |               |      |       |      
|Total on-balance sheet average loans |               | $    | 55.9  |      
|                                     |               |      |       |      

Revenues,
net of interest expense, of $14.669 billion in 2003 increased $981 million or 7% from 2002, reflecting growth in North America of $637 million or 6% and in
International Cards of $344 million or 15%. Revenue growth in North America reflected the impact of acquisitions, net interest margin expansion, the benefit of increased purchase sales and
cardholder services fees, and gains from the sale of non-strategic portfolios. Revenue growth in 2003 was partially offset by increased credit losses on securitized receivables, which are
recorded as a reduction to other revenue after receivables are securitized. In 2003 and 2002, revenues included net gains of $342 million and $425 million, respectively, primarily as a
result of changes in estimates related to the timing of revenue recognition on securitized portfolios. Revenue growth in International Cards was mainly driven by receivables and sales increases in
Asia and EMEA, the addition of Diners Club Europe, as well as the net effect of foreign currency translation.

Operating
expenses of $6.227 billion in 2003 were $692 million or 13% higher than 2002, reflecting the impact of acquisitions and foreign currency translation and increased
investment spending, including higher advertising and marketing expenditures, costs associated with expansion into Russia and China, and repositioning costs, mainly in EMEA and Latin America.

The
provision for credit losses in 2003 was $2.935 billion compared to $3.410 billion in 2002. The decrease in the provision for credit losses in 2003 was mainly due to an
increase in the level of securitized receivables combined with credit improvements in North

14

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America
and Latin America, including a $44 million reduction in the allowance for credit losses in Argentina due to improvement in credit experience and lower portfolio volumes. The decline in
2003 was partially offset by the impact of acquisitions. In 2002, the provision for credit losses included a $206 million addition to the allowance for credit losses established in accordance
with FFIEC guidance related to past-due interest and late fees on the on-balance sheet credit card receivables in Citi Cards and a $109 million net provision for credit
losses resulting from deteriorating credit in Argentina.

The
securitization of credit card receivables is limited to the Citi Cards business within North America. At December 31, 2003, securitized credit card receivables were
$76.1 billion, compared to $67.1 billion at December 31, 2002. There were no credit card receivables held-for-sale at December 31, 2003, compared to
$6.5 billion at December 31, 2002. Because securitization changes Citicorp's role from that of a lender to that of a loan servicer, it removes the receivables from Citicorp's balance
sheet and affects the amount of revenue and the manner in which revenue and the provision for credit losses are classified in the income statement. For securitized receivables and receivables
held-for-sale, gains are recognized upon sale, and amounts that would otherwise be reported as net interest revenue, fee and commission revenue, and credit losses on loans are
instead reported as fee and commission revenue (for servicing fees) and other revenue (for the remaining revenue, net of credit losses and the amortization of previously recognized securitization
gains). Because credit losses are a component of these cash flows, revenues over the term of the transactions may vary depending upon the credit performance of the securitized receivables. However,
Citicorp's exposure to credit losses on the securitized receivables is contractually limited to the cash flows from the receivables.

Including
securitized receivables and receivables held-for-sale, managed net credit losses in 2003 were $7.694 billion with a related loss ratio of 5.90%,
compared to $7.169 billion and 5.93% in 2002. The decline in the ratio from the prior year was primarily driven by improvements in North America and the international markets, particularly in
Hong Kong, Taiwan, and Argentina, partially offset by the addition of the Sears portfolio. Contributing to the improvement in North America was the addition of the Home Depot portfolio, which at
acquisition was recorded at fair market value and represented $2.8 billion of average loans in the net credit loss calculation. Loans delinquent 90 days or more were
$3.392 billion or 2.14% at December 31, 2003, compared to $2.397 billion or 1.84% at December 31, 2002. The increase in delinquent loans in 2003 was primarily attributable
to the Sears and Home Depot acquisitions. 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                             |  | 2003 |        | 2002 |  
|-------------------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense                  |  | $    | 10,003 |      | $
|Operating expenses                                 |  |      | 3,488  |      |  
|Provisions for benefits, claims, and credit losses |  |      | 3,727  |      |  
|                                                   |  |      |        |      |  
|Income before taxes                                |  |      | 2,788  |      |  
|Income taxes                                       |  |      | 860    |      |  
|                                                   |  |      |        |      |  
|Net income                                         |  | $    | 1,928  |      | $
|                                                   |  |      |        |      |  
|Average assets(in billions of dollars)             |  | $    | 105    |      | $
|Return on assets                                   |  |      | 1.84   | %    |  
|                                                   |  |      |        |      |  

Consumer Financereported net income of $1.928 billion in 2003, down $271 million or 12% from 2002, principally reflecting a
decline in International Consumer Finance resulting from continued weakness in Japan, which was partially offset by the acquisition of GSB in November of 2002 and a $94 million release of a tax
reserve related to a settlement with tax authorities, which increased income in Japan.

|In billions of dollars    |  | 2003 |      | 2002
|------------------------- |  | ---- | ---- | ----
|Average loans             |  |      |      |     
|Real-estate-secured loans |  | $    | 52.1 |     
|Personal                  |  |      | 22.5 |     
|Auto                      |  |      | 11.1 |     
|Sales finance and other   |  |      | 5.0  |     
|                          |  |      |      |     
|Total average loans       |  | $    | 90.7 |     
|                          |  |      |      |     

As
shown in the preceding table, average loans grew 11% in 2003 resulting from acquisitions, growth in real-estate-secured loans, the impact of funding auto loan volumes
internally and strengthening currencies in the international markets. Growth in real-estate-secured loans mainly reflected the continued cross-selling of products through a Citigroup unit
as well as portfolio acquisitions in North America and growth in the U.K. Average auto loans in 2003 increased $2.7 billion or 32% from 2002, primarily resulting from the addition of GSB auto
loans in November of 2002, as well as a shift in funding policy to fund business volumes internally. In Japan, average loans of $12.1 billion declined 1% from 2002, as the benefit of foreign
currency translation was more than offset by the impact of charge-offs, higher pay-downs, reduced loan demand and tighter underwriting standards.

As
shown in the following table, the average net interest margin of 10.10% in 2003 declined 53 basis points from 2002, primarily reflecting compression in the international markets,
particularly in Japan. In North America, the average net interest margin was 8.40% in 2003, declining 3 basis points from the prior year as the benefit of lower cost of funds was offset by lower
yields, reflecting the lower interest rate environment and the continued shift to higher-quality credits. The average net interest margin for International Consumer Finance was 15.80% in 2003,
declining 175 basis points from the prior year, primarily driven by Japan. The compression of net interest margin in Japan reflected a decline in higher-yielding personal loans combined with a change
in the treatment of adjustments and refunds of interest and continued high levels of non-performing loans. Beginning in the second quarter of 2003, adjustments and refunds of interest
charged to customer accounts are accounted for as a reduction of net interest margin whereas, in prior periods, such amounts were treated as credit costs. The net interest margin decline in Japan was
offset, in part, by margin expansion in Europe, which was driven by lower cost of funds and higher yields.

|                            |  | 2003  |   | 2002  |  
|--------------------------- |  | ----- | - | ----- | -
|Average net interest margin |  |       |   |       |  
|North America               |  | 8.40  | % | 8.43  | %
|International               |  | 15.80 | % | 17.55 | %
|Total                       |  | 10.10 | % | 10.63 | %
|                            |  |       |   |       |  

Revenues,
net of interest expense, of $10.003 billion in 2003 increased $196 million or 2% from 2002. The increase in revenue reflected growth of $490 million or 8%
in North America, partially offset by a decline of $294 million or 8% in International Consumer Finance. Revenue growth in North America was primarily driven by growth in receivables, which
included the addition of the GSB auto portfolio, partially offset by declines in insurance-related revenue. In International Consumer Finance, the decline in revenue was primarily due to lower volumes
and spreads in Japan, which was partially offset by the timing of acquisitions in 2002, the net effect of foreign currency translation, and growth in Asia.

15

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Operating expenses of $3.488 billion in 2003 increased $374 million or 12% from 2002, reflecting increases of $218 million or 12% in North America and
$156 million or 13% in International Consumer Finance. The increase in operating expenses in North America was primarily due to increased volumes and the addition of the GSB auto portfolio, as
well as increased staffing costs and collection and compliance expenses. The increase in operating expenses for International Consumer Finance reflected the impact of foreign currency translation,
additional costs in Japan attributable to actions taken to restructure the business in response to the continued challenging business environment and the timing of acquisitions in the prior year,
partially offset by expense savings from branch closings and headcount reductions in Japan.

The
provisions for benefits, claims, and credit losses were $3.727 billion in 2003, up from $3.294 billion in 2002, primarily reflecting increases in Japan due to
deteriorating credit conditions, the timing of acquisitions, and the impact of foreign currency translation, partially offset by a decline in policyholder benefits and claims in North America. Net
credit losses and the related loss ratio were $3.517 billion and 3.88% in 2003, up from $3.026 billion and 3.69% in 2002. In North America, net credit losses were $2.059 billion
and the related loss ratio was 2.94% in 2003, compared to $1.865 billion and 3.00% in 2002. The decrease in the ratio in 2003 was mainly driven by improvements in the
real-estate-secured and auto portfolios, which were partially offset by increased loss rates in the personal loan portfolio. Net credit losses in International Consumer Finance were
$1.458 billion and the related loss ratio was 7.02% in 2003, up from $1.161 billion and 5.88% in 2002, primarily due to increased bankruptcy and contractual losses in Japan. The 2003 net
credit loss ratio for International Consumer Finance was reduced by 56 basis points as a result of the change in treatment of adjustments and refunds as discussed above.

Loans
delinquent 90 days or more were $2.221 billion or 2.36% of loans at December 31, 2003, compared to $2.197 billion or 2.48% at December 31, 2002.
The decrease in the delinquency ratio in 2003 was primarily due to improvements in North America, partially offset by deterioration in Japan.

RETAIL BANKING

|In millions of dollars                             |  | 2003 |        | 2002 |  
|-------------------------------------------------- |  | ---- | ------ | ---- | -
|Revenues, net of interest expense                  |  | $    | 14,284 |      | $
|Operating expenses                                 |  |      | 8,134  |      |  
|Provisions for benefits, claims, and credit losses |  |      | 843    |      |  
|                                                   |  |      |        |      |  
|Income before taxes and minority interest          |  |      | 5,307  |      |  
|Income taxes                                       |  |      | 1,651  |      |  
|Minority interest, after-tax                       |  |      | 47     |      |  
|                                                   |  |      |        |      |  
|Net income                                         |  | $    | 3,609  |      | $
|                                                   |  |      |        |      |  
|Average assets(in billions of dollars)             |  | $    | 224    |      | $
|Return on assets                                   |  |      | 1.61   | %    |  
|                                                   |  |      |        |      |  

Retail Bankingreported net income of $3.609 billion in 2003, up $1.115 billion or 45% from 2002. The increase in Retail Bankingreflected growth in
both North America and International Retail Banking net income of $778 million or 51% and $337 million or
35%, respectively. Growth in North America was primarily due to the acquisition of GSB, strong growth in customer volumes including mortgage originations as well as loan and deposit balances, combined
with improved credit costs in Mexico and CitiCapital. The increase in International Retail Banking income reflected improvements in Argentina and growth in EMEA and Asia, which more than offset the
prior-year gain on sale of the mortgage portfolio in Japan.

|In billions of dollars          |               | 2003 |       | 2002 
|------------------------------- | ------------- | ---- | ----- | -----
|Average customer deposits       |               |      |       |      
|                                | North America |      | $     | 153.4
|                                | International |      |       | 86.2 
|                                |               |      |       |      
|Total average customer deposits |               | $    | 239.6 |      
|                                |               |      |       |      
|Average loans                   |               |      |       |      
|                                | North America |      | $     | 122.9
|                                | International |      |       | 36.0 
|                                |               |      |       |      
|Total average loans             |               | $    | 158.9 |      
|                                |               |      |       |      

As
shown in the preceding table,Retail Bankinggrew average customer deposits and average loans in 2003. The growth in North America
average customer deposits and average loans of 19% and 26%, respectively, was largely driven by the acquisition of GSB. In addition, North America experienced customer deposit growth in Citibanking
North America that was partially offset by the negative impact of foreign currency translation in Mexico. Average loan growth in North America also reflected higher mortgage and student loan balances
in Consumer Assets that were partially offset by a decline in CitiCapital resulting from the liquidation of non-core portfolios, including the sale in 2003 of the $1.2 billion
CitiCapital Fleet Services portfolio. International Retail Banking average customer deposits grew across all regions, except Latin America, and benefited from the impact of foreign currency
translation. Average loans in International Retail Banking grew 5% as the impact of foreign currency translation and growth in installment loans, primarily in Germany, partially offset a decline in
mortgage loans in all regions.

As
shown in the following table, revenues, net of interest expense, of $14.284 billion in 2003 increased $2.161 billion or 18% from 2002. Revenues in North America grew
$1.420 billion or 18%, primarily due to the acquisition of GSB and growth in Consumer Assets. Excluding the acquisition of GSB, growth in North America (excluding Mexico) was driven by the
benefit of increased loan and deposit volumes, higher mortgage servicing and securitization income, and growth in fee revenues, which was partially offset by lower net funding and positioning spreads
in Citibanking North America and the impact of the liquidation of non-core portfolios in CitiCapital. Revenues in Mexico declined $12 million or 1% as the negative impact of foreign
currency translation and the net write-down of certain investments offset growth in deposit volumes and spreads. International Retail Banking revenues increased $741 million or 17%,
reflecting growth across all regions except Japan, which declined due to a $65 million gain on sale of the $2.0 billion mortgage portfolio in the prior year. Excluding Japan, growth
reflected the net effect of foreign currency translation, increased loan volumes in EMEA, mainly in Germany, and strong investment and insurance product sales in Asia. The revenue increase in Latin
America reflected improvements in
Argentina resulting from lower losses and the release of reserves related to customer deposit liabilities and a decline in government-mandated inflation indexed accruals. These improvements were
partially offset by a benefit in the prior year related to a change in the allocation of re-denomination losses among products based on the pesification decree issued by the Argentine
government in February 2002.

16

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|In millions of dollars                                      |  | 2003 |        | 2002
|----------------------------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense                           |  |      |        |     
|Citibanking North America, Consumer Assets, and CitiCapital |  | $    | 7,351  |     
|Mexico                                                      |  |      | 1,836  |     
|                                                            |  |      |        |     
|North America                                               |  |      | 9,187  |     
|                                                            |  |      |        |     
|EMEA                                                        |  |      | 2,450  |     
|Japan                                                       |  |      | 448    |     
|Asia                                                        |  |      | 1,679  |     
|Latin America                                               |  |      | 520    |     
|                                                            |  |      |        |     
|International                                               |  |      | 5,097  |     
|                                                            |  |      |        |     
|Total revenues, net of interest expense                     |  | $    | 14,284 |     
|                                                            |  |      |        |     

Operating
expenses of $8.134 billion in 2003 increased $1.141 billion or 16% from 2002, reflecting increases in North America and in International Retail Banking. In North
America, the growth of $788 million or 17% was mainly driven by the addition of GSB and volume-related increases in Consumer Assets, as well as investments in technology. Expense growth in
North America was reduced by the impact of foreign currency translation in Mexico. International Retail Banking expenses increased $353 million or 14%, reflecting the impact of foreign currency
translation, higher sales commissions and increased investment spending, including costs associated with branch and sales-force expansion, higher advertising, investments in technology and
repositioning costs in Latin America and EMEA.

The
provisions for benefits, claims, and credit losses were $843 million in 2003, down from $1.229 billion in 2002, reflecting a lower provision for credit losses. The
decrease in the provision for credit losses in 2003 was mainly due to lower credit costs in Mexico, including a credit recovery of $64 million in 2003, and in CitiCapital, which benefited from
the liquidation of non-core portfolios. The provision for credit losses in 2003 also included a $57 million net reduction in the allowance for credit losses in Argentina due to
improvement in credit experience and lower portfolio volumes that was essentially offset by additions to the allowance for credit losses in Germany. In 2002, the provision for credit losses included a
$108 million provision related to Argentina. Net credit losses (excluding Commercial Markets) were $614 million and the related loss ratio was 0.52% in 2003, compared to
$644 million and 0.71% in 2002. The decrease in net credit losses (excluding Commercial Markets) in 2003 was mainly due to improvements in Mexico, partially offset by higher write-downs of the
Argentina compensation note that were written down against previously established reserves. Commercial Markets net credit losses were $462 million and the related loss ratio was 1.09% in 2003,
compared to $712 million and 1.76% in 2002. The decline in Commercial Markets net credit losses was mainly due to improvement in CitiCapital and a recovery in Mexico.

Loans
delinquent 90 days or more (excluding Commercial Markets) were $3.802 billion or 3.07% of loans at December 31, 2003, compared to $3.647 billion or
3.18% at December 31, 2002. The increase in delinquent loans in 2003 was primarily due to the impact of foreign currency translation combined with increases in Germany, and was partly offset by
declines in Consumer Assets, Asia and Argentina.

Cash-basis
loans in Commercial Markets were $1.350 billion or 3.38% of loans at December 31, 2003, compared to $1.299 billion or 2.90% at
December 31, 2002. The increase in cash-basis loans in 2003 primarily reflected increases in the vehicle leasing and transportation portfolios in CitiCapital and was offset in part
by improvements and foreign currency translation in Mexico.

Average
assets of $224 billion in 2003 increased $45 billion from 2002. The increase in 2003 primarily reflected the impact of acquisitions combined with growth in loans.

OTHER CONSUMER

|In millions of dollars            |  | 2003 |      | 2002 |  
|--------------------------------- |  | ---- | ---- | ---- | -
|Revenues, net of interest expense |  | $    | 118  |      | $
|Operating expenses                |  |      | 256  |      |  
|                                  |  |      |      |      |  
|Loss before tax benefits          |  |      | (138 | )    |  
|Income tax benefits               |  |      | (51  | )    |  
|                                  |  |      |      |      |  
|Net loss                          |  | $    | (87  | )    | $
|                                  |  |      |      |      |  

Other Consumerwhich includes certain treasury and other unallocated staff functions, global marketing and other
programsreported losses of $87 million and $59 million in 2003 and 2002, respectively. Included in the 2002 results was a
$52 million after-tax gain resulting from the disposition of an equity investment in EMEA, a $25 million after-tax release of a reserve related to unused
travelers checks in a non-core business, and gains from the sales of buildings in Asia. Excluding these items, the reduction in losses in 2003 was primarily due to prior-year
legal costs in connection with settlements reached during 2002 and lower global marketing costs.

Revenues,
expenses, and the provision 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 47.

During
2004, the Global Consumer businesses will continue to maintain a 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 2003,Cardsreported record income of $3.6 billion, an increase of
18% over 2002, while completing the acquisitions of the Home Depot, Sears, and Diners Club Europe portfolios and launching card offerings in both China and Russia. In 2004, Cardsexpects to deliver
strong earnings growth as receivables continue to grow and credit losses continue to improve.

In
2004, Citi Cards expects continued income and receivables growth through the integration of Sears and Home Depot, an expanded private-label platform, new product launches, and organic
growth. In Mexico, the Company will continue to leverage the expertise and experience of the globalCardsfranchise. International Cards is also expecting
strong earnings growth in 2004 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 2003,Consumer Financereported income of $1.9 billion,
a decrease of 12% from 2002, largely reflecting continued difficult business conditions in Japan. In 2004,Consumer Financeexpects moderate income
growth.

In
North America, CitiFinancial expects to deliver income growth through growth in receivables and a continued focus on expense management combined with the integration of Washington
Mutual Finance Corporation, which was acquired in January 2004 and added approximately $4.0 billion in assets. In the international markets,

17

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growth
in 2004 will continue to be impacted by the challenging operating environment that persists in Japan. Net credit losses in Japan began to stabilize in the 2003 third quarter, and, in 2004, a
more moderate level of bankruptcy filings and slightly improved economic conditions are expected. However, we also expect the consumer finance operations in Japan to continue to experience volume
pressure as the business is repositioned. To mitigate the impact of the challenging environment, the business will continue to maintain its focus on operating efficiencies. In other international
markets, important growth opportunities are anticipated as we continue to focus on gaining market share in both new and established markets including India, Poland, Romania, Italy, South Korea, and
Thailand.

Retail BankingIn 2003,Retail Bankingreported record income of
$3.6 billion, an increase of 45% from 2002, reflecting the successful integration of GSB and core business improvements in all markets. In 2004,Retail
Bankingexpects to deliver growth in core businesses driven by the benefits of investment spending, including the impact of repositioning businesses in Latin America and EMEA,
and continuing to expand our footprint and penetration into select markets, such as the growing Hispanic banking market.

In
2004, Citibanking North America will continue to enhance the customer experience 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. In Consumer Assets, CitiMortgage 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. CitiCapital's focus on strategic segments and the continued
liquidation of low-return portfolios are expected to deliver growth in 2004. TheRetail Bankingbusiness in Mexico expects to drive growth
through new loan, deposit, and investment products while continuing to improve operating margins. In the international markets, EMEA is 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. In Asia and Japan, the businesses will continue to build on
their strengths in developing customer relationships through investment product sales, deposit gathering, and branch lending. In Latin America, the business is building on repositioning initiatives
that focus on strategic countries and markets while continuing to manage through the economic uncertainties in the region.

18

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GLOBAL CORPORATE  AND INVESTMENT BANK

|In millions of dollars                    |  | 2003 |        | 2002
|----------------------------------------- |  | ---- | ------ | ----
|Revenues, net of interest expense         |  | $    | 11,307 |     
|Operating expenses                        |  |      | 5,723  |     
|Provision for credit losses               |  |      | 734    |     
|                                          |  |      |        |     
|Income before taxes and minority interest |  |      | 4,850  |     
|Income taxes                              |  |      | 1,267  |     
|Minority interest, after-tax              |  |      | 20     |     
|                                          |  |      |        |     
|Net income                                |  | $    | 3,563  |     
|                                          |  |      |        |     

Global Corporate and Investment Bank (GCIB)reported net income of $3.563 billion and $2.509 billion in 2003 and 2002,
respectively. The increase in net income reflects increases of $842 million or 43% inCapital Markets and Bankingand $212 million or 38% in Transaction
Services.

Capital Markets and Bankingnet income of $2.793 billion in 2003 increased $842 million or 43% compared to 2002, primarily
reflecting a lower provision for credit losses, increases in Fixed Income and the absence of prior-year redenomination losses in Argentina, partially offset by
mark-to-market losses on credit derivatives (which serve as an economic hedge for the loan portfolio) as credit spreads tightened.

Transaction Servicesnet income of $770 million in 2003 increased $212 million or 38% from 2002, primarily due to a lower
provision for credit losses, the benefit of lower taxes due to the application of APB 23 indefinite investment criteria and business consolidation, as well as lower expenses resulting from expense
control initiatives.

The
businesses of GCIB are significantly affected by the levels of activity in the global capital markets which, in turn, are influenced by macro-economic and political policies and
developments, among other factors, in approximately 100 countries in which the businesses operate. Global economic and market events can have both positive and negative effects on the revenue
performance of the businesses and can affect credit performance.

CAPITAL MARKETS AND BANKING

|In millions of dollars                    |  | 2003 |       | 2002
|----------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense         |  | $    | 7,680 |     
|Operating expenses                        |  |      | 3,167 |     
|Provision for credit losses               |  |      | 740   |     
|                                          |  |      |       |     
|Income before taxes and minority interest |  |      | 3,773 |     
|Income taxes                              |  |      | 960   |     
|Minority interest, after-tax              |  |      | 20    |     
|                                          |  |      |       |     
|Net income                                |  | $    | 2,793 |     
|                                          |  |      |       |     

Capital Markets and Bankingnet income of $2.793 billion in 2003 increased $842 million or 43% during 2003, primarily due to a
lower provision for credit losses, increases in Fixed Income, and the absence of prior-year redenomination losses in Argentina, partially offset by mark-to-market
losses on credit derivatives as credit spreads tightened and declines in Sales and Trading (due to lower positioning gains).

Revenues,
net of interest expense, of $7.680 billion in 2003 decreased $491 million or 6% from 2002, primarily due to mark-to-market losses on
credit derivatives as credit spreads tightened and declines in Sales and Trading, partially offset by increases in Fixed Income and the absence of prior-year redenomination losses and
write-downs of sovereign securities in Argentina.

Operating
expenses of $3.167 billion in 2003 decreased from $3.344 billion in 2002 primarily due to declines in compensation and benefits, which is impacted by the revenue
and credit performance of the business.

The
provision for credit losses was $740 million in 2003 compared to $2.046 billion in 2002, primarily due to the absence of prior-year provisions for Argentina
and exposures in the energy and telecommunications industries, as well as reserve releases reflecting improved credit trends, partially offset by the provision of $338 million for credit losses
related to exposure to a single European counterparty.

Cash-basis
loans were $3.246 billion and $3.394 billion at December 31, 2003 and 2002, respectively. The decrease in 2003 is primarily due to decreases
to corporate borrowers in Argentina and New Zealand, as well as reductions in the telecommunications industry, partially offset by the reclassification of cash-basis loans
($248 million) in Mexico fromTransaction ServicestoCapital Markets and Bankingand increases in
exposure to a single European counterparty and the energy industry.

TRANSACTION SERVICES

|In millions of dollars                    |  | 2003 |       | 2002
|----------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense         |  | $    | 3,627 |     
|Operating expenses                        |  |      | 2,556 |     
|Provision for credit losses               |  |      | (6    | )   
|                                          |  |      |       |     
|Income before taxes and minority interest |  |      | 1,077 |     
|Income taxes                              |  |      | 307   |     
|Minority interest, after-tax              |  |      |      |     
|                                          |  |      |       |     
|Net income                                |  | $    | 770   |     
|                                          |  |      |       |     

Transaction Servicesreported net income of $770 million in 2003, up $212 million or 38% from 2002, primarily due to a lower
provision for credit losses, the benefit of lower taxes due to the application of APB 23 indefinite investment criteria, business consolidation, and lower expenses resulting from expense control
initiatives.

As
shown in the following table, average liability balances and assets under custody experienced growth in 2003. Average liability balances of $99 billion and $85 billion
in 2003 and 2002, respectively, primarily reflected growth in Europe and Asia. Assets under custody increased 25% to $6.4 trillion in 2003, primarily reflecting market appreciation and increases in
customer volumes.

|                                        |  | 2003 |     | 2002
|--------------------------------------- |  | ---- | --- | ----
|Liability balances(average in billions) |  | $    | 99  |     
|Assets under custody(EOP in trillions)  |  | $    | 6.4 |     
|                                        |  |      |     |     

Revenues,
net of interest expense, increased $7 million to $3.627 billion in 2003, due to increased business volumes reflected by higher liability balances, gains on the
early termination of intracompany deposits (which were offset inCapital Markets and Banking), and a benefit from foreign exchange currency translation.
The increase was partially offset by lower spreads reflecting the low interest rate environment in 2003 as well as price compression.

Operating
expenses decreased $27 million or 1% in 2003 to $2.556 billion from $2.583 billion in 2002, primarily reflecting expense control initiatives. The decrease
in operating expenses in 2003 was partially offset by costs associated with the repositioning of the Company's business in Latin America, primarily severance-related, and investment spending related
to higher business volumes and integration costs associated with new business relationships.

The
provision for credit losses was ($6) million and $209 million in 2003 and 2002, respectively. The provision for credit losses

19

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decreased
by $215 million from 2002, primarily due to prior-year write-offs in Argentina and reserve releases reflecting improved credit trends. The reduction in credit
costs was partially offset by 2003 provisions for selected borrowers in Brazil and a single European counterparty.

Cash-basis
loans, which were primarily trade finance receivables in theTransaction Servicesbusiness were $156 million
and $572 million at December 31, 2003 and 2002, respectively. Cash-basis loans decreased $416 million in 2003, primarily due to a reclassification of
cash-basis loans ($248 million) in Mexico fromTransaction ServicestoCapital Markets and
Banking, along with 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 47.

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.

Capital Markets and Bankingin 2003 was driven by improving credit trends and strong growth in Fixed Income as corporations continued to
take advantage of the low interest rate environment. In addition, the business continued to focus on expense reduction initiatives.

In
2004, focus will remain on expanding the Company's market share positions and outperforming the industry, credit risk mitigation, and expense management. While initiatives will focus
on expanding market share in priority countries through organic growth, revenue and credit performance are dependent upon the strength and stability of U.S. and global economic conditions. Net credit
losses and cash-basis loans are expected to improve from 2003 levels, reflecting improving global economic conditions. Citicorp remains diversified across many geographies and industry
groups. Citicorp continues to monitor the economic situation in emerging market countries closely and, where appropriate, adjusts exposures and pursues risk management initiatives.

Transaction Serviceswas adversely impacted in 2003 by a low interest rate environment and heightened price compression, which were offset
by improved credit trends and increased business volumes.

In
2004, the business will focus on realizing the benefit of key customer mandates, continuing expansion of market share, as well as interest rate risk management, continued credit
improvement and expense control. While revenue performance depends on the interest rate environment and the sustained economy in the U.S. and global markets, the business will maintain focus on
building business volumes and developing more effective spread management. Additionally, the business will continue to leverage Citicorp's global corporate relationship client base through
cross-selling initiatives.

20

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GLOBAL INVESTMENT MANAGEMENT

|In millions of dollars                             |  | 2003 |       | 2002
|-------------------------------------------------- |  | ---- | ----- | ----
|Revenues, net of interest expense                  |  | $    | 3,257 |     
|Operating expenses                                 |  |      | 1,929 |     
|Provisions for benefits, claims, and credit losses |  |      | 356   |     
|                                                   |  |      |       |     
|Income before taxes and minority interest          |  |      | 972   |     
|Income taxes                                       |  |      | 286   |     
|Minority interest, after-tax                       |  |      | 11    |     
|                                                   |  |      |       |     
|Net income                                         |  | $    | 675   |     
|                                                   |  |      |       |     

Global Investment Managementreported net income of $675 million in 2003, which was up $6 million or 1% from 2002. Life Insurance and Annuitiesnet loss of
$10 million in 2003 represented a decrease in income of $84 million from 2002, reflecting decreased
International Insurance Manufacturing results of $85 million, driven by impairments of Argentina Government Promissory Notes (GPNs) of $114 million and the impact of certain liability
restructuring actions taken in the Argentina voluntary annuity business of $20 million, partially offset by increases in Asia of $24 million and Mexico of $20 million. Private Banknet
income of $551 million in 2003 increased $88 million or 19% from 2002, primarily reflecting increased investment management
and capital markets activity, increased lending activity and a lower provision for credit losses, and were partially offset by higher expenses, reflecting incentive compensation expense associated
with higher revenues and higher other employee-related costs, and the impact of a narrowing of interest rate spreads.Asset Managementnet income of
$134 million in 2003 increased $2 million or 2% from 2002, primarily reflecting lower expenses, partially offset by the impact of impairments in Argentina.

LIFE INSURANCE AND ANNUITIES

|In millions of dollars            |  | 2003 |     | 2002
|--------------------------------- |  | ---- | --- | ----
|Revenues, net of interest expense |  | $    | 629 |     
|Provision for benefits and claims |  |      | 345 |     
|Operating expenses                |  |      | 284 |     
|                                  |  |      |     |     
|Income before taxes               |  |      |    |     
|Income taxes                      |  |      | 10  |     
|                                  |  |      |     |     
|Net income (loss)                 |  | $    | (10 | )   
|                                  |  |      |     |     

Life Insurance and Annuitiescomprises International Insurance Manufacturing (IIM) and Citi Insurance Group (CIG).

Life Insurance and Annuitiesreported a net loss of $10 million in 2003, a decrease of $84 million from net income of
$74 million in 2002. The $84 million decrease primarily resulted from a decrease in Latin America of $140 million, partially offset by increases in Asia of $24 million and
in Mexico of $20 million. The $140 million decrease in Latin America was primarily driven by impairments of GPNs of $114 million and the impact of certain liability restructuring
actions taken in the Argentina voluntary annuity business of $20 million. The GPN impairment was the result of an Argentine government decree, which required the mandatory exchange (the
Exchange) of existing GPNs to Argentine government bonds denominated in U.S. dollars. Upon the Exchange, the assets were considered impaired and written down to fair market value based on prevailing
market prices on the decree date. Certain GPNs, which were held in general accounts, were considered impaired through recognition as an insurance investment portfolio loss ($56 million). The
impact of these items on the 2003 decline in income was partially offset by an Amparos charge recorded by the Company in 2002 relating to Siembra's voluntary annuity business in the amount of
$21 million. See "Impact from Argentina's Economic Changes" and "Argentina" on pages 5 and 11, respectively, for further discussions of these actions. The $24 million increase in Asia
was driven by the benefit of lower taxes due to the application of APB 23 indefinite investment criteria, while the $20 million increase in Mexico was the result of higher business volumes and
the impact of a lower tax rate.

Operating
expenses of $284 million in 2003 increased $145 million from 2002, driven by a change in the presentation of certain fee-sharing arrangements with
various Global Consumer businesses. This change in presentation increased both revenues and operating expenses by $86 million. The remaining expense increase of $59 million was primarily
the result of higher business volumes.

21

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PRIVATE BANK

|In millions of dollars                                           |  | 2003 |       | 2002 |  
|---------------------------------------------------------------- |  | ---- | ----- | ---- | -
|Revenues, net of interest expense                                |  | $    | 1,995 |      | $
|Operating expenses                                               |  |      | 1,183 |      |  
|Provision for credit losses                                      |  |      | 11    |      |  
|                                                                 |  |      |       |      |  
|Income before taxes                                              |  |      | 801   |      |  
|Income taxes                                                     |  |      | 250   |      |  
|                                                                 |  |      |       |      |  
|Net income                                                       |  | $    | 551   |      | $
|                                                                 |  |      |       |      |  
|Average assets(in billions of dollars)                           |  | $    | 38    |      | $
|Return on assets                                                 |  |      | 1.45  | %    |  
|                                                                 |  |      |       |      |  
|Client business volumes under management(in billions of dollars) |  | $    | 195   |      | $
|                                                                 |  |      |       |      |  

Private Bankreported net income of $551 million in 2003, up $88 million or 19% from 2002, primarily reflecting increased
investment management and capital markets activity, lending activity, and a lower provision for credit losses, partially offset by higher expenses, reflecting incentive compensation expense associated
with higher revenues and higher other employee-related costs, and the impact of narrowing interest rate spreads.

Client
business volumes under management, which include custody accounts, assets under fee-based management, deposits, and loans, were $195 billion at the end of the
year, up 15% from $170 billion in 2002, reflecting increases in other (principally custody) accounts of $12 billion, banking and fiduciary deposits of $7 billion, loans of
$4 billion, and assets under fee-based management of $2 billion. Regionally, the increase primarily reflected growth in Asia of $8 billion, EMEA of $6 billion,
and North America (including Mexico) of $6 billion. The regional disclosures contained herein are aligned with the Citicorp management structure and therefore the business in Mexico is
reflected in the results of North America and is excluded from Latin America.

Revenues,
net of interest expense, were $1.995 billion in 2003, up $291 million or 17% from 2002, primarily driven by revenue increases from investment management and
capital markets activity, lending and banking activities, partially offset by the impact of a narrowing of interest rate spreads. Investment management and capital markets activity includes client
trading, management, performance and placement fees, and investment product fees. On a regional basis, the 2003 increase also reflected continued favorable trends in North America (including Mexico),
up $103 million or 14% from 2002, primarily in lending, banking, and client trading activity. International revenues increased $188 million or 20% from 2002, primarily due to growth in
Asia of $86 million or 28% (client trading and performance fees), Japan of $68 million or 34% (client trading and lending, primarily consisting of commercial real estate), Latin America
of $27 million or 15% (client trading and management, placement and performance fees), and EMEA of $7 million or 3% (client trading and performance fees).

Operating
expenses of $1.183 billion in 2003 were up $176 million or 17% from 2002, primarily reflecting increased incentive compensation associated with higher revenues,
higher other employee-related costs including severance, and increased salary and benefits costs due to a change in employee mix of front-end sales staff. The increase in employee-related
expenses included costs relating to incremental repositioning efforts of $15 million,
primarily related to EMEA. The increased expenses in North America (including Mexico) reflect the increased revenues in the region, with expenses up $43 million or 12% from 2002, driven by
higher incentive compensation and the impact of the inclusion of Banamex intoPrivate Bankresults beginning in August 2002. International expenses
increased $133 million or 20% from 2002, primarily due to higher employee-related costs, including incentive compensation, in Asia and Japan and higher severance costs in EMEA. The
$133 million increase in operating expenses internationally was driven by increases in Asia of $50 million or 28%, EMEA of $43 million or 19%, Japan of $29 million or 26%,
and Latin America of $11 million or 8%.

The
provision for credit losses was $11 million in 2003, down $7 million or 39% from 2002, primarily reflecting an improvement in credit experience in North America
(including Mexico) and Asia, partially offset by higher net write-offs in Japan and Asia. Net credit losses in 2003 remained at a nominal level of 0.05% of average loans outstanding,
compared with 0.05% in 2002. Loans 90 days or more past due at year-end 2003 were $121 million or 0.35% of total loans outstanding, compared with $174 million or 0.56%
at the end of 2002.

Average
assets of $38 billion in 2003 increased $9 billion or 31% from $29 billion in 2002. The increase from the prior-year period was primarily related
to increased lending activity (higher margin lending, mortgage financing and refinancing activity, and tailored loans) and the consolidation of a previously unconsolidated entity due to changes in the
contractual relationship with this entity.

ASSET MANAGEMENT

|In millions of dollars                             |  | 2003 |     | 2002
|-------------------------------------------------- |  | ---- | --- | ----
|Revenues, net of interest expense                  |  | $    | 633 |     
|Operating expenses                                 |  |      | 462 |     
|                                                   |  |      |     |     
|Income before taxes and minority interest          |  |      | 171 |     
|Income taxes                                       |  |      | 26  |     
|Minority interest, after-tax                       |  |      | 11  |     
|                                                   |  |      |     |     
|Net income                                         |  | $    | 134 |     
|                                                   |  |      |     |     
|Assets under management(in billions of dollars)(1) |  | $    | 167 |     
|                                                   |  |      |     |     

---

Asset Managementoffers institutional, high-net-worth, and retail clients a broad range of investment alternatives
from investment centers located around the world and includes the businesses of Citibank Global Asset Management, Banamex asset management and retirement services businesses, other retirement services
businesses in Latin America and an alternative investments business.

Asset Managementreported net income of $134 million in 2003, which was up $2 million or 2% compared to 2002, primarily
reflecting lower expenses as a result of continued expense management, partially offset by a decline in the Latin America Retirement Services (LARS) business of $50 million. The
$50 million decline in LARS from 2002 primarily reflected 2003 impairments of a Deferred Acquisition Cost (DAC) asset relating to the retirement services business in Argentina of
$42 million and of Argentine GPNs of $9 million relating to the Exchange, as well as the impact of increased insurance costs on earned fees. See "Impact from Argentina's Economic
Changes" and "Argentina" on pages 5 and 11, respectively, for a further discussion of these actions. An additional item impacting LARS was a loss incurred on the sale of an El Salvador retirement
services business of $10 million, partially offset by the impact of less severe economic conditions in Argentina.

Assets
under management of $167 billion as of December 31, 2003, increased $5 billion or 3% from 2002.

Revenues,
net of interest expense, decreased $25 million or 4% to $633 million in 2003, primarily due to the impact of increased insurance costs on fees earned in a
retirement services business in Argentina, the loss on sale of the El Salvador retirement services business, and $9 million relating to the Exchange in Argentina, partially

22

---

offset
by the absence of a prior-year pesification loss in Argentina and an increase related to certain assets consolidated under FIN 46. These consolidated assets incurred FX movements
on the euro, creating $17 million of gains (offset in minority interest).

Operating
expenses of $462 million in 2003 declined $59 million or 11% from 2002, primarily reflecting continued expense management and the absence of 2002 first quarter
restructuring charges in Argentina (LARS), for which the remaining reserve was released in 2003, partially offset by the DAC impairment in Argentina of $42 million.

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

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 47.

Life Insurance and AnnuitiesIIM leverages the distribution strength of Citigroup globally by manufacturing insurance linked to
credit products as well as stand-alone indemnity and investment-related products. In the less-developed markets where populations are generally under-insured, increasing disposable income,
pension reform, greater awareness of the benefits of insurance among the general population, and promotion of the insurance industry by local governments are expected to continue assisting IIM's
growth. In mature but restructuring economies, such as Japan, IIM is capturing a share of the insurance market on products associated with the movement of savings from traditional products to new
alternatives, including variable annuities. The growth of IIM is affected by the expansion of Citigroup's consumer business, including the volume of new loans and credit cards. It is also highly
dependent on local regulations governing the cross-selling of insurance products to Citigroup customers and the evolution of consumer buying patterns. In Argentina, the potential impact from changes
in economic conditions on the valuation of IIM's assets relative to liabilities will continue to be a key concern, including the impact of Argentine government actions on insurance contract
liabilities in that country. For further information regarding the situation in Argentina, see the discussions in "Impact from Argentina's Economic Changes" and "Argentina" on pages 5 and 11,
respectively.

Private BankThe strong performance ofPrivate Bankin 2003 can be attributed to
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 enabled Private
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.

Private Bankis well-positioned to continue this growth in 2004. Consistent with Citigroup priorities, Private Bankwill focus on new geographic markets including China,
 India, and South Korea; continue to build-out the investments business
globally; maintain and expand a successful partnership with other Citigroup entities worldwide; and continue to deepen wallet share with existing clients.Private
Bankexpects its market-leading regions to continue their strong performance in 2004, in addition to a significant contribution from EMEA.

Asset ManagementTheAsset Managementbusiness experienced relatively flat income
in 2003. However, the assets under management increased as a result of improving equity markets and strong net flows.

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.

For
2004, the business will focus on leveraging the full breadth of its global investment capabilities, continuing to capture the economic value of Citigroup's global distribution
network, expansion of third-party distribution in key geographies, and 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.

23

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PROPRIETARY INVESTMENT ACTIVITIES

|In millions of dollars                           |  | 2003 |     | 2002 |  
|------------------------------------------------ |  | ---- | --- | ---- | -
|Revenues, net of interest expense                |  | $    | 791 |      | $
|Operating expenses                               |  |      | 282 |      |  
|Provision for credit losses                      |  |      |    |      |  
|                                                 |  |      |     |      |  
|Income (loss) before taxes and minority interest |  |      | 509 |      |  
|Income taxes (benefits)                          |  |      | 178 |      |  
|Minority interest, after-tax                     |  |      | 175 |      |  
|                                                 |  |      |     |      |  
|Net income (loss)                                |  | $    | 156 |      | $
|                                                 |  |      |     |      |  

Proprietary Investment Activitiesreported revenues, net of interest expense, of $791 million in 2003, up $882 million from
2002 primarily reflecting higher Private Equity results of $1.414 billion driven by higher net mark-to-market gains on public securities, higher net
impairment/valuation revenues, higher fee revenues and lower funding costs, partially offset by lower Other Investment Activities revenues of $532 million. The decline in Other Investment
Activities was driven by the absence of the 2002 gain on the sale of 399 Park Avenue of $527 million.

Operating
expenses of $282 million in 2003 increased $71 million from 2002, primarily reflecting increased expenses in Private Equity of $46 million and CAI of
$33 million, driven by higher performance based compensation and business growth. The decrease in the provision for credit losses of $30 million from 2002 primarily relates to the
absence of Private Equity loan write-offs that occurred in 2002.

Minority
interest, after-tax, of $175 million in 2003 increased $152 million from 2002, primarily due to the impact of dividends and a
mark-to-market valuation on the recapitalization of an investment held within the Citigroup Venture Capital (CVC) Equity Partners Fund in 2003.

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 indirect basis, including investments made by CVC Equity
Partners Fund, to companies primarily located in the United States and Western Europe, investments in companies located in developing economies with a private equity focus, the investment portfolio
related to the Banamex acquisition in August 2001, and CVC/Opportunity Equity Partners, LP (Opportunity). Opportunity is a third-party managed fund through which Citicorp co-invests
in companies that were privatized by the government of Brazil in the mid-1990s. The remaining investments in the Banamex portfolio were liquidated during 2003.

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

As
of December 31, 2003 and December 31, 2002, Private Equity included assets of $5.470 billion and $6.243 billion, respectively, with the portfolio invested
in industrial, consumer goods, communication, and technology companies. The decline in the portfolio of $773 million primarily relates to sales of U.S. private and public equity investments,
the impact of impairments, and the liquidation of the Banamex portfolio. On a regional basis as of December 31, 2003, Private Equity included assets of $2.395 billion in North America
(including Mexico), $1.790 billion in EMEA, $961 million in Latin America, $317 million in Asia and $7 million in Japan. As of December 31, 2002, Private Equity
included assets of $3.396 billion in North America (including Mexico), $1.391 billion in EMEA, $1.156 billion in Latin America, $295 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            |  | 2003 |      | 2002 |  
|--------------------------------- |  | ---- | ---- | ---- | -
|Net realized gains (losses)(1)    |  | $    | 388  |      | $
|Public mark-to-market             |  |      | 258  |      |  
|Net impairments/valuations(2)     |  |      | (240 | )    |  
|Other(3)                          |  |      | 257  |      |  
|                                  |  |      |      |      |  
|Revenues, net of interest expense |  | $    | 663  |      | $
|                                  |  |      |      |      |  

---

Revenues,
net of interest expense, of $663 million in 2003 increased $1.414 billion from 2002, primarily relating to higher net mark-to-market gains
on public securities of $467 million, higher net impairment/valuation revenues of $430 million, higher other revenues of $309 million, and higher net realized gains on sales of
investments of $208 million. The higher net mark-to-market gains on public securities primarily resulted from the improved equity market conditions that existed in 2003.
The higher net impairment/valuation revenues were driven by higher net impairment/valuation revenues on emerging market investments, lower impairments on other private equity investments, and higher
valuation revenues in 2003 from the recapitalization of certain private equity investments held within the CVC Equity Partners Fund. The higher net impairment/valuation revenues in emerging markets
included $264 million in lower impairments in Argentina and lower other Latin America impairments, partially offset by lower revenues on the Opportunity fund investment of $210 million.
Other revenues increased $309 million due to higher dividends and fees, largely the result of the recapitalization of certain Private Equity investments and from an investment that had an
initial public offering, all of which are held within the CVC Equity Partners Fund, as well as the impact of lower funding costs. The increase in net realized gains on sales of investments of
$208 million was driven by higher sales of venture capital and emerging market investments, including the liquidation of the remaining Banamex holdings.

Other Investment Activitiesinclude 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, 2003, Other Investment Activities included assets of $1.347 billion, including $911 million in hedge funds, the majority of which represents money managed for TPC,
$365 million in the LDC Debt/Refinancing portfolios and $71 million in other assets. As of December 31, 2002, total assets of Other Investment Activities were
$1.838 billion, including $1.120 billion in hedge funds, $579 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            |  | 2003 |     | 2002
|--------------------------------- |  | ---- | --- | ----
|LDC Debt/Refinancing portfolios   |  | $    | 10  |     
|Hedge fund investments            |  |      | 75  |     
|Other                             |  |      | 43  |     
|                                  |  |      |     |     
|Revenues, net of interest expense |  | $    | 128 |     
|                                  |  |      |     |     

Revenues,
net of interest expense, of $128 million in 2003, decreased $532 million from the prior year due to the absence of a $527 million gain in 2002 from the
sale of 399 Park Avenue. The decline in LDC Debt/Refinancing portfolio revenues primarily resulted from lower interest earnings, as the portfolios are in run-off.

Proprietary
Investment Activities results may fluctuate in the future as a result of market and asset-specific factors. This statement is a forward-looking statement within the meaning
of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

CORPORATE/OTHER

|In millions of dollars                             |  | 2003 |      | 2002 |  
|-------------------------------------------------- |  | ---- | ---- | ---- | -
|Revenues, net of interest expense                  |  | $    | 747  |      | $
|Operating expenses                                 |  |      | 901  |      |  
|Provisions for benefits, claims, and credit losses |  |      | (5   | )    |  
|                                                   |  |      |      |      |  
|Income/(loss) before taxes and minority interest   |  |      | (149 | )    |  
|Income tax benefits                                |  |      | (236 | )    |  
|Minority interest, after-tax                       |  |      | 21   |      |  
|                                                   |  |      |      |      |  
|Net income                                         |  | $    | 66   |      | $
|                                                   |  |      |      |      |  

Corporate/Otherreported revenues, net of interest expense, of $747 million in 2003, which decreased $49 million from 2002,
primarily due to lower net treasury results reflecting increased funding costs not allocated to the individual businesses, partially offset by higher intersegment eliminations.

Operating
expenses of $901 million in 2003 increased $125 million from 2002, primarily due to higher unallocated corporate costs and a $50 million pretax expense for
the contribution of appreciated venture capital securities to the Citigroup Foundation, partially offset by lower intersegment eliminations. The increase in unallocated corporate costs included higher
employee-related and legal costs. The Citigroup Foundation contributions had minimal impact on Citicorp's earnings after related tax benefits.

The
provisions for benefits, claims, and credit losses in 2003 and 2002 were primarily the result of intersegment eliminations. Income tax benefits of $236 million in 2003
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. Income tax
benefits of $53 million in 2002 include the tax benefit resulting from the loss incurred on the sale of the Associates property and casualty operations to TPC, which was spun-off by
Citigroup in the 2002 third quarter.

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

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

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



The
Citigroup Senior Risk Officer is responsible for establishing standards for the measurement, approval, reporting and limiting of risk, for managing, evaluating, and compensating the
senior independent risk managers at the business level, for approving business-level risk management policies, for approving business risk-taking authority through the allocation of limits
and capital, and for reviewing, on an ongoing basis, major risk
exposures and concentrations across the organization. Risks are regularly reviewed with the independent business-level risk managers, the Citigroup senior business managers, and as appropriate, the
Citigroup Board of Directors and Citicorp 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 Office, 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                                 |                                          | 2003 |         | 2002(1) |   | 2001(1) |         | 2000(1) |         | 1999(1) |  
|------------------------------------------------------------------ | ---------------------------------------- | ---- | ------- | ------- | - | ------- | ------- | ------- | ------- | ------- | -
|Consumer loans                                                     |                                          |      |         |         |   |         |         |         |         |         |  
|In U.S. offices:                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   | Mortgage and real estate                 |      | $       | 129,507 |   | $       | 121,178 |         | $       | 80,099  |  
|                                                                   | Installment, revolving credit, and other |      |         | 136,725 |   |         | 113,620 |         |         | 100,801 |  
|                                                                   | Lease financing                          |      |         | 8,523   |   |         | 12,027  |         |         | 13,206  |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 274,755 |         |   | 246,825 |         |         | 194,106 |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|In offices outside the U.S.:                                       |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   | Mortgage and real estate                 |      |         | 28,743  |   |         | 26,564  |         |         | 28,688  |  
|                                                                   | Installment, revolving credit, and other |      |         | 76,718  |   |         | 65,343  |         |         | 57,681  |  
|                                                                   | Lease financing                          |      |         | 2,216   |   |         | 2,123   |         |         | 2,143   |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 107,677 |         |   | 94,030  |         |         | 88,512  |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 382,432 |         |   | 340,855 |         |         | 282,618 |         |  
|Unearned income                                                    |                                          |      | (2,500  | )       |   | (3,174  | )       |         | (4,644  | )       |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|Consumer loansnet                                                 |                                          |      | 379,932 |         |   | 337,681 |         |         | 277,974 |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|Corporate loans                                                    |                                          |      |         |         |   |         |         |         |         |         |  
|In U.S. offices:                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   | Commercial and industrial                |      |         | 15,791  |   |         | 21,279  |         |         | 17,713  |  
|                                                                   | Lease financing                          |      |         | 2,010   |   |         | 2,017   |         |         | 4,473   |  
|                                                                   | Mortgage and real estate                 |      |         | 95      |   |         | 588     |         |         | 515     |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 17,896  |         |   | 23,884  |         |         | 22,701  |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|In offices outside the U.S.:                                       |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   | Commercial and industrial                |      |         | 62,886  |   |         | 67,456  |         |         | 72,515  |  
|                                                                   | Mortgage and real estate                 |      |         | 1,751   |   |         | 1,885   |         |         | 1,874   |  
|                                                                   | Loans to financial institutions          |      |         | 12,440  |   |         | 8,621   |         |         | 10,456  |  
|                                                                   | Lease financing                          |      |         | 2,859   |   |         | 2,784   |         |         | 2,036   |  
|                                                                   | Governments and official institutions    |      |         | 1,496   |   |         | 3,081   |         |         | 4,033   |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 81,432  |         |   | 83,827  |         |         | 90,914  |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|                                                                   |                                          |      | 99,328  |         |   | 107,711 |         |         | 113,615 |         |  
|Unearned income                                                    |                                          |      | (291    | )       |   | (296    | )       |         | (455    | )       |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|Corporate loansnet                                                |                                          |      | 99,037  |         |   | 107,415 |         |         | 113,160 |         |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|Total loansnet of unearned income                                 |                                          |      | 478,969 |         |   | 445,096 |         |         | 391,134 |         |  
|Allowance for credit losseson drawn exposures                     |                                          |      | (12,643 | )       |   | (11,101 | )       |         | (9,688  | )       |  
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  
|Total loansnet of unearned income and allowance for credit losses |                                          | $    | 466,326 |         | $ | 433,995 |         | $       | 381,446 |         | $
|                                                                   |                                          |      |         |         |   |         |         |         |         |         |  

---

OTHER REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS

|In millions of dollars at year-end |  | 2003 |     | 2002(1) |   | 2001(1) |  | 2000(1) |     | 1999(1)
|---------------------------------- |  | ---- | --- | ------- | - | ------- |  | ------- | --- | -------
|Other real estate owned(2)         |  |      |     |         |   |         |  |         |     |        
|Consumer                           |  | $    | 437 |         | $ | 495     |  | $       | 393 |        
|Corporate                          |  |      | 59  |         |   | 53      |  |         | 103 |        
|Corporate/Other                    |  |      |    |         |   |        |  |         |    |        
|                                   |  |      |     |         |   |         |  |         |     |        
|Total other real estate owned      |  | $    | 496 |         | $ | 548     |  | $       | 496 |        
|                                   |  |      |     |         |   |         |  |         |     |        
|Other repossessed assets(3)        |  | $    | 151 |         | $ | 230     |  | $       | 439 |        
|                                   |  |      |     |         |   |         |  |         |     |        

---

27

---

DETAILS OF CREDIT LOSS EXPERIENCE

|In millions of dollars                                              |                             | 2003 |        | 2002(1) |   | 2001(1) |       | 2000(1) |        | 1999(1) |  
|------------------------------------------------------------------- | --------------------------- | ---- | ------ | ------- | - | ------- | ----- | ------- | ------ | ------- | -
|Allowance for credit losses at beginning of year                    |                             | $    | 11,101 |         | $ | 9,688   |       | $       | 8,561  |         | $
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Provision for credit losses                                         |                             |      |        |         |   |         |       |         |        |         |  
|Consumer                                                            |                             |      | 7,316  |         |   | 7,714   |       |         | 5,947  |         |  
|Corporate                                                           |                             |      | 729    |         |   | 2,281   |       |         | 843    |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    |                             |      | 8,045  |         |   | 9,995   |       |         | 6,790  |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Gross credit losses                                                 |                             |      |        |         |   |         |       |         |        |         |  
|Consumer(2)                                                         |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        | 5,783   |   |         | 5,826 |         |        | 4,991   |  
|                                                                    | In offices outside the U.S. |      |        | 3,270   |   |         | 2,865 |         |        | 2,132   |  
|Corporate                                                           |                             |      |        |         |   |         |       |         |        |         |  
|Mortgage and real estate                                            |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        |        |   |         | 5     |         |        | 13      |  
|                                                                    | In offices outside the U.S. |      |        | 27      |   |         | 23    |         |        | 3       |  
|Governments and official institutions outside the U.S.              |                             |      | 111    |         |   |        |       |         |       |         |  
|Loans to financial institutions                                     |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        |        |   |         |      |         |        | 10      |  
|                                                                    | In offices outside the U.S. |      |        | 13      |   |         | 4     |         |        |        |  
|Commercial and industrial                                           |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        | 381     |   |         | 819   |         |        | 572     |  
|                                                                    | In offices outside the U.S. |      |        | 939     |   |         | 1,018 |         |        | 557     |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    |                             |      | 10,524 |         |   | 10,560  |       |         | 8,278  |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Credit recoveries                                                   |                             |      |        |         |   |         |       |         |        |         |  
|Consumer(2)                                                         |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        | 763     |   |         | 729   |         |        | 543     |  
|                                                                    | In offices outside the U.S. |      |        | 735     |   |         | 510   |         |        | 423     |  
|Corporate(3)                                                        |                             |      |        |         |   |         |       |         |        |         |  
|Mortgage and real estate                                            |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        |        |   |         | 1     |         |        | 1       |  
|                                                                    | In offices outside the U.S. |      |        | 1       |   |         |      |         |        | 1       |  
|Governments and official institutions outside the U.S.              |                             |      |       |         |   | 2       |       |         |       |         |  
|Loans to financial institutions in offices outside the U.S.         |                             |      | 12     |         |   | 6       |       |         | 9      |         |  
|Commercial and industrial                                           |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        | 33      |   |         | 147   |         |        | 154     |  
|                                                                    | In offices outside the U.S. |      |        | 215     |   |         | 168   |         |        | 129     |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    |                             |      | 1,759  |         |   | 1,563   |       |         | 1,260  |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Net credit losses                                                   |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    | In U.S. offices             |      |        | 5,368   |   |         | 5,773 |         |        | 4,888   |  
|                                                                    | In offices outside the U.S. |      |        | 3,397   |   |         | 3,224 |         |        | 2,130   |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|                                                                    |                             |      | 8,765  |         |   | 8,997   |       |         | 7,018  |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Othernet(4)                                                        |                             |      | 2,262  |         |   | 415     |       |         | 1,355  |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Allowance for credit losses at end of year                          |                             | $    | 12,643 |         | $ | 11,101  |       | $       | 9,688  |         | $
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Allowance for unfunded lending commitments(5)                       |                             |      | 600    |         |   | 567     |       |         | 450    |         |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Total allowance for loans, leases, and unfunded lending commitments |                             | $    | 13,243 |         | $ | 11,668  |       | $       | 10,138 |         | $
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Net consumer credit losses                                          |                             | $    | 7,555  |         | $ | 7,452   |       | $       | 6,157  |         | $
|As a percentage of average consumer loans                           |                             |      | 2.22   | %       |   | 2.55    | %     |         | 2.33   | %       |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  
|Net corporate credit losses                                         |                             | $    | 1,210  |         | $ | 1,545   |       | $       | 861    |         | $
|As a percentage of average corporate loans                          |                             |      | 1.18   | %       |   | 1.45    | %     |         | 0.75   | %       |  
|                                                                    |                             |      |        |         |   |         |       |         |        |         |  

---

28

---



CASH-BASIS, RENEGOTIATED, AND PAST DUE LOANS

|In millions of dollars at year end                                |  | 2003 |       | 2002(1) |   | 2001(1) |  | 2000(1) |       | 1999(1)
|----------------------------------------------------------------- |  | ---- | ----- | ------- | - | ------- |  | ------- | ----- | -------
|Corporate cash-basis loans                                        |  |      |       |         |   |         |  |         |       |        
|Collateral dependent (at lower of cost or collateral value)(2)    |  | $    | 8     |         | $ | 64      |  | $       | 365   |        
|Other(5)                                                          |  |      | 3,394 |         |   | 3,902   |  |         | 2,522 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Total                                                             |  | $    | 3,402 |         | $ | 3,966   |  | $       | 2,887 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Corporate cash-basis loans(3)(5)                                  |  |      |       |         |   |         |  |         |       |        
|In U.S. offices                                                   |  | $    | 623   |         | $ | 858     |  | $       | 678   |        
|In offices outside the U.S.                                       |  |      | 2,779 |         |   | 3,108   |  |         | 2,209 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Total                                                             |  | $    | 3,402 |         | $ | 3,966   |  | $       | 2,887 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Corporate renegotiated loans(4)                                   |  |      |       |         |   |         |  |         |       |        
|In U.S. offices                                                   |  | $    | 107   |         | $ | 115     |  | $       | 263   |        
|In offices outside the U.S.                                       |  |      | 33    |         |   | 55      |  |         | 74    |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Total                                                             |  | $    | 140   |         | $ | 170     |  | $       | 337   |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Consumer loans on which accrual of interest had been suspended(5) |  |      |       |         |   |         |  |         |       |        
|In U.S. offices                                                   |  | $    | 3,127 |         | $ | 3,114   |  | $       | 3,101 |        
|In offices outside the U.S.                                       |  |      | 2,958 |         |   | 2,792   |  |         | 2,266 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Total                                                             |  | $    | 6,085 |         | $ | 5,906   |  | $       | 5,367 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Accruing loans 90 or more days delinquent(6)(7)                   |  |      |       |         |   |         |  |         |       |        
|In U.S. offices                                                   |  | $    | 3,298 |         | $ | 2,639   |  | $       | 1,822 |        
|In offices outside the U.S.                                       |  |      | 576   |         |   | 447     |  |         | 776   |        
|                                                                  |  |      |       |         |   |         |  |         |       |        
|Total                                                             |  | $    | 3,874 |         | $ | 3,086   |  | $       | 2,598 |        
|                                                                  |  |      |       |         |   |         |  |         |       |        

---

FOREGONE INTEREST REVENUE ON LOANS(1)

|In millions of dollars                                                         |  | In U.S. offices |     | In non-U.S. offices |   | 2003 Total
|------------------------------------------------------------------------------ |  | --------------- | --- | ------------------- | - | ----------
|Interest revenue that would have been accrued at original contractual rates(2) |  | $               | 342 |                     | $ | 585       
|Amount recognized as interest revenue(2)                                       |  |                 | 45  |                     |   | 145       
|                                                                               |  |                 |     |                     |   |           
|Foregone interest revenue                                                      |  | $               | 297 |                     | $ | 440       
|                                                                               |  |                 |     |                     |   |           

---

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 72% originated in the United States and 28% originated
from offices outside the United States. Mortgage and real estate loans constitute 41% of the total consumer loan portfolio; and installment, revolving credit and other consumer loans and leases
constitute 59% 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 is set according to loan product and country (see Note 1 to the Consolidated Financial Statements).

Commercial
Markets, which is included withinRetail Banking, includes loans and leases made principally to small- and middle-market
businesses. Commercial Markets loans, which comprise 11% 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 Markets
non-accrual loans are not strictly determined on a delinquency basis; therefore, they have been presented as a separate component in the consumer credit disclosures.

The
following table summarizes delinquency and net credit loss experience in both the managed and on-balance sheet loan portfolios in terms of loans 90 days or more
past due, net credit losses, and as a percentage of related loans. The table also summarizes the accrual status of Commercial Markets loans as a percentage of related loans. The managed loan portfolio
includes credit card receivables held-for-sale and securitized, and the table reconciles to a held basis, the comparable GAAP measure. Only North America Cards from a product
view and North America from a regional view are impacted. Although a managed basis presentation is not in conformity with GAAP, the Company believes it provides a representation of performance and key
indicators of the credit card business that is consistent with the way management reviews operating performance and allocates resources. Furthermore, investors utilize information about the credit
quality of the entire managed portfolio, as the results of both the held and securitized portfolios impact the overall performance of theCardsbusiness.
For a further discussion of managed basis reporting, see theCardsbusiness on page 14 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                                                 |       | $                              | 158.4 |                             | $     | 3,392         |      | $     | 2,397  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 2.14 | %     |        | 1.84 | %    
|                                                      |       | North America Cards            |       |                             | 143.7 |               |      | 3,133 |        |      | 2,185
|                                                      |       |                                | Ratio |                             |       |               |      |       | 2.18   | %    |      
|                                                      |       | International Cards            |       |                             | 14.7  |               |      | 259   |        |      | 212  
|                                                      |       |                                | Ratio |                             |       |               |      |       | 1.76   | %    |      
|Consumer Finance                                      |       |                                | 94.1  |                             |       | 2,221         |      |       | 2,197  |      |      
|                                                      | Ratio |                                |       |                             |       |               | 2.36 | %     |        | 2.48 | %    
|                                                      |       | North America Consumer Finance |       |                             | 72.6  |               |      | 1,683 |        |      | 1,786
|                                                      |       |                                | Ratio |                             |       |               |      |       | 2.32   | %    |      
|                                                      |       | International Consumer Finance |       |                             | 21.5  |               |      | 538   |        |      | 411  
|                                                      |       |                                | Ratio |                             |       |               |      |       | 2.50   | %    |      
|Retail Banking                                        |       |                                | 123.9 |                             |       | 3,802         |      |       | 3,647  |      |      
|                                                      | Ratio |                                |       |                             |       |               | 3.07 | %     |        | 3.18 | %    
|                                                      |       | North America Retail Banking   |       |                             | 88.5  |               |      | 2,299 |        |      | 2,419
|                                                      |       |                                | Ratio |                             |       |               |      |       | 2.60   | %    |      
|                                                      |       | International Retail Banking   |       |                             | 35.4  |               |      | 1,503 |        |      | 1,228
|                                                      |       |                                | Ratio |                             |       |               |      |       | 4.24   | %    |      
|Private Bank(3)                                       |       |                                | 34.8  |                             |       | 121           |      |       | 174    |      |      
|                                                      | Ratio |                                |       |                             |       |               | 0.35 | %     |        | 0.56 | %    
|Other Consumer                                        |       |                                | 0.9   |                             |       |              |      |       | 1      |      |      
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|Managed loans
(excluding Commercial Markets)(4)       |       | $                              | 412.1 |                             | $     | 9,536         |      | $     | 8,416  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 2.31 | %     |        | 2.30 | %    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|Securitized receivables (all in North America Cards)  |       |                                | (76.1 | )                           |       | (1,421        | )    |       | (1,285 | )    |      
|Credit card receivables held-for-sale(5)              |       |                                |      |                             |       |              |      |       | (121   | )    |      
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|On-balance sheet loans
(excluding Commercial Markets) |       | $                              | 336.0 |                             | $     | 8,115         |      | $     | 7,010  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 2.42 | %     |        | 2.40 | %    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|
|Commercial Markets Groups(6)                          |       | $                              | 39.9  |                             | $     | 1,350         |      | $     | 1,299  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 3.38 | %     |        | 2.90 | %    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|Total Consumer Loans(7)                               |       | $                              | 375.9 |                             |       |               |      |       |        |      | $    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|Regional View:                                        |       |                                |       |                             |       |               |      |       |        |      |      
|North America (excluding Mexico)                      |       | $                              | 317.8 |                             | $     | 6,794         |      | $     | 6,135  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 2.14 | %     |        | 2.18 | %    
|Mexico                                                |       |                                | 6.9   |                             |       | 388           |      |       | 355    |      |      
|                                                      | Ratio |                                |       |                             |       |               | 5.65 | %     |        | 5.43 | %    
|EMEA                                                  |       |                                | 34.0  |                             |       | 1,669         |      |       | 1,253  |      |      
|                                                      | Ratio |                                |       |                             |       |               | 4.90 | %     |        | 4.47 | %    
|Japan                                                 |       |                                | 17.4  |                             |       | 355           |      |       | 258    |      |      
|                                                      | Ratio |                                |       |                             |       |               | 2.04 | %     |        | 1.46 | %    
|Asia (excluding Japan)                                |       |                                | 33.1  |                             |       | 286           |      |       | 340    |      |      
|                                                      | Ratio |                                |       |                             |       |               | 0.86 | %     |        | 1.19 | %    
|Latin America                                         |       |                                | 2.9   |                             |       | 44            |      |       | 75     |      |      
|                                                      | Ratio |                                |       |                             |       |               | 1.50 | %     |        | 2.48 | %    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      
|Managed loans
(excluding Commercial Markets)(4)       |       | $                              | 412.1 |                             | $     | 9,536         |      | $     | 8,416  |      | $    
|                                                      | Ratio |                                |       |                             |       |               | 2.31 | %     |        | 2.30 | %    
|                                                      |       |                                |       |                             |       |               |      |       |        |      |      

---

31

---



Consumer Loan Balances, Net of Unearned Income

|                                                     |  | End of Period |       | Average Loans |  
|---------------------------------------------------- |  | ------------- | ----- | ------------- | -
|
|
|Total managed(2)(including Commercial Markets)       |  | $             | 452.0 |               | $
|Securitized receivables (all in North America Cards) |  |               | (76.1 | )             |  
|Credit card receivables held-for-sale(3)             |  |               |      |               |  
|                                                     |  |               |       |               |  
|On-balance sheet(4)(including Commercial Markets)    |  | $             | 375.9 |               | $
|                                                     |  |               |       |               |  

---

Total
delinquencies 90 days or more past due (excluding Commercial Markets) in the managed portfolio were $9.536 billion or 2.31% of loans at December 31, 2003,
compared to $8.416 billion or 2.30% at December 31, 2002. Total cash-basis loans in Commercial Markets were $1.350 billion or 3.38% of loans at December 31,
2003, compared to $1.299 billion or 2.90% at December 31, 2002. Total managed net credit losses (excluding Commercial Markets) in 2003 were $11.843 billion and the related loss
ratio was 3.18%, compared to $10.863 billion and 3.36% in 2002. In Commercial Markets, total net credit losses were $462 million and the related loss ratio was 1.09% in 2003, compared to
$712 million and 1.76% in 2002. For a discussion of trends by business, see business discussions on pages 14 to 18 and page 22.

Citicorp's
total allowance for loans, leases and corporate lending commitments of $13.243 billion is available to absorb probable credit losses inherent in the entire portfolio.
For analytical purposes only, the portion of Citicorp's allowance for credit losses attributed to the consumer portfolio was $9.088 billion at December 31, 2003 and $7.021 billion
at December 31, 2002. The increase in the allowance for credit losses from 2002 was primarily due to an addition of $2.1 billion associated with the acquisition of Sears and the impact
of foreign currency translation, partially offset by the write-off of Argentine compensation notes in the 2003 third quarter.During the year,
the impact of improved credit conditions in North America and Latin America, mainly in Argentina which also experienced a decline in loan volumes, was partially offset by increases in the allowance
for credit losses attributable to credit conditions in Germany and Japan.

On-balance
sheet consumer loans of $375.9 billion increased $39.2 billion or 12% from December 31, 2002, primarily driven by the additions of the Sears
and Home Depot portfolios, combined with the impact of strengthening currencies and growth in mortgage and other real-estate-secured loans in Consumer Assets, Consumer FinanceandPrivate Bank. Growth in student loans in North America and margin lending in Private Bankalso contributed to the growth in consumer loans. Loans in Japan declined in
2003, as a high level of charge-offs and
pay-downs were combined with reduced loan demand in theConsumer Financeportfolio. In CitiCapital, loans declined in 2003, reflecting the
liquidation of non-core portfolios including a decline of approximately $1.2 billion resulting from the 2003 sale of the CitiCapital Fleet Services portfolio.

Net
credit losses, delinquencies and the related ratios are affected by the credit performance of the portfolios, including bankruptcies, unemployment, global economic conditions,
portfolio growth and seasonal factors, as well as macro-economic and regulatory policies. Net credit losses are expected to increase from 2003 due to the inclusion of a full year's credit losses for
acquired portfolios. Credit loss ratios in North America Cards are expected to increase due to the integration of the Sears and Home Depot portfolios, including the impact of conforming to Citigroup
and FFIEC guidelines. Excluding the impact of Sears and Home Depot, management expects that 2004 consumer credit loss rates will be comparable to 2003. This paragraph contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

32

---

CORPORATE CREDIT RISK

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



These
policies apply universally across corporate clients. 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 tables present Corporate Credit Risk details excluding related party credit exposures.

The
following table presents the corporate credit portfolio, before consideration of collateral, by maturity at December 31, 2003. 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    |  | $             | 136 |                                  | $ | 37                   |  | $             
|Unfunded commitments   |  |               | 138 |                                  |   | 70                   |  |               
|                       |  |               |     |                                  |   |                      |  |               
|Total                  |  | $             | 274 |                                  | $ | 107                  |  | $             
|                       |  |               |     |                                  |   |                      |  |               

Portfolio Mix

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

Dec. 31,
2003

Dec. 31,
2002North America

43
%
43
%EMEA

29
%
27
%Japan

3
%
4
%Asia

13
%
13
%Latin America

5
%
6
%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 Corporate Risk Rating Policy. Any exception to the policy must be approved by the Citigroup
Senior Risk Officer. The Corporate 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, 2003 and 2002, as a percentage of the total portfolio:

Direct Outstandings and Unfunded Commitments2003

2002AAA/AA/A

53
%
52
%BBB

26
%
24
%BB/B

16
%
20
%CCC or below

2
%
2
%Unrated

3
%
2
%100
%
100
%


33

---

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 Commitments2003

2002Government and central banks

14
%
13
%Other financial institutions

8
%
8
%Banks

6
%
6
%Insurance

5
%
5
%Investment banks

5
%
3
%Utilities

4
%
5
%Agricultural and food preparation

4
%
4
%Telephone and cable

4
%
4
%Petroleum

3
%
3
%Industrial machinery and equipment

3
%
3
%Autos

3
%
2
%Freight transportation

2
%
2
%Global information technology

2
%
3
%Chemicals

2
%
2
%Metals

2
%
2
%Other industries(1)

33
%
35
%Total

100
%
100
%


---

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

2003

2002(1)Corporate cash-basis loans(2)Capital Markets and Banking

$
3,246

$
3,394Transaction Services


156


572Total corporate cash-basis loans

$
3,402

$
3,966Net credit lossesCapital Markets and Banking

$
1,190

$
1,349Transaction Services


23


165Investment Activities(3)


(3
)

31Total net credit losses

$
1,210

$
1,545Corporate allowance for credit losses

$
3,555

$
4,080Corporate allowance for credit losses on unfunded lending commitments(4)


600


567Total corporate allowance for loans, leases and unfunded lending commitments

$
4,155

$
4,647As a percentage of total corporate loans(5)


3.59
%

3.80
%


---

Corporate
cash-basis loans were $3.402 billion and $3.966 billion at December 31, 2003 and 2002, respectively. Cash-basis loans decreased
$564 million from December 31, 2002 due to a $416 million decrease inTransaction Servicesand a $148 million decrease in Capital Markets and
Banking.Transaction Servicesdecreased primarily due to a reclassification of
cash-basis loans ($248 million) in Mexico toCapital Markets and Bankingand charge-offs in Argentina and Poland. Capital Markets and Bankingdecreased primarily due to decreases to corporate borrowers in Argentina and New Zealand, as well as reductions in the
telecommunications industry, partially offset by the reclassification of cash-basis loans ($248 million) in Mexico fromTransaction
Servicesand increases on exposure to a single European counterparty and the energy industry.

Total
corporate Other Real Estate Owned (OREO) was $59 million and $53 million at December 31, 2003 and 2002, respectively.

Total
corporate loans outstanding at December 31, 2003 were $99 billion as compared to $107 billion at December 31, 2002.

Total
corporate net credit losses of $1,210 million in 2003 decreased $335 million compared to 2002, primarily due to the absence of prior-year net credit
losses for Argentina and exposures in the energy and telecommunications industries, reflecting improvements in the overall credit environment, partially offset by $345 million of credit losses
related to exposure to a single European counterparty and credit losses to corporate borrowers in Poland.

34

---

Citicorp's
allowance for credit losses for loans, leases and lending commitments of $13.243 billion is available to absorb probable credit losses inherent in the entire portfolio.
For analytical purposes only, the portion of Citicorp's allowance for credit losses attributed to the corporate portfolio was $4.155 billion
at December 31, 2003, compared to $4.647 billion at December 31, 2002. The allowance attributed to corporate loans and leases as a percentage of corporate loans was 3.59% at
December 31, 2003, as compared to 3.80% at December 31, 2002. The $492 million decrease in the total allowance at December 31, 2003 from December 31, 2002 primarily
reflects reserve releases of $300 million due to continued improvement in the portfolio. Losses on corporate lending activities and the level of cash-basis loans can vary widely
with respect to timing and amount, particularly within any narrowly-defined business or loan type. Corporate net credit losses and cash-basis loans are expected to improve from 2003 levels
reflecting improving global economic conditions. This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on
page 47.

LOAN MATURITIES AND SENSITIVITY  TO CHANGES IN INTEREST RATES

|In millions of dollars at year-end                                      |                                 | Due Within 1 Year |        | Over 1 Year
but Within
5 Years |   | Over 5
Years |       | Total
|----------------------------------------------------------------------- | ------------------------------- | ----------------- | ------ | ------------------------------ | - | ------------ | ----- | -----
|Maturities of the gross corporate loan portfolio                        |                                 |                   |        |                                |   |              |       |      
|In U.S. offices                                                         |                                 |                   |        |                                |   |              |       |      
|                                                                        | Commercial and Industrial loans |                   | $      | 6,502                          |   | $            | 7,063 |      
|                                                                        | Mortgage and real estate        |                   |        | 37                             |   |              | 44    |      
|                                                                        | Lease financing                 |                   |        | 783                            |   |              | 934   |      
|In offices outside the U.S.                                             |                                 |                   | 52,411 |                                |   | 25,304       |       |      
|                                                                        |                                 |                   |        |                                |   |              |       |      
|Total corporate loan Portfolio                                          |                                 | $                 | 59,733 |                                | $ | 33,345       |       | $    
|                                                                        |                                 |                   |        |                                |   |              |       |      
|Sensitivity of loans due after one year to changes in interest rates(1) |                                 |                   |        |                                |   |              |       |      
|Loans at predetermined interest rates                                   |                                 |                   |        |                                | $ | 7,375        |       | $    
|Loans at floating or adjustable interest rates                          |                                 |                   |        |                                |   | 25,970       |       |      
|                                                                        |                                 |                   |        |                                |   |              |       |      
|Total                                                                   |                                 |                   |        |                                | $ | 33,345       |       | $    
|                                                                        |                                 |                   |        |                                |   |              |       |      

---

35

---

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 40. 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. During the second quarter of 2003, Citigroup implemented a revised market risk management policy for its non-trading portfolios. Under this policy, there is a uniform set of
standards for defining, measuring, limiting and reporting market risk in non-trading portfolios in order to ensure consistency across businesses, stability in methodologies and
transparency of risk.

Price
risk in non-trading portfolios is measured predominantly through Interest Rate Exposure and factor sensitivity techniques. These techniques are 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.

Business
units manage the potential earnings effect of interest rate movements by managing the asset and liability mix, either directly or through the use of derivative financial
products. These include interest rate swaps and other derivative instruments that are designated and effective as hedges. The utilization of derivatives is determined based on changing market
conditions as well as to changes in the characteristics and mix of the related assets and liabilities.

Interest
Rate Exposure is the primary corporate-wide method for measuring price risk in Citigroup's non-trading portfolios. Interest Rate Exposure measures the
pretax earnings impact of specified upward and downward instantaneous parallel 50, 100, and 200 basis point shifts in the individual currency yield curve assuming a static portfolio. Citigroup
measures this impact over one-year, five-year, and ten-year time horizons under business-as-usual conditions.

The
Interest Rate Exposure is calculated separately for each currency and reflects the repricing gaps in the position as well as option positions, both explicit and embedded. Citigroup
aggregates its Interest Rate Exposure on a daily basis by business, geography, and currency.

The
following table illustrates the impact to Citicorp's pretax earnings over a one-year and five-year time horizon from a 100 basis point increase and a 100
basis point decrease in the yield curves applicable to the U.S. dollar and Mexican peso.

Citicorp Interest Rate Exposure (Impact on Pretax Earnings)

|                       |  | December 31, 2003 |      | December 31, 2002 |  
|---------------------- |  | ----------------- | ---- | ----------------- | -
|
|
|U.S. dollar            |  |                   |      |                   |  
|Twelve months and less |  | $                 | (763 | )                 | $
|Discounted five year   |  | $                 | 965  |                   | $
|                       |  |                   |      |                   |  
|Mexican peso(1)        |  |                   |      |                   |  
|Twelve months and less |  | $                 | 55   |                   | $
|Discounted five year   |  | $                 | 226  |                   | $
|                       |  |                   |      |                   |  

---

The
change in U.S. dollar Interest Rate Exposure from the prior year reflects changes in the aggregate asset/liability mix, changes in actual and projected pre-payments for
mortgages and mortgage-related investments, as well as Citigroup's view of prevailing interest rates.

Trading Portfolios

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 100,000 market risk factors, including factors that track the
specific issuer risk in debt and equity securities.

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 unused limit capacity and
intra-day trading activity.

Citicorp
periodically performs extensive back-testing of many hypothetical test portfolios as one check on the accuracy of its Value-at-Risk.
Back-testing is the process in which the ex-ante 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

36

---

level.
A daily trading loss in excess of a 99% confidence level Value-at-Risk should occur on average only 1% of the time. In all cases, thus far, Citicorp's VAR has met this
requirement.

New
and/or complex products in trading portfolios 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 $42 million at December 31, 2003 and
$40 million at December 31, 2002. Daily exposures averaged $39 million in 2003 and ranged from $25 million to $56 million.

The
following table summarizes Value-at-Risk in the trading portfolios as of December 31, 2003 and 2002, along with the averages:

|In millions of dollars |  | Dec. 31,
2003 |     | 2003
Average |   | Dec. 31,
2002 |   | 2002
Average |    
|---------------------- |  | ------------- | --- | ------------ | - | ------------- | - | ------------ | ---
|Interest rate          |  | $             | 36  |              | $ | 33            |   | $            | 31 
|Foreign exchange       |  |               | 11  |              |   | 21            |   |              | 24 
|Equity                 |  |               | 19  |              |   | 13            |   |              | 5  
|Commodity              |  |               | 9   |              |   | 4             |   |              | 3  
|Covariance adjustment  |  |               | (33 | )            |   | (32           | ) |              | (23
|                       |  |               |     |              |   |               |   |              |    
|Total                  |  | $             | 42  |              | $ | 39            |   | $            | 40 
|                       |  |               |     |              |   |               |   |              |    

The
table below provides the range of Value-at-Risk in the trading portfolios that was experienced during 2003 and 2002:

|                 |  | 2003 |    | 2002
|---------------- |  | ---- | -- | ----
|
|
|Interest rate    |  | $    | 20 |     
|Foreign exchange |  |      | 8  |     
|Equity           |  |      | 5  |     
|Commodity        |  |      | 1  |     
|                 |  |      |    |     

37

---

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 Operational Risk Policy (the Policy) codifies the core governing principles for operational risk management and provides the framework to identify, control, monitor, measure, test, and
report operational risks in a consistent manner across Citigroup. The Policy requires each business to identify its operational risks and establish controls for those risks 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
operational risk 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
operational risk framework including the Policy and its requirements facilitates the aggregation of operational risks across products and businesses and promotes effective
communication of those risks to management. Information about the businesses' operational risks and losses is reported regularly to the Citigroup Risk Management Committee 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 operational risk framework. Citigroup's operational risk framework facilitates the Citigroup'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

During 2003, a formal governance structure was established to provide direction, oversight, and monitoring of Citigroup's RCSA programs. The Policy was amended to
incorporate standards for risk and control self-assessment that are applicable to all businesses and to establish RCSA as the process whereby risks that are inherent in a business'
strategy, objectives, and activities are identified and the effectiveness of the controls over those risks are evaluated and monitored. 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. Beginning in
2004, the entire process is subject to audit by Citigroup's Audit and Risk Review with reporting to the Audit and Risk Management Committee of Citigroup's Board of Directors.

Information Security and Continuity of Business

In October 2003, Citigroup formed an Executive Council of senior business managers to oversee information security and continuity of business policy and
implementation. These are important issues for Citigroup and the entire industry in light of the risk environment. Significant upgrades to Citigroup's processes are continuing.

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

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

38

---

COUNTRY AND CROSS-BORDER RISK MANAGEMENT PROCESS

Country Risk

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

Cross-Border Risk

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

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

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, 2003 |     | December 31, 2002
|-------------- |  | ----------------- | --- | -----------------
|
|
|
|Germany        |  | $                 | 6.0 |                  
|Italy          |  |                   | 0.4 |                  
|Canada         |  |                   | 1.0 |                  
|Australia      |  |                   | 0.9 |                  
|Mexico         |  |                   |    |                  
|United Kingdom |  |                   | 1.8 |                  
|Brazil         |  |                   | 0.5 |                  
|               |  |                   |     |                  

---

39

---



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, Treasurer, Senior Risk Officer and several other senior officers 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 2003. In addition, the Tier 1 capital ratio at December 31, 2003 was above
Citicorp's target range of 8.00% to 8.30%. Also see Note 15 to the Consolidated Financial Statements.

Citicorp Regulatory Capital Ratios

|At year-end                       |  | 2003  |   | 2002  |  
|--------------------------------- |  | ----- | - | ----- | -
|Tier 1 capital                    |  | 8.44  | % | 8.11  | %
|Total capital (Tier 1 and Tier 2) |  | 12.68 | % | 12.31 | %
|Leverage(1)                       |  | 6.70  | % | 6.82  | %
|Common stockholders' equity       |  | 9.97  | % | 10.11 | %
|                                  |  |       |   |       |  

---

Components of Capital Under Regulatory Guidelines

|In millions of dollars at year-end                                |                                    | 2003 |         | 2002    |  
|----------------------------------------------------------------- | ---------------------------------- | ---- | ------- | ------- | -
|Tier 1 capital                                                    |                                    |      |         |         |  
|Common stockholder's equity                                       |                                    | $    | 81,794  |         | $
|Qualifying mandatorily redeemable securities of subsidiary trusts |                                    |      | 840     |         |  
|Minority interest                                                 |                                    |      | 1,225   |         |  
|Less: Net unrealized gains on securities available-for-sale(1)    |                                    |      | (948    | )       |  
|Accumulated net gains on cash flow hedges, net of tax             |                                    |      | (879    | )       |  
|Intangible assets:(2)                                             |                                    |      |         |         |  
|                                                                  | Goodwill                           |      |         | (25,302 | )
|                                                                  | Other disallowed intangible assets |      |         | (5,837  | )
|Other                                                             |                                    |      | (222    | )       |  
|                                                                  |                                    |      |         |         |  
|Total Tier 1 capital                                              |                                    |      | 50,671  |         |  
|                                                                  |                                    |      |         |         |  
|Tier 2 capital                                                    |                                    |      |         |         |  
|Allowance for credit losses(3)                                    |                                    |      | 7,700   |         |  
|Qualifying debt(4)                                                |                                    |      | 17,709  |         |  
|Unrealized marketable equity securities gains(1)                  |                                    |      | 73      |         |  
|                                                                  |                                    |      |         |         |  
|Total Tier 2 capital                                              |                                    |      | 25,482  |         |  
|                                                                  |                                    |      |         |         |  
|Total capital (Tier 1 and Tier 2)                                 |                                    | $    | 76,153  |         | $
|                                                                  |                                    |      |         |         |  
|Risk-adjusted assets(5)                                           |                                    | $    | 600,554 |         | $
|                                                                  |                                    |      |         |         |  

---

The
net increase in stockholder's equity during 2003 primarily reflects net income of $13.5 billion and employee benefits and other activity of $0.2 billion, partially
offset by dividends paid of $4.2 billion and net changes in equity from nonowner sources of $1.3 billion. The decrease in the stockholder's equity ratio during the year reflected the
above items and the 13% increase in assets.

Total
mandatorily redeemable securities of subsidiary trusts (trust preferred securities), which qualify as Tier 1 capital, at December 31, 2003 and December 31, 2002 were
$0.840 billion and $1.095 billion, respectively. Interest expense on the trust securities amounted to $72 million and $76 million in 2003 and 2002, respectively. The
Company continues to consolidate issuer trusts under FIN 46. When FIN 46-R becomes effective in the first quarter of 2004, deconsolidation of the subsidiary trusts will be required. The
Company is currently exploring restructuring alternatives to meet the new requirements for continued consolidation. Although the FRB has issued interim guidance that continues to recognize trust
preferred securities as a component of Tier 1 capital, it is possible that a change may result in these securities' qualifying for Tier 2 capital rather than Tier 1 capital. This statement is a
forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47. If Tier 2 capital treatment

40

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had
been required at December 31, 2003, Citicorp would have continued to be "well-capitalized" and its Tier 1 capital ratio would have been within management's targeted range of
8.00% to 8.30%.

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, 2003, all of Citicorp's subsidiary depository institutions were "well-capitalized" under the federal regulatory agencies' definitions.

Citibank, N.A. Ratios

|At year-end                       |  | 2003  |   | 2002  |  
|--------------------------------- |  | ----- | - | ----- | -
|Tier 1 capital                    |  | 8.40  | % | 8.40  | %
|Total capital (Tier 1 and Tier 2) |  | 12.56 | % | 12.58 | %
|Leverage(1)                       |  | 6.57  | % | 7.00  | %
|Common stockholder's equity       |  | 7.56  | % | 7.89  | %
|                                  |  |       |   |       |  

---

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

|In billions of dollars at year-end |  | 2003 |      | 2002
|---------------------------------- |  | ---- | ---- | ----
|Tier 1 capital                     |  | $    | 35.9 |     
|Total capital (Tier 1 and Tier 2)  |  | $    | 53.7 |     
|                                   |  |      |      |     

Citibank's
net income for 2003 amounted to $7.9 billion. During 2003, Citibank paid dividends of $6.0 billion to Citicorp (Citibank's parent company).

During
2003, Citibank issued an additional $0.8 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, 2003 and included in Citibank's Tier 2 capital amounted to $12.3 billion.

Capital Securities Issuance and Redemptions

While Citicorp is a separately rated company, it did not access external markets for any long-term debt or equity issuance in 2003. On
October 3, 2003, Citicorp redeemed for cash all of the $225 million trust preferred securities of Citicorp Capital III.

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, is developing 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. In a press release dated January 15,
2004, it was announced that the Basel Committee will make further refinements to certain critical components of Pillar 1 of the New Accord, including the rules for recognizing credit risk mitigation
techniques, and the Basel Committee has subsequently published changes for the capital treatment of expected and unexpected credit losses, the treatment of securitization-related exposures, and
principles for the cross-border implementation of the advanced measurement approaches (AMA) for operational risk requirements. The Basel Committee also clarified the implementation of the supervisory
review of capital adequacy (Pillar 2 of the New Accord). Additionally, the Basel Committee has committed to revisiting the treatment of retail credit exposures by their next meeting. The Basel
Committee's next scheduled meeting is in May 2004, where working groups will make recommendations on outstanding issues and the Basel Committee will address the calibration of capital
requirements under Pillar 1. The Basel Committee intends to finalize the New Accord by mid-year 2004. The U.S. banking regulators issued an advance notice of proposed rulemaking in
August 2003 to address issues in advance of publishing their proposed rules incorporating the new Basel standards. The final version of these rules will apply to Citigroup and other large U.S.
banks and bank holding companies. Citigroup and Citicorp are assessing the impact of the proposed new capital standards, participating in efforts to refine the standards and monitoring the progress of
the Basel initiative. The U.S. banking regulators have proposed an effective date of January 1, 2007 for the New Accord.

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

Additionally,
from time to time, the FRB and the FFIEC propose amendments to, and issue interpretations of, risk-based capital guidelines and reporting instructions. Such
proposals or interpretations could, if implemented in the future, affect reported capital ratios and net risk-adjusted assets. This statement is a forward-looking statement within the
meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

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 ALCO undertakes this oversight responsibility. The Global ALCO functions as an oversight forum
comprised of Citigroup's Chief Financial Officer, Senior Risk Officer, Corporate

41

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

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

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

A
series of standard corporate-wide liquidity ratios have been established to monitor the structural elements of Citigroup's liquidity. For bank entities these include
measures of long-term liabilities and capital against illiquid assets"cash capital", 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, there are ratios established for liquid assets against short-term obligations. Triggers to elicit management discussion, which
may result in other actions, have been established against these ratios. In addition, each individual major operating subsidiary or country establishes targets against these ratios and may monitor
other ratios as approved in its funding and liquidity plan.

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

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

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

Funding

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

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

Citicorp's
national and state-chartered bank subsidiaries can declare dividends to their respective parent companies in 2004, without regulatory approval, of approximately
$4.3 billion, adjusted by the effect of their net income (loss) for 2004 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 $2.4 billion of the available $4.3 billion, adjusted by the effect of their net
income (loss) up to the date of any such dividend declaration.

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

During
2004, it is not anticipated that any restrictions on the subsidiaries' dividending capability will restrict Citicorp's ability to meet its obligations as and when they become due.
This statement is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act. See "Forward-Looking Statements" on page 47.

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.

Primary
sources of liquidity for Citicorp and its principal subsidiaries include deposits, collateralized financing transactions, senior and subordinated debt, issuance of commercial
paper, proceeds

42

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from
issuance of trust preferred securities, and purchased/wholesale funds. Citicorp and its principal subsidiaries also generate funds through securitizing financial assets including credit card
receivables and single-family or multi-family residences. Finally, Citicorp's net earnings provide a significant source of funding to the corporation.

Citicorp's
funding sources are well-diversified across funding types and geography, a benefit of the strength of the global franchise. Funding for the parent company and its
major operating subsidiaries includes a large geographically diverse retail and corporate deposit base of $478 billion. Citicorp's deposits represent 59% of total funding at December 31,
2003 and 60% of total funding at December 31, 2002. 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. Loans securitized and sold during 2003 included $20.0 billion of U.S. credit cards and $65.9 billion
of U.S. consumer mortgages. As credit card securitization transactions amortize, newly originated receivables are recorded on Citicorp's balance sheet and become available for asset securitization. In
2003, the scheduled amortization of certain credit card securitization transactions made available $11.9 billion of new receivables. In addition, at least $18.2 billion of credit card
securitization transactions are scheduled to amortize during 2004.

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 2003. 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. 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, securities and unused bank lines of credit to support their combined
outstanding commercial paper. See Note 10 of 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 26 of 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.

43

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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, 2003. The Company's capital lease obligations are not material and are included within purchase obligations in the table. Citicorp's contractual obligations include
agreements to purchase businesses and other 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 table below, other liabilities reflected on the Company's Consolidated Balance Sheet includes obligations for goods and services which have already been received as well as other
long-term liabilities that have already been incurred and will ultimately be paid in cash. The table excludes deposit liabilities, except for deposits with defined maturities, as the
timing of account holder withdrawals is not certain.

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. At December 31, 2003, there were no minimum required contributions and no discretionary or non-cash contributions are currently planned for the U.S.
pension plans. Accordingly, no amounts have been included in the table below for future contributions to the U.S. pension plans. For the non-U.S. plans, Citigroup discretionary
contributions in 2004 are anticipated to be approximately $129 million and this amount has been included within other 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                                              |                                             |                                
|Business acquisitions(2) (3)                                             |                                             |                                
|Purchase obligations:                                                    |                                             |                                
|                                                                         | Consulting, outsourcing and administration  |                                
|                                                                         | Advertising and sponsorship                 |                                
|                                                                         | Computer hardware, software and maintenance |                                
|                                                                         | Premises related(4)                         |                                
|                                                                         | Investment commitments(5)                   |                                
|                                                                         | Other purchase obligations                  |                                
|Other liabilities reflected on the Company's Consolidated Balance Sheet: |                                             |                                
|                                                                         | Deposits with defined maturities            |                                
|                                                                         | Benefits and compensation                   |                                
|                                                                         | Other(6)                                    |                                
|                                                                         |                                             |                                
|Total                                                                    |                                             | $                              
|                                                                         |                                             |                                

---

44

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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 and Poor's, Moody's Investors Service, or Fitch Ratings, than the transferor could obtain for its own debt issuances, resulting in
less expensive financing costs. The transferor can use the cash proceeds from the sale to extend credit to additional customers or for other business purposes. The SPE may also enter into derivative
contracts in order to convert the yield or currency of the underlying assets to match the needs of the SPE's investors or to limit or change the credit risk of the SPE. The Company may be the
counterparty to any such derivative. The securitization process enhances the liquidity of the financial markets, may spread credit risk among several market participants, and makes new funds available
to extend credit to consumers and commercial entities.

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

Our
credit card receivable and mortgage loan securitizations are organized as QSPEs and are, therefore, not VIEs subject to FIN 46. SPEs may be QSPEs or VIEs or neither. When an entity
is deemed a variable interest entity (VIE) under FIN 46, the entity in question must be consolidated by the primary beneficiary; however, we are not the primary beneficiary of most of these entities
and as such do not consolidate most of them.

Securitization of Citicorp's Assets

In certain of these off-balance sheet arrangements, including credit card receivable and mortgage loan securitizations, Citicorp is securitizing assets
that were previously recorded in its Consolidated Balance Sheet. At December 31, 2003 and 2002, the total amount of mortgage loans securitized and outstanding was $216 billion and
$234 billion, respectively. Servicing rights and other retained interests amounted to $4.6 billion and $3.3 billion at December 31, 2003 and 2002, respectively. 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 retained interest, consisting of seller's interest and an
interest-only strip that arises from the calculation of gain or loss at the time receivables are sold to the SPE. When the predetermined amount is reached, net revenue with respect to the
investors' interest is passed directly to the Citicorp subsidiary that sold the receivables. Credit card securitizations are revolving securitizations; that is, as customers pay their credit card
balances, the cash proceeds are used to purchase new receivables and replenish the receivables in the trust. Citigroup Global Markets Holdings Inc. (CGMHI) is one of several underwriters that
distribute securities issued by the trusts to investors. The Company relies on securitizations to fund approximately 60% of its Citi Cards business.

At
December 31, 2003 and 2002, total assets in the credit card trusts were $89 billion and $84 billion, respectively. Of that amount at December 31, 2003 and
2002, $76 billion and $67 billion, respectively, has been sold to investors via trust-issued securities, and the remaining seller's interest of $13 billion and $17 billion,
respectively, is recorded in Citicorp's Consolidated Balance Sheet as Consumer Loans. The Company has retained securities issued by the trust totaling $1.1 billion at December 31, 2003.
There were no securities retained at December 31, 2002. Citicorp retains credit risk on its seller's interests and reserves for expected credit losses. Amounts receivable from the trusts were
$1.4 billion and $1.1 billion, respectively, and amounts due to the trusts were $1.1 billion and $0.9 billion, respectively, at December 31, 2003 and 2002. The
Company also recognized an interest-only strip of $836 million and $494 million at December 31, 2003 and 2002, respectively, that arose from the calculation of gain or
loss at the time assets were sold to the QSPE. During the years ended December 31, 2003, 2002, and 2001, finance charges and interchange fees of $10.9 billion, $10.3 billion and
$10.1 billion, respectively, were collected by the trusts in each year. Also for the years ended December 31, 2003, 2002, and 2001, the trusts recorded $6.6 billion,
$6.3 billion and $6.5 billion, respectively, in coupon interest paid to third-party investors, servicing fees, and other costs. Servicing fees of $1.4 billion, $1.2 billion
and $1.2 billion were earned and an additional $4.4 billion, $3.9 billion and $3.6 billion of net cash flows were received by the Company in 2003, 2002, and 2001,
respectively. In 2003, the Company recorded net gains of $342 million and, in 2002, recorded net gains of $425 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.

45

---

Mortgages and Other Assets

The Company provides a wide range of mortgage and other loan products to a diverse customer base. In addition to providing a source of liquidity and less expensive
funding, securitizing these assets also reduces the Company's credit exposure to the borrowers. In connection with the securitization of these loans, the Company may retain servicing rights that
entitle the Company to a future stream of cash flows based on the outstanding principal balances of the loans and the contractual servicing fee. Failure to service the loans in accordance with
contractual servicing obligations may lead to a termination of the servicing contracts and the loss of future servicing fees. In non-recourse servicing, the principal credit risk to the
servicer arises from temporary advances of funds. In recourse servicing, the servicer agrees to share credit risk with the owner of the mortgage loans, such as FNMA, FHLMC, GNMA, or with a private
investor, insurer or guarantor. The Company's mortgage loan securitizations are primarily non-recourse, thereby effectively transferring the risk of future credit losses to the purchasers
of the securities issued by the trust. In addition to servicing rights, the Company also retains a residual interest in its auto loan, student loan and other assets securitizations, consisting of
securities and interest-only strips that arise from the calculation of gain or loss at the time assets are sold to the SPE. The Company recognized gains related to the securitization of
mortgages and other assets of $582 million, $302 million, and $258 million in 2003, 2002, and 2001, 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, 2003 and 2002, total assets in the unconsolidated conduits were $44 billion and $49 billion, respectively, and liabilities were
$44 billion and $49 billion, respectively. One conduit with assets of $823 million is consolidated at December 31, 2003. For 2003 and 2002, the Company's revenues for these
activities amounted to $217 million and $239 million, and estimated expenses before taxes were $37 million and $44 million. Expenses have been estimated based upon a
percentage of product revenues to business revenues. In addition, the Company participates in providing liquidity backstop lines of credit to conduits administered by other financial institutions with
assets totaling $334 million and $2.9 billion at December 31, 2003 and 2002, respectively.

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 also packages and securitizes other 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.

The
Company also packages and securitizes assets purchased in the financial markets in order to create new security offerings, including hedge funds, mutual funds, unit investment
trusts, and other investment funds, for institutional andPrivate Bankclients as well as retail customers, that match the clients' investment needs and
preferences. The 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:

|In millions of dollars at year-end                                             |  | 2003 |           | 2002
|------------------------------------------------------------------------------ |  | ---- | --------- | ----
|Financial standby letters of credit and foreign office guarantees              |  | $    | 36,065    |     
|Performance standby letters of credit and foreign office guarantees            |  |      | 8,101     |     
|Commercial and similar letters of credit                                       |  |      | 4,411     |     
|One- to four-family residential mortgages                                      |  |      | 3,599     |     
|Revolving open-end loans secured by one- to four-family residential properties |  |      | 14,007    |     
|Commercial real estate, construction and land development                      |  |      | 1,322     |     
|Credit card lines(1) (2)                                                       |  |      | 739,162   |     
|Commercial and other consumer loan commitments(3)                              |  |      | 221,024   |     
|                                                                               |  |      |           |     
|Total                                                                          |  | $    | 1,027,691 |     
|                                                                               |  |      |           |     

---

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

46

---

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.

During
the 2002 third quarter, Citigroup created 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 which applies to all finance, accounting, treasury, tax and investor relations professionals worldwide and which supplements the Citigroup-wide Code of
Conduct. Both the Code of Conduct and the Code of Ethics for Financial Professionals as well as 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 website @
www.citigroup.com 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, 2003 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;
sovereign or regulatory actions; 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 interest rates, bankruptcy filings and unemployment rates, as well as political policies
and developments around the world; the continued threat of terrorism; the potential impact of Argentine government actions; the realizability of Argentine government obligations; the potential in
Argentina for the re-dollarization of pension annuities and further debt restructurings; changes in assumptions underlying the fair value of investments; changes in management's estimates
underlying the allowance for credit losses; the challenging operating environment in Japan; the ability ofCardsto continue to increase receivables and
improve net credit losses; the ability ofRetail Bankingto continue to expand into select markets; the ability of CitiMortgage to continue leveraging
Citigroup distribution channels; the ability of Citicorp's consumer business to expand, including the volume of new loans and credit cards; the credit performance of the portfolios, portfolio growth
and seasonal factors; the ability to leverage the newly-formed alliances with Sears and Home Depot; 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.

47

---



INDEPENDENT AUDITORS' REPORT

The
Board of Directors and Shareholder
        Citicorp:

We
have audited the accompanying consolidated balance sheet of Citicorp and subsidiaries (the "Company") as of December 31, 2003 and 2002, 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, 2003, and the related consolidated balance sheet of
Citibank, N.A. and subsidiaries as of December 31, 2003 and 2002. 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 auditing standards generally accepted in the United States of America. 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 and subsidiaries as of
December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003, and the financial
position of Citibank, N.A. and subsidiaries as of December 31, 2003 and 2002, in conformity with accounting principles generally accepted in the United States of America.

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. Also, as discussed in Note 1 to the consolidated financial statements, in 2001 the Company changed
its methods of accounting for derivative instruments and hedging activities, accounting for interest income and impairment on purchased and retained beneficial interests in securitized financial
assets, and accounting for goodwill and intangible assets resulting from business combinations consummated after June 30, 2001.

/s/
KPMG LLP
New York, New York
February 26, 2004

48

---



CONSOLIDATED FINANCIAL STATEMENTS    CONSOLIDATED STATEMENT OF INCOME  Citicorp and Subsidiaries

|                                                                                           |                                 | Year Ended December 31, |       
|------------------------------------------------------------------------------------------ | ------------------------------- | ----------------------- | ------
|
|
|Interest revenue                                                                           |                                 |                         |       
|Loans, including fees                                                                      |                                 | $                       | 37,969
|Deposits with banks                                                                        |                                 |                         | 819   
|Federal funds sold and securities purchased under agreements to resell                     |                                 |                         | 322   
|Investments, including dividends                                                           |                                 |                         | 4,760 
|Trading account assets                                                                     |                                 |                         | 1,485 
|Loans held-for-sale                                                                        |                                 |                         | 919   
|                                                                                           |                                 |                         |       
|                                                                                           |                                 |                         | 46,274
|                                                                                           |                                 |                         |       
|Interest expense                                                                           |                                 |                         |       
|Deposits                                                                                   |                                 |                         | 7,151 
|Trading account liabilities                                                                |                                 |                         | 62    
|Purchased funds and other borrowings                                                       |                                 |                         | 1,624 
|Long-term debt                                                                             |                                 |                         | 3,637 
|                                                                                           |                                 |                         |       
|                                                                                           |                                 |                         | 12,474
|                                                                                           |                                 |                         |       
|Net interest revenue                                                                       |                                 |                         | 33,800
|Benefits, claims and credit losses                                                         |                                 |                         |       
|Policyholder benefits and claims                                                           |                                 |                         | 545   
|Provision for credit losses                                                                |                                 |                         | 8,045 
|                                                                                           |                                 |                         |       
|Total benefits, claims and credit losses                                                   |                                 |                         | 8,590 
|                                                                                           |                                 |                         |       
|Net interest revenue after benefits, claims and credit losses                              |                                 |                         | 25,210
|                                                                                           |                                 |                         |       
|Fees, commissions and other revenue                                                        |                                 |                         |       
|Fees and commissions                                                                       |                                 |                         | 12,048
|Foreign exchange                                                                           |                                 |                         | 3,530 
|Trading account                                                                            |                                 |                         | (546  
|Investment transactions                                                                    |                                 |                         | 254   
|Other revenue                                                                              |                                 |                         | 6,090 
|                                                                                           |                                 |                         |       
|                                                                                           |                                 |                         | 21,376
|                                                                                           |                                 |                         |       
|Operating expense                                                                          |                                 |                         |       
|Salaries                                                                                   |                                 |                         | 10,500
|Employee benefits                                                                          |                                 |                         | 2,301 
|                                                                                           |                                 |                         |       
|                                                                                           | Total employee-related expenses |                         |       
|Net premises and equipment                                                                 |                                 |                         | 3,646 
|Restructuring-related items                                                                |                                 |                         | (45   
|Other expense                                                                              |                                 |                         | 10,538
|                                                                                           |                                 |                         |       
|                                                                                           |                                 |                         | 26,940
|                                                                                           |                                 |                         |       
|Income before income taxes, minority interest, and cumulative effect of accounting changes |                                 |                         | 19,646
|Income taxes                                                                               |                                 |                         | 5,827 
|Minority interest, net of income taxes                                                     |                                 |                         | 278   
|                                                                                           |                                 |                         |       
|Income before cumulative effect of accounting changes                                      |                                 |                         | 13,541
|Cumulative effect of accounting changes                                                    |                                 |                         |      
|                                                                                           |                                 |                         |       
|Net Income                                                                                 |                                 | $                       | 13,541
|                                                                                           |                                 |                         |       

See
Notes to the Consolidated Financial Statements.

49

---



CONSOLIDATED BALANCE SHEET    Citicorp and Subsidiaries

|In millions of dollars                                                                                                             |                                                                                                                                                          | December 31,
2003 |         | December 31,
2002(1) |  
|---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------- | -------------------- | -
|Assets                                                                                                                             |                                                                                                                                                          |                   |         |                      |  
|Cash and due from banks                                                                                                            |                                                                                                                                                          | $                 | 16,707  |                      | $
|Deposits at interest with banks                                                                                                    |                                                                                                                                                          |                   | 19,777  |                      |  
|Federal funds sold and securities purchased under agreements to resell                                                             |                                                                                                                                                          |                   | 18,797  |                      |  
|Trading account assets (including $2,078 and $2,514 pledged to creditors at December 31, 2003 and December 31, 2002, respectively) |                                                                                                                                                          |                   | 85,681  |                      |  
|Investments                                                                                                                        |                                                                                                                                                          |                   |         |                      |  
|                                                                                                                                   | Held to maturity                                                                                                                                         |                   |         | 54                   |  
|                                                                                                                                   | Available-for-sale and short-term and other (including $10,126 and $8,663 pledged to creditors at December 31, 2003 and December 31, 2002, respectively) |                   |         | 120,633              |  
|                                                                                                                                   | Venture capital                                                                                                                                          |                   |         | 3,605                |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total investments                                                                                                                  |                                                                                                                                                          |                   | 124,292 |                      |  
|Loans held-for-sale                                                                                                                |                                                                                                                                                          |                   | 9,229   |                      |  
|Loans, net of unearned income                                                                                                      |                                                                                                                                                          |                   |         |                      |  
|                                                                                                                                   | Consumer                                                                                                                                                 |                   |         | 379,932              |  
|                                                                                                                                   | Corporate                                                                                                                                                |                   |         | 99,037               |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Loans, net of unearned income                                                                                                      |                                                                                                                                                          |                   | 478,969 |                      |  
|                                                                                                                                   | Allowance for credit losses                                                                                                                              |                   |         | (12,643              | )
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total loans, net                                                                                                                   |                                                                                                                                                          |                   | 466,326 |                      |  
|Goodwill                                                                                                                           |                                                                                                                                                          |                   | 25,302  |                      |  
|Intangible assets                                                                                                                  |                                                                                                                                                          |                   | 12,924  |                      |  
|Premises and equipment, net                                                                                                        |                                                                                                                                                          |                   | 6,514   |                      |  
|Interest and fees receivable                                                                                                       |                                                                                                                                                          |                   | 5,075   |                      |  
|Other assets                                                                                                                       |                                                                                                                                                          |                   | 29,479  |                      |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total assets                                                                                                                       |                                                                                                                                                          | $                 | 820,103 |                      | $
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Liabilities                                                                                                                        |                                                                                                                                                          |                   |         |                      |  
|Non-interest-bearing deposits in U.S. offices                                                                                      |                                                                                                                                                          | $                 | 30,214  |                      | $
|Interest-bearing deposits in U.S. offices                                                                                          |                                                                                                                                                          |                   | 146,713 |                      |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                          |                                                                                                                                                          |                   | 23,405  |                      |  
|Interest-bearing deposits in offices outside the U.S.                                                                              |                                                                                                                                                          |                   | 278,162 |                      |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total deposits                                                                                                                     |                                                                                                                                                          |                   | 478,494 |                      |  
|Trading account liabilities                                                                                                        |                                                                                                                                                          |                   | 53,455  |                      |  
|Purchased funds and other borrowings                                                                                               |                                                                                                                                                          |                   | 66,361  |                      |  
|Accrued taxes and other expense                                                                                                    |                                                                                                                                                          |                   | 9,985   |                      |  
|Long-term debt                                                                                                                     |                                                                                                                                                          |                   | 102,234 |                      |  
|Other liabilities                                                                                                                  |                                                                                                                                                          |                   | 27,780  |                      |  
|Stockholder's equity                                                                                                               |                                                                                                                                                          |                   |         |                      |  
|Common stock: ($0.01 par value) issued shares: 1,000 in each period                                                                |                                                                                                                                                          |                   |        |                      |  
|Surplus                                                                                                                            |                                                                                                                                                          |                   | 40,203  |                      |  
|Retained earnings                                                                                                                  |                                                                                                                                                          |                   | 43,998  |                      |  
|Accumulated other changes in equity from nonowner sources                                                                          |                                                                                                                                                          |                   | (2,407  | )                    |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total stockholder's equity                                                                                                         |                                                                                                                                                          |                   | 81,794  |                      |  
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  
|Total liabilities and stockholder's equity                                                                                         |                                                                                                                                                          | $                 | 820,103 |                      | $
|                                                                                                                                   |                                                                                                                                                          |                   |         |                      |  

---

See
Notes to the Consolidated Financial Statements.

50

---



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 2003, in 2002 and in 2001                            |  | $                       |      
|                                                                                                 |  |                         |       
|Balance, end of yearShares: 1,000 in 2003, in 2002, and in 2001                                 |  | $                       |      
|                                                                                                 |  |                         |       
|Surplus                                                                                          |  |                         |       
|Balance, beginning of year                                                                       |  | $                       | 39,966
|Capital contribution from Citigroup(1)                                                           |  |                         |      
|Employee benefit plans                                                                           |  |                         | 97    
|Other(2)                                                                                         |  |                         | 140   
|                                                                                                 |  |                         |       
|Balance, end of year                                                                             |  | $                       | 40,203
|                                                                                                 |  |                         |       
|Retained earnings                                                                                |  |                         |       
|Balance, beginning of year                                                                       |  | $                       | 34,667
|Net income                                                                                       |  |                         | 13,541
|Dividends paid                                                                                   |  |                         | (4,210
|                                                                                                 |  |                         |       
|Balance, end of year                                                                             |  | $                       | 43,998
|                                                                                                 |  |                         |       
|Accumulated other changes in equity from nonowner sources                                        |  |                         |       
|Balance, beginning of year                                                                       |  | $                       | (1,093
|Cumulative effect of accounting changes, after-tax(3)                                            |  |                         |      
|Net change in unrealized gains and losses on investment securities available-for-sale, after-tax |  |                         | 134   
|Net change in foreign currency translation adjustment, after-tax                                 |  |                         | (873  
|Net change for cash flow hedges, after-tax                                                       |  |                         | (575  
|                                                                                                 |  |                         |       
|Balance, end of year                                                                             |  | $                       | (2,407
|                                                                                                 |  |                         |       
|Total stockholder's equity                                                                       |  |                         |       
|Balance, beginning of year                                                                       |  | $                       | 73,540
|Changes during the year, net                                                                     |  |                         | 8,254 
|                                                                                                 |  |                         |       
|Balance, end of year                                                                             |  | $                       | 81,794
|                                                                                                 |  |                         |       
|Summary of changes in equity from nonowner sources                                               |  |                         |       
|Net income                                                                                       |  | $                       | 13,541
|Other changes in equity from nonowner sources, after-tax                                         |  |                         | (1,314
|                                                                                                 |  |                         |       
|Total changes in equity from nonowner sources                                                    |  | $                       | 12,227
|                                                                                                 |  |                         |       

---

See
Notes to the Consolidated Financial Statements.

51

---

CONSOLIDATED STATEMENT OF CASH FLOWS
Citicorp and Subsidiaries

|                                                                                                         |                                                         | Year Ended December 31, |        
|-------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------------- | -------
|
|
|Cash flows from operating activities                                                                     |                                                         |                         |        
|Net income                                                                                               |                                                         | $                       | 13,541 
|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                             |                         |        
|                                                                                                         | Cumulative effect of accounting changes, after-tax      |                         |        
|                                                                                                         | Venture capital activity                                |                         |        
|                                                                                                         | Net loss (gain) 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 (decrease) in trading account liabilities  |                         |        
|                                                                                                         |                                                         |                         |        
|Total adjustments                                                                                        |                                                         |                         | (1.349 
|                                                                                                         |                                                         |                         |        
|Net cash provided by operating activities                                                                |                                                         |                         | 12,192 
|                                                                                                         |                                                         |                         |        
|Cash flows from investing activities                                                                     |                                                         |                         |        
|Net (increase) decrease in deposits at interest with banks                                               |                                                         |                         | (3,395 
|Investmentsavailable-for-sale and short-term and other                                                  |                                                         |                         |        
|                                                                                                         | Purchases                                               |                         |        
|                                                                                                         | Proceeds from sales                                     |                         |        
|                                                                                                         | Maturities                                              |                         |        
|Net (increase) decrease in federal funds sold and securities purchased under resale agreements           |                                                         |                         | (13,520
|Net increase in loans                                                                                    |                                                         |                         | (31,607
|Proceeds from sales of loans                                                                             |                                                         |                         | 18,553 
|Business acquisitions                                                                                    |                                                         |                         | (21,456
|Capital expenditures on premises and equipment                                                           |                                                         |                         | (1,565 
|Proceeds from sales of premises and equipment, subsidiaries and affiliates, and other repossessed assets |                                                         |                         | 1,254  
|                                                                                                         |                                                         |                         |        
|Net cash used in investing activities                                                                    |                                                         |                         | (56,411
|                                                                                                         |                                                         |                         |        
|Cash flows from financing activities                                                                     |                                                         |                         |        
|Net increase in deposits                                                                                 |                                                         |                         | 40,774 
|Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements       |                                                         |                         | (6,247 
|Net increase (decrease) in commercial paper and funds borrowed                                           |                                                         |                         | 4,389  
|Proceeds from issuance of long-term debt                                                                 |                                                         |                         | 38,499 
|Repayment of long-term debt                                                                              |                                                         |                         | (26,582
|Dividends paid                                                                                           |                                                         |                         | (4,210 
|                                                                                                         |                                                         |                         |        
|Net cash provided by financing activities                                                                |                                                         |                         | 46,623 
|                                                                                                         |                                                         |                         |        
|Effect of exchange rate changes on cash and due from banks                                               |                                                         |                         | 579    
|                                                                                                         |                                                         |                         |        
|Net increase in cash and due from banks                                                                  |                                                         |                         | 2,983  
|Cash and due from banks at beginning of year                                                             |                                                         |                         | 13,724 
|                                                                                                         |                                                         |                         |        
|Cash and due from banks at end of year                                                                   |                                                         | $                       | 16,707 
|                                                                                                         |                                                         |                         |        
|Supplemental disclosure of cash flow information                                                         |                                                         |                         |        
|Cash paid during the year for:                                                                           |                                                         |                         |        
|                                                                                                         | Interest                                                |                         | $      
|                                                                                                         | Income taxes                                            |                         |        
|Non-cash investing activitiestransfers to repossessed assets                                            |                                                         |                         | 1,026  
|Non-cash financing activities:                                                                           |                                                         |                         |        
|Dividends                                                                                                |                                                         |                         |       
|Contribution from Citigroup                                                                              |                                                         |                         |       
|                                                                                                         |                                                         |                         |        

See
Notes to the Consolidated Financial Statements.

52

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CONSOLIDATED BALANCE SHEET  Citibank, N.A. and Subsidiaries

|In millions of dollars                                                                                                         |                                                                                                                              | December 31,
2003 |         | December 31,
2002(1) |  
|------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------- | -------------------- | -
|Assets                                                                                                                         |                                                                                                                              |                   |         |                      |  
|Cash and due from banks                                                                                                        |                                                                                                                              | $                 | 13,330  |                      | $
|Deposits at interest with banks                                                                                                |                                                                                                                              |                   | 19,426  |                      |  
|Federal funds sold and securities purchased under agreements to resell                                                         |                                                                                                                              |                   | 16,869  |                      |  
|Trading account assets (including $258 and $203 pledged to creditors at December 31, 2003 and December 31, 2002, respectively) |                                                                                                                              |                   | 79,871  |                      |  
|Investments                                                                                                                    |                                                                                                                              |                   |         |                      |  
|                                                                                                                               | Held to maturity                                                                                                             |                   |         | 47                   |  
|                                                                                                                               | Available-for-sale (including $1,043 and $871 pledged to creditors at December 31, 2003 and December 31, 2002, respectively) |                   |         | 86,700               |  
|                                                                                                                               | Venture capital                                                                                                              |                   |         | 435                  |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total investments                                                                                                              |                                                                                                                              |                   | 87,182  |                      |  
|Loans held-for-sale                                                                                                            |                                                                                                                              |                   | 2,940   |                      |  
|Loans, net of unearned income                                                                                                  |                                                                                                                              |                   | 324,477 |                      |  
|Allowance for credit losses                                                                                                    |                                                                                                                              |                   | (8,709  | )                    |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total loans, net                                                                                                               |                                                                                                                              |                   | 315,768 |                      |  
|Goodwill                                                                                                                       |                                                                                                                              |                   | 6,610   |                      |  
|Intangible assets                                                                                                              |                                                                                                                              |                   | 9,184   |                      |  
|Premises and equipment, net                                                                                                    |                                                                                                                              |                   | 3,964   |                      |  
|Interest and fees receivable                                                                                                   |                                                                                                                              |                   | 3,791   |                      |  
|Other assets                                                                                                                   |                                                                                                                              |                   | 23,188  |                      |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total assets                                                                                                                   |                                                                                                                              | $                 | 582,123 |                      | $
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Liabilities                                                                                                                    |                                                                                                                              |                   |         |                      |  
|Non-interest-bearing deposits in U.S. offices                                                                                  |                                                                                                                              | $                 | 22,372  |                      | $
|Interest-bearing deposits in U.S. offices                                                                                      |                                                                                                                              |                   | 91,860  |                      |  
|Non-interest-bearing deposits in offices outside the U.S.                                                                      |                                                                                                                              |                   | 18,499  |                      |  
|Interest-bearing deposits in offices outside the U.S.                                                                          |                                                                                                                              |                   | 248,504 |                      |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total deposits                                                                                                                 |                                                                                                                              |                   | 381,235 |                      |  
|Trading account liabilities                                                                                                    |                                                                                                                              |                   | 52,718  |                      |  
|Purchased funds and other borrowings                                                                                           |                                                                                                                              |                   | 42,479  |                      |  
|Accrued taxes and other expense                                                                                                |                                                                                                                              |                   | 7,599   |                      |  
|Long-term debt and subordinated notes                                                                                          |                                                                                                                              |                   | 32,779  |                      |  
|Other liabilities                                                                                                              |                                                                                                                              |                   | 19,360  |                      |  
|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                                                                                                                        |                                                                                                                              |                   | 24,831  |                      |  
|Retained earnings                                                                                                              |                                                                                                                              |                   | 19,515  |                      |  
|Accumulated other changes in equity from nonowner sources(2)                                                                   |                                                                                                                              |                   | (1,094  | )                    |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total stockholder's equity                                                                                                     |                                                                                                                              |                   | 45,953  |                      |  
|                                                                                                                               |                                                                                                                              |                   |         |                      |  
|Total liabilities and stockholder's equity                                                                                     |                                                                                                                              | $                 | 582,123 |                      | $
|                                                                                                                               |                                                                                                                              |                   |         |                      |  

---

See
Notes to the Consolidated Financial Statements.

53

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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). The Company consolidates subsidiaries 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, "Consolidation of Variable Interest Entities" (FIN 46). 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 on 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 stockholders' 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,
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 stockholder's 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 include securities and derivatives and 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. 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

54

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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.

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 we have 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.

Commissions, Underwriting, and Principal Transactions

Commissions, Underwriting, and Principal Transactions revenues and related expenses are recognized in income on a trade-date basis.

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 we accrue 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
certain Consumer Finance businesses 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 a certainConsumer Financebusiness, unsecured loans in bankruptcy are charged-off when they are 30 days
contractually past due.

Commercial
Markets, which is included withinRetail Banking, includes loans and leases made principally to small- and middle-market
businesses. Commercial Markets loans are placed on a non-accrual basis when it is determined that the payment of interest or principal is doubtful of collection or when interest or
principal is past due for 90 days or more, except when the loan is well-secured and in the process of collection.

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.

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 substantially 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.

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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, including unfunded commitments. 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 portfolio, 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 statistical 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.

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 statistical 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 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 future expected cash flows using modeling techniques that incorporate management's best
estimates of key assumptions, including payment speeds, credit losses, and discount rates.

56

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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 securitizations 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 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, 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 periodically 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. Through the end of 2001, goodwill related to
purchase acquisitions completed prior to June 30, 2001 was amortized on a straight-line basis over its estimated useful life. Effective January 1, 2002, amortization ceased
on this goodwill. Goodwill related to purchase acquisitions completed after June 30, 2001 is not amortized. 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, present value of future profits, 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, the hedge relationship is designated and 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 is being assessed. A derivative must be highly effective in accomplishing the
objective of offsetting either changes in fair value or cash flows for the risk being hedged. The effectiveness of these hedging relationships is evaluated on a retrospective and prospective basis
typically using quantitative measures of correlation. If a hedge relationship is 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.

57

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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 stockholder's 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 floating rate credit card receivables and loans, rollovers of commercial paper, and foreign currency denominated funding. Cash flow hedges also include hedges of
certain forecasted transactions up to a maximum tenor 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 stockholder's equity from
nonowner sources as part of the foreign currency translation adjustment.

End-user
derivatives that are economic hedges rather than qualifying as hedges are also carried at fair value with changes in value included in trading account income or
other income.

For
those hedge relationships that are terminated, hedge designations that are removed, or forecasted transactions that are no longer expected to occur, 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 to 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 stockholder's 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. 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 options under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25), and related interpretations 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 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" below.

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

|In millions of dollars                                         |             | 2003 |   | 2002   |  | 2001
|-------------------------------------------------------------- | ----------- | ---- | - | ------ |  | ----
|Compensation expense related to stock option plans, net of tax |             |      |   |        |  |     
|                                                               | As reported |      | $ | 58     |  | $   
|                                                               | Pro forma   |      |   | 193    |  |     
|Net income                                                     |             |      |   |        |  |     
|                                                               | As reported |      | $ | 13,541 |  | $   
|                                                               | Pro forma   |      |   | 13,406 |  |     

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.

Accounting Changes

Costs Associated with Exit or Disposal Activities

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

Derivative Instruments and Hedging Activities

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

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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 stockholder's equity is recorded equal to the amount of compensation expense charged.

The
impact of this change in 2003 is disclosed on page 58.

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 have
been shortened to three and six years, respectively. In addition, the sale of underlying shares acquired through the exercise of options granted after December 31, 2002 will be 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 will not have a reload feature; however, previously granted options will retain that feature.

Consolidation of Variable Interest Entities

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

For
any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities, and noncontrolling interests of the VIE are initially
measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an
accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46 first applies may be used to measure the assets, liabilities, and noncontrolling interests of
the VIE. In October 2003, FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to
February 1, 2003. With the exception of the deferral related to certain investment company subsidiaries, Citicorp elected to implement the remaining provisions of FIN 46 in the 2003 third
quarter, resulting in the consolidation of VIEs increasing both total assets and total liabilities by approximately $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. FASB continues to provide additional guidance on implementing FIN 46 through FASB Staff Positions.

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 enhancement in the form of letters of credit and other guarantees. During 2003, to comply with FIN 46, all but two of the
conduits issued "first loss" subordinated notes, such that one third-party investor in each conduit would be deemed the primary beneficiary and would consolidate that conduit. At December 31,
2003 and 2002, total assets in the unconsolidated conduits were $44 billion and $49 billion, respectively, and liabilities were $44 billion and $49 billion, respectively.
One conduit with assets of $823 million is consolidated at December 31, 2003.

In
December 2003, FASB released a revision of FIN 46 (FIN 46-R), which includes substantial changes from the original. The calculation of expected losses and expected
residual returns have both been altered to reduce the impact of decision maker and guarantor fees in the calculation of expected residual returns and expected losses. In addition, FIN 46-R
changes the definition of a variable interest. The interpretation permits adoption of either the original or the revised versions of FIN 46 until the first quarter of 2004, at which time FIN
46-R must be adopted. For 2003 year-end financial statements, Citicorp's financial statements are in accordance with the original FIN 46.

The
Company is evaluating the impact of applying FIN 46-R to existing VIEs in which it has variable interests and has not yet completed this analysis. We are revising our
calculations of expected losses and expected residual returns to reflect the new guidance in FIN 46-R to determine whether any changes to our consolidation decisions under FIN 46 will be
needed. Depending on the results of these calculations, we are also considering restructuring alternatives that would enable certain VIEs to continue to meet the criteria for
non-consolidation. In the case of the Trust Preferred Securities (TruPS), we are considering restructuring alternatives that would enable us to continue to consolidate the trusts or other
alternatives to provide Tier 1 capital. In the event that the TruPS trusts cannot be restructured, there would be no material impact on the financial statements. At this time, it is anticipated that
the effect on the Company's Consolidated Balance Sheet could be an increase of approximately $43 billion to assets and

59

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liabilities,
primarily due to certain multi-seller finance companies administered by the Company and certain structured transactions. If consolidation is required for additional VIEs, the future
viability of these businesses will be assessed. As we continue to evaluate the impact of applying FIN 46-R, additional entities may be identified that would need to be consolidated by the
Company. See Note 9 to the Consolidated Financial Statements.

Guarantees and Indemnifications

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

Adoption of EITF 99-20

During the second quarter of 2001, the Company adopted EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased and
Retained Beneficial Interests in Securitized Financial Assets" (EITF 99-20). EITF 99-20 provides new guidance regarding income recognition and identification and determination
of impairment on certain asset-backed securities. The initial adoption resulted in a cumulative adjustment of $111 million after-tax, recorded as a charge to earnings, and an
increase of $88 million included in other changes in stockholder's equity from nonowner sources.

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.

Derivatives and Hedge Accounting

On January 1, 2001, Citicorp adopted SFAS 133. This Statement changed the accounting treatment of derivative contracts (including foreign exchange
contracts) that are employed to manage risk outside of Citicorp's trading activities, as well as certain derivative instruments embedded in other contracts. SFAS 133 requires that all
derivatives be recorded on the balance sheet at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction, including whether it has been
designated and qualifies as part of a hedging relationship. The majority of Citicorp's derivatives are entered into for trading purposes and were not impacted by the adoption of SFAS 133. The
cumulative effect of adopting SFAS 133 at January 1, 2001 was an after-tax charge of $33 million included in net income and an increase of $82 million included
in other changes in stockholder's equity from nonowner sources.

60

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Transfers and Servicing of Financial Assets

In September 2000, FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a
Replacement of FASB 125" (SFAS 140).

In
July 2001, FASB issued Technical Bulletin No. 01-1, "Effective Date for Certain Financial Institutions of Certain Provisions of Statement 140 Related to the
Isolation of Transferred Assets."

Certain
provisions of SFAS 140 require that the structure for transfers of financial assets to certain securitization vehicles be modified to comply with revised isolation
guidance for institutions subject to receivership by the Federal Deposit Insurance Corporation. These provisions are effective for transfers taking place after December 31, 2001, with an
additional transition period ending no later than September 30, 2006 for transfers to certain master trusts. It is not expected that these provisions will materially affect the Consolidated
Financial Statements. SFAS 140 also provides revised guidance for an entity to be considered a qualifying special purpose entity.

Future Application of Accounting Standards

Postretirement Benefits

In January 2004, FASB issued FASB Staff Position FAS 106-1, "Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003" (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. FSP FAS 106-1 allows plan
sponsors the option of accounting for the effects of the Act in financial statements for periods that cover the date of enactment or making a one-time election to defer the accounting for
the effects of the Act.

Citicorp
has decided to defer recognizing any effects of the Act until further guidance is issued by FASB. Measurements of the accumulated postretirement benefit obligation or net
periodic postretirement benefit cost in the financial statements or accompanying notes do not reflect the effects of the Act on the Company's postretirement benefit plans. The Act is not expected to
have a material effect on the Company's Consolidated Financial Statements.

Consolidation of Variable Interest Entities

In December 2003, FASB released a revision of FIN 46 (FIN 46-R). See "Consolidation of Variable Interest Entities" in the "Accounting Changes"
section of this Note for a discussion of FIN 46-R.

Accounting for Certain Loans or Debt Securities Acquired in a Transfer

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

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

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2.     Business Developments

Acquisition of Sears' Credit Card and Financial Products Business

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

Acquisition of The Home Depot's Private-Label Portfolio

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

Acquisition of Washington Mutual Finance Corporation

On January 9, 2004, Citigroup acquired Washington Mutual Finance Corporation (WMF) for $1.25 billion. WMF was the consumer finance subsidiary of
Washington Mutual, Inc. WMF provides direct consumer installment loans and real-estate-secured loans, as well as sales finance and the sale of insurance. The acquisition includes
409 WMF offices located in 25 states, primarily in the Southeastern and Southwestern United States. WMF has more than 2,300 employees and total assets of approximately $4 billion. Citicorp has
guaranteed all outstanding unsecured indebtedness of WMF in connection with this acquisition. The operations of WMF will be integrated into the businesses of Citicorp.

Acquisition of Golden State Bancorp

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

Acquisition of Banamex

In August 2001, Citicorp completed its acquisition of Grupo Financiero Banamex-Accival (Banamex), a Mexican financial institution, for approximately
$12.5 billion in cash and Citigroup stock. On September 24, 2001, Citicorp became the holder of 100% of the issued and outstanding ordinary shares of Banamex following a share redemption
by Banamex. Banamex's and Citicorp's banking operations in Mexico have been integrated and conduct business under the "Banamex" brand name.

Acquisition of EAB

On July 17, 2001, Citibank completed its acquisition of European American Bank (EAB), a New York State-chartered bank, for $1.6 billion plus the
assumption of $350 million in EAB preferred stock.

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 Investment Management, and Proprietary Investment Activities business segments. These
segments reflect the characteristics of its 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, 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 Investment Management segment offers a broad range of life insurance, annuity, asset management and personalized wealth management products and services distributed to
institutional, high-net-worth, and retail clients.

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 corporate 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.

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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) |   | Income (Loss)
Before Cumulative Effect of Accounting Changes(1)(2)(3)(4) |   | Identifiable Assets at Year-End(1)
|------------------------------------ |  | --------------------------------------- | ------ | --------------------------------------- | - | ------------------------------------------------------------------------ | - | ----------------------------------
|
|
|Global Consumer                      |  | $                                       | 39,074 |                                         | $ | 35,906                                                                   |   | $                                 
|Global Corporate and Investment Bank |  |                                         | 11,307 |                                         |   | 11,791                                                                   |   |                                   
|Global Investment Management         |  |                                         | 3,257  |                                         |   | 2,920                                                                    |   |                                   
|Proprietary Investment Activities    |  |                                         | 791    |                                         |   | (91                                                                      | ) |                                   
|Corporate/Other                      |  |                                         | 747    |                                         |   | 796                                                                      |   |                                   
|                                     |  |                                         |        |                                         |   |                                                                          |   |                                   
|Total                                |  | $                                       | 55,176 |                                         | $ | 51,322                                                                   |   | $                                 
|                                     |  |                                         |        |                                         |   |                                                                          |   |                                   

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4.     Investments

|In millions of dollars at year-end                           |  | 2003 |         | 2002
|------------------------------------------------------------ |  | ---- | ------- | ----
|Fixed maturities, primarily available-for-sale at fair value |  | $    | 115,604 |     
|Equity securities, primarily at fair value                   |  |      | 4,720   |     
|Venture capital, at fair value                               |  |      | 3,605   |     
|Short-term and other                                         |  |      | 363     |     
|                                                             |  |      |         |     
|Total                                                        |  | $    | 124,292 |     
|                                                             |  |      |         |     

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

|                                              |  | 2003 |         | 2002
|--------------------------------------------- |  | ---- | ------- | ----
|
|Fixed maturity securities held to maturity(1) |  | $    | 54      |     
|                                              |  |      |         |     
|Fixed maturity securities available-for-sale  |  |      |         |     
|U.S. Treasury and federal agencies            |  | $    | 40,868  |     
|State and municipal                           |  |      | 7,557   |     
|Foreign government                            |  |      | 43,500  |     
|U.S. corporate                                |  |      | 8,240   |     
|Other debt securities                         |  |      | 14,120  |     
|                                              |  |      |         |     
|                                              |  |      | 114,285 |     
|                                              |  |      |         |     
|Total fixed maturities                        |  | $    | 114,339 |     
|                                              |  |      |         |     
|Equity securities(2)                          |  | $    | 4,558   |     
|                                              |  |      |         |     

---

At
December 31, 2003, the cost of approximately 2,500 investments in equity and fixed maturity securities exceeded their fair value by $591 million. Of the
$591 million, the gross unrealized loss on equity securities was $12 million. Of the remainder, $256 million represents fixed maturity investments that have been in a gross
unrealized loss position for less than a year and of these 88% are rated investment grade; and $323 million represents fixed maturity investments that have been in a gross unrealized loss
position for a year or more and of these 86% are rated investment grade.

The
fixed maturity investments that have been in a gross unrealized loss position for a year or more include 25 related investment grade asset-backed securities, within U.S. Corporate in
the following table, with a gross unrealized loss of $232 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 low interest rate environment, i.e., the unrealized loss is unrelated to the credit of the securities. These 25 related
asset-backed securities are accounted for

63

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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, 2003 are temporary in nature. The Company
conducts a review each quarter 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:



The
table below shows the fair value of investments in fixed maturity and equity securities in an unrealized loss position at December 31, 2003:

|                                             |  | Less Than 12 Months |       | 12 Months Or Longer |   | Total
|-------------------------------------------- |  | ------------------- | ----- | ------------------- | - | -----
|
|Fixed maturity securities held to maturity   |  | $                   |      |                     | $ |     
|                                             |  |                     |       |                     |   |      
|Fixed maturity securities available-for-sale |  |                     |       |                     |   |      
|U.S. Treasury and federal agencies           |  | $                   | 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                       |  | $                   | 9,724 |                     | $ | 256  
|                                             |  |                     |       |                     |   |      
|Equity securities                            |  | $                   | 27    |                     | $ | 3    
|                                             |  |                     |       |                     |   |      

64

---

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,
2003:

|In millions of dollars                |  | Amortized
Cost |         | Fair
Value |   | Yield   | 
|------------------------------------- |  | -------------- | ------- | ---------- | - | ------- | 
|U.S. Treasury and federal agencies(1) |  |                |         |            |   |         | 
|Due within 1 year                     |  | $              | 4,427   |            | $ | 4,464   | 
|After 1 but within 5 years            |  |                | 17,658  |            |   | 17,685  | 
|After 5 but within 10 years           |  |                | 1,302   |            |   | 1,304   | 
|After 10 years(2)                     |  |                | 17,481  |            |   | 17,557  | 
|                                      |  |                |         |            |   |         | 
|Total                                 |  | $              | 40,868  |            | $ | 41,010  | 
|                                      |  |                |         |            |   |         | 
|State and municipal                   |  |                |         |            |   |         | 
|Due within 1 year                     |  | $              | 89      |            | $ | 89      | 
|After 1 but within 5 years            |  |                | 336     |            |   | 353     | 
|After 5 but within 10 years           |  |                | 795     |            |   | 853     | 
|After 10 years(2)                     |  |                | 6,337   |            |   | 6,818   | 
|                                      |  |                |         |            |   |         | 
|Total                                 |  | $              | 7,557   |            | $ | 8,113   | 
|                                      |  |                |         |            |   |         | 
|All other(3)                          |  |                |         |            |   |         | 
|Due within 1 year                     |  | $              | 19,656  |            | $ | 19,861  | 
|After 1 but within 5 years            |  |                | 31,894  |            |   | 32,118  | 
|After 5 but within 10 years           |  |                | 10,331  |            |   | 10,559  | 
|After 10 years(2)                     |  |                | 4,033   |            |   | 3,943   | 
|                                      |  |                |         |            |   |         | 
|Total                                 |  | $              | 65,914  |            | $ | 66,481  | 
|                                      |  |                |         |            |   |         | 
|Total fixed maturities                |  | $              | 114,339 |            | $ | 115,604 | 
|                                      |  |                |         |            |   |         | 

---

The
following table presents interest and dividends on investments:

|In millions of dollars                       |  | 2003 |       | 2002 |   | 2001 
|-------------------------------------------- |  | ---- | ----- | ---- | - | -----
|Taxable interest                             |  | $    | 4,039 |      | $ | 4,199
|Interest exempt from U.S. federal income tax |  |      | 364   |      |   | 327  
|Dividends                                    |  |      | 357   |      |   | 209  
|                                             |  |      |       |      |   |      
|Total interest and dividends                 |  | $    | 4,760 |      | $ | 4,735
|                                             |  |      |       |      |   |      

The
following table presents realized gains and losses on investments:

|In millions of dollars             |  | 2003 |      | 2002 |    | 2001 |  
|---------------------------------- |  | ---- | ---- | ---- | -- | ---- | -
|Gross realized investment gains    |  | $    | 913  |      | $  | 542  |  
|Gross realized investment (losses) |  |      | (659 | )    |    | (915 | )
|                                   |  |      |      |      |    |      |  
|Net realized gains/(losses)        |  | $    | 254  |      | ($ | 373  | )
|                                   |  |      |      |      |    |      |  

The
following table presents venture capital investment gains and losses:

|In millions of dollars                     |  | 2003 |      | 2002 |    | 2001 |  
|------------------------------------------ |  | ---- | ---- | ---- | -- | ---- | -
|Net realized investment gains              |  | $    | 406  |      | $  | 214  |  
|Gross unrealized gains                     |  |      | 737  |      |    | 563  |  
|Gross unrealized (losses)                  |  |      | (440 | )    |    | (863 | )
|                                           |  |      |      |      |    |      |  
|Net realized and unrealized gains/(losses) |  | $    | 703  |      | ($ | 86   | )
|                                           |  |      |      |      |    |      |  

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                                        |  | 2003 |        | 2002
|------------------------------------------------------------- |  | ---- | ------ | ----
|Trading account assets                                        |  |      |        |     
|U.S. Treasury and federal agency securities                   |  | $    | 7,583  |     
|Foreign government securities, corporate and other securities |  |      | 31,929 |     
|Derivatives and other(1)                                      |  |      | 46,169 |     
|                                                              |  |      |        |     
|                                                              |  | $    | 85,681 |     
|                                                              |  |      |        |     
|Trading account liabilities                                   |  |      |        |     
|Securities sold, not yet purchased                            |  | $    | 6,682  |     
|Derivatives and other(1)                                      |  |      | 46,773 |     
|                                                              |  |      |        |     
|                                                              |  | $    | 53,455 |     
|                                                              |  |      |        |     

---

6.     Trading-Related Revenue

Trading-related revenue consists of principal transactions revenues and net interest revenue associated with trading activities. Principal transactions revenues
consist of realized and unrealized gains and losses from trading activities. The following table presents trading- related revenue for the years ended December 31:

|In millions of dollars                     |  | 2003 |       | 2002(1) |   | 2001(1)
|------------------------------------------ |  | ---- | ----- | ------- | - | -------
|Global Corporate and Investment Bank       |  |      |       |         |   |        
|Fixed income(2)                            |  | $    | 1,171 |         | $ | 2,004  
|Equities(3)                                |  |      | 131   |         |   | 105    
|Foreign exchange(4)                        |  |      | 1,757 |         |   | 1,770  
|All other                                  |  |      | (273  | )       |   | 97     
|                                           |  |      |       |         |   |        
|Total Global Corporate and Investment Bank |  |      | 2,786 |         |   | 3,976  
|Global Investment Management(5)            |  |      | 325   |         |   | 193    
|Global Consumer(5)                         |  |      | 321   |         |   | 57     
|Other                                      |  |      | 94    |         |   | 102    
|                                           |  |      |       |         |   |        
|Total trading-related revenue              |  | $    | 3,526 |         | $ | 4,328  
|                                           |  |      |       |         |   |        

---

The
following table reconciles foreign exchange and trading account revenues on the Consolidated Statement of Income to trading-related revenue for the years ended December 31:

|In millions of dollars         |  | 2003 |       | 2002 |   | 2001 
|------------------------------ |  | ---- | ----- | ---- | - | -----
|Foreign exchange               |  | $    | 3,530 |      | $ | 2,168
|Trading account                |  |      | (546  | )    |   | 1,763
|Net interest revenue and other |  |      | 542   |      |   | 397  
|                              
|Total trading-related revenue  |  | $    | 3,526 |      | $ | 4,328
|                               |  |      |       |      |   |      

65

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7.     Loans

|In millions of dollars at year-end      |                                          | 2003 |         | 2002(1) |  
|--------------------------------------- | ---------------------------------------- | ---- | ------- | ------- | -
|Consumer                                |                                          |      |         |         |  
|In U.S. offices                         |                                          |      |         |         |  
|                                        | Mortgage and real estate(2)              |      | $       | 129,507 |  
|                                        | Installment, revolving credit, and other |      |         | 136,725 |  
|                                        | Lease financing                          |      |         | 8,523   |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 274,755 |         |  
|                                        |                                          |      |         |         |  
|In offices outside the U.S.             |                                          |      |         |         |  
|                                        | Mortgage and real estate(2)              |      |         | 28,743  |  
|                                        | Installment, revolving credit, and other |      |         | 76,718  |  
|                                        | Lease financing                          |      |         | 2,216   |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 107,677 |         |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 382,432 |         |  
|Net unearned income                     |                                          |      | (2,500  | )       |  
|                                        |                                          |      |         |         |  
|Consumer loans, net of unearned income  |                                          | $    | 379,932 |         | $
|                                        |                                          |      |         |         |  
|Corporate                               |                                          |      |         |         |  
|In U.S. offices                         |                                          |      |         |         |  
|                                        | Commercial and industrial(3)             |      | $       | 15,791  |  
|                                        | Lease financing                          |      |         | 2,010   |  
|                                        | Mortgage and real estate(2)              |      |         | 95      |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 17,896  |         |  
|                                        |                                          |      |         |         |  
|In offices outside the U.S.             |                                          |      |         |         |  
|                                        | Commercial and industrial(3)             |      |         | 62,886  |  
|                                        | Mortgage and real estate(2)              |      |         | 1,751   |  
|                                        | Loans to financial institutions          |      |         | 12,440  |  
|                                        | Lease financing                          |      |         | 2,859   |  
|                                        | Governments and official institutions    |      |         | 1,496   |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 81,432  |         |  
|                                        |                                          |      |         |         |  
|                                        |                                          |      | 99,328  |         |  
|Net unearned income                     |                                          |      | (291    | )       |  
|                                        |                                          |      |         |         |  
|Corporate loans, net of unearned income |                                          | $    | 99,037  |         | $
|                                        |                                          |      |         |         |  

---

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           |  | 2003 |       | 2002(1) |   | 2001(1)
|-------------------------------------------- |  | ---- | ----- | ------- | - | -------
|Impaired corporate loans                     |  | $    | 3,284 |         | $ | 3,815  
|Other impaired loans(2)                      |  |      | 986   |         |   | 1,154  
|                                             |  |      |       |         |   |        
|Total impaired loans(3)                      |  | $    | 4,270 |         | $ | 4,969  
|                                             |  |      |       |         |   |        
|Impaired loans with valuation allowances     |  | $    | 3,277 |         | $ | 3,905  
|Total valuation allowances(4)                |  |      | 561   |         |   | 1,069  
|                                             |  |      |       |         |   |        
|During the year                              |  |      |       |         |   |        
|Average balance of impaired loans            |  | $    | 3,432 |         | $ | 3,975  
|Interest income recognized on impaired loans |  | $    | 98    |         | $ | 116    
|                                             |  |      |       |         |   |        

---

8.     Allowance for Credit Losses

|In millions of dollars                                             |                                       | 2003 |        | 2002(1) |   | 2001(1) |       
|------------------------------------------------------------------ | ------------------------------------- | ---- | ------ | ------- | - | ------- | ------
|Allowance for credit losses at beginning of year                   |                                       | $    | 11,101 |         | $ | 9,688   |       
|Additions                                                          |                                       |      |        |         |   |         |       
|                                                                   | Consumer provision for credit losses  |      |        | 7,316   |   |         | 7,714 
|                                                                   | Corporate provision for credit losses |      |        | 729     |   |         | 2,281 
|                                                                   |                                       |      |        |         |   |         |       
|Total provision for credit losses                                  |                                       |      | 8,045  |         |   | 9,995   |       
|                                                                   |                                       |      |        |         |   |         |       
|Deductions                                                         |                                       |      |        |         |   |         |       
|                                                                   | Consumer credit losses                |      |        | 9,053   |   |         | 8,691 
|                                                                   | Consumer credit recoveries            |      |        | (1,498  | ) |         | (1,239
|                                                                   |                                       |      |        |         |   |         |       
|Net consumer credit losses                                         |                                       |      | 7,555  |         |   | 7,452   |       
|                                                                   |                                       |      |        |         |   |         |       
|                                                                   | Corporate credit losses               |      |        | 1,471   |   |         | 1,869 
|                                                                   | Corporate credit recoveries(2)        |      |        | (261    | ) |         | (324  
|                                                                   |                                       |      |        |         |   |         |       
|Net corporate credit losses                                        |                                       |      | 1,210  |         |   | 1,545   |       
|                                                                   |                                       |      |        |         |   |         |       
|Other, net(3)                                                      |                                       |      | 2,262  |         |   | 415     |       
|                                                                   |                                       |      |        |         |   |         |       
|Allowance for credit losses at end of year                         |                                       |      | 12,643 |         |   | 11,101  |       
|Allowance for credit losses on unfunded lending commitments(4)     |                                       |      | 600    |         |   | 567     |       
|                                                                   |                                       |      |        |         |   |         |       
|Total allowance for loan, leases, and unfunded lending commitments |                                       | $    | 13,243 |         | $ | 11,668  |       
|                                                                   |                                       |      |        |         |   |         |       

---

66

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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 2003, 2002, and 2001:

|                                                                   |  | 2003 |       | 2002 |   | 2001
|------------------------------------------------------------------ |  | ---- | ----- | ---- | - | ----
|
|Proceeds from new securitizations                                  |  | $    | 19.1  |      | $ | 53.4
|Proceeds from collections reinvested in new receivables            |  |      | 143.4 |      |   |    
|Servicing fees received                                            |  |      | 1.4   |      |   | 0.3 
|Cash flows received on Retained interests and other net cash flows |  |      | 4.4   |      |   |    
|                                                                   |  |      |       |      |   |     

---

The
Company recognized gains on securitizations of mortgages of $530 million, $267 million, and $258 million for 2003, 2002, and 2001, respectively. In 2003, the
Company recorded net gains of $342 million and, in 2002, recorded net gains of $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 2003 and 2002 were $52 million and
$35 million, respectively, and no gains were recognized in 2001.

Key
assumptions used for credit cards, mortgages, and other assets during 2003 and 2002 in measuring the fair value of retained interests at the date of sale or securitization follow:

|                              |  | 2003 |   | 2002
|----------------------------- |  | ---- | - | ----
|
|Discount rate                 |  | 10.0 | % | 11.2
|Constant prepayment rate      |  | 17.5 | % | 7.7 
|Anticipated net credit losses |  | 5.6  | % | 0.01
|                              |  |      |   |     

---

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.

67

---

At
December 31, 2003, 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, 2003 |  | Discount
Rate |   | Constant
Prepayment
Rate |  | Anticipated
Net Credit
Losses
|------------------------------------ |  | ------------- | - | ------------------------ |  | -----------------------------
|Mortgages                            |  | 10.7          | % | 19.1%                    |  | 0.04%                        
|Credit cards                         |  | 10.0          | % | 14.7% to 17.5%           |  | 4.8% to 5.6%                 
|Auto loans                           |  | 15.0          | % | 20.7% to 23.5%           |  | 11.3% to 15.7%               

|In millions of dollars               |  | December 31, 2003 |      
|------------------------------------ |  | ----------------- | -----
|Carrying value of retained interests |  | $                 | 4,615
|                                     |  |                   |      
|Discount rate                        |  |                   |      
|10%                                  |  | $                 | (159 
|20%                                  |  | $                 | (243 
|                                     |  |                   |      
|Constant prepayment rate             |  |                   |      
|10%                                  |  | $                 | (335 
|20%                                  |  | $                 | (571 
|                                     |  |                   |      
|Anticipated net credit losses        |  |                   |      
|10%                                  |  | $                 | (286 
|20%                                  |  | $                 | (501 
|                                     |  |                   |      

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.

|In millions of dollars, except loans in billions |                     | 2003 |       | 2002   |  
|------------------------------------------------ | ------------------- | ---- | ----- | ------ | -
|Managed credit card receivables                  |                     |      |       |        |  
|Principal amounts, at period end                 |                     |      |       |        |  
|                                                 | Total managed       |      | $     | 158.4  |  
|                                                 | Securitized amounts |      |       | (76.1  | )
|                                                 | Loans held-for-sale |      |       |       |  
|                                                 |                     |      |       |        |  
|On-balance sheet                                 |                     | $    | 82.3  |        | $
|                                                 |                     |      |       |        |  
|Delinquencies, at period end                     |                     |      |       |        |  
|                                                 | Total managed       |      | $     | 3,392  |  
|                                                 | Securitized amounts |      |       | (1,421 | )
|                                                 | Loans held-for-sale |      |       |       |  
|                                                 |                     |      |       |        |  
|On-balance sheet                                 |                     | $    | 1,971 |        | $
|                                                 |                     |      |       |        |  

|Credit losses, net of recoveries, for the year ended December 31 |  | 2003 |        | 2002 |   | 2001   |  
|---------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|Total managed                                                    |  | $    | 7,694  |      | $ | 7,169  |  
|Securitized amounts                                              |  |      | (4,529 | )    |   | (3,760 | )
|Loans held-for-sale                                              |  |      | (221   | )    |   | (355   | )
|                                                                 |  |      |        |      |   |        |  
|On-balance sheet                                                 |  | $    | 2,944  |      | $ | 3,054  |  
|                                                                 |  |      |        |      |   |        |  

Servicing Rights

The fair value of capitalized mortgage loan servicing rights was $2.0 billion and $1.6 billion at December 31, 2003 and 2002, respectively.
The following table summarizes the changes in capitalized mortgage servicing rights (MSR):

|In millions of dollars                    |  | 2003 |       | 2002 |  
|----------------------------------------- |  | ---- | ----- | ---- | -
|Balance, beginning of period              |  | $    | 1,632 |      | $
|Originations                              |  |      | 839   |      |  
|Purchases                                 |  |      | 301   |      |  
|Amortization                              |  |      | (471  | )    |  
|Gain (loss) on change in value of MSRs(1) |  |      | (39   | )    |  
|Provision for impairment(2) (3)           |  |      | (282  | )    |  
|                                          |  |      |       |      |  
|Balance, end of period                    |  | $    | 1,980 |      | $
|                                          |  |      |       |      |  

---

68

---

Variable Interest Entities

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

|In billions of dollars            |  | December 31, 2003
|--------------------------------- |  | -----------------
|Cash                              |  | $                
|Trading account assets            |  |                  
|Investments                       |  |                  
|Loans                             |  |                  
|Other assets                      |  |                  
|                                  |  |                  
|Total assets of consolidated VIEs |  | $                
|                                  |  |                  

The
consolidated VIEs included in the table above represent hundreds of separate entities with which the Company is involved and includes $955 million related to VIEs newly
consolidated as a result of adopting FIN 46. Of the $27.1 billion of total assets of VIEs consolidated by the Company at December 31, 2003, $20.1 billion represents structured
transactions where the Company packages and securitizes assets purchased in the financial markets or from clients in order to create new security offerings and financing opportunities for clients,
$5.6 billion represents investment vehicles that were established to provide a return to the investors in the vehicles, $0.8 billion relates to trust preferred securities which are a
source of funding and regulatory capital for the Company, and $0.6 billion represents vehicles that hold lease receivables and equipment as collateral to issue debt securities, thus obtaining
secured financing at favorable interest rates.

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

In
addition to the VIEs that are consolidated in accordance with FIN 46, 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.

The
Company administers several third-party owned, special purpose, multi-seller finance companies that purchase pools of trade receivables, credit cards, and other financial assets from
third-party clients of the Company. As administrator, the Company provides accounting, funding, and operations services to these conduits. Generally, the Company has no ownership interest in the
conduits. The sellers continue to service the transferred assets. The conduits' asset purchases are funded by issuing commercial paper and medium-term notes. The sellers absorb the first
losses of the conduit by providing collateral in the form of excess assets. The Company along with other financial institutions provides liquidity facilities, such as commercial paper backstop lines
of credit to the conduits. The Company also provides loss 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, 2003, total assets in unconsolidated conduits were $44.3 billion. One conduit with assets of $823 million is consolidated at December 31, 2003.

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.

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.

In
addition to the conduits discussed above, the total assets of unconsolidated VIEs where the Company has significant involvement is $65.5 billion at December 31, 2003,
including $58.2 billion in structured finance and other transactions, $6.8 billion in mortgage-related transactions, and $0.5 billion in CDO-type transactions.

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

In
addition, the Company administers numerous personal estate trusts. The Company may act as trustee and may also be the investment manager for the trust assets.

As
mentioned above, the Company may, along with other financial institutions, provide liquidity facilities, such as commercial paper backstop lines of credit to the VIEs. The Company may
be a party to derivative contracts with VIEs, may provide loss enhancement in the form of letters of credit and other guarantees to the VIEs, may be the investment manager, and may also have an
ownership interest in certain VIEs. Although actual losses are not expected to be material, the Company's maximum exposure to loss as a result of its involvement with VIEs that are not consolidated
was $41 billion and $59 billion at December 31, 2003 and 2002, 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. Some of the Company's private equity subsidiaries may invest in venture capital entities that may also be subject to FIN 46. 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 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 in mid-2004. Following issuance of the Statement of Position, the FASB will consider further modification to FIN 46 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, the Company will assess the effect of such guidance on its private equity
business.

69

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10.   Purchased Funds and Other Borrowings(1)

|In millions of dollars                                                     |  | 2003 |        | 2002
|-------------------------------------------------------------------------- |  | ---- | ------ | ----
|Federal funds purchased and securities sold under agreements to repurchase |  | $    | 30,500 |     
|Commercial paper                                                           |  |      | 14,712 |     
|Other funds borrowed                                                       |  |      | 21,149 |     
|                                                                           |  |      |        |     
|Total                                                                      |  | $    | 66,361 |     
|                                                                           |  |      |        |     

---

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

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

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates First Capital Corporation (Associates), had an unutilized credit facility of Canadian $1.0 billion as
of December 31, 2003 that matures in 2004. The facility is guaranteed by Citicorp. In connection therewith, Citicorp is required to maintain a certain level of consolidated stockholder's equity
(as defined in the agreements). At December 31, 2003, this requirement was exceeded by approximately $63.4 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 |  | 2003 |         | 2002
|---------------------- |  | ----------------------- | - | ---------- |  | ---- | ------- | ----
|Parent Company         |  |                         |   |            |  |      |         |     
|Senior notes           |  | 3.57                    | % | 2004-2033  |  | $    | 25,244  |     
|Subordinated notes     |  | 6.38                    | % | 2004-2033  |  |      | 19,789  |     
|Subsidiaries(2)        |  |                         |   |            |  |      |         |     
|Senior notes           |  | 3.38                    | % | 2004-2037  |  |      | 55,929  |     
|Subordinated notes     |  | 7.88                    | % | 2004-2027  |  |      | 1,272   |     
|                       |  |                         |   |            |  |      |         |     
|Senior notes           |  |                         |   |            |  |      | 81,173  |     
|Subordinated notes     |  |                         |   |            |  |      | 21,061  |     
|                       |  |                         |   |            |  |      |         |     
|Total                  |  |                         |   |            |  | $    | 102,234 |     
|                       |  |                         |   |            |  |      |         |     

---

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 Parent Company and Subsidiaries debt represents local
currency borrowings where prevailing rates may vary significantly from rates in the United States.

Subsidiaries'
subordinated notes 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 2003, Citicorp's overall weighted average rate for
long-term debt was 4.07% on a contractual basis and 4.04% 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 |  | 2004 |        | 2005 |   | 2006   |  | 2007 |        | 2008 |   | Thereafter
|---------------------- |  | ---- | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ----------
|Parent Company         |  | $    | 769    |      | $ | 1,146  |  | $    | 884    |      | $ | 662       
|Subsidiaries           |  |      | 10,359 |      |   | 10,249 |  |      | 14,256 |      |   | 7,387     
|                       |  |      |        |      |   |        |  |      |        |      |   |           
|Total                  |  | $    | 11,128 |      | $ | 11,395 |  | $    | 15,140 |      | $ | 8,049     
|                       |  |      |        |      |   |        |  |      |        |      |   |           

12.   Goodwill and Intangible Assets

Net income for 2003, 2002, and 2001 adjusted to exclude amortization expense (after-tax) related to goodwill and indefinite-lived intangible assets
that are no longer amortized are as follows:

|In millions of dollars                          |                     | 2003 |        | 2002   |   | 2001  
|----------------------------------------------- | ------------------- | ---- | ------ | ------ | - | ------
|Net income                                      |                     |      |        |        |   |       
|Reported net income                             |                     | $    | 13,541 |        | $ | 10,709
|Goodwill amortization                           |                     |      |       |        |   |      
|Indefinite-lived intangible assets amortization |                     |      |       |        |   |      
|                                                |                     |      |        |        |   |       
|                                                | Adjusted net income |      | $      | 13,541 |   | $     
|                                                |                     |      |        |        |   |       

During
2003 and 2002, no goodwill was impaired or written off. 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 Company recorded goodwill of $4.385 billion during the
fourth quarter of 2002 in connection with the acquisition of Golden State Bancorp. The Company also recorded goodwill of $41 million during the 2002 second quarter and $74 million during
the 2002 first quarter in connection with the consumer finance acquisitions of Marufuku Co., Ltd. and Taihei Co., Ltd., respectively, in Japan. Additionally, in February 2002,
Banamex completed the purchase of the remaining 48% interest in Seguros Banamex, a life insurance business, and AFORE Banamex, a pension fund management business, from AEGON for $1.24 billion
which resulted in additional goodwill of $1.14 billion in the Global Investment Management segment.

The
changes in goodwill during 2003 and 2002 were as follows:

|In millions of dollars              |  | Global
Consumer |        | Global Corporate
and Investment
Bank |   | Global Investment
Management |   | Total |      
|----------------------------------- |  | --------------- | ------ | ------------------------------------ | - | ---------------------------- | - | ----- | -----
|Balance at January 1, 2002(1)       |  | $               | 13,890 |                                      | $ | 3,098                        |   | $     | 2,152
|Goodwill acquired during 2002       |  |                 | 4,500  |                                      |   |                             |   |       | 1,143
|Other(2)                            |  |                 | 212    |                                      |   | 79                           |   |       | (391 
|                                    |  |                 |        |                                      |   |                              |   |       |      
|Balance at December 31, 2002(1)     |  | $               | 18,602 |                                      | $ | 3,177                        |   | $     | 2,904
|Goodwill acquired during the period |  |                 | 890    |                                      |   | 60                           |   |       |     
|Other(2)                            |  |                 | 39     |                                      |   | (159                         | ) |       | (211 
|                                    |  |                 |        |                                      |   |                              |   |       |      
|Balance at December 31, 2003        |  | $               | 19,531 |                                      | $ | 3,078                        |   | $     | 2,693
|                                    |  |                 |        |                                      |   |                              |   |       |      

---

71

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The
components of intangible assets were as follows:

|                                    |  | December 31, 2003 |        | December 31, 2002
|----------------------------------- |  | ----------------- | ------ | -----------------
|
|Purchased credit card relationships |  | $                 | 7,132  |                  
|Mortgage servicing rights           |  |                   | 5,160  |                  
|Core deposit intangibles            |  |                   | 1,084  |                  
|Other customer relationships        |  |                   | 921    |                  
|Other(2)                            |  |                   | 4,318  |                  
|                                    |  |                   |        |                  
|Total amortizing intangible assets  |  | $                 | 18,615 |                  
|Indefinite-lived intangible assets  |  |                   |        |                  
|                                    |  |                   |        |                  
|Total intangible assets             |  |                   |        |                  
|                                    |  |                   |        |                  

---

At
December 31, 2003 and 2002, $405 million and $425 million, respectively, of the Company's acquired trade names are considered to be indefinite-lived and are not
subject to amortization. All other acquired intangible assets are subject to amortization.

The
intangible assets recorded during 2003 and their respective amortization periods were as follows:

|In millions of dollars                                |  | 2003 |       | Weighted-Average
Amortization Period in Years
|----------------------------------------------------- |  | ---- | ----- | ---------------------------------------------
|Mortgage servicing rights                             |  | $    | 1,140 |                                              
|Purchased credit card relationships                   |  |      | 3,000 |                                              
|Other intangibles(1)                                  |  |      | 2,775 |                                              
|                                                      |  |      |       |                                              
|Total intangible assets recorded during the period(2) |  | $    | 6,915 |                                              
|                                                      |  |      |       |                                              

---

During
2003, the Company recognized $3.0 billion of purchased credit card relationships (PCCR) and $2.8 billion of contract-related intangibles primarily in connection with
the acquisition of the Sears and Home Depot credit card portfolios. PCCR is an intangible asset recognized upon the acquisition of a credit card portfolio representing the present value of the
estimated net cash flows attributable to cardholder borrowing activity, subsequent to acquisition, on accounts existing at the date of acquisition. The contract-related intangibles represent the
present value of future earnings on accounts to be originated under an exclusive agreement. The contract-related intangibles are initially recorded at their fair value, representing the present value
of estimated net cash flows attributable to the future borrowing activity of accounts to be originated subsequent to the date of acquisition. Both PCCR and contract-related intangibles are amortized
using a proportionate cash flow method over the period in which 95% of the net cash flows comprising the respective asset are realized. The key assumptions used in measuring the fair value of the PCCR
and contract-related intangible assets at the date of acquisition are set out below. The assumptions used to value the mortgage servicing rights are described in Note 9 to the Consolidated
Financial Statements.

|                             |  | Discount Rate |  | Weighted Average
Annual Growth
(Attrition) Rate |   
|---------------------------- |  | ------------- |  | ----------------------------------------------- | --
|PCCR                         |  | 14% to 15%    |  | (10                                             | )%
|Contract-related intangibles |  | 16% to 17%    |  | 16                                              | % 

Intangible
assets amortization expense was $1,149 million, $803 million and $726 million for 2003, 2002, and 2001, respectively. Intangible assets amortization
expense is estimated to be $1,150 million in 2004, $1,090 million in 2005, $1,070 million in 2006, $1,010 million in 2007, and $980 million in 2008.

72

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13.   Restructuring-Related Items

The status of the 2003, 2002, and 2001 restructuring initiatives is summarized in the following table:

Restructuring Reserve Activity

|                             |      | Restructuring Initiatives |   
|---------------------------- | ---- | ------------------------- | --
|
|
|Original charges             |      | $                         |  
|                             |      |                           |   
|Acquisitions during:(1)      |      |                           |   
|                             | 2003 |                           |   
|                             | 2002 |                           |   
|                             | 2001 |                           |   
|                             |      |                           |   
|                             |      |                           | 82
|                             |      |                           |   
|Utilization during:(2)       |      |                           |   
|                             | 2003 |                           |   
|                             | 2002 |                           |   
|                             | 2001 |                           |   
|                             |      |                           |   
|                             |      |                           |  
|                             |      |                           |   
|Other                        |      |                           |  
|                             |      |                           |   
|Balance at December 31, 2003 |      | $                         | 82
|                             |      |                           |   

---

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.
These restructuring initiatives are expected to be substantially implemented over the next year.

During
2002, Citicorp recorded restructuring charges of $65 million. Of the $65 million, $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 on the Consolidated Statement of Income. In addition, a restructuring reserve of $186 million was recognized as a liability in the purchase price
allocation of GSB related to 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.

The
2002 restructuring reserve utilization of $241 million included employee severance of $123 million and $62 million of leasehold and other exit costs which were
paid in cash and an additional $56 million is legally obligated. Through December 31, 2003, approximately 4,450 gross staff positions have been eliminated under these programs including
approximately 2,400 gross staff positions in connection with the GSB acquisition.

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

As
of December 31, 2003, the 2001 restructuring reserve was fully utilized, including $65 million of asset impairment charges as well as $318 million of severance
and other costs, together with foreign currency translation effects. Through December 31, 2003, approximately 11,000 gross staff positions have been eliminated under these programs.

Restructuring-related
items included on the Consolidated Statement of Income for the years ended December 31 were as follows:

|In millions of dollars            |  | 2003 |     | 2002 |   | 2001 |  
|--------------------------------- |  | ---- | --- | ---- | - | ---- | -
|Restructuring charges             |  | $    |    |      | $ | 65   |  
|Changes in estimates              |  |      | (45 | )    |   | (79  | )
|Accelerated depreciation          |  |      |    |      |   | 8    |  
|                                  |  |      |     |      |   |      |  
|Total restructuring-related items |  | $    | (45 | )    | $ | (6   | )
|                                  |  |      |     |      |   |      |  

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 2003 resulted in the reduction of the reserve for 2002 restructuring initiatives of $13 million, 2001
restructuring initiatives of $14 million, and an $18 million reduction in the reserve for prior years restructuring initiatives. During 2002, changes in estimates resulted in the
reduction of the reserve for 2002 restructuring initiatives of $2 million, a reduction of $27 million for 2001 restructuring initiatives and a reduction of $50 million for prior
years restructuring initiatives. During 2001, changes in estimates resulted in the reduction of the reserve for 2001 restructuring initiatives of $5 million and a reduction of
$35 million for prior years restructuring initiatives.

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 2003, and
$8 million and $61 million were recognized in 2002 and 2001, respectively.

73

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14.   Income Taxes

Following are the components of total income tax expense broken out between the various categories of income and stockholder's equity in which the income tax
expense is reported:

|In millions of dollars                                                          |                               | 2003 |       | 2002 |   | 2001  |       
|------------------------------------------------------------------------------- | ----------------------------- | ---- | ----- | ---- | - | ----- | ------
|Current                                                                         |                               |      |       |      |   |       |       
|Federal                                                                         |                               | $    | 2,384 |      | $ | 2,843 |       
|Foreign                                                                         |                               |      | 2,642 |      |   | 2,399 |       
|State                                                                           |                               |      | 203   |      |   | 319   |       
|                                                                                |                               |      |       |      |   |       |       
|                                                                                |                               |      | 5,229 |      |   | 5,561 |       
|                                                                                |                               |      |       |      |   |       |       
|Deferred                                                                        |                               |      |       |      |   |       |       
|Federal                                                                         |                               |      | 266   |      |   | (271  | )     
|Foreign                                                                         |                               |      | 294   |      |   | 114   |       
|State                                                                           |                               |      | 38    |      |   | (59   | )     
|                                                                                |                               |      |       |      |   |       |       
|                                                                                |                               |      | 598   |      |   | (216  | )     
|                                                                                |                               |      |       |      |   |       |       
|Provision for income tax before minority interest(1)                            |                               |      | 5,827 |      |   | 5,345 |       
|Provision (benefit) for income taxes on cumulative effect of accounting changes |                               |      |      |      |   |      |       
|Income tax expense (benefit) reported in stockholder's equity related to:       |                               |      |       |      |   |       |       
|                                                                                | Foreign currency translation  |      |       | (244 | ) |       | (1,027
|                                                                                | Securities available-for-sale |      |       | (28  | ) |       | 343   
|                                                                                | Employee stock plans          |      |       | (16  | ) |       | (12   
|                                                                                | Cash flow hedges              |      |       | (199 | ) |       | 615   
|                                                                                |                               |      |       |      |   |       |       
|Income taxes before minority interest                                           |                               | $    | 5,340 |      | $ | 5,264 |       
|                                                                                |                               |      |       |      |   |       |       

---

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:

|In millions of dollars                     |  | 2003 |    | 2002 |    | 2001 |   
|------------------------------------------ |  | ---- | -- | ---- | -- | ---- | --
|Federal statutory rate                     |  | 35.0 | %  | 35.0 | %  | 35.0 | % 
|State income taxes, net of federal benefit |  | 0.8  | %  | 1.0  | %  | 1.4  | % 
|Foreign income tax rate differential       |  | (4.1 | )% | (2.7 | )% | (0.9 | )%
|Other, net                                 |  | (2.0 | )% | (0.2 | )% | (0.3 | )%
|                                           |  |      |    |      |    |      |   
|Effective income tax rate                  |  | 29.7 | %  | 33.1 | %  | 35.2 | % 
|                                           |  |      |    |      |    |      |   

Deferred
income taxes at December 31 related to the following:

In millions of dollars

2003

2002Deferred tax assetsCredit loss deduction

$
3,327

$
3,912Unremitted foreign earnings





71Deferred compensation


68


73Employee benefits


300


244Interest-related items


494


388Foreign and state loss carryforwards


255


223Restructuring and settlement reserves


354


626Other deferred tax assets


1,355


847Gross deferred tax assets


6,153


6,384Valuation allowance


302


158Deferred tax assets after valuation allowance


5,851


6,226Deferred tax liabilitiesUnremitted foreign earnings


(357
)

Investments


(1,372
)

(1,428
)Leases


(2,262
)

(2,418
)Intangibles


(324
)

(359
)Depreciation


(439
)

(150
)Other deferred tax liabilities


(280
)

(214
)Gross deferred tax liabilities


(5,034
)

(4,569
)Net deferred tax asset

$
817

$
1,657


Foreign
pretax earnings approximated $8.1 billion in 2003, $8.4 billion in 2002, and $7.7 billion in 2001. As a U.S. corporation, Citicorp is 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, 2003, $4.5 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 $1.4 billion would have to be provided if such earnings were remitted. The current year's effect on the income tax expense from continuing operations is shown in the
reconciliation of the federal statutory rate to the Company's effective income tax rate above.

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, 2003, the amount of the base year reserves totaled approximately $358 million (subject to a tax of
$125 million).

The
2003 net change in the valuation allowance related to deferred tax assets was an increase of $144 million, primarily relating to unutilizable foreign deferred tax assets. The
valuation allowance of $302 million at December 31, 2003 is primarily related to specific state and local, and foreign tax carryforwards or tax law restrictions on benefit recognition in
the U.S. federal tax return and in the above jurisdictions. Of the $302 million valuation allowance, $211 relates to foreign deferred tax assets which do not affect Citicorp's consolidated tax
expense due to foreign tax credits.

Management
believes that the realization of the recognized net deferred tax asset of $817 million is more likely than not based on existing carryback ability and expectations as
to future taxable income in the jurisdictions in which it operates. Under a tax sharing agreement with Citigroup, the Company is entitled to a current benefit if it incurs losses which are utilized in
Citigroup's consolidated return. Citigroup, which has a history of strong earnings, has reported pretax financial

74

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statement
income from continuing operations of approximately $22 billion, on average each year, over the last three years.

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, 2003 and
2002, all of Citicorp's U.S. insured subsidiary depository institutions were "well-capitalized." At December 31, 2003, 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         |  |                  |   |                           |      | $        | 50,671 |                | $
|Total capital(1)       |  |                  |   |                           |      | $        | 76,153 |                | $
|Tier 1 capital ratio   |  | 4.0              | % | 6.0                       | %    |          | 8.44   | %              |  
|Total capital ratio(1) |  | 8.0              | % | 10.0                      | %    |          | 12.68  | %              |  
|Leverage ratio(2)      |  | 3.0              | % | 5.0                       | %(3) |          | 6.70   | %              |  
|                       |  |                  |   |                           |      |          |        |                |  

---

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 2004, without regulatory approval, of approximately $4.3 billion adjusted by the effect of their net income (loss) for 2004 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 $2.4 billion of the available $4.3 billion, adjusted by the effect of their net income (loss) up to the date of any such dividend declaration.

75

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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, 2003 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, 2001                                                               |  | $                                             | (14  | )                                       | $ | (755             | ) | $                                                         |     
|Cumulative effect of accounting changes, after-tax of $98(1)                           |  |                                               | 86   |                                         |   | 19               |   |                                                           | 65   
|Unrealized gains on investment securities, after-tax of $96                            |  |                                               | 197  |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, after-tax of ($27) |  |                                               | (50  | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax of ($321)                           |  |                                               |     |                                         |   | (1,156           | ) |                                                           |     
|Cash flow hedges, after-tax of $142                                                    |  |                                               |     |                                         |   |                 |   |                                                           | 247  
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Change                                                                                 |  |                                               | 233  |                                         |   | (1,137           | ) |                                                           | 312  
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2001                                                             |  |                                               | 219  |                                         |   | (1,892           | ) |                                                           | 312  
|Unrealized gains on investment securities, after-tax of $220                           |  |                                               | 345  |                                         |   |                 |   |                                                           |     
|Add: Reclassification adjustment for losses included in net income, after-tax of $123  |  |                                               | 250  |                                         |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax of ($1,027)                         |  |                                               |     |                                         |   | (1,469           | ) |                                                           |     
|Cash flow hedges, after-tax of $615                                                    |  |                                               |     |                                         |   |                 |   |                                                           | 1,142
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Change                                                                                 |  |                                               | 595  |                                         |   | (1,469           | ) |                                                           | 1,142
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2002                                                             |  |                                               | 814  |                                         |   | (3,361           | ) |                                                           | 1,454
|Unrealized gains on investment securities, after-tax of $61                            |  |                                               | 299  |                                         |   |                 |   |                                                           |     
|Less: Reclassification adjustment for gains included in net income, after-tax of ($89) |  |                                               | (165 | )                                       |   |                 |   |                                                           |     
|Foreign currency translation adjustment, after-tax of ($244)                           |  |                                               |     |                                         |   | (873             | ) |                                                           |     
|Cash flow hedges, after-tax of ($199)                                                  |  |                                               |     |                                         |   |                 |   |                                                           | (575 
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Current period change                                                                  |  |                                               | 134  |                                         |   | (873             | ) |                                                           | (575 
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      
|Balance, December 31, 2003                                                             |  | $                                             | 948  |                                         | $ | (4,234           | ) | $                                                         | 879  
|                                                                                       |  |                                               |      |                                         |   |                  |   |                                                           |      

---

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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 (benefit) of $101 million, $24 million and ($39) million in
2003, 2002, and 2001, respectively. Citicorp's allocated share of the net expense (benefit) was $53 million, $11 million, and ($21) million for 2003, 2002, and 2001, 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 $137 million,
$119 million and $128 million in 2003, 2002, and 2001, respectively.

At
December 31, 2003, the Citigroup U.S. plans' projected benefit obligations were $9.6 billion, the accumulated benefit obligations were $9.4 billion and plan
assets were $9.4 billion based upon a discount rate of 6.25%, 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 $3.0 billion, $2.7 billion and $2.8 billion, respectively, at December 31, 2003.

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 $70 million, $75 million and $30 million for 2003,
2002, and 2001, respectively.

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 $44 million in 2003, $38 million in 2002, and
$48 million in 2001.

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, 2003, approximately 431 million shares were authorized for grant under Citigroup's stock incentive plans.

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 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 2003 have a term of six years. Also, the sale of underlying shares acquired through the exercise of options granted
in 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 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.

Stock
Purchase Program offerings, which are administered under the Citigroup 2003 Stock Purchase Program and the Citigroup 2000 Stock Purchase Plan, allow eligible employees to enter
into fixed subscription agreements to purchase shares in the future at the market value on the date of the agreements. 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 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. The program ends in July 2005. The
original offering under the Citigroup Stock Purchase Program was in August 2000. In 2001, three additional offerings were made to new employees in March, July, and November 2001. In
February 2002, an additional offering was made to new employees. All offerings under the Citigroup 2000 Stock Purchase Plan have expired. See Note 1 to the Consolidated Financial
Statements for the impact during the current year.

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.

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

77

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to
the stock ownership commitment). From the date of award, the recipient can direct the vote on the shares and receive regular dividends.

During
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 $158 million in 2003, $84 million in 2002, and $52 million in 2001.

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. 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.

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, 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 which are unrelated to the
risks being hedged. Similarly, the assessment of effectiveness may exclude changes in the fair value of a derivative related to time value which, if excluded, are recognized in current earnings.

The
following table summarizes certain information related to the Company's hedging activities for the years ended December 31, 2003, 2002, and 2001:

|In millions of dollars |                                                                                                                                      | 2003 |   | 2002   |   | 2001
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | ---- | - | ------ | - | ----
|Fair value hedges      |                                                                                                                                      |      |   |        |   |     
|                       | Hedge ineffectiveness recognized in earnings                                                                                         |      | $ | (63    | ) | $   
|                       | Net gain (loss) excluded from assessment of effectiveness                                                                            |      |   | (75    | ) |     
|Cash flow hedges       |                                                                                                                                      |      |   |        |   |     
|                       | Hedge ineffectiveness recognized in earnings                                                                                         |      |   | (16    | ) |     
|                       | Net gain excluded from assessment of effectiveness                                                                                   |      |   | 2      |   |     
|Net investment hedges  |                                                                                                                                      |      |   |        |   |     
|                       | Net gain (loss) included in foreign currency translation adjustment within accumulated other changes in equity from nonowner sources |      |   | (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 twelve months of December 31, 2003 are $738 million.

The
accumulated other changes in equity from nonowner sources from cash flow hedges for 2003, 2002, and 2001 can be summarized as follows (after-tax):

|In millions of dollars               |  | 2003 |       | 2002 |   | 2001  |  
|------------------------------------ |  | ---- | ----- | ---- | - | ----- | -
|Beginning balance(1)                 |  | $    | 1,454 |      | $ | 312   |  
|Net gain from cash flow hedges       |  |      | 159   |      |   | 1,668 |  
|Net amounts reclassified to earnings |  |      | (734  | )    |   | (526  | )
|                                     |  |      |       |      |   |       |  
|Ending balance                       |  | $    | 879   |      | $ | 1,454 |  
|                                     |  |      |       |      |   |       |  

---

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

78

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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 and if 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.

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, derivative, 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, 2003, 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, amounted to $29.4 billion and $18.7 billion at
December 31, 2003 and 2002, 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 $21.9 billion and $25.0 billion at December 31, 2003 and 2002, respectively, and is comprised of investment securities,
loans, and trading assets.

20.   Fair Value of Financial Instruments

Estimated Fair Value of Financial Instruments

The table below 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.

|                               |  | 2003 |       | 2002
|------------------------------ |  | ---- | ----- | ----
|
|Assets                         |  |      |       |     
|Investments                    |  | $    | 124.3 |     
|Trading account assets         |  |      | 85.7  |     
|Loans(1)                       |  |      | 451.1 |     
|Other financial assets(2)      |  |      | 87.2  |     
|                               |  |      |       |     
|Liabilities                    |  |      |       |     
|Deposits                       |  | $    | 478.5 |     
|Trading account liabilities    |  |      | 53.5  |     
|Long-term debt                 |  |      | 102.2 |     
|Other financial liabilities(3) |  |      | 90.3  |     
|                               |  |      |       |     

---

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 $19.7 billion in
2003 and $19.0 billion in 2002. Within these totals, estimated fair values exceeded carrying values for consumer loans net of the allowance by $16.3 billion, an increase of
$1.9 billion from 2002, and for corporate loans net of the allowance by $3.4 billion, which was a decrease of $1.3 billion from 2002. 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.

79

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21.   Pledged Assets, Collateral, Commitments and Guarantees

Pledged Assets

At December 31, 2003 and 2002 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                                                        |  | 2003 |         | 2002
|----------------------------------------------------------------------------- |  | ---- | ------- | ----
|For securities sold under agreements to repurchase                            |  | $    | 21,467  |     
|As collateral for securities borrowed of approximately equivalent value       |  |      | 1,096   |     
|As collateral on bank loans                                                   |  |      | 30,801  |     
|To clearing organizations or segregated under securities laws and regulations |  |      | 15,550  |     
|For securities loaned                                                         |  |      | 118     |     
|Other                                                                         |  |      | 45,692  |     
|                                                                              |  |      |         |     
|Total                                                                         |  | $    | 114,724 |     
|                                                                              |  |      |         |     

Included
in the Other line in the table above is $13.8 billion and $733 million at December 31, 2003 and 2002, respectively, of consumer loans that were pledged as
collateral in financing transactions. The increase from the prior year relates to secured borrowings associated with the acquired Sears Credit Card and Financial Products business.

Collateral

At December 31, 2003 and 2002, 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 $785 million and $441 million, respectively. This collateral was received in connection with resale agreements, securities
borrowings and loans, derivative transactions, and margined broker loans.

At
December 31, 2003 and 2002, $483 million and $291 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, 2003 and 2002, the Company had pledged $103 billion and $82 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 $1.2 billion, $1.1 billion and $1.2 billion for the years ended
December 31, 2003, 2002, and 2001, respectively.

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

|In millions of dollars at year-end |  |  
|---------------------------------- |  | -
|2004                               |  | $
|2005                               |  |  
|2006                               |  |  
|2007                               |  |  
|2008                               |  |  
|Thereafter                         |  |  
|                                   |  |  
|Total                              |  | $
|                                   |  |  

Loan Commitments

|In millions of dollars at year-end                                             |  | 2003 |         | 2002
|------------------------------------------------------------------------------ |  | ---- | ------- | ----
|One- to four-family residential mortgages                                      |  | $    | 3,599   |     
|Revolving open-end loans secured by one- to four-family residential properties |  |      | 14,007  |     
|Commercial real estate, construction and land development                      |  |      | 1,322   |     
|Credit card lines(1)(2)                                                        |  |      | 739,162 |     
|Commercial and other consumer loan commitments(3)                              |  |      | 221,024 |     
|                                                                               |  |      |         |     
|Total                                                                          |  | $    | 979,114 |     
|                                                                               |  |      |         |     

---

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 $4.4 billion and $5.0 billion at December 31, 2003 and 2002, 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 table on page 81 summarizes at December 31, 2003 all of the Company's guarantees and indemnifications, where we believe the guarantees and indemnifications are
related to an asset, liability, or equity security of the guaranteed parties at the inception of the contract. The maximum potential amount of future payments represents the notional amounts that
could be lost under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from
collateral held or pledged. Such amounts bear no relationship to the anticipated losses on these guarantees and indemnifications and greatly exceed anticipated losses.

80

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The following tables present information about the Company's guarantees at December 31, 2003 and 2002:

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

|                                                   |  | 2002(2)
|-------------------------------------------------- |  | -------
|
|Financial standby letters of credit                |  | $      
|Performance guarantees                             |  |        
|Derivative instruments                             |  |        
|Guarantees of collection of contractual cash flows |  |        
|Loans sold with recourse                           |  |        
|Securities lending indemnifications(1)             |  |        
|Credit card merchant processing(1)                 |  |        
|Custody indemnifications(1)                        |  |        
|Market value guarantees(1)                         |  |        
|                                                   |  |        
|Total                                              |  | $      
|                                                   |  |        

---

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

At
December 31, 2003 and 2002, the Company's maximum potential amount of future payments under these guarantees was approximately $252.7 billion and $151.8 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

81

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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, 2003 and 2002, respectively, the Company held as collateral approximately $61 million and
$31 million, respectively, of merchant escrow deposits and also had $109 million and $96 million, respectively, payable to merchants, which the Company has the right to set off
against amounts due from the individual merchants.

The
Company's maximum potential liability for this contingent merchant processing liability is estimated to be the total volume of credit card transactions that meet the associations'
requirements to be valid chargeback transactions at any given time. At December 31, 2003 and 2002, this maximum potential exposure was estimated to be $22.6 billion and
$15.4 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,
2003, 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 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, 2003, the
estimated losses incurred and the carrying value of the Company's obligations related to these programs are immaterial.

In
the normal course of business, the Company provides standard representations and warranties to counterparties in contracts in connection with numerous transactions and also provides
indemnifications that protect the counterparties to the contracts in the event that additional taxes are owed due either to a change in the tax law or an adverse interpretation of the tax law.
Counterparties to these transactions provide the Company with comparable indemnifications. While such representations, warranties and tax indemnifications are essential components of many contractual
relationships, they do not represent the underlying business purpose for the transactions. The indemnification clauses are often standard contractual terms related to the Company's own performance
under the terms of a contract and are entered into in the normal course of business based on an assessment that the risk of loss is remote. Often these clauses are intended to ensure that terms of a
contract are met at inception (for example, that loans transferred to a counterparty in a sales transaction did in fact meet the conditions specified in the contract at the transfer date). No
compensation is received for these standard representations and warranties and it is not possible to determine their fair value because they rarely, if ever, result in a payment. In many cases, there
are no stated or notional amounts included in the indemnification clauses and the contingencies potentially triggering the obligation to indemnify have not occurred and are not expected to occur.
There are no amounts reflected on the Consolidated Balance Sheet as of December 31, 2003 or 2002, 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, 2003 or 2002 for
potential obligations that could arise from the Company's involvement with VTN associations.

At
December 31, 2003 and 2002, the carrying amounts of the liabilities related to the guarantees and indemnifications included in the table above amounted to approximately
$12.7 billion and $8.0 billion, respectively. The carrying value of derivative instruments is included in either trading liabilities or other liabilities depending upon whether the
derivative was entered into for trading or non-trading purposes. The carrying value of financial and performance guarantees is included in other liabilities. The carrying value of the
guarantees of contractual cash flows are offset against the receivables from the credit card trusts. For loans sold with recourse the carrying value of the liability is included in other liabilities.
In addition, at December 31, 2003 and 2002, other liabilities includes an allowance for credit losses of $600 million and $567 million, respectively, relating to letters of credit
and unfunded lending commitments.

In
addition to the collateral available in respect of the credit card merchant processing contingent liability discussed above, the Company has collateral available to reimburse
potential losses on its other guarantees. Cash collateral available to the Company to reimburse losses realized under these guarantees and indemnifications amounted to $38.3 billion and
$31.9 billion at December 31, 2003 and 2002, respectively. Securities and other marketable assets held as collateral amounted to $29.6 billion and $18.8 billion and letters
of credit in favor of the Company held as collateral amounted to $1.5 billion and $834 million at December 31, 2003 and 2002, 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.

82

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Loans Sold with Credit Enhancements

In billions of dollars at year-end

2003

2002

Form of Credit EnhancementResidential mortgages and other loans sold with recourse(1)

$
6.2

$
8.1

2003: Recourse obligation of $1.9
2002: Recourse obligation of $3.6,
and put options as described belowGNMA sales/servicing agreements(2)


21.0


31.1

Secondary recourse obligationSecuritized credit card receivables


74.8


66.9

Includes net revenue over the life of the transaction. Also includes other recourse obligations of $2.8 in 2003 and $2.0 in 2002


---

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 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
$90 million at December 31, 2003 and $230 million at December 31, 2002. Net revenue from securitized credit card receivables included in other revenue was
$3.3 billion, $2.7 billion, and $2.1 billion for the years ended December 31, 2003, 2002, and 2001, respectively.

Various
put options were written during 2000 and 1999 which require Citicorp to purchase, upon request of the holders, securities issued in certain securitization transactions in order
to broaden the investor base and improve execution in connection with the securitizations. The aggregate amortized amount of these options was approximately $0.8 billion at December 31,
2002. The Company had recorded liabilities totaling approximately $6 million at December 31, 2002 in connection with these options. Subsequent to their initial issuance, such options are
marked-to-market with the fluctuation being reflected on the Consolidated Statement of Income. During the first quarter of 2003, Citicorp purchased all remaining outstanding
Class A certificates related to the securitization covered by the put option. This effectively removed the remaining put option.

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 $55.5 billion at December 31, 2003 and
$38.0 billion at December 31, 2002, and performance standby letters of credit.

|                                          |  |   |      |  |   | 2003 |  | 2002
|----------------------------------------- |  | - | ---- |  | - | ---- |  | ----
|
|Insurance, surety                         |  | $ | 3.2  |  | $ | 9.6  |  | $   
|Options, purchased securities, and escrow |  |   | 0.3  |  |   |     |  |     
|Clean letters of credit                   |  |   | 3.9  |  |   | 2.3  |  |     
|Other debt related                        |  |   | 9.1  |  |   | 4.1  |  |     
|                                          |  |   |      |  |   |      |  |     
|Total(1)                                  |  | $ | 16.5 |  | $ | 16.0 |  | $   
|                                          |  |   |      |  |   |      |  |     

---

22.   Contingencies

As described in the "Legal Proceedings" discussion on page 99, the Company is a defendant in numerous lawsuits and other legal proceedings arising out of the
transactions and activities that were the subjects of the July 2003 settlement of the Enron-related inquiries conducted by the Securities and Exchange Commission, the Federal Reserve Bank of
New York, the Office of the Comptroller of the Currency, and the Manhattan District Attorney. The Company's reserve toward the costs of resolving the lawsuits and other legal proceedings in connection
with these matters was $600 million at December 31, 2003. The total reserve established in 2002 amounted to $700 million pretax and an after-tax amount of
$460 million.

It
is not possible to predict the ultimate outcome of these lawsuits and other legal proceedings, or the timing of their resolution. Management reviews the status of these matters on an
ongoing basis and will exercise its judgment in resolving them in such manner as it believes to be in the best interests of the Company. The Company will defend itself vigorously in these cases and
believes that it has substantial defenses to the claims asserted. However, given the uncertainties of the timing and outcome of this type of litigation, the large number of cases, the multiple
defendants in many of them, the very large aggregate damages sought by the plaintiffs, the novel issues presented, the length of time before these cases will be resolved by settlement or through
litigation, and the current difficult litigation environment, it is not presently possible to determine the Company's ultimate exposure for these matters and there is no assurance that the ultimate
resolution of these matters will not significantly exceed the reserve accrued by the Company. In the opinion of the Company's management, the ultimate resolution of these lawsuits and other
proceedings, while not likely to have a material adverse effect on the consolidated financial condition of the Company, may be material to the Company's operating results for any particular period.

83

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

Changes in Stockholder's Equity

|In millions of dollars                                                                         |  | 2003 |        | 2002 |   | 2001   |  
|---------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|Balance at beginning of year                                                                   |  | $    | 41,309 |      | $ | 37,623 |  
|Net income                                                                                     |  |      | 7,919  |      |   | 6,357  |  
|Dividends paid                                                                                 |  |      | (6,812 | )    |   | (8,061 | )
|Contributions from parent company                                                              |  |      | 1,518  |      |   | 9,127  |  
|Distribution to parent company                                                                 |  |      |       |      |   | (6,400 | )
|Employee benefit plans                                                                         |  |      | 220    |      |   | 136    |  
|Net change in unrealized gains (losses) on investment securities available-for-sale, after-tax |  |      | (207   | )    |   | 391    |  
|Net change in foreign currency translation adjustment, after-tax                               |  |      | 61     |      |   | (629   | )
|Net change for cash flow hedges, after-tax                                                     |  |      | (427   | )    |   | 1,004  |  
|Preferred stock                                                                                |  |      |       |      |   | 1,600  |  
|Other                                                                                          |  |      | 2,372  |      |   | 161    |  
|                                                                                               |  |      |        |      |   |        |  
|Balance at end of year                                                                         |  | $    | 45,953 |      | $ | 41,309 |  
|                                                                                               |  |      |        |      |   |        |  

24.   Related Party Balances

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

25.   Selected Quarterly Financial Data (Unaudited)

|                                                 |  | 2003 |        | 2002
|------------------------------------------------ |  | ---- | ------ | ----
|
|
|Net interest revenue                             |  | $    | 9,041  |     
|Fees, commissions and other revenue              |  |      | 5,480  |     
|                                                 |  |      |        |     
|Total revenues                                   |  |      | 14,521 |     
|Total benefits, claims and credit losses         |  |      | 2,331  |     
|Operating expense                                |  |      | 7,124  |     
|                                                 |  |      |        |     
|Income before income taxes and minority interest |  |      | 5,066  |     
|Income taxes                                     |  |      | 1,488  |     
|Minority interest, after-tax                     |  |      | 39     |     
|                                                 |  |      |        |     
|Net income                                       |  | $    | 3,539  |     
|                                                 |  |      |        |     

84

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26.   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 AFCC to CBC, making AFCC a wholly owned subsidiary of CBC. Citicorp remains the guarantor of the
outstanding long-term debt, securities and commercial paper of AFCC.

Citigroup
Finance Canada Inc., a wholly owned subsidiary of Associates, had an unutilized credit facility of Canadian $1.0 billion as of December 31, 2003 that
matures in 2004. The facility is guaranteed by Citicorp. In connection therewith, Citicorp is required to maintain a certain level of consolidated stockholder's equity (as defined in the agreements).
At December 31, 2003, this requirement was exceeded by approximately $63.4 billion. Citicorp also has guaranteed various debt obligations of Associates and CCC.

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

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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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                                                                                 |  | $                           
|                                                                                           |  |                             

---

86

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Condensed Consolidating Statement of Income

|                                                                                                                                    |  | Year Ended December 31, 2001 |      
|----------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -----
|
|Revenue                                                                                                                             |  |                              |      
|Dividends from subsidiary banks and bank holding companies                                                                          |  | $                            | 3,108
|Interest from subsidiaries                                                                                                          |  |                              | 2,542
|Interest on loans, including feesthird party                                                                                       |  |                              |     
|Interest on loans, including feesintercompany                                                                                      |  |                              |     
|Other interest revenue                                                                                                              |  |                              | 10   
|Fees, commissions and other revenue                                                                                                 |  |                              | 4    
|                                                                                                                                    |  |                              |      
|                                                                                                                                    |  |                              | 5,664
|                                                                                                                                    |  |                              |      
|Expense                                                                                                                             |  |                              |      
|Interest on other borrowed fundsthird party                                                                                        |  |                              | 2,436
|Interest on other borrowed fundsintercompany                                                                                       |  |                              |     
|Interest and fees paid to subsidiaries                                                                                              |  |                              | 219  
|Interest on long-term debtthird party                                                                                              |  |                              |     
|Interest on long-term debtintercompany                                                                                             |  |                              |     
|Interest on deposits                                                                                                                |  |                              |     
|Benefits, claims and credit losses                                                                                                  |  |                              |     
|Other expense                                                                                                                       |  |                              | 89   
|                                                                                                                                    |  |                              |      
|                                                                                                                                    |  |                              | 2,744
|                                                                                                                                    |  |                              |      
|Income before taxes, minority interest, cumulative effect of accounting changes, and equity in undistributed income of subsidiaries |  |                              | 2,920
|Income tax (benefit)                                                                                                                |  |                              | (100 
|Minority interest, net of income taxes                                                                                              |  |                              |     
|Cumulative effect of accounting changes                                                                                             |  |                              |     
|Equity in undistributed income of subsidiaries                                                                                      |  |                              | 6,622
|                                                                                                                                    |  |                              |      
|Net income                                                                                                                          |  | $                            | 9,642
|                                                                                                                                    |  |                              |      

---

87

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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

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Condensed Consolidating Balance Sheet

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

---

89

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Condensed Consolidating Statements of Cash Flows

|                                                                          |                     | December 31, 2003 |       
|------------------------------------------------------------------------- | ------------------- | ----------------- | ------
|
|Net cash provided by operating activities                                 |                     | $                 | 3,181 
|                                                                          |                     |                   |       
|Cash flows from investing activities                                      |                     |                   |       
|Investmentsavailable-for-sale                                            |                     |                   |       
|                                                                          | 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 issuance of long-term debtthird party                      |                     |                   | 15,710
|Repayment of long-term debtthird party                                   |                     |                   | (3,538
|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                                            |                     |                              |        
|                                                                          | 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 issuance of long-term debtthird party                      |                     |                              | 47,512 
|Repayment of long-term debtthird party                                   |                     |                              | (44,360
|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:                                            |                     |                              |        
|Dividends                                                                 |                     |                              |       
|Contributions from parent company                                         |                     | $                            | 5,832  
|                                                                          |                     |                              |        

---

91

---

Condensed Consolidating Statements of Cash Flows

|                                                                          |                     | Year Ended December 31, 2001 |        
|------------------------------------------------------------------------- | ------------------- | ---------------------------- | -------
|
|Net cash provided by operating activities                                 |                     | $                            | 1,816  
|                                                                          |                     |                              |        
|Cash flows from investing activities                                      |                     |                              |        
|Investmentsavailable-for-sale                                            |                     |                              |        
|                                                                          | Purchases           |                              |        
|                                                                          | Proceeds from sales |                              |        
|                                                                          | Maturities          |                              |        
|Changes in investments and advances  intercompany                        |                     |                              | (16,635
|Net decrease (increase) in loans                                          |                     |                              | 671    
|Proceeds from sales of loans                                              |                     |                              |       
|Business acquisitions                                                     |                     |                              |       
|Other investing activities                                                |                     |                              | 220    
|                                                                          |                     |                              |        
|Net cash used in investing activities                                     |                     |                              | (16,623
|                                                                          |                     |                              |        
|Cash flows from financing activities                                      |                     |                              |        
|Net increase (decrease) in deposits                                       |                     |                              |       
|Net change in purchased funds and other borrowingsthird party            |                     |                              | 3,929  
|Net change in purchased funds, other borrowings and advancesintercompany |                     |                              | (502   
|Proceeds from issuance of long-term debtthird party                      |                     |                              | 20,085 
|Repayment of long-term debtthird party                                   |                     |                              | (2,931 
|(Repayments of) proceeds from issuance of long-term debtintercompany     |                     |                              |       
|Dividends paid                                                            |                     |                              | (5,784 
|Contributions from parent company                                         |                     |                              |       
|                                                                          |                     |                              |        
|Net cash provided by financing activities                                 |                     |                              | 14,797 
|                                                                          |                     |                              |        
|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                              |                     |                              | 28     
|                                                                          |                     |                              |        
|Cash and due from banks at end of year                                    |                     | $                            | 18     
|                                                                          |                     |                              |        
|Supplemental disclosure of cash flow information                          |                     |                              |        
|Cash paid during the year for:                                            |                     |                              |        
|Interest                                                                  |                     | $                            | 1,340  
|Income taxes                                                              |                     |                              | 1,630  
|Non-cash investing activities:                                            |                     |                              |        
|Transfers to repossessed assets                                           |                     |                              |       
|Capital contributions to subsidiaries                                     |                     |                              | 2,000  
|Non-cash financing activities:                                            |                     |                              |        
|Dividends                                                                 |                     |                              | 642    
|Contributions from parent company                                         |                     | $                            | 6,250  
|                                                                          |                     |                              |        

---

92

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FINANCIAL DATA SUPPLEMENT (UNAUDITED)

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

|                                                                       |                             | Average Volume |         | Interest Revenue |   | % Average Rate
|---------------------------------------------------------------------- | --------------------------- | -------------- | ------- | ---------------- | - | --------------
|
|
|Assets                                                                 |                             |                |         |                  |   |               
|Loans (net of unearned income)(5)                                      |                             |                |         |                  |   |               
|Consumer loans                                                         |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             | $              | 245,013 |                  | $ | 203,227       
|In offices outside the U.S.(6)                                         |                             |                | 96,394  |                  |   | 89,387        
|                                                                       |                             |                |         |                  |   |               
|Total consumer loans                                                   |                             |                | 341,407 |                  |   | 292,614       
|                                                                       |                             |                |         |                  |   |               
|Corporate loans                                                        |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Commercial and industrial   |                |         | 18,743           |   |               
|                                                                       | Lease financing             |                |         | 2,052            |   |               
|                                                                       | Mortgage and real estate    |                |         | 245              |   |               
|In offices outside the U.S.(6)                                         |                             |                | 81,100  |                  |   | 84,188        
|                                                                       |                             |                |         |                  |   |               
|Total corporate loans                                                  |                             |                | 102,140 |                  |   | 106,555       
|                                                                       |                             |                |         |                  |   |               
|Total loans                                                            |                             |                | 443,547 |                  |   | 399,169       
|                                                                       |                             |                |         |                  |   |               
|Federal funds sold and securities purchased under agreements to resell |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 4,710   |                  |   | 6,219         
|In offices outside the U.S.(6)                                         |                             |                | 8,071   |                  |   | 2,951         
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 12,781  |                  |   | 9,170         
|                                                                       |                             |                |         |                  |   |               
|Investments                                                            |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                |         |                  |   |               
|                                                                       | Taxable                     |                |         | 56,412           |   |               
|                                                                       | Exempt from U.S. income tax |                |         | 7,424            |   |               
|In offices outside the U.S.(6)                                         |                             |                | 60,358  |                  |   | 53,155        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 124,194 |                  |   | 95,165        
|                                                                       |                             |                |         |                  |   |               
|Trading account assets(7)                                              |                             |                |         |                  |   |               
|In U.S. offices                                                        |                             |                | 9,424   |                  |   | 6,641         
|In offices outside the U.S.(6)                                         |                             |                | 18,156  |                  |   | 15,103        
|                                                                       |                             |                |         |                  |   |               
|Total                                                                  |                             |                | 27,580  |                  |   | 21,744        
|                                                                       |                             |                |         |                  |   |               
|Loans held-for-sale, in U.S. offices                                   |                             |                | 14,258  |                  |   | 12,071        
|                                                                       |                             |                |         |                  |   |               
|Deposits at interest with banks(6)                                     |                             |                | 19,764  |                  |   | 17,406        
|                                                                       |                             |                |         |                  |   |               
|Total interest-earning assets                                          |                             |                | 642,124 |                  |   | 554,725       
|                                                                       |                             |                |         |                  |   |               
|Non-interest earning assets(7)                                         |                             |                | 117,185 |                  |   | 102,931       
|                                                                       |                             |                |         |                  |   |               
|Total assets                                                           |                             | $              | 759,309 |                  | $ | 657,656       
|                                                                       |                             |                |         |                  |   |               

---

93

---



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

|                                                                           |                     | Average Volume |         | Interest Expense |   | % Average Rate
|-------------------------------------------------------------------------- | ------------------- | -------------- | ------- | ---------------- | - | --------------
|
|
|Liabilities                                                                |                     |                |         |                  |   |               
|Deposits                                                                   |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                |         |                  |   |               
|                                                                           | Savings deposits(5) |                | $       | 115,614          |   | $             
|                                                                           | Other time deposits |                |         | 31,127           |   |               
|In offices outside the U.S.(6)                                             |                     |                | 254,508 |                  |   | 228,296       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 401,249 |                  |   | 352,768       
|                                                                           |                     |                |         |                  |   |               
|Trading account liabilities(7)                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 4,303   |                  |   | 2,999         
|In offices outside the U.S.(6)                                             |                     |                | 1,163   |                  |   | 579           
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 5,466   |                  |   | 3,578         
|                                                                           |                     |                |         |                  |   |               
|Purchased funds and other borrowings                                       |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 41,787  |                  |   | 39,881        
|In offices outside the U.S.(6)                                             |                     |                | 20,359  |                  |   | 19,482        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 62,146  |                  |   | 59,363        
|                                                                           |                     |                |         |                  |   |               
|Long-term debt                                                             |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     |                | 77,785  |                  |   | 63,191        
|In offices outside the U.S.(6)                                             |                     |                | 8,284   |                  |   | 10,242        
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     |                | 86,069  |                  |   | 73,433        
|                                                                           |                     |                |         |                  |   |               
|Total interest-bearing liabilities                                         |                     |                | 554,930 |                  |   | 489,142       
|                                                                           |                     |                |         |                  |   |               
|Demand deposits in U.S. offices                                            |                     |                | 7,382   |                  |   | 8,218         
|Other non-interest bearing liabilities(7)                                  |                     |                | 120,206 |                  |   | 92,927        
|Total stockholder's equity                                                 |                     |                | 76,791  |                  |   | 67,369        
|                                                                           |                     |                |         |                  |   |               
|Total liabilities and stockholder's equity                                 |                     | $              | 759,309 |                  | $ | 657,656       
|                                                                           |                     |                |         |                  |   |               
|Net interest revenue as a percentage of average interest-earning assets(8) |                     |                |         |                  |   |               
|In U.S. offices                                                            |                     | $              | 358,310 |                  | $ | 292,407       
|In offices outside the U.S.                                                |                     |                | 283,814 |                  |   | 262,318       
|                                                                           |                     |                |         |                  |   |               
|Total                                                                      |                     | $              | 642,124 |                  | $ | 554,725       
|                                                                           |                     |                |         |                  |   |               

---

94

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ANALYSIS OF CHANGES IN NET INTEREST REVENUE, TAXABLE EQUIVALENT BASIS(1)(2)  Citicorp and Subsidiaries

|                                                                       |  | 2003 vs. 2002 |       | 2002 vs. 2001 |  
|---------------------------------------------------------------------- |  | ------------- | ----- | ------------- | -
|
|
|Assets                                                                 |  |               |       |               |  
|Loansconsumer                                                         |  |               |       |               |  
|In U.S. offices                                                        |  | $             | 3,755 |               | $
|In offices outside the U.S.(4)                                         |  |               | 809   |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 4,564 |               |  
|                                                                       |  |               |       |               |  
|Loanscorporate                                                        |  |               |       |               |  
|In U.S. offices                                                        |  |               | (68   | )             |  
|In offices outside the U.S.(4)                                         |  |               | (218  | )             |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | (286  | )             |  
|                                                                       |  |               |       |               |  
|Total loans                                                            |  |               | 4,278 |               |  
|                                                                       |  |               |       |               |  
|Federal funds sold and securities purchased under agreements to resell |  |               |       |               |  
|In U.S. offices                                                        |  |               | (22   | )             |  
|In offices outside the U.S.(4)                                         |  |               | 285   |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 263   |               |  
|                                                                       |  |               |       |               |  
|Investments                                                            |  |               |       |               |  
|In U.S. offices                                                        |  |               | 812   |               |  
|In offices outside the U.S.(4)                                         |  |               | 382   |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 1,194 |               |  
|                                                                       |  |               |       |               |  
|Trading account assets                                                 |  |               |       |               |  
|In U.S. offices                                                        |  |               | 135   |               |  
|In offices outside the U.S.(4)                                         |  |               | 236   |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 371   |               |  
|                                                                       |  |               |       |               |  
|Loans held-for-sale,in U.S. offices                                    |  |               | 182   |               |  
|                                                                       |  |               |       |               |  
|Deposits at interest with banks(4)                                     |  |               | 124   |               |  
|                                                                       |  |               |       |               |  
|Total interest revenue                                                 |  | $             | 6,412 |               | $
|                                                                       |  |               |       |               |  
|Liabilities                                                            |  |               |       |               |  
|Deposits                                                               |  |               |       |               |  
|In U.S. offices                                                        |  | $             | 291   |               | $
|In offices outside the U.S.(4)                                         |  |               | 736   |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 1,027 |               |  
|                                                                       |  |               |       |               |  
|Trading account liabilities                                            |  |               |       |               |  
|In U.S. offices                                                        |  |               | 16    |               |  
|In offices outside the U.S.(4)                                         |  |               | 9     |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 25    |               |  
|                                                                       |  |               |       |               |  
|Purchased funds and other borrowings                                   |  |               |       |               |  
|In U.S. offices                                                        |  |               | 44    |               |  
|In offices outside the U.S.(4)                                         |  |               | 66    |               |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 110   |               |  
|                                                                       |  |               |       |               |  
|Long-term debt                                                         |  |               |       |               |  
|In U.S. offices                                                        |  |               | 676   |               |  
|In offices outside the U.S.(4)                                         |  |               | (88   | )             |  
|                                                                       |  |               |       |               |  
|Total                                                                  |  |               | 588   |               |  
|                                                                       |  |               |       |               |  
|Total interest expense                                                 |  |               | 1,750 |               |  
|                                                                       |  |               |       |               |  
|Net interest revenue                                                   |  | $             | 4,662 |               | $
|                                                                       |  |               |       |               |  

---

95

---

RATIOS

|                                             |  | 2003  |   | 2002  |   | 2001 |  
|-------------------------------------------- |  | ----- | - | ----- | - | ---- | -
|Net income to average assets                 |  | 1.78  | % | 1.63  | % | 1.63 | %
|Return on average total stockholder's equity |  | 17.6  | % | 15.9  | % | 18.0 | %
|Total average equity to average assets       |  | 10.11 | % | 10.24 | % | 9.11 | %
|                                             |  |       |   |       |   |      |  

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

|                                   |  | 2003 |         | 2002 |      | 2001 |  
|---------------------------------- |  | ---- | ------- | ---- | ---- | ---- | -
|
|Banks(2)                           |  | $    | 28,800  |      | 2.81 | %    | $
|Other demand deposits              |  |      | 86,472  |      | 1.53 | %    |  
|Other time and savings deposits(2) |  |      | 160,590 |      | 2.11 | %    |  
|                                   |  |      |         |      |      |      |  
|Total                              |  | $    | 275,862 |      | 2.00 | %    | $
|                                   |  |      |         |      |      |      |  

---

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

|In millions of dollars at year-end 2003 |  | Under 3 Months |        | Over
3 to 6 Months |   | Over
6 to 12 Months |  | Over 12 Months
|--------------------------------------- |  | -------------- | ------ | ------------------ | - | ------------------- |  | --------------
|Certificates of deposit                 |  | $              | 4,293  |                    | $ | 726                 |  | $             
|Other time deposits                     |  |                | 11,715 |                    |   | 246                 |  |               
|                                        |  |                |        |                    |   |                     |  |               

SHORT-TERM AND OTHER BORROWINGS(1)

|                                    |  | Federal Funds Purchased
and Securities Sold Under
Agreements to Repurchase(2) |        |   |   |        |   |   |        |   |   |        |   |   |       
|----------------------------------- |  | ----------------------------------------------------------------------------- | ------ | - | - | ------ | - | - | ------ | - | - | ------ | - | - | ------
|
|
|
|Amounts outstanding at year-end     |  | $                                                                             | 30,500 |   | $ | 36,997 |   | $ | 30,328 |   | $ | 14,712 |   | $ | 16,487
|Average outstanding during the year |  |                                                                               | 31,652 |   |   | 33,055 |   |   | 16,776 |   |   | 14,461 |   |   | 12,829
|Maximum month-end outstanding       |  |                                                                               | 38,433 |   |   | 36,997 |   |   | 33,245 |   |   | 16,942 |   |   | 16,487
|                                    |  |                                                                               |        |   |   |        |   |   |        |   |   |        |   |   |       
|Weighted-average interest rate      |  |                                                                               |        |   |   |        |   |   |        |   |   |        |   |   |       
|During the year(3)                  |  |                                                                               | 2.97   | % |   | 4.15   | % |   | 5.62   | % |   | 1.06   | % |   | 1.73  
|At year-end(4)                      |  |                                                                               | 3.12   | % |   | 3.26   | % |   | 4.96   | % |   | 1.25   | % |   | 1.57  
|                                    |  |                                                                               |        |   |   |        |   |   |        |   |   |        |   |   |       

---

96

---



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 20 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

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Securities
Litigation Reform Act. See "Forward-Looking Statements" on page 47.

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, 2003, 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 the most extensive consumer privacy provisions ever enacted by Congress. These provisions, among other things, require full disclosure of the Company's privacy
policy to consumers and mandate offering the consumer the ability to "opt out" of having non-public customer information disclosed to third parties. Pursuant to these provisions, the
federal banking regulators 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 47. 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, which is expected to become effective on approximately December 1, 2004, when implementing regulations become effective, largely parallels the Company's current practice under its
privacy policy.

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 which 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),

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Europe
and Latin America. The majority of these sites are leased and, although numerous, none is material to Associates' operations.

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.

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. Citigroup's motion to dismiss the complaint was denied in December 2002, and Citigroup filed an answer
in January 2003. In May 2003, plaintiffs filed an amended consolidated class action complaint, and Citigroup filed a motion to dismiss in June 2003. Plaintiffs filed a motion for
class certification in May 2003. Discovery is proceeding pending the Court's decision on class certification.

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) an action by banks that participated in two Enron revolving credit facilities, originally 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; the Court granted Citigroup's motion to dismiss with respect to all claims except for
certain claims of aiding and abetting and civil conspiracy; (iii) an action brought by several funds in connection with secondary market purchases of Enron debt securities, alleging violations
of the federal securities law, 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 the federal securities law, including Section 11 of the Securities Act of 1933, as amended, and Section 10(b) of the
Securities Exchange Act of 1934, as amended; (v) a putative class action brought by clients of Citigroup Global Markets Inc. (CGMI) in connection with research reports concerning Enron,
alleging breach of contract; (vi) an action brought by a retirement and health benefits plan in connection with the purchase of certain Enron notes, alleging violation of federal securities
law, including Section 11 of the Securities Act of 1933, as amended, violations of state securities and unfair competition law, and common law fraud and breach of fiduciary duty;
(vii) an action brought by the Attorney General of Connecticut in connection with various commercial and investment banking services provided to Enron; (viii) 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; (ix) an action brought by an
investment company, alleging that Enron fraudulently induced it to enter into a commodity sales contract; (x) 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; (xi) 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 and others; and (xii) 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. Several of these cases have been
consolidated or coordinated with the NEWBY action and are now generally inactive pending the Court's decision on the pending motion on class certification.

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 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.

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 complaint alleges
that the Citigroup Parties and numerous other defendants committed acts in violation of the Bank Holding Company Act and the 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
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.

Additional
lawsuits containing similar claims 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 auditors for the Company, which include those fees billed to the Company as well as those
not yet billed, for services rendered to Citicorp for the years ended December 31, 2003 and 2002:

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 auditors. 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, due diligence on
completed acquisitions 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, 2003 and December 31, 2002 totaled approximately $32.0 million and $25.7 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 attest 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, 2003 and
December 31, 2002 totaled approximately $4.3 million and $2.6 million, respectively.

Tax Fees:Tax fees include corporate tax compliance, counsel and advisory services as well as expatriate
tax services primarily in 2002. The aggregate fees earned by KPMG for the tax related services rendered to Citicorp and its subsidiaries for the years ended December 31, 2003 and
December 31, 2002 totaled approximately $7.5 million and $13.8 million, respectively.

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 Citigroup's adoption of its policy prohibiting the
engagement of KPMG for such services. Of the $13.8 million of tax fees earned by KPMG in 2002, approximately $8.9 million was related to expatriate tax services and the balance, $4.9 million,
was related to tax compliance, tax counsel and advisory services.

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, 2003 and December 31, 2002 totaled approximately $0.1 million and $1.2 million,
respectively.

The
fees earned by KPMG in 2003 and 2002 were for services contracted for prior to Citicorp's adoption of its policy prohibiting the engagement of its primary independent auditors for
non-audit services, as described below. 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.

Financial Information Systems Design and Implementation Fees:Citicorp did not engage KPMG to provide
advice to Citicorp regarding financial information systems design and implementation during the years ended December 31, 2003 and December 31, 2002.

Approval of Independent Auditor Services and Fees

Citigroup's Audit and Risk Management Committee has reviewed and approved all fees charged by Citicorp's independent auditors, 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
auditors 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.

Under
the Citigroup policy approved by the Audit and Risk Management Committee, the committee must pre-approve all services provided by Citicorp's independent auditors and
fees charged. The committee will consider annually the provision of audit services and, if appropriate, pre-approve 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 will periodically monitor the levels of KPMG fees against the pre-approved limits. The Audit
and Risk Management Committee will also consider on a case by case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved. 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 within, 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 into a single document the requirements of the accounting profession and the Securities and
Exchange Commission, including a comprehensive explanation of 2003 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                                                                                      
|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, Financial Statement Schedules, and Reports on Form 8-K                                             

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CORPORATE INFORMATION

EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

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.

Reports on Form 8-K

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

No
other reports on Form 8-K were filed during the 2003 fourth quarter. However, on January 22, 2004, the Company filed a Current Report on
Form 8-K, dated January 22, 2004, reporting under Item 5 thereof the summarized results of its operations for the quarter and year ended December 31, 2003. On
February 3, 2004, the Company filed a Current Report on Form 8-K, dated January 23, 2004, (a) reporting under Item 5 thereof the completion of a consent
solicitation with respect to certain debt obligations of Associates First Capital Corporation and (b) filing as exhibits under Item 7 thereof the related supplemental indentures.

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.

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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 17th day of March, 2004.

| | Citicorp
(Registrant)                                    
| | ---------------------------------------------------------
| | /s/TODD S. THOMSONTodd S. Thomson
Chief Financial Officer

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 17th day of March, 2004.

| | Citicorp's Principal Executive Officer:    
| | -------------------------------------------
| | /s/ROBERT B. WILLUMSTADRobert B. Willumstad
| | Citicorp's Principal Financial Officer:    
| | /s/TODD S. THOMSONTodd S. Thomson          
| | 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 17, 2004 by the Directors of Citicorp.

| | /s/WILLIAM R. RHODESWilliam R. Rhodes, Chairman
| | -----------------------------------------------
| | /s/DAVID C. BUSHNELLDavid C. Bushnell          
| | /s/THOMAS W. JONESThomas W. Jones              
| | /s/ALAN S. MACDONALDAlan S. MacDonald          
| | /s/MARJORIE MAGNERMarjorie Magner              
| | /s/DERYCK C. MAUGHANDeryck C. Maughan          
| | /s/TODD S. THOMSONTodd S. Thomson              
| | /s/ROBERT B. WILLUMSTADRobert B. Willumstad    

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