Citigroup Inc. 2021 Resolution Plan Public Section July 1, 2021
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Transcript of Citigroup Inc. 2021 Resolution Plan Public Section July 1, 2021
Introduction
A. Introduction...................................................................................................... 1B. TheSPOEStrategy............................................................................................ 5
B.1. OverviewoftheSPOEStrategy........................................................................................... 6B.2. CitiSupportAgreement....................................................................................................... 7
B.3.ObjectsofWindDown,ObjectsofSaleDivestitureStrategy,andtheResultingOrganization........................................................................................................................ 9
C. WhyCitiIsResolvable........................................................................................ 11C.1. SingleIntegratedTriggerFramework.................................................................................. 12C.2. SufficientFinancialResourcesAppropriatelyPositioned.................................................... 15C.3. AbilitytoDeliverFinancialResourcesWhereandWhenNeeded....................................... 17C.4. OperationalResilienceandContinuity................................................................................ 19C.5. RobustSeparabilityandWind-DownPlan........................................................................... 22C.6. SignificantFlexibilityandOptionality.................................................................................. 24C.7. IntegrationintoBusiness-As-UsualGovernance,Processes,andInfrastructure................ 26
D. ActionsTakentoAddressShortcomings............................................................ 29E. DescriptionofCoreBusinessLines..................................................................... 31
E.1. BankingCBLs........................................................................................................................ 32E.2. Markets&SecuritiesServicesCBLs..................................................................................... 32E.3. GlobalConsumerBankingCBLs........................................................................................... 33
F. BackgroundInformationonMaterialLegalEntities........................................... 34F.1. ParentandIHC..................................................................................................................... 37F.2. BankingEntitiesandBranches............................................................................................ 41F.3. BrokerDealerEntities.......................................................................................................... 59F.4. ServiceMLEs........................................................................................................................ 67
G. ResolutionPlanningCorporateGovernanceStructureandProcesses................. 90
H.SummaryFinancialInformationRegardingAssets,Liabilities,Capital,andMajorFundingSources...................................................................................... 93
H.1. FinancialSummary-CitiConsolidated................................................................................ 94H.2. FundingandLiquidity.......................................................................................................... 95
I. DescriptionofDerivativeandHedgingActivities................................................ 99J. MembershipsinMaterialPayment,ClearingandSettlementSystems............... 102K. DescriptionofForeignOperations..................................................................... 104L. MaterialSupervisoryAuthorities....................................................................... 108M. PrincipalOfficersofCitigroupInc....................................................................... 110N. OverviewofMaterialManagementInformationSystems.................................. 112O. Forward-LookingStatements............................................................................. 116P. Glossary............................................................................................................. 118
TableofContents
Citi2021§165(d)ResolutionPlanPublicSection
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A.Introduction
Citiiscommittedtoensuringthatitcanberesolvedinasafe,efficientandorderlymannerthatavoidstheuseoftaxpayerfundsandminimizestheimpacttodepositors,customers,counterparties,andtheU.S.andglobalfinancialsystems.Aspartofthiscommitment,Citievaluates,onanongoingbasis,itsgovernance,processes,andinfrastructuretosupporttheexecutionofitsResolutionstrategy.The2021ResolutionPlan1marksthelateststepinamulti-yeareffortCitihasundertakentofurtherembedResolutionPlanningintobusiness-as-usual(BAU)processes,infrastructure,andgovernanceinordertoensurethesustainabilityandoperationalreadinessofResolutionplanningacrosstheorganization.
Citi’sfinancialresourcesprovideitwiththecapitalandliquiditytowithstandsignificantfinancialstress.AsofDecember31,2020,CitihadaCommonEquityTier1Capitalratioof11.7%basedontheBaselIIIStandardizedApproachesfordeterminingrisk-weightedassets,wellinexcessoftheregulatorythresholdofwell-capitalized,andapproximately$544.8billioninhigh-qualityliquidassets(HQLA).Citihadanaverageliquiditycoverageratio(LCR)of118%forthefourthquarterof2020undertheU.S.LCRrules,alsowellabovetheminimumrequirement.
Inadditiontostrengtheningitsfinancialresiliency,CiticontinuestomakeRecoveryandResolutionpreparednessacompany-widepriority.Citi’sBoardofDirectorsandmanagementremaincommittedtodemonstratingthat,intheeventofseverefinancialdistress,Citicanberesolvedthroughabankruptcyproceedinginasafe,efficient,andorderlymannerthatminimizestheimpacttodepositors,customers,clients,counterparties,andtheU.S.andglobalfinancialsystems.Asaresult,CiticontinuestoinvestconsiderableresourcesinsimplifyingitsbusinessmodelandlegalentitystructureandstrengtheningitsResolutionplanningandexecutioncapabilities.
Citi’spreferredResolutionstrategyremainsasinglepointofentrystrategy(SPOEStrategy)underwhichCitigroupInc.(CitigroupParent)wouldenterbankruptcy,butCiti’smateriallegalentities(MLEs)wouldcontinueoperatingforthebenefitoftheCitigroupParentbankruptcyestate.Specifically,undertheSPOEStrategy,Citi’sOperatingMLEs—whichareMLEsthatcontainoperatingbusinessesandincludeCitibank,N.A.(CBNA),BancoNacionaldeMexico,S.A.(Citibanamex),andcertainbrokerdealers,amongothers—wouldberecapitalizedsothattheywouldcontinueoperatingthroughoutCiti’sResolution.Inaddition,Citi’sServiceMLEs—whichareMLEsthathousesharedservicefunctions—areprefundedwithatleastsixmonthsofworkingcapital,enablingtheircontinuityduringResolution.
TheSPOEStrategyisdesignedto(i)minimizetheimpactofCiti’sResolutionontheU.S.andglobalfinancialsystems,depositors,clients,andcounterparties,(ii)maintaincontinuityofCiti’scorebusinesslines(CBLs),criticaloperations(COs),andMLEs,and(iii)maximizethevalueofCiti’sbusinessesforthebenefitoftheCitigroupParentbankruptcyestate.CitibelievesthatneithertheU.S.governmentnortheFederalDepositInsuranceCorporation(FDIC)depositinsurancefundwouldincurlossesundertheSPOEStrategy.Rather,shareholdersandunsecuredcreditorsofCitigroupParentwouldabsorbanylosses.
Citi2021§165(d)ResolutionPlanPublicSection
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1UndertheResolutionPlanRule,CitiisrequiredtosubmitatargetedresolutionplanonorbeforeJuly1,2021
Inadditiontothewidespreadpublichealthimplications,theCOVID-19pandemichashadanextraordinaryimpactonmacroeconomicconditionsintheU.S.andaroundtheworld.Citi’sbusinesses,resultsofoperationsandfinancialconditionhavebeenimpactedbyeconomicdislocationsandtrendscausedbythepandemic.Governmentsandcentralbanksgloballyhavetakenaseriesofaggressiveactionstosupporttheireconomiesandmitigatethesystemicimpactsofthepandemic,andCiticontinuestoproactivelyassessandutilizethesemeasureswhereappropriate.FormoreinformationonCiti’sresponsetotheCOVID-19pandemic,see“COVID-19PandemicOverview”inCiti’s2020Form10-K.
• Citihasrespondedonmultiplefrontstothechallengesofthepandemictosupporttheongoingneedsofitscustomersandclients,whileconcurrentlymaintainingsafetyandsoundnessstandards.Citi’sdedicatedcontinuityofbusinessandcrisismanagementgroupsaremanagingCiti’sprotocolsinresponsetothepandemic.Theseprotocolsprovideforthesafetyandwell-beingofCiti’sstaff,whilecontinuingtomaintainhighlevelsofclientservicingacrossallofthemarketsinwhichCitioperates.Theseprotocolsaddresstheprioritizationofcriticalprocessing;abilityofstaffandthirdpartiestosupporttheseprocessesfromremoteworklocations;deploymentofnewhardwaretosupporttechnologyneeds;andongoingmonitoringtoassesscontrolsandservicelevels.PlanningforCiti’sreturn-to-officestrategyisongoing.
• Citi’sorganizationalresponsetothepandemichasbeengovernedbyCiti’sExecutiveManagementTeam,consistingoftheCitigroupParentCEOandcertaindirectreportsoftheCEO,anddriventhroughregionaltaskforcesthatweredeployedinAsia,EMEA,NorthAmericaandLatinAmerica.LedbyregionalCEOsandtheirmanagementteams,thesegroupsfocusedon,andcontinuetomanage,thepandemicresponses,implementationofcontinuityofbusinessplans,locationalandstaffingstrategiesandresponsestocustomerandclientneeds.
• Throughoutthecrisis,CitihasalsoworkedcloselywithU.S.authoritiesandhostgovernmentsonimplementingimmediatepolicyresponsesandfinancialassistancestructurestomitigatethesystemicimpactsofthepandemic.Citialsocontinuestoengagecloselywithcustomersandclients,regulatorsandotherrelevantstakeholderstoassurealignmentonallpandemic-relatedmatters.
Manyofthesamepeople,processesandsystemsleveragedduringtheCOVID-19pandemicresponsewouldbeleveragedinapotentialresolutionscenario.CitiutilizedcontingencyplanningframeworkstomanagetheeffectsoftheCOVID-19pandemicinBAUandincorporatedlessonslearnedfromthepandemic,whererelevant,toenhanceresolutioncapabilities.
The2021ResolutionPlandescribesCiti'sresponsetotheCOVID-19pandemic,includinghowCitileverageditsfinancialandoperationalcontingencyrelatedcapabilities,andtherelevanceofthelessonslearnedwithrespecttoresolutioncapabilities.
AsdescribedfurtherthroughoutthisPublicSection,CitiisresolvableundertheSPOEStrategybecauseithas:
• ASingleIntegratedTriggerFrameworkthatenablesittounderstandwhentotakeappropriateactionstoexecutetheSPOEStrategy;
• SufficientfinancialresourcesthatareappropriatelypositionedatCiti’slegalentitiestoexecutetheSPOEStrategy;
Citi2021§165(d)ResolutionPlanPublicSection
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• TheabilitytodeliverfinancialresourcesrequiredbyOperatingMLEsfortheexecutionoftheSPOEStrategyandimplementedmitigantstoaddresspotentialobstaclestodelivery;
• Capabilitiestomaintainthecontinuityofinternalsharedservices,third-partyvendorservices,realestateaccess,andfinancialmarketinfrastructure(FMI)accessduringResolution;
• Credibledivestitureandwind-downoptionsforitsbusinesses;
• Flexibilityandoptionalitybydevelopingmitigantsforkeysourcesofuncertainty;and
• Enhanceditspractices,infrastructure,policies,andprocedurestoautomateprocessesandfurtherembedResolutionpreparednessintoitsongoingdailyoperations.
TheremainingportionofthisPublicSectionofCiti’s2021ResolutionPlandiscussesthefollowing:
• SectionBprovidesanoverviewoftheSPOEStrategy;
• SectionCsummarizesCiti’sResolutioncapabilities,includingkeyenhancementsCitihasmade;
• SectionDoutlinestheactionstakeninresponsetotheregulatoryfeedbackissuedbytheBoardofGovernorsoftheFederalReserveSystem(FRB)andtheFDIConDecember16,2019onCiti’s2019ResolutionPlansubmission;and
• SectionsEthroughPfurtherdescribethe2021ResolutionPlan,includinginformationonCiti’sCBLsandMLEs,operationalcontinuity,andgovernance,aswellasprovideinformationrequiredbyrelevantrulesandguidance.
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B.TheSPOEStrategy
Citi’s2021ResolutionPlansetsforthasinglepreferredstrategy,theSPOEStrategy.ThissectiondescribestheSPOEStrategy,theCitiSupportAgreement(CSA),Citi’sstrategyforwindingdownanddivestingitsbusinessesduringResolution,andtheresultingorganization.TheSPOEStrategyhasbeendevelopedbaseduponahypotheticalidiosyncraticfailurescenarioandonassumptionsprovidedtoCitibytheFRBandtheFDIC.ItdoesnotreflectCiti’sviewoflikelyfutureevents.Instead,itprovidesasetofsteps,baseduponthoseassumptions,whichCitiwouldtaketosafelyresolveitselfwithoutrelianceontaxpayerfundsintheunlikelyeventthatCitiweretofail.
B.1.OverviewoftheSPOEStrategy
TheSPOEStrategyhasthreekeyhigh-levelsteps:
• Recapitalization:IntheperiodleadinguptoandatCiti’spointofnon-viability,theOperatingMLEswouldberecapitalizedpursuanttothecontractually-bindingCSA(seesectionB.2.CitiSupportAgreementbelowformoreinformation)underwhichCiticorpLLC(Citicorp),asCiti’sintermediateholdingcompany(IHC),wouldprovidecapitalandliquiditysupporttotheOperatingMLEsasneeded.Inaddition,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitaltoenabletheircontinuityduringResolution.
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• Transfer:CitigroupParentwouldenterbankruptcy,andCitigroupParent’ssubsidiaries,includingCiticorpandtheMLEs,wouldbetransferredtoanewlycreatedbankholdingcompany,NewCitigroup.NewCitigroupwouldbeheldbyaReorganizationTrustforthebenefitoftheCitigroupParentbankruptcyestate.
• Divestiture/Wind-Down:Overtime,CitigroupParent’ssubsidiarieswouldbesegmentedintoObjectsofSaleanddivestedpursuanttoCiti’sObjectsofSaleDivestitureStrategyorwounddown.TheproceedsofthedivestitureswouldbecomepartofthebankruptcyestateandwouldultimatelybedistributedtoCitigroupParent’sstakeholders.EachObjectofSalewouldbesignificantlysmallerandlesssystemicallyimportantthanCitiistoday.TheObjectsofSaleDivestitureStrategyandresultingorganizationarediscussedinmoredetailinSectionB.3.ObjectsofWindDown,ObjectsofSaleDivestitureStrategy,andResultingOrganizationbelow.
ForadiscussionoffinancialandoperationalinterconnectionsforeachMLEandhowtheyaremaintainedundertheSPOEStrategy,pleaserefertoSectionF.BackgroundInformationonMaterialLegalEntities.
B.2.CitiSupportAgreement
TheCSA,whichCitienteredintoonJuly1,2017,isaninteraffiliateagreementthatcontractuallybindsCitigroupParentandCiticorptoprovidecapitalandliquiditysupporttoalloftheOperatingMLEsintheunlikelyeventofCiti'sfailuresothattheycancontinueasgoingconcernsoutsideofresolutionorbankruptcyproceedings.CitimaintainsCiticorpasitsIHCtofacilitatetheoperationoftheCSA.CiticorpiswhollyownedbyCitigroupParentandholdstheOperatingMLEsotherthantwobrokerdealerMLEs.
PursuanttotheCSA,CitigroupParentprefundedCiticorpbymakinganinitialcontributionofassets,includingliquidassetsandinteraffiliateloans,toCiticorp.CitigroupParentmustmakeadditionalcontributionstoCiticorpasitacquiresnewfundinginexcessofcertainlimits.Inbusiness-as-usualconditions,CiticorpservesastheprimaryfundingvehicleforalloftheOperatingMLEsandprovidescapitalandliquiditytotheOperatingMLEsconsistentwithCiti’sexistingpoliciesandprocedures.TheCSAprovidestwomechanismsunderwhichCiticorpisrequiredtotransfercashtoCitigroupParentforCitigroupParent’sdebtserviceandotheroperatingneeds:(i)interestandprincipalpaymentsonfundingnotesissuedbyCiticorptoCitigroupParent,and(ii)acommittedlineofcreditunderwhichCitigroupParentmayborrowfromCiticorp.CiticorpmayalsoissuedividendstoCitigroupParent.
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ThegraphicbelowillustratestheflowoffundsundertheCSAinBAUconditions:
Asindicatedbelow,upontheoccurrenceoftheRecapitalizationTriggeratthepointofnon-viabilityandjustbeforeCitigroupParententersbankruptcyproceedings,theCSArequiresCitigroupParenttotransferitsremainingliquidassetstoCiticorpthroughafinalcontribution,exceptforaholdbackamountforadministrativeexpensesforCitigroupParent’sbankruptcy,andrequiresCiticorptorecapitalizetheOperatingMLEsandprovidethemwithongoingsupportthroughoutCiti’sResolution.Inaddition,thefundingnotesissuedbyCiticorptoCitigroupParentwouldbeconvertedintoequityandthecommittedlineofcreditwouldterminate.
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ThegraphicbelowillustratesthechangestotheflowoffundsundertheCSAupontheoccurrenceoftheRecapitalizationTrigger.
CitigroupParent’sobligationsandCiticorp’sobligationstotheOperatingMLEsundertheCSAaresecuredbyapledgeofsubstantiallyalloftheirassets(exceptforequityinterestsinsubsidiariesandexcludedassets),includingcertainliquidassetsandinteraffiliateloanspursuanttoaSecurityAgreement.
CitiunderstandsthatitmustbalanceholdingcapitalandliquidityresourcesatCitigroupParentandCiticorpandpre-positioningsuchresourcesdirectlyattheMLEs.Citicontinuestoleverageaframeworktodeterminetheappropriatebalanceofcapitalandliquidityresourcesandhasincorporatedtheseandotherconsiderationsintoitspoliciesandprocedures,aswellasthe2021ResolutionPlan.
B.3.ObjectsofWindDown,ObjectsofSaleDivestitureStrategy,andtheResultingOrganization
The2021ResolutionPlancontemplatesthattheentitythatexitsfromResolutionwouldbesignificantlysmallerandlesssystemicallyimportantthanCiti.TheObjectsofSaleDivestitureStrategy,firstarticulatedinCiti's2015ResolutionPlan,continuestobeupdatedandenhanced.CitidevelopedtheObjectsofSaleDivestitureStrategyasameansfordisposingitsbusinessesinahypotheticalidiosyncraticResolutionscenario.Itdoesnotrepresentalong-term,value-maximizingstrategyforCitigroupParentstakeholdersoutsideofResolution.
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Itiscontemplatedthatunderthe2021ResolutionPlan,Citi’sbankingentitiesandbranches,brokerdealerentities,andServiceMLEswouldbedivestedorwound-downasfollows:
• BankingEntitiesandBranches.UndertheObjectsofSaleDivestitureStrategy,Citi’sbankingoperations(CBNAandCitibanamex)wouldbesegmentedintonumerousObjectsofSale,allofwhichwouldbedivestedthroughaseriesofmergerandacquisition(M&A)transactionsandinitialpublicofferings(IPOs).Citiconsideredmanywaysofsegmentingitsbankingoperationsacrossdifferentbusinessesandgeographiesandarangeofpotentialpurchasers,includingnon-U.S.institutions.
TheGlobalConsumerBankingbusinesseswouldbeprimarilydivestedaccordingtogeographicboundaries.TheU.S.consumeroperationswouldbesegmentedintoaretailbankandacreditcardbankandbesoldtothepublicinIPOs.Theinternationalconsumeroperationswouldbesoldinprivatetransactions.Inalimitednumberofcountrieswheretheconsumerandinstitutionalbusinessesarehighlyintegrated,theywouldbeofferedasasingleunit,ineitheraprivatesaleoranIPO.
TheInstitutionalClientsGroupglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransactionandwouldcontinuetoservelargecorporateclientsandgovernments.OtherInstitutionalClientsGroupbusinessesthatprimarilyoperatethroughCiti’sbankingentitieswouldbesegmentedalongtheirproductofferingsandsoldinprivatetransactions.
• BrokerDealerEntities.Thebrokerdealerentitieswouldundergoasolventwind-downinanorderly,value-maximizingmannerthatwouldminimizebothmarketdisruptionandcreditorandcounterpartylosses.
Theproceedsfromthedivestitureorwind-downofthesebusinesseswouldultimatelyberemittedtotheReorganizationTrust.
EachbusinessdivestedundertheObjectsofSaleDivestitureStrategywouldbesignificantlysmallerandlesssystemicallyimportantthanCiti.Forexample:
• ThelargestbusinessthatwouldbesoldinaprivatetransactionwouldbeCiti’sglobalcorporatebankingoperations.AsofDecember31,2020,thisbusinesshadapproximately$480billioninassets,orrepresentsapproximately21%ofCiti’stotalassets.
• ThelargestbusinessthatwouldbeofferedinanIPOwouldbeCiti’sU.S.RetailBankoperations.AsofDecember31,2020,thisbusinesshadapproximately$138billioninassets,orapproximately6%ofCiti’stotalassets.
TheassetlevelsabovearebasedupontheestimatedsegmentationsofthebusinessesaswellastheimpactofbothestimatedlossesandrunoffofliquidityintheResolutionscenario.
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C.WhyCitiIsResolvable
ThissectionsummarizesCiti’sResolutioncapabilitiesandpreparednessbyoutliningthekeyreasonsCitiisresolvableregardlessoftheResolutionscenario,including:(i)Citi’sSingleIntegratedTriggerFramework;(ii)sufficientandappropriatelypositionedfinancialresources;(iii)abilitytodeliverfinancialresourceswhereandwhenneeded;(iv)operationalresilienceandcontinuity;(v)robustseparabilityandwind-downplan;(vi)significantflexibilityandoptionality;and(vii)integrationofResolutionpreparednessintoitsongoingdailyoperations.Citihasassessedthe2021ResolutionPlanandResolutioncapabilitiesagainstthe2019AmendedRule2,2019ResolutionPlanGuidanceand2021Plantargetedinformationrequest.
C.1.SingleIntegratedTriggerFramework
CiticontinuestoleverageitsSingleIntegratedTriggerFrameworktoprovideitwithaclearunderstandingofitsfinancialconditionateachstageoftheResolutiontimehorizonandenableittotakeappropriateactionswithsufficientleadtimeandinthepropersequencetoexecutetheSPOEStrategyeffectively.
C.1.a.ObjectiveMetricsDefiningEachStageoftheResolutionTimeHorizon
TheSingleIntegratedTriggerFrameworkprovidesCiti’sBoardofDirectorsandmanagementwithobjective,well-definedtriggersthatdefineeachstageoftheResolutiontimehorizon.ThesetriggersincorporatealloftheResolution-specificcapitalandliquiditymetricsidentifiedbyregulators,includingResolutionLiquidityAdequacyandPositioning(RLAP),ResolutionLiquidityExecutionNeed(RLEN),ResolutionCapitalAdequacyandPositioning(RCAP),andResolutionCapitalExecutionNeed(RCEN).ThetriggersarecalibratedsothatCiti’sBoardofDirectorsandmanagementhavesufficienttimetotakeactionsnecessarytoexecutetheSPOEStrategy.ThesecapitalandliquiditymetricsarediscussedinmoredetailinSectionC.2.aSufficientFinancialResourcestoExecutetheSPOEStrategy.
TheSingleIntegratedTriggerFrameworkidentifiessevenphasesoftheResolutiontimehorizonusingtriggersspecificallydesignedtoaddresstheuniquecharacteristicsofeachphase:
• StressPeriod:ThefirstphaseoftheResolutiontimehorizonistheStressPeriod.TheStressPeriodwouldbeginwiththebreachofcertaintriggersinCiti’sContingencyFundingPlanandCapitalContingencyFramework.DuringtheStressPeriod,Citiwouldtakecertainactionstoimproveitsfinancialposition.
• RecoveryPeriod:ThesecondphaseoftheResolutiontimehorizonistheRecoveryPeriod.TheRecoveryPeriodwouldbeginwiththebreachofcertaintriggerssetforthinCiti’sRecoveryPlan.Thesetriggersincludeanarrayofmetricsdesignedtocaptureawidevarietyofpotentialstresses,includingthoserelatedtomarketconditions,operationalriskevents,capitalandliquiditypositions,andprofitability.
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2See12CFRPart243and12CFRPart381(publishedNovember1,2019).
• RunwayPeriod:ThethirdphaseoftheResolutiontimehorizonistheRunwayPeriod.TheRunwayPeriodwouldbeginwiththebreachofthequantitativeRunwayPeriodTrigger,whichiscalibratedtosignalthatCitigroupParentisprojectedtoneedtofileforbankruptcywithin30days,orbasedonmanagementdiscretion.
• PointofNon-Viability:ThefourthphaseoftheResolutiontimehorizonisthepointofnon-viability.Thepointofnon-viabilitywouldoccuruponabreachofthequantitativeRecapitalizationTriggerorbasedonmanagementdiscretion.TheRecapitalizationTriggerhasbeensettothelevelwhereCitigroupParentandCiticorp’scapitalandliquidityresourcesapproachtheestimatedaggregatecapitalandliquidityresourceneedsoftheOperatingMLEsduringResolution.
• InitialStabilizationPeriod:ThefifthphaseoftheResolutiontimehorizonistheInitialStabilizationPeriod.TheInitialStabilizationPeriodwouldbeginonedayafterthepointofnon-viability.
• ContinuedStabilizationPeriod:ThesixthphaseoftheResolutiontimehorizonistheContinuedStabilizationPeriod.TheContinuedStabilizationPeriodwouldbeginwhenCiticanbegintomonetizelessliquidassets.ThisabilitysignalsthatmarketconditionshavenormalizedsufficientlyforCititobegintoselldownitslessliquidpositions.InitialStabilizationandContinuedStabilizationtogethercomprisetheStabilizationPeriod.
• PostStabilizationPeriod:TheseventhandfinalphaseoftheResolutiontimehorizonisthePostStabilizationPeriod.ThePostStabilizationPeriodwouldbeginwhentheOperatingMLEsrequiringcreditratingsreceiveratingsupgradesfromoneofthemajorratingsagencies,enablingthemtoaccessunsecuredthird-partyfunding.
C.1.b.TriggersThatAreDynamictoReflectReal-TimeConditions
CitihasdesignedeachoftheRunwayPeriodTriggerandRecapitalizationTriggertobedynamicandadjustabletoreflecttheBoardofDirectors'andmanagement’smostcurrentassessmentofCiti’sfinancialcondition.Citi’sabilitytomaintainthisreal-timeviewisgroundedinseveralcharacteristicsofitstriggers:
• AuthoritativeSourceData:TheRunwayPeriodTriggerandRecapitalizationTriggerusedatathatisderivedfromCiti’sauthoritativesourcesystems,whereverpossible,andincorporatethemostrecentlyavailableinformation.
• Granular,AdjustableAssumptions:TheRunwayPeriodTriggerandRecapitalizationTriggerincorporategranularassumptions,whichcanbeadjustedtoaccountforthespecificcharacteristicsofastressevent.Forexample,MLETreasurershavetheabilitytomakespecificchangestothenetoutflowprojectionsintheRunwayTriggerandRecapitalizationTriggerbasedonmarketconditionsandclientbehavior.Asaresult,managementcanmakereal-timechangestotheexpectedoutflowsintheRunwayPeriodTriggerandRecapitalizationTriggertoincorporateitsmostrecentassessmentofcustomerbehaviorandmarketconditionsinanactualstressscenario.
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• ManagementActions:CitihastheabilitytoadjustthemeasurementoftheRunwayPeriodTriggerandRecapitalizationTriggermetricstoaccountfortheimpactofmanagementactionsduringastressscenario,includingtheexecutionofcontingencyactions.ByincorporatingtheimpactoftheseactionsonCiti’scapitalandliquiditypositions,managementcanprovideCitigroupParent'sBoardofDirectorswithmoretimelyinformation,sothatthesetriggersarebreachedneithertooearlynortoolatetoenableamoreeffectiveexecutionofthe2021ResolutionPlanintheunlikelyeventofanybreachofthetriggers.
C.1.c.ClearActionsLinkedtoEachTriggerwithFlexibilityBasedontheScenario
AspartoftheSingleIntegratedTriggerFramework,Citihaslinkedeachofitstriggerstoasetofactionssothateachoftheactionsrequiredfortheeffectiveexecutionofthe2021ResolutionPlanaretakeninacoordinatedmanneracrossbusinessesandfunctionsandwithsufficienttimefortheirtimelycompletion.
Sometriggersarelinkedtoactionsthroughlegalcontractsorpolicies.Forexample,undertheCSA,uponthebreachoftheRecapitalizationTriggeratthepointofnon-viability,CiticorpwouldbecontractuallyobligatedtoprovidetheOperatingMLEswithsupportcontributionsandsupportloanstomeetanyshortfallsinResolutioncapitalandliquidityneeds.Othertriggersareindicatorsformanagementtotakecertainactions(andarelinkedtospecificexpectedactions),butmanagementretainstheflexibilitytomodifythetimingofthoseactionsorthewayinwhichtheactionsaretakenbasedonthespecificsoftheResolutionscenario.KeyillustrativeactionsincorporatedintotheSingleIntegratedTriggerFrameworkincludethefollowing:
• RecoveryActions:UponthebreachofaRecoverytrigger,theframeworkprovidesthatCitiwouldimmediatelynotifyCiti’sCapitalCommittee(aseniormanagementcommittee)andBoardofDirectorsand,ifrequired,initiateactionsoutlinedintheContingencyFundingPlan(CFP),CapitalContingencyFramework(CCF),and/orRecoveryPlan,amongotheractions.
• RunwayActions:UponthebreachoftheRunwayPeriodTriggerandinanticipationofCitigroupParentfilingforbankruptcy,theframeworkprovidesthatCiti’sseniormanagementwouldimmediatelynotifytheCapitalCommitteeandBoardofDirectors.Additionally,Citiwouldprepaycertainvendorcontracts,asrequired,soastomaintaincontinuityofservicesfollowingCitigroupParent’sbankruptcy,andpreparerelevantbankruptcydocuments,amongotheractions.
• PointofNon-Viability/RecapitalizationActions:UponthebreachoftheRecapitalizationTrigger,theframeworkprovidesthatCitigroupParentwouldtransferitsremainingliquidassetstoCiticorp,lessaholdbackamountforadministrativeexpensesforCitigroupParent’sbankruptcy,pursuanttotheCSA,andCitiwouldconveneameetingofCitigroupParent’sBoardofDirectorstoconsiderfilingforbankruptcy,amongotheractions.
ThroughouttheResolutiontimehorizon,CitiwouldactivelycommunicatewithitsU.S.andforeignregulatorstoexplaintheRecoveryandResolutionactionsitistakingorplanningtotake.Citiwouldalsoactivelycommunicatewithexternalstakeholders(e.g.,investors,clientsandcustomers),asappropriate,duringeachofthesephases.
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C.1.d.DetailedStep-by-StepPlaybooksforAllKeyActions
Citi’striggersarelinkedtocertainactionsthroughtheCSA,Resolutionplaybooks,andinternalpolicies.Inparticular,CitihasdevelopedandupdatednumerousResolutionplaybookstoguidethetimelyandcoordinatedexecutionofitsResolutionactions.TheseplaybooksincludethespecificstepsthatmanagementwouldbepromptedtotaketoeffectivelyexecutetheSPOEStrategy.
Citi’sResolutionplaybooksinclude:
• TrustStructurePlaybook,
• FMIPlaybooks,
• GovernancePlaybooks,
• ObjectofSalePlaybooks,
• CommunicationsPlanandCommunicationsPlaybooks,
• StaffSubstitutabilityPlaybooks,
• DerivativesWind-DownandNovationPlaybooks,
• RatingAgencyPlaybookand
• SingleContingencyActionPlaybooks.
ToaddressthelegalobstaclesthatcouldarisefromemergencymotionsthatCitiwouldfileforthetransferofsubsidiariesfromCitigroupParenttoNewCitigroup,CiticontinuestoleverageitsBankruptcyPlaybookthatisintegratedintotheTrustStructurePlaybook.TheTrustStructurePlaybookalsoincludesapre-draftedemergencytransfermotionandotherrelevantfirst-daybankruptcymotionsanddocuments.
C.2.SufficientFinancialResourcesAppropriatelyPositioned
CitihasestimatedthefinancialresourcesrequiredtomeetitsneedsinResolutionandbelievesithas:
• SufficientfinancialresourcestoexecutetheSPOEStrategybasedonestimatesofRCAP,RCEN,RLAP,andRLEN,whichCitihastheabilitytocalculateonadailybasis;
• Conservativeassumptionsinitsestimationofthoseresolutionresourceneeds,withbufferstoaccountforsourcesofuncertainty;and
• Appropriatebalancingandpositioningofthoseresourcestomitigatepotentialrisks,withsufficientpre-positionedresourcesattheOperatingMLEsandcontributableresourcesheldatCitigroupParentandCiticorp.
Citi’sconservativeestimationofitsfinancialresourceneedsandpositioningtomeettheseneedshelpstoensurethattheOperatingMLEswouldremainsolventthroughouttheResolutiontimehorizon.
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C.2.a.SufficientFinancialResourcestoExecutetheSPOEStrategy
CitibelievesithassufficientcapitalandliquidityresourcestoexecutetheSPOEStrategyunderawiderangeofpotentialscenariosandhasestablishedtheprocesses,policies,infrastructure,andgovernancesothatitmaintainstheseresourcesinbusiness-as-usualconditions.Citi’smethodologyfordeterminingitsResolutionresourceneedsisbasedonitsRCAP,RCEN,RLAP,andRLENestimates,andCitibelievesitholdssufficientfinancialresourcesintheformofliquidassets,regulatorycapital,andInternalTotalLoss-AbsorbingCapacity(InternalTLAC)tomeeteachoftheseresolutionresourceneedsasofJuly1,2021.
Citihasincorporatedconservativeassumptionsintothemethodologiesdiscussedbelow,includingthatnon-MLEsdonotprovideliquiditysupporttoMLEs,thatnoCitientityhasaninvestment-graderatingduringResolution,andthatObjectsofSalehaveconservativevaluations.Citihasalsoallocatedbufferstoaccountforadditionaluncertaintyinprojections.
ResolutionCapitalAdequacyandPositioning(RCAP)
Citi’sapproachtoensuringithassufficientcapitalresourcestoeffectivelyexecutetheSPOEStrategyisgroundedinitsRCAPmethodology,whichmeasurestheamountofInternalTLAC(regulatorycapitalandeligibledebt)neededtocoverlossesateachofitsOperatingMLEsthroughoutCiti’sResolution,whileretainingsufficientcapitalforeachOperatingMLEtomeetapplicableregulatorycapitalrequirementsandmaintainmarketconfidence.CitihastheabilitytocalculateRCAPforeachoftheOperatingMLEsonadailybasis.
CitiexpectstomeetitsRCAPrequirementsataconsolidatedlevel,forCBNAconsolidated,andateachnon-branchOperatingMLEthroughacombinationofregulatorycapital,InternalTLAC,andcontributableresourcesheldatCitigroupParentandCiticorp.AsofJuly1,2021,CitibelievesitholdscontributableresourcesandInternalTLACthataremorethansufficienttomeetitsconsolidatedandOperatingMLE-specificRCAPneeds.
ResolutionCapitalExecutionNeed(RCEN)
RCENistheamountofcapitalrequiredateachOperatingMLEtocoverlossesatandafterthepointofnon-viabilitywhilemeetingapplicableregulatorycapitalrequirementsandmaintainingmarketconfidence.The2021ResolutionPlancontemplatesthatCitiwillmaintainanamountofInternalTLACateachofitsnon-branchOperatingMLEssufficienttomeetitsRCENrequirements.AsofJuly1,2021,Citibelievesitmeetstheserequirements.CitihastheabilitytocalculateRCENforeachofthenon-branchOperatingMLEsonadailybasis.
ResolutionLiquidityAdequacyandPositioning(RLAP)
Citi’sapproachtoensuringithassufficientliquidityresourcestoeffectivelyexecutetheSPOEStrategyisbasedonitsRLAPmethodology,whichmeasurestheamountofliquidityrequiredtocoveraseverelystressed30-dayliquidityoutflowacrosseachofitsOperatingMLEs.Citi’sapproachtoestimatingRLAPresultsinnetliquidityoutflowswhichare,inaggregate,atleastassevereasthoseundertheU.S.LCRrulesbecauseitincorporatesmultipleadditionalstresses.CitihastheabilitytocalculateRLAPforeachoftheOperatingMLEsonadailybasis.
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AsofJuly1,2021,CitibelievesitholdsliquidityresourcesthataremorethansufficienttomeetitsconsolidatedandOperatingMLE-specificRLAPneedsthroughpre-positionedliquidityateachOperatingMLE.
ResolutionLiquidityExecutionNeed(RLEN)
RLENistheamountofliquidityresourcesrequiredateachOperatingMLEtocoverliquidityoutflowsafterthepointofnon-viabilitythroughtheStabilizationPeriod,whilemaintainingsufficientliquiditytomeettheOperatingMLE’sminimumoperatingneedsforitemssuchasoperatingexpensesandworkingcapital.The2021ResolutionPlancontemplatesthatCitiwillmaintainanamountofliquidityresourcesatCitigroupParent,Citicorp,anditsOperatingMLEssufficienttomeetitsRLENrequirements.AsofJuly1,2021,Citibelievesitmeetstheserequirements.CitihastheabilitytocalculateRLENforeachoftheOperatingMLEsonadailybasis.
C.2.b.AppropriateBalancingofResourcestoMitigatePotentialRisks
Citihaspositioneditscapitalandliquidityresourcesat:
• OperatingMLEstoaddressknown,measurable,andattributablerisksatthoseOperatingMLEs;and
• CitigroupParentandCiticorptoprovideflexibilityandaddressrisksforwhichthesizeandlocationoftheresourceneedsaremoredifficulttoestimatebeforehand.
Thisbalancingisbasedonamulti-parttestandisdesignedtoprovideCitiwiththeflexibilitytomeettheResolutionresourceneedsoftheOperatingMLEsunderawiderangeofpotentialResolutionscenarios.
C.3.AbilitytoDeliverFinancialResourcesWhereandWhenNeeded
CitihasidentifiedpotentiallegalandregulatoryobstaclestodeliveringthecapitalandliquidityresourcestoitsOperatingMLEsandexecutionoftheSPOEStrategy,andhasestablishedmeasurestoaddresseachoftheseobstacles.
C.3.a.MeasurestoAddressPotentialCreditorChallenges
ApotentialobstaclethatcouldimpedetheprovisionofcapitalandliquiditysupporttotheOperatingMLEsrelatestopotentialcreditorchallenges,includingclaimsthattheplannedprovisionofresourcestotheOperatingMLEsisafraudulentconveyance,preference,orbreachoffiduciaryduty.CitiidentifiedallsourcesofpotentialcreditorchallengestotheplannedprovisionofsupportinResolutioninthekeyjurisdictionswhereithasunsecuredthird-partydebt.
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Citihasidentifiedandimplementedmeasurestoaddressthesepotentialsourcesofchallenge,including:
• ContractuallyBindingMechanism:Citihasimplementedacontractuallybindingmechanism—theCSAandrelatedSecurityAgreement.TheCSAcontractuallyobligatesCitigroupParentandCiticorptoprovidetheOperatingMLEswithsupportcontributionsandsupportloanstomeettheirResolutioncapitalandliquidityneedsandcontainsaliquidateddamagesprovision.TheSecurityAgreementgrantstheOperatingMLEsasecurityinterestinthecontributableassetsofCitigroupParentandCiticorp.BecausetheseagreementsarelegallybindingcontractsenteredintoatatimewhenCitiisfinanciallyhealthyandclearlysolvent,theyprovidemeaningfulprotectionagainstkeysourcesofpotentialcreditorchallenge.
• CreationofthePrefundedIHC:Inconnectionwiththefilingofits2017ResolutionPlan,CitirestructureditsinteraffiliatefundingflowssothatCiticorpnowactsastheprimaryfundingvehiclefortheOperatingMLEsinbusiness-as-usualconditions.CiticorpalsohasanongoingclaimonCitigroupParent’sliquidassetsinexcessofcertainlimits.ThisrestructuringofCiti’sinteraffiliateloansandliquidassetsatCiticorpmitigatestheriskofpotentialcreditorchallengesbecausesupportisprovidedtotheOperatingMLEsbyCiticorp.
• PublicDisclosureoftheCitiSupportAgreement,SecurityAgreement,andPrefundedIHC:CitihaspubliclydisclosedtheexistenceandkeytermsoftheSPOEStrategy,CitiSupportAgreement,SecurityAgreement,andCiticorp’sroleasCiti’sIHCinnumerousvenues.Forexample,since2016,CitihasdisclosedthekeytermsoftheSupportAgreementinthepublicsectionsofitsResolutionPlansandCitigroupParent’sAnnualReportsonForm10-K.CitiwillcontinuetodisclosethekeyelementsofitsResolutionPlanandthisbroad-baseddisclosuretoprotectagainstthepotentialforcreditorchallengesduetoclaimsoffraudulentconveyance.
C.3.b.MitigantstoPotentialRegulatoryChallenges
AnotherpotentialobstaclethatcouldimpedetheprovisionofcapitalandliquiditysupporttotheOperatingMLEsrelatestopotentialregulatorychallenges.Specifically,regulatorsandlegalauthoritiesinnon-U.S.jurisdictionsmaybelieveitisintheirinteresttoring-fencecertainofCiti’sassetsthatareeitherpre-positionedin—orflowingthrough—theirrespectivejurisdictions,therebyreducingCiti’sabilitytodeliverresourcesascontemplatedunderitsResolutionPlan.
Citi’smitigantstopotentialring-fencingoffinancialresourcesincludethefollowing:
• Pre-positioningatOperatingMLEs:Citipre-positionscapitalandliquidityresourcesinOperatingMLEs.Thesepre-positionedresourcesaredesignedsothateachOperatingMLEcouldmeetitsRLAPandRCENrequirements.Thispre-positioningshouldprovideconfidencetolocalregulatorsthattheresourceneedsofOperatingMLEsintheirjurisdictionwillbemetinResolution,reducingtheriskofring-fencing.
• ContributableResourcesHeldatCiticorp:CitialsoretainscontributableresourcesatCitigroupParentandCiticorptoassistOperatingMLEsinmeetinganyneedsthatcannotbeaddressedthroughresourcespre-positionedatOperatingMLEs.Thecentralpoolofnon-pre-positionedresourceseliminatestheneedforCititotransferresourcesbetweenOperatingMLEs,mitigatingtheimpactofpotentialring-fencing.
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• CleanFundingPathways:CitiestablishescleanlinesoffundingbetweenCiticorpandeachoftheOperatingMLEssothatCitiwouldbeabletodelivernecessaryresourcesfromCiticorptotheOperatingMLEsduringtheResolutiontimehorizon.ThesepathwaysdirectlylinkCiticorpwiththeOperatingMLEswithoutpassingthroughanyintermediateregulatoryorlegaljurisdictionssothatresourcescanbeprovidedwhenandwhereneededinResolution.
• LegalEntityStructureProtectingLocalRetailDepositors:Citi’slegalentitystructureisbasedonanextensiveuseofsubsidiariesforinternationalconsumerbusinessesconductedoutofMLEs.Thisfacilitatesglobalregulatorycooperationbyprovidingforeignregulatorswithasignificantlevelofcomfortastothetreatmentofthelocalretaildepositorbase.
• SPOEStrategy:TheSPOEStrategyfurtherincentivizescooperationbetweenregulatorsbyreducingglobaldisruptionassociatedwithmultiplecompetinginsolvenciesindifferentjurisdictions.BecausetheOperatingMLEsareprovidedwithcapitalandliquiditysupportasneededundertheCSAandwouldnotfailundertheSPOEStrategy,localResolutionactionsbyforeignregulatorswouldnotbewarrantedornecessarytofurthertheinterestsofanyforeignjurisdiction.
• ContinuityofOperations:AsdiscussedinSectionC.4.OperationalResilienceandContinuitybelow,CitidevelopscapabilitiessothatitmaintainscontinuityofsharedservicesthroughouttheResolutiontimehorizon,therebyprovidingassurancetoforeignregulatorsthatCitiwillbeabletocontinuetheoperationsofitsCOs,CBLs,andMLEs.
C.4.OperationalResilienceandContinuity
Citihasdevelopedcapabilitiessothatitmaintainscontinuityofinternalsharedservices,third-partyvendorservices,realestateaccess,andFMIaccessthroughouttheResolutiontimehorizon.ThesecapabilitiesminimizepotentialdisruptiontoCBLs,COs,MLEs,andObjectsofSale.
C.4.a.ContinuityofInternalSharedServices
CitihasestablishedmechanismsinordertomaintaincontinuityofsharedservicessupportingCOsandCBLsinMLEsthroughouttheResolutiontimehorizon,bothinadvanceofandfollowinganydivestitureofitsObjectsofSale.
Specifically,Citicontinuestoleveragethefollowingsharedservices,Resolution-relatedcapabilities:
• DetailedServiceMapping:CiticonductsperiodicdetailedservicemappingtoidentifyallservicesrequiredbyeachOperatingMLEandeachObjectofSaleinResolution,alongwiththeassociatedserviceproviders.ThemappinglinksthespecificservicesrequiredbytheMLEstotheentitiesprovidingthoseservice.TheinformationismaintainedcentrallyinCiti’sproprietarymanagementinformationsystem(MIS)forResolutionplanning.ThissystemprovidesCititheabilitytodevelopdetailedreportingofservicesprovidedandreceivedbyCOs,CBLs,MLEsandObjectsofSale.
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• AlignmentofSharedServices:CitihasstructureditssharedservicesdeliverymodelsothatthevastmajorityofitsResolution-criticalsharedservicecapabilitiesarelocatedinMLEsorCBNA.ThisstructuringallowsCiti‘sCOs,CBLs,MLEs,andObjectsofSaletoreceivethesharedservicestheyrequirethroughouttheResolutiontimehorizon.
• RobustInteraffiliateServiceAgreements:ThegeneraltermsandconditionsofCiti’sinteraffiliateserviceagreementscontainclausesprovidingthat(i)aninteraffiliateserviceagreementcannotbeterminatedduetoCitigroupParent’sbankruptcy,(ii)servicesprovidedunderaninteraffiliateserviceagreementmustcontinuetobeprovidedaslongaspaymentisreceived,and(iii)aninteraffiliateserviceagreementmaybeassignedtoadifferentCitientity.TheseResolution-favorabletermsareincorporatedintoallofCiti’sexistinginteraffiliateserviceagreementsandarerequiredtobeincorporatedintoallnewinteraffiliateserviceagreements.
• SignificantWorkingCapitalReserves:CiticonservativelyholdsatleastsixmonthsofworkingcapitalateachoftheServiceMLEssothattheyareabletocontinueprovidingservicesasneeded,evenintheabsenceofpaymentsfromtheentitiesreceivingthoseservices.
• IdentificationofEmployeesforWind-DownActivities:Citihasidentifiedtheemployeesthatarecriticaltoexecutinganorderlywind-downofitstradingbusinessesthatarenotdivestedasObjectsofSaleandhasdevelopedanemployeeretentionframeworksothattheyremainintheirrolesduringResolution.
C.4.b.ContinuityofThird-PartyVendorServices
CitihascatalogeditsvendorcontractssupportingCOsandCBLsandhasassessedeachserviceprovidedunderthosecontractssothatmechanismsexisttoprotecttheircontinuationthroughouttheResolutiontimehorizon.
• AlignmentwithMLEs:CitihasassesseditscriticalvendorcontractstoensurethatthesecontractscouldbeassignedtoanMLEviaanassignabilityclauseduringtheResolutiontimehorizon.AsofJuly1,2021,over99%ofCiti’sessential,non-substitutablecontractswithcriticalvendorcontractsareassignabletoanMLEduringresolution.
• Resolution-FavorableTermsinVendorContracts:CitinegotiatesResolution-favorabletermsintothevastmajorityofitscriticalvendorcontracts.TheseResolution-favorabletermsinclude(i)therightofCititoassignthecontracttoanotherCitientity,(ii)noterminationforconveniencebythevendorwithlessthan180days’notice,and(iii)noterminationbythevendorduetothebankruptcyofCitigroupParent.
• PrefundingServiceforRemainingVendorContracts:ForthesmallnumberofCiti’sthird-partyvendorcontractsthatdonotcontainallthreeoftheResolution-favorabletermsdiscussedabove,Citihasincrementalliquiditysufficienttocoversixmonthsofpre-paymentsforthosevendorsatMLEsandhasestablishedtriggerstoprepaythosevendorsuponentryintotheRunwayPeriod.Byprepayingthesevendorsinadvanceofthepointofnon-viabilityforservicesyettobeprovided,CitianticipatesmaintainingcontinuedaccesstothoseservicesinResolution.
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C.4.c.ContinuedAccesstoRealEstate
CitihasestablishedthefollowingResolution-favorablemeasuresinBAUforitsrealestatetomaintaincontinuedaccessthroughouttheResolutiontimehorizon:
• AlignmentwithMLEs:CitihasalignedownershiporleasesofnearlyallofitsResolution-criticalbranchesandofficebuildingstoMLEsandCBNA,whichwouldcontinuetofinanciallysupportthesebuildingsandbranches,includingthroughthepaymentofrentonthosefacilities.
• InclusionofResolution-FavorableLeaseTerms:CitinegotiatesleasestoincludeResolution-favorableterms,including(i)therightofCititoassigntheleasetoanotherCitientity,(ii)noterminationforconveniencebythelandlordwithlessthan180days’notice,and(iii)noterminationbythelandlordduetothebankruptcyofCitigroupParent.
• PrefundingofLeasePaymentsWhereRequired:ForthosebuildingsthatCitihasbeenunabletonegotiateallthreeResolution-favorableterms,Citihassixmonthsofrentpaymentsforthoseleases.ThisrentprepaymentwouldoccuratthebeginningoftheRunwayPeriodsothatCitiwouldmaintainaccesstothosefacilitiesthroughouttheResolutiontimehorizon.
C.4.d.ContinuityofFinancialMarketInfrastructure(FMI)Access
CitihasestablishedcapabilitiesthataredesignedtoallowittomaintaincontinuedaccesstocriticalFMIsthroughouttheResolutiontimehorizon.Specifically:
• InventoryofCriticalFMIs:CitiidentifiedtheFMIsthatarecriticaltosupportingCOsandCBLsinResolution.Citi’sanalysisisbasedonagranularanalysisofthevolumeandvalueoftransactionsexecutedthroughthoseFMIssothatCitimaintainsaccesstoallofitsmostimportantFMIrelationshipsacrosseachofthemajorproductcategoriesinwhichitoperates.
• MembershipsinOperatingMLEs:Citi’smembershipswitheachofthekeyFMIsareprimarilyhelddirectlybyOperatingMLEsusingtheseservices.BasedonCiti’svolumeandvalueanalysisofitsmostimportantFMIs,asubstantialmajorityofCiti’stransactionactivitywithineachmajorproductclassoccurswithFMIswhosemembershipsareheldbyanOperatingMLE.Additionally,CitihaslimiteditsuseofagentbanksandhasdirectaccesstoitsmostimportantFMIssothattheserelationshipswouldbedirectlymaintainedinaResolutionscenario.
• Clear,ActionableMitigants:Citihasidentifiedspecific,actionablemitigantstoeachofthepotentialadverseactionsthatcouldbetakenbycriticalFMIs.Thesemitigantsincludepre-positioningadditionalreservestomeetincreasedprefundingorintradayliquidityrequirements,andincreasedreportingtotheFMI,amongotheractions.ThesepotentialadverseactionsandtheirassociatedmitigantsaresetforthinCiti’sFMIplaybooks.
• SignificantAvailableLiquidityResources:CitimaintainsliquidityresourceswithinOperatingMLEstomeetincreasedmargincallsorpaymentrequirementswithkeyFMIs.Theseresourcesaremaintainedonabusiness-as-usualbasis.
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C.5.RobustSeparabilityandWind-DownPlan
Citihasdevelopedasetofcredibleoptionsforthedivestitureofitsbankingoperationsandthesolventwind-downofitstradingbusinesses,andhastakenstepssothatthesebusinessesarefinancially,operationally,andlegallyseparable.
C.5.a.CredibleObjectsofSale
CitiutilizedthecapabilitiesithasdevelopedthroughitsextensiveM&Aexperienceandhistoryofsuccessfultransactionexecutiontodevelopitsdivestiturestrategyandtoputinplacetheinfrastructuretosupporttheimplementation,ifnecessary,ofitsResolutionPlan,inamannerthatcanbeadaptedtodifferentcircumstances.Citi’spreferredstrategyforthedivestitureofitsoperationsisbasedonthedispositionofnumerousObjectsofSalethathavebeendesignedtobeviable,attractivebusinesses.Citi’sapproachtoconfiguringtheObjectsofSaleaccountsforbusinessmodel,potentialacquirers,separability,andotherconsiderationssothatthedivestiturescouldbecompletedinanorderlymanner.TosupportfinancialseparabilityforeachObjectofSale,Citiestablishedthefollowingcapabilities:
• ViableConfigurationofBusinessesinObjectsofSale:CitidevelopedtheObjectsofSalebasedonabusinesssegmentationframeworkthattakesintoaccountoperational,financial,andlegalconsiderations.Specifically,CitidesigneditsObjectsofSaletominimizepotentialdisruptiontoitsoperations,mitigatepotentialforlegalorregulatoryimpediments,andattractsignificantinterestfrommultiplepotentialacquirersand/orpublicinvestors.
• AppropriateTransactionStructuringandSequencing:ForeachObjectofSale,CitievaluatedbothprivatesaleandIPOoptions,andtailoredtheplannedapproach,transactionstructure,andsequencingfortheObjectofSalebasedonthatassessment.CitianalyzedthecapitalandliquidityimpactofeachdivestiturethroughouttheResolutiontimelineandusedconservativevaluationmultiples.
• MeaningfulOptionalityAcrossaRangeofPotentialScenarios:CitihasincorporatedmeaningfuloptionalityintheObjectsofSaledivestiturestrategysothatitcouldbecompletedinarangeofpotentialscenarios.
C.5.b.FinancialSeparability
CitihasconductedananalysisofeachObjectofSale’sfinancialseparabilityinResolution,determinedthebalancesheetstructuringrequiredtofacilitatetheexecutionofeachdivestiture,andestablishedthecapabilitytoproducefinancialstatements(historicalandforecastedbalancesheetsandprofitandlossstatements)foreachObjectofSale.
Specifically,Citiestablishedthefollowingfinancialseparabilitycapabilities:
• AssetandLiabilityProfiles:CitihasconstructedtheassetandliabilityprofileofeachObjectofSalethroughanassessmentoftheloans,deposits,securities,derivativepositions,intangibleassets,andphysicalassetsthatwouldbedisposedalongwitheachObjectofSale.CitihasbuiltthetechnologyandprocesscapabilitiestomodifytheseprofilesandhasestablishedtriggerstoupdatetheseprofilesonceCitihasenteredtheRecoveryPeriod.
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• HistoricalCarve-OutFinancialStatements:Citihasdevelopedandmaintainsmultipleyearsofcarve-outhistoricalfinancials(includingprofitandlossstatementsandbalancesheets)foreachObjectofSaleandhasestablishedthetechnologyrequiredtodynamicallyredefinethosefinancialsbasedonpotentialchangesinitsObjectsofSaleduringanactualResolutionevent.
• ForecastedCarve-OutFinancialStatements:CitihasalsodevelopedandmaintainstheinfrastructureandprocessestodevelopfinancialforecastsforeachObjectofSalethatwouldbeavailabletopotentialacquirersinaResolutionscenario.Theseforecastsalignwiththehistoricalcarve-outfinancialstatements.BecausetheseObjectsofSaleforecastsleverageCiti’sbusiness-as-usualprocesses,CitiwouldbeabletoupdatetheprojectionsasandwhenrequiredduringaResolutionevent.
C.5.c.OperationalSeparability
CitihasdevelopedandimplementedasetofcapabilitiessothateachObjectofSalewouldcontinuetoreceiveallrequiredservicesintheperiodsleadinguptoandfollowingitsdivestiture.TosupporttheoperationalcontinuityandseparabilityofeachObjectofSaleduringitsdivestiture,Citihasestablishedthefollowingkeycapabilities:
• IdentificationofRequiredServices,People,Assets,andInfrastructure:CitihasidentifiedthededicatedandsharedservicesthatwouldberequiredbyeachMLEandObjectofSaleinResolution,includingthepeople,realestate,datacenters,applications,andvendorsneededforeachObjectofSale.TheseelementsaremappedtoeachOperatingMLEandObjectofSaleandtothelegalentityprovidingtheservicesorowningtherelevantassets.
• VirtualDataRooms:Citimaintainspre-populatedvirtualdataroomsforeachObjectofSalesothatfinancial,legal,andoperationalinformationisavailabletoexternalpartiestofacilitatethedivestitures.ThevirtualdataroomswouldberefresheduponCiti’sentryintotheRecoveryPeriod.ThesevirtualdataroomscanbeadaptedtoalternateconfigurationsoftheObjectsofSale,asneeded.
C.5.d.LegalSeparability
CitihasconductedlegalriskassessmentsforeachObjectofSaletoidentifypotentiallegalandregulatoryrisksthatcouldariseinitsdivestitureofeachObjectofSaleanddevelopedasetofmitigantstoaddresseachoftheserisks.CitiassessedanumberoflegalandregulatoryriskareasforeachObjectofSale,includingregulatoryapprovals,keyvendorandpartnercontracts,andcustomerconsentsandnotices.Citibelievesthatithasidentifiedmitigantstoallissuesidentifiedthroughthisanalysis,andthat,asaresult,theObjectsofSalecouldbedivestedinanorderlymanner.
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C.5.e.AbilitytoSolventlyWind-DownDerivativesandTradingActivities
Citihasdevelopedstrategiesandcapabilitiesfortheorderlyandsolventwind-downofbusinessesnotpartoftheObjectsofSale,whichincludebrokerdealerentitiesaswellascertainderivativesandtradingactivitieswithinCBNA.Citi’scapabilitiestoconductawind-downinanorderlymannerincludethefollowing:
• PreferredWind-DownStrategy:Citihasdevelopedderivativeswind-downstrategies,includingapreferredstrategyunderwhichtheOperatingMLEsholdingthederivativespositionsremainsolventovertheResolutiontimehorizon.Citiestimatesthatithassufficientfinancialresourcesandoperationalcapabilitiestoexecuteitspreferredstrategyinanorderlymannerandhasthemiddleandbackofficecapacitytotransferitsclientprimebrokerageassets.
• InteraffiliateRiskManagementInfrastructure:Citihastheriskmanagementdata,infrastructure,andprocessestomeasure,monitor,andmanageitslegalentity-levelandinteraffiliateriskexposuresrelatedtoderivativestransactionswiththirdpartiesandaffiliates.
• DerivativesBookingModel:CitihasestablishedaderivativesbookingmodelthatfacilitatesresolvabilitybyensuringthatrisksareaggregatedintolegalentitieswheretheycanbebestmanagedandthatCitidoesnotoriginatetransactionsthatimpederesolvabilityinbusiness-as-usualconditions.
C.6.SignificantFlexibilityandOptionality
Citihasidentifiedthekeysourcesofuncertaintyrelatedtothe2021ResolutionPlanandhasdevelopedasetofmitigantsforthesesourcesofuncertainty.
C.6.a.MitigantsforScenarioRisk
CitirecognizesthatmacroeconomicandmarketconditionsinResolutionwilllikelydifferfromthosecontemplatedinthe2021ResolutionPlanandhasdesigneditsResolutioncapabilitiestoexplicitlyaccountforsuchscenarioriskthroughthefollowingmechanisms:
• CapitalandLiquidityBuffers:CitihasincorporatedadditionalbuffersintoitsestimatesofrequiredcapitalandliquidityresourcestoaccountforuncertaintyinthemagnitudeofrequiredresourceneedsinResolution.
• BalancingFramework:Citiusesabalancingframeworkthatpre-positionsresourceswithintheOperatingMLEswhilesimultaneouslyretainingcontributableresourcesatCitigroupParentandCiticorp.ThisframeworkisdesignedtoprovideflexibilityandenableCititoeffectivelyrespondtouncertaintyinthelocationofcapitalandliquidityresourceneedsacrossarangeofResolutionscenarios.
• ObjectofSaleOptionality:CitihastheabilitytoreconfigureitsObjectsofSale,includingthebusinessestobesoldandtransactionstructuretoaccountforarangeofdiversemarketconditionsandpotentialbuyerinterestinitsbusinesses,enablingCititoexecuteitsObjectsofSaleDivestitureStrategyacrossarangeofpotentialResolutionscenarios.
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• RobustDerivativeWind-DownPathway:Citihasdevelopedarobustderivativeswind-downpathwayandestimatesithassufficientfinancialresourcesandtheoperationalcapabilitiestoexecuteit.
C.6.b.MitigantsforTimingRisk
The2021ResolutionPlanalsoaccountsforuncertaintyintimingandsequencingofkeyResolutionactionstakenbyCitiandbythirdpartiesinResolution.
Citiaccountsforthistimingandsequencingriskthroughthefollowingmitigants:
• DivestitureSequencing:CitirecognizesthatmarketconditionsandbuyerappetitecouldhaveameaningfulimpactonitsabilitytodivestitsObjectsofSaleintheorderenvisionedinthe2021ResolutionPlan.Toaccountforthisuncertainty,Citihastheabilitytodelayorreorderitsdivestitures,asappropriate.
• TimingBuffers:CitihasalsoincorporatedtimingbuffersintoitsSingleIntegratedTriggerFramework,includingthemetricsusedtoinformCiti'sentryintoRunwayandRecapitalization,inordertosuccessfullyexecutetheSPOEStrategy.
C.6.c.MitigantsforInteraffiliateRing-FencingRisk
TheSPOEStrategyandCiti’sunderlyingcapabilitiesaccountforthepossibilitythatcertainentitiesmaybering-fencedbylocalregulators.
Tolimittheimpactofsuchring-fencingriskontheexecutionoftheSPOEStrategy,Citihasimplementedaseriesofmitigantstospecificallyaddressthisrisk,including:
• Pre-positioningResources:Citihaspre-positionedcapitalandliquidityresourceswithineachofitsOperatingMLEsinanamountinexcessoftheircalculatedRLAPandRCENrequirements.Suchpre-positioningofresourcesmitigatestheriskthatlocalregulatorswouldring-fencelocalassets.The2021ResolutionPlandoesnotrelyonanyresourcetransfersbetweenOperatingMLEs.
• ContributableResourcesatCitigroupParentandCiticorp:CitibelievesitalsomaintainssufficientcontributableresourcesatCitigroupParentandCiticorptomeetcapitalorliquidityneedsattheOperatingMLEsthatcannotbemetthroughresourcespre-positionedatthoseentitiesduringtheResolutiontimehorizon.
• CleanFundingPathways:CitihasestablishedcleanfundingpathwaysfromCiticorptoeachOperatingMLEsothatCitiwouldbeabletodeliverresourcesfromCiticorptotheOperatingMLEsasneededduringtheResolutiontimehorizon.ThesepathwaysdirectlylinkCiticorpwiththeOperatingMLEswithoutpassingthroughanyintermediateregulatoryorlegaljurisdictionssothatresourcescanbeprovidedwhenandwhereneededinResolution.
C.6.d.MitigantsforCounterpartyandVendorBehaviorRisk
CitiassumesthatinanactualResolutionscenario,counterpartiesandvendorswouldacttoprotecttheirinterestsinthemostproactivepossiblemanner,andCitihasdesigneditsResolutioncapabilitiestoaccountforsuchcounterpartyandvendorbehavior.
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ThecapabilitiesCitihasimplementedtoaddressthissourceofriskinclude:
• ResourcestoAddressDerivativeCounterpartyTerminations:CitiassumesthatderivativecounterpartieswouldexerciseallavailablerightstoprotecttheirinterestsinaCitiResolutionscenario,includingterminatingcontractsandrequiringCititopostadditionalcollateralduetoaratingsdowngrade.Citi’scapitalandliquiditymodelingaccountsfortheseresourceneeds.
• PrefundingofFMIs:CitiassumesthatFMIsmayrequiremorefrequentpaymentsorprefundingofthosepaymentsforCititomaintaincontinuedaccess.CitihastheabilitytoincreasethefrequencyofFMIintradaypaymentsandprefundingrelatedtosettlementbanks.DuringtheRunwayPeriodandafterthepointofnon-viability,CiticouldalsoprefundprojectedintradayobligationswithFMIsatthestartofeachdayasrequiredforoperationalcontinuity.
• Resolution-FavorableInteraffiliateServiceAgreementsandVendorContracts:CitihasrevisedallofitsinteraffiliateserviceagreementsandalmostallcriticalvendorcontractstoincorporateResolution-favorabletermsinordertocontinuetomaintainbothinternalandexternalservicesinResolution.
• PrefundingVendorandLandlordRelationships:Citiassumesthatthird-partyvendorsandlandlordswhosecontractsdonotprovideforcontinuityinResolution,couldceasetoprovideservicestoCitiinaResolutionscenario.Toaddressthisrisk,CitihassixmonthsofpaymentsfortheserelationshipsandwouldprepaythoseamountsatthebeginningoftheRunwayPeriod.
• AdoptionofInternationalSwapsandDerivativesAssociation(ISDA)Protocols:CitihasadheredtotheISDA2015UniversalResolutionStayProtocolandtheISDA2018U.S.ResolutionStayProtocol(together,theISDAProtocols),whichlimittheearlyterminationofqualifiedfinancialcontracts(QFCs)ofU.S.globallysystemicallyimportantbanks(G-SIBs)andtheU.S.operationsofnon-U.S.G-SIBs.Citi’sadherencetotheISDAProtocolsmitigatestheriskofcounterpartiesunilaterallyterminatingcontractsinResolution.
C.7.IntegrationintoBusiness-As-UsualGovernance,Processes,andInfrastructure
Citihasenhanceditsbusiness-as-usualgovernance,practices,infrastructure,policies,andprocedurestofurtherembedResolutionpreparednessinitsactivitiesonacontinualbasis,helpingCititomaintainandcontinuouslystrengthenitsResolutionpreparedness.
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C.7.a.Business-As-UsualGovernanceCapabilities
Citihasensuredsustainablebusiness-as-usualgovernancecapabilitiespromoteitsresolvability.Thesegovernancecapabilitiesinclude:
• LegalEntityOversight:Citimaintainsitssimplifiedandstreamlinedbusiness-as-usuallegalentitystructurebyrequiringthatanychangesareshapedbyResolutionconsiderations.Citi’slegalentityrationalizationprinciplesaredesignedtopromoteitsresolvabilityundertheSPOEStrategyunderdifferentmarketconditions.Inparticular,thegoalsofCiti’slegalentityrationalizationprinciplesaretofacilitaterecapitalizationandliquiditysupport,enableseparability,supportoperationalcontinuity,protectcustomers'deposits,anddemonstratesimplicityandefficiency.
• Business-As-UsualInteraffiliateRiskGovernance:Citimaintainsbusiness-as-usualinteraffiliateriskmanagementinfrastructureandgovernancetomeasureandlimitcredit,market,andliquidityrisksbetweenCitientities.
• Business-As-UsualDerivativesBookingModelLimitingRisk:Citi’sbusiness-as-usualderivativesriskmanagementandbookingpracticesincorporateResolutionconsiderations.
• Business-As-UsualCollateralManagement:Citi’sbusiness-as-usualcollateralmanagementpolicyisdesignedsothatinteraffiliatecollateralismanagedonanarm’s-lengthbasisandprohibitscross-entityandcross-contractnettingthatimpedesresolvability.
C.7.b.Business-As-UsualCapitalandLiquidityCapabilities
Citi'sResolutioncapitalandliquidityneedsareincorporatedintoitsbusiness-as-usualmonitoringandcontinuestoensurethatsuchcapitalandliquidityneedsareunderstoodandmetatalltimes,includingthrough:
• ResolutionMetricsMonitoredinBusiness-As-UsualConditions:Citi'sbusiness-as-usualcapitalandliquidityframeworkincorporatesthemonitoringofResolution-specificmetricsintoitscapitalandliquiditypolicies.CiticalculatesOperatingMLE-levelRCAP,RCEN,andRLAPonadailybasisandRLENonatleastaquarterlybasisinbusiness-as-usualconditions.(CitihastheabilitytocalculateRLENdailyinBAUifnecessary).CiticalculatesOperatingMLE-levelRLENonadailybasisinStress.
• PrefundedIHCasBusiness-As-UsualFundingHub:CitimaintainsCiticorpasitsIHCandtheprimaryfundingvehicleforallOperatingMLEsinbusiness-as-usualconditions.
• SufficientResourcesandPre-positioninginBusiness-As-UsualConditions:ResourcespositionedattheOperatingMLEsandCiticorparedesignedtobesufficienttomeettheOperatingMLEs’Resolutionneeds.
• Business-As-UsualCapitalandLiquidityPolicies:CitimaintainskeyResolutioncapitalandliquidityrequirementswithinitsbusiness-as-usualpoliciesandprocesses,includingOperatingMLE-specificpolicies.Theserequirementsincludethemeasurementofkeymetrics,aswellasthecorrespondingactionspromptedbythebreachofkeytriggers.
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C.7.c.Business-As-UsualOperationalCapabilities
Citi’sbusiness-as-usualstructureandcapabilitiesensurethatoperationalcapabilitiesaremaintainedandstrengthenedovertimetosupportresolvability.Thesecapabilitiesinclude:
• ContinuityofSharedServices:CitihasplacedthevastmajorityofitsResolution-criticalsharedservicesinMLEsorCBNAandhaspoliciesandproceduresinplacesothatanynewsharedserviceissimilarlylocatedtosupportresolvability.CitialsomaintainsaminimumofsixmonthsworkingcapitalinitsServiceMLEstoensurecontinuity.
• ContinuityofFMIRelationships:Citi’smembershipswithcriticalFMIsarehelddirectlybyOperatingMLEsusingtheseservices.CitihasalsosetasideresourcesspecificallytomeettheneedsofFMIsinResolution.
• CollateralTrackingandManagementTools:Citi’sbusiness-as-usualcollateralmanagementtools,continuetoprovideCitiwiththeabilitytomonitorandtrackcollateralacrossgeographiesandrapidlymove,value,andmargincollateralinResolution.Inparticular,Citihas(i)robustbusiness-as-usualcollateraltrackingandreportingcapabilitieswhichprovidetransparencybyCUSIP,counterparty,legalentity,andjurisdiction,(ii)collateralmanagementprocessesthatensuretimelypositionmanagement,includingvaluationofmargincallsandefficientuseofconstrainedresourcesthroughoptimization,and(iii)collateralmanagementpoliciesthatensureconsistenttreatmentofcollateralandappropriateriskmanagementinbusiness-as-usualconditionsandResolution.
• MIS:Citi’sbusiness-as-usualMIScapabilitiesaredesignedtoreadilyproducedataonalegalentitybasisandhavecontrolstoensuredataintegrityandreliability.CitibelievesithasthedataneededtoexecutetheSPOEStrategyatasufficientlevelofgranularity,frequency,andtimelinessandhastheinfrastructureinplacetoretrievekeydatarequiredforResolutioninatimelyfashion.CitialsomaintainsrobustgovernancesothatithastherightMISinfrastructure,reliabledata,andcontinuedaccesstoitsMIScapabilitiesduringResolution.FormoreinformationonCiti’sMIS,pleaserefertoSectionN.OverviewofMaterialManagementInformationSystems.
C.7.d.Business-As-UsualLegalCapabilities
Citihasstrengtheneditsbusiness-as-usuallegalcapabilitiestosupportresolvability.Thesecapabilitiesinclude:
• CitiSupportAgreementinBusiness-As-UsualConditions:CertainprovisionsoftheCSArelatingtotheprovisionofcapitalandliquiditytotheOperatingMLEsapplyinbusiness-as-usualconditions.
• IncorporationofResolution-FavorableTermsintoInteraffiliateandVendorServicesContracts:Citi’sstandardvendorcontractsandinteraffiliateserviceagreementsincludeResolution-favorableterms.TheseResolution-favorabletermsarerequiredtobeusedfornewvendorcontractsandinteraffiliateserviceagreements.
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D.ActionsTakentoAddressShortcomings
InDecember2019,CitireceivedfeedbackfromtheFRBandFDIConits2019Citigroup165(d)ResolutionPlansubmission.Thefeedbackidentifiedoneshortcomingrelatedtogovernancemechanisms.Morespecifically,theshortcomingrequiredCitito:
1. DemonstrateareliableandtimelyprocessthatprovidesanappropriatelevelofconfidencetoCiti'sdecision-makerstoactpursuanttotheCSA,includingensuringthecorrectbalancebetweentimelinessandaccuracynecessarytoexecutekeyactionscontemplatedbytheCSA.
2. DevelopprocessesandcapabilitiesforproducingandpresentingtheinformationnecessaryforimplementationoftheSPOEstrategy,includingtestingandvalidatingthisinformationwithkeydecision-makers.
InApril2020,CitiprovidedaresponselettertotheFRBandtheFDIC,whichoutlinedCiti'sapproachtoaddresstheshortcoming,aswellasothercommitmentstocontinuetodriveimprovementsinCiti'sresolutioncapabilities.Citihascompletedtheseplannedactions,whichCitibelieveshasstrengthenedtheeffectivenessandpreparednessofitsresolutioncapabilities.
Inparticular,the2021ResolutionPlandescribestheactionsCitihasimplementedtoaddresstheshortcomingfeedback.Throughexecutionoftheseactions,CitibelievesithasareliableandtimelyprocesstoexecutekeyactionscontemplatedbytheCSA,andhastestedandvalidatedtheinformationwithkeydecision-makers.
• Balancingtimelinesandaccuracy:Citidevelopeddesignprinciplesforassessingdatatimelinessandaccuracytrade-offstoensuretheappropriatebalancebetweenthetimelinessandaccuracyofsuchdatatoensurethatdecision-makershavetheappropriatelevelofconfidenceintheinformationtoexecutekeyactionscontemplatedbytheCSA.
• Reportingimprovements:CitimadeproceduralenhancementstoensurethesustainableproductionofthereportingcontemplatedbytheCSAinBAUandduringastressperiodforanextendedperiodoftime.
• Testingandvalidatinginformationwithkey-decisionmakers:CiticonductedmultipletestsandsimulationswithmanagementandtheBoardtoreviewtheirrolesandresponsibilitiesineachphaseofthestresscontinuum,includingthedecisionstheywouldbeexpectedtotake,aswellasillustratingtheinformationthatwouldbeavailabletothemtoenabledecision-makingandsuccessfulexecutionoftheSPOEstrategy.
InadditiontotheenhancementsdescribedabovethatservetostrengthentheeffectivenessandpreparednessofCiti'sresolutioncapabilities,Citicontinuouslyseeksopportunitiesforongoingimprovement.The2021ResolutionPlandescribestheseriesofenhancementsCitihasexecutedsinceitspriorresolutionplanandidentifiesareasforfutureimprovement.
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E.DescriptionofCoreBusinessLines
Citi’sactivitiesareconductedthroughtheGlobalConsumerBankingandInstitutionalClientsGroupbusinesssegments.Citi'sremainingoperationsareincludedinCorporate/Other,whichconsistsofcertainunallocatedcostsofglobalstafffunctionsnotassignedtoaspecificbusinesssegment,othercorporateexpensesandunallocatedglobaloperationsandtechnologyexpensesandincometaxes,aswellasCorporateTreasury,certainNorthAmericalegacyconsumerloanportfolios,otherlegacyassets,anddiscontinuedoperations.Asnotedbelow,Citi’sthreemainbusinesslinesconsistofBanking(partoftheInstitutionalClientsGroup),Markets&SecuritiesServices(partoftheInstitutionalClientsGroup),andGlobalConsumerBanking.
Forthepurposesofthe2021ResolutionPlan,Citiidentified17businesslines(seebelow)underthethreemainbusinesslinesasCBLsasofDecember31,2020.CBLsarebusinesslines—includingassociatedoperations,services,functions,andsupport—thatuponfailurewouldresultinamateriallossofrevenue,profitorfranchisevalueforCiti.InidentifyingitsCBLsforResolutionplanningpurposes,CitibeganwiththebusinessesthatarecoretoCiti’sstrategyandincorporatedquantitativeandqualitativecriteriasuchasthird-partyassets,revenues,netincome,andemployees.
E.1.BankingCBLs
Name Briefdescription
GlobalPayments TheGlobalPaymentsbusinessprovideskeypaymentexecutionservicestoclientsofCiti’sInstitutionalClientsGroup,including:(i)wirepayments;(ii)cross-currencypayments;(iii)ContinuousLinkedSettlement;(iv)AutomatedClearingHousepayments;and(v)instantpayments.
LiquidityManagementServices LiquidityManagementServicesprovidesliquiditymanagementservicesandshort-terminvestmentproductstoclientsofCiti’sInstitutionalClientsGroup.
DebtCapitalMarkets DebtCapitalMarketsoriginates,structures,andsyndicatesbondsandloansindebtcapitalmarkets.
CorporatePortfolioManagement
CorporatePortfolioManagementmaintainsabookofloansthatispartofCiti'sBanking,CapitalMarketsandAdvisory(BCMA)business.
PrivateBank CitiPrivateBankprovideslendingandinvestingservicesforultrahighnetworthandemerginghighnetworthindividualsandmegawealthfamilies.TheLawFirmGroupwithinCitiPrivateBankalsoprovidestheseservicestomajorlawfirmsandtheirattorneys.
U.S.CommercialBank U.S.CommercialBankprovidesglobalbankingcapabilitiesandservicestomidsized,trade-orientedcompaniesthroughouttheUnitedStates.
E.2.Markets&SecuritiesServicesCBLs
Name Briefdescription
GlobalSpreadProducts–Municipals
TheMunicipalsbusinesswithinGlobalSpreadProductsprovidesitsclient-basewithanarrayofservicesrangingfromdebtunderwriting,M&Aandadvisoryservicestomunicipalissuers,tofinancingtoaffordablehousingdeveloperstoliquidityinsecondarytradingofmunicipalsecuritiesandderivativestoitinstitutionalclients.
RatesandCurrencies RatesandCurrenciesiscomprisedofGlobalRates,GlobalFXandMarketsTreasury.Revenuesarederivedfromclientspreads,managementofresidualmarketexposureonclienttransactionsandassetliabilitymanagement.
Custody Custodyprovidesforthesafekeeping,settlement,andclearingofsecuritiesonbehalfofinstitutionalclients.
AsaresultofthereorganizationoftheMarketsfranchise,theGlobalForeignExchange/LocalMarketsandG10RatesCBLswereconsolidatedandreplacedwithanewRatesandCurrenciesCBL.
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E.3.GlobalConsumerBankingCBLs
Name Briefdescription
U.S.BrandedCards U.S.BrandedCardsoffersbothproprietaryandco-brandedcreditcardsthatareoriginatedthroughdirectmail,apply-by-phone,mobilephone,internet/onlineandtheU.S.RetailBankingbranchnetwork.
U.S.RetailServices U.S.RetailServicespartnerswithmajornationalretailers,oilcompanies,andspecialtyretailersanddealerstoprovideretailcreditcardproductstotheircustomers.
U.S.RetailBank U.S.RetailBankprovidestraditionalbankingservicestoretailcustomersandsmallbusinessesintheU.S.throughanetworkofretailbankbranchesandbranchAutomatedTellerMachines.TheretailbankbranchesarelargelyconcentratedinthegreatermetropolitanareasofNewYork,LosAngeles,SanFrancisco,Chicago,Miami,andWashingtonD.C.
U.S.ConsumerMortgages U.S.ConsumerMortgagesisanationwidelenderofresidentialhomemortgages.ThisbusinessincludesmortgageassetsthatresideinboththeCiticorpandCitiHoldingsportfolios.
MexicoGCB TheinternationalGlobalConsumerBanking(GCB)businessinMexicoprovidestraditionalbankingservicestoretailcustomersandsmalltomid-sizebusinesses,alongwithcreditcardandmortgageproducts.
HongKongGCB TheinternationalGCBbusinessinHongKongprovidestraditionalbankingservicestoretailcustomersandsmalltomid-sizebusinesses,alongwithcreditcardandmortgageproducts.
SingaporeGCB TheinternationalGCBbusinessinSingaporeprovidestraditionalbankingservicestoretailcustomersandsmalltomid-sizebusinesses,alongwithcreditcardandmortgageproducts.
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F.BackgroundInformationonMaterialLegalEntities
Citi’slegalentitystructureconsistsof:
• ParentcompanyandIHC(CitigroupParentandCiticorp,respectively);
• BankingactivitiesconductedbyCBNA,includingitsbranchesandsubsidiaries,andCitibanamex;
• CapitalmarketsandbankingactivitiesconductedbyCiti’sseparatelycapitalizedbrokerdealers;and
• Operations&Technologyactivitiesconductedbyselectsubsidiaries.
Forthepurposesofthe2021ResolutionPlan,CitihasidentifiedtheentitiesandbranchesbelowasMLEs,whichareentities—includingasubsidiaryorforeignoffice—thataresignificanttotheactivitiesofaCBLorCO.CitiiscontinuallyreviewingitsMLEstructureandperformsanannualMLEdesignationanalysistoidentify,reviewandapproveitsMLEs.
CiticonservativelymodeledhowitsMLEswouldevolveaftertheirtransfertoNewCitigroup,identifiedthedetailedstepsthatneedtotakeplacetoenableanorderlyresolution,understandstheimplicationsofthosesteps,anddevelopedaplanforhowCiti’sbusinessescouldbesoldorwounddowninResolution.
ParentCompanyandIHC
Name Jurisdictionoforganization
CitigroupInc.(CitigroupParent) U.S.
CiticorpLLC(Citicorp) U.S.
BankingEntitiesandBranches
PrimaryInsuredDepositoryInstitution
Citibank,N.A.HomeOffice(CBNAHomeOffice) U.S.
SubsidiariesofCBNA
CitibankEuropeplc(CEP) Ireland
CitibankSingaporeLtd.(CSL) Singapore
Citibank(HongKong)Ltd.(CHKL) HongKong
BranchesofCBNA
Citibank,N.A.UnitedKingdom(CBNAUK) UK
Citibank,N.A.Japan(CBNAJapan) Japan
Citibank,N.A.HongKong(CBNAHongKong) HongKong
Citibank,N.A.Singapore(CBNASingapore) Singapore
AdditionalBankSubsidiaryofCitigroupParent
BancoNacionaldeMexico,S.A.(Citibanamex) Mexico
Name Jurisdictionoforganization
OfthesevenCBNAbranchesdesignatedasMLEs,three—CBNAIreland,CBNAGermany,andCBNAROHQ—havebeendesignatedasServiceMLEsbecauseoftheinteraffiliateservicestheyprovide,ratherthananybankingoperationsconducted.CBNAIrelandandCBNAROHQconductnobankingactivities.
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BrokerDealerEntities
Name Jurisdictionoforganization
CitigroupGlobalMarketsInc.(CGMI) U.S.
CitigroupGlobalMarketsLtd.(CGML) UK
CitigroupGlobalMarketsJapanInc.(CGMJ) Japan
CitigroupGlobalMarketsHoldingInc.(CGMHI) U.S.
Collectively,thebankingentitiesandbranchesandthebrokerdealerentitiesarereferredtoasCiti’sOperatingMLEs.
ServiceMLEs
SubsidiariesofCitigroupParent
CitigroupServicesJapanG.K(CSJ) Japan
Non-BankSubsidiariesofCBNA
CitigroupTechnologyInc.(CTI) U.S.
CitiMortgage,Inc.(CMI) U.S.
CitigroupTechnologyInfrastructure(HongKong)Limited(CTI(HK)Ltd) HongKong
CiticorpCreditServices,Inc.(USA)(CCSIUSA) U.S.
CitishareCorp.(Citishare) U.S.
CitiBusinessServicesCostaRica(CBSCostaRica) CostaRica
CiticorpServicesIndiaPrivateLimited(CSIPL) India
R.B.BishopsgateInvestmentsLimited(RBBIL) UK
BranchesofCBNA
Citibank,N.A.Ireland(CBNAIreland) Ireland
Citibank,N.A.ROHQ(CBNAROHQ) Philippines
Citibank,N.A.Germany(CBNAGermany) Germany
Name Jurisdictionoforganization
Citi'sMLEs(discussedbelow)areorganizedbycategory:ParentandIHC,bankingentitiesandbranches,brokerdealerentities,andServiceMLEs.ForeachMLE,backgroundinformationisprovidedregardingfinancials,operations,capitalandfundingresources,jurisdictionallocationandinteraffiliateinterconnections,aswellashowtheMLEwouldberesolvedundertheSPOEStrategy.
AssetsandliabilitiesreportedforeachMLEbelowareprimarilydisplayedinroundedbillionsofdollarsandincludeinteraffiliateassetsandliabilities.
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F.1.ParentandIHC
F.1.a.CitigroupParent
Introduction
CitigroupParentisaregisteredbankholdingcompanyandafinancialholdingcompanyincorporatedinDelaware.Itsprincipalbusinessactivityisraisingfundsthroughthepublicissuanceofsecurities,includingdebtandpreferredstock,andthemanagementofitsoutstandingsecurities,includingperiodicrepurchases.CitigroupParentusesthefundingprovidedbyitssecuritiesissuancestomakeinvestmentsinitssubsidiaries,lendtoitssubsidiaries,andmaintainaportfolioofinvestmentsecuritiesforliquiditypurposes.
CitigroupParent’smostsignificantassetsareinvestmentsinsubsidiaries.CitigroupParent’smostsignificantliabilitiesarelong-termdebt,andithasceasedissuingdebtwithcontractualmaturitiesoflessthanoneyear.AsofDecember31,2020,CitigroupParenthadtotalassetsof$386billionandtotalliabilitiesof$186billion.
CitigroupParent’sprincipalrevenuesconsistofdividendsfromsubsidiaries.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CitigroupParentwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenuesandnetincome,andduetoitsroleinraisingfundsthroughthird-partydebtandequityissuances.
ResolutionStrategy
Atthepointofnon-viability,CitigroupParentwouldfileforbankruptcyprotectionunderChapter11oftheU.S.BankruptcyCode.WiththeapprovaloftheU.S.BankruptcyCourt,CitigroupParentwouldmoveallitssubsidiaries—includingCBNA,Citicorp,Citibanamex,brokerdealerentities,andServiceMLEs—toanewholdingcompanyownedbytheReorganizationTrust,NewCitigroup.Followingthesaleorwind-downofthebankingentitiesandbrokerdealerentities,theReorganizationTrustwouldbedissolvedandwoulddistributeanyremainingassets(afterthepaymentoffeesandexpensesowedbytheReorganizationTrust)tothebankruptcyestateofCitigroupParentfordistributiontoCitigroupParentstakeholdersunderitsplanofreorganization.
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FinancialInterconnections;CapitalandFunding
CitigroupParent’sprimarysourcesoffundingareitsstockholders’equityandlong-termborrowings.CitigroupParentisasourceofbothfundingandmanagerialstrengthandsupportforitsbankandnon-banksubsidiaries.Asdiscussedabove,CitigroupParenthasprefundedCiticorppursuanttotheCSA.Inbusiness-as-usualconditions,CiticorpistheprimaryunsecureddebtfundingvehiclefortheOperatingMLEsandprovidessufficientcapitalandliquiditytotheOperatingMLEsconsistentwithCiti’sexistingpoliciesandprocedures.UndertheCSA,CitigroupParentmustmakeadditionalcontributionstoCiticorpasitacquiresnewfundinginexcessofcertainlimits.CitigroupParentmakesprincipalandinterestpaymentsonoutstandingdebt,payscommonandpreferredstockdividends,andpaysoperatingexpenses,whichareprimarilyassociatedwithpaymentstosubsidiariesforadministrativeactivities.
CitigroupParentprovidesguaranteestocounterpartiesinconnectionwithtransactionsenteredintobycertainofitssubsidiaries,includingtheMLEs.TheseguaranteesincludeguaranteesthatsupportderivativecontractsenteredintobyCitisubsidiaries,principallyISDAmasteragreements.AbankruptcyofCitigroupParent,ascontemplatedbytheResolutionPlan,wouldresultinanunderlyingeventofdefaultunderapplicableISDAmasteragreements.Asdiscussedabove,theISDAProtocolswerespecificallydesignedtolimittheearlyterminationofQFCs,includingISDAmasteragreementsuponthecommencementofbankruptcyorinsolvencyproceedingsbyanaffiliate,includingCitigroupParent.ForinformationonthecleanholdingcompanyrequirementsapplicabletoCitiunderthefinalTLACrule,includingthoserelatedtoprohibitionsoncertaintypesofguarantees,see“LiquidityRisk-TotalLossAbsorbingCapacity”inCiti’s2020Form10-K.
OperationalInterconnections
Asaholdingcompany,CitigroupParentdoesnotengageinanysignificantoperatingbusinessactivities.Inbusiness-as-usualconditions,CitigroupParentreliesontheoperationalcapabilitiesofsubsidiaryMLEsandsharedservicesinsupportofitssecuritiesissuanceandmanagementactivities.ThevastmajorityofservicesusedbyCitigroupParentareprovidedbyCBNAandCTI.
BecauseCitigroupParent’sactivitieswouldceaseinResolution,continuationoftheseserviceswouldnotbenecessary.
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F.1.b.Citicorp
Introduction
CiticorpisabankholdingcompanyandDelawarelimitedliabilitycompany.CiticorpalsoservesasCiti’sIHC.Citicorphastwoprimaryfunctions:(i)toallowforflexibilityonwhatamountoffundsarepre-positionedattheMLEsversusCitigroupParentinbusiness-as-usualconditionsandResolution,and(ii)tobethecentralfundinghubtoOperatingMLEsthatwouldneedtooperateduringResolution.
Citicorp’smostsignificantassetsareitsinvestmentinsubsidiariesandtheliquidassetsandinteraffiliateloanscontributedfromCitigroupParentpursuanttotheCSA.ItsmostsignificantliabilitiesrelatetointeraffiliateloansaswellasfundingnotesissuedtoCitigroupParent.CiticorpalsoprovidesacommittedlineofcredittoCitigroupParent.AsofDecember31,2020,Citicorphadtotalassetsof$366billionandtotalliabilitiesof$196billion.
Citicorp’sprincipalrevenuesconsistofinterestrevenueandotherrevenuerelatedtoinvestmentsinsubsidiariesandthelineofcreditwithCitigroupParent.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CiticorpwasdesignatedanOperatingMLEbecauseofitsprominentroleasanIHCinfundingotherMLEs.
ResolutionStrategy
UndertheSPOEStrategy,CiticorpwouldbetransferredtotheReorganizationTrustwhereitwouldcontinuetoprovidecapitalandliquiditysupporttotheOperatingMLEsinaccordancewiththetermsoftheCSA.
FinancialInterconnections;CapitalandFunding
PursuanttotheCSA,CitigroupParenthasprefundedCiticorpbymakinganinitialcontributionofassets,includingliquidassetsandinteraffiliateloans,toCiticorp.CitigroupParentmustmakeadditionalcontributionstoCiticorpasitacquiresnewfundinginexcessofcertainlimits.Inbusiness-as-usualconditions,CiticorpistheprimaryfundingvehiclefortheOperatingMLEsandprovidescapitalandliquiditytotheOperatingMLEsconsistentwithCiti’sexistingpoliciesandprocedures.AtCiti’spointofnon-viability,theCSArequiresCiticorptorecapitalizetheOperatingMLEsandprovidethemwithongoingsupportthroughoutCiti’sresolution.
OperationalInterconnections
AsanIHC,Citicorpengagesinnooperatingbusinessactivities.
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FollowingtransfertotheReorganizationTrust,CiticorpwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.BankingEntitiesandBranches
F.2.a.CBNAHomeOffice
Introduction
CBNAHomeOfficeprimarilycomprisesallofCBNA’sU.S.branches(689branchesasofDecember31,2020),includingPuertoRico.Itsprincipalofferingsincludecreditcards,mortgagelending,retailbankingproductsandservices,commerciallending,cashmanagement,capitalmarkets,tradefinance,e-commerceproductsandservices,foreignexchange,G-10Rates,commodities,andprivatebankingproductsandservices.
CBNAHomeOffice’smostsignificantassetsincludealoanportfolioconsistingofconsumerloansoriginatedintheGlobalConsumerBankingbusinessandcorporateandinstitutionalloansoriginatedintheInstitutionalClientsGroup,securities,tradingaccountassets,investmentsinsubsidiariesanddepositswithbanks.ItsmostsignificantliabilitiesincludeastrongdepositbasecomprisingretaildepositsfromGlobalConsumerBankingandcorporateandinstitutionaldepositsfromtheInstitutionalClientsGroupaswellaslong-termdebtandtradingaccountliabilities.
AsofDecember31,2020,totalassetsofCBNAHomeOfficewere$1,244billion,primarilyconsistingofinvestments,loans,tradingaccountassets,cashandduefrombanks,depositswithbanks,resaleagreements,andotherassets.AsofDecember31,2020,totalliabilitiesofCBNAHomeOfficewere$1,085billion,primarilyconsistingofdeposits,long-termdebt,tradingaccountliabilities,repurchaseagreements,andotherliabilities.
CBNAHomeOffice’sprincipalrevenuesconsistofinterestrevenueandotherrevenuerelatedtoinvestmentsinsubsidiaries.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAHomeOfficewasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
AlthoughCBNAHomeOfficeisidentifiedasacarve-outofCBNAinthe2021ResolutionPlan,theSPOEStrategyappliestoCBNA,thelegalentity.UndertheSPOEStrategy,CBNAanditsbranchesandsubsidiarieswouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.
FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
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CBNAconductsactivitiesaspartoftheU.S.consumer,internationalconsumerandcorporatebankingbusinesses,aswellasotherInstitutionalClientsGroupbusinesslines.UndertheObjectsofSaleDivestitureStrategy,Citi’sU.S.consumeroperationswouldbeofferedtothepublicinanIPO,whileCiti’sinternationalconsumeroperationswouldbesoldinaseriesofprivatetransactions.Theglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransaction.Citi’sotherInstitutionalClientsGroupbusinessesoperatingthroughthebankingentitieswouldbesegmentedalongtheirproductofferingsandsoldinprivatetransactions.Citi’sObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
UndertheCSA,theOperatingMLEs,includingCBNA,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sresolutiontoexecutetheSPOEStrategy.
CBNA’sfundingneedsarepredominantlyfulfilledbynon-affiliatedthird-partysourceswithitscorporateandconsumerdepositfranchisesastheprimarysources.CBNA’smostsignificantformofaffiliatedfundingisitsstockholders’equity,whichisownedbyitsshareholder,Citicorp.Inaddition,CBNAhasrelated-partytransactionswithcertainaffiliates.Thesetransactionsincludecashaccounts,collateralizedfinancingtransactions,marginaccounts,derivativetrading,chargesforoperationalsupport,andtheborrowingandlendingoffunds,andareenteredintointheordinarycourseofbusiness.
WithinCBNA,themanagementofcashsurplusesdenominatedinmultiplecurrencies,acrossmultiplebranchesandsubsidiaries,resultsinasignificantnumberoftransactionsbetweenCBNAentities.Thesetransactionsaregenerallyplacementsanddepositsandarebookedacrossmultipleentitiesandjurisdictions.
OperationalInterconnections
CBNAHomeOfficereliesonanetworkofinternalservicestooperate,includingglobalfunctionservices,operationsandtechnologyfunctions,andprocessesandservicesprovidedbyCitiaffiliates.ProvidersofservicestoCBNAHomeOfficeincludeCTI,CGMI,andCCSI.UsersofservicesprovidedbyCBNAHomeOfficeincludeCGMIandCCSI.
FollowingtransfertotheReorganizationTrust,CBNAHomeOfficewouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNA.CitialsoprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.b.CEP
Introduction
CEPisasubsidiaryofCBNAandheadquarteredinIreland.ItoperatesunderabankinglicensefromtheCentralBankofIreland.CEPofferscashmanagementandtradefinanceproductsandalsoprovidesservicesforTreasuryandTradeSolutionsandSecuritiesServicesbusinessesofferedbyitselfandotherCitiaffiliates.CEPisalsosubjecttodirectEuropeanCentralBanksupervisionundertheSingleSupervisoryMechanismasasignificantinstitution.
AsofDecember31,2020,totalassetsofCEPwere$71billion,consistingprimarilyofdepositswithbanks,loans,resaleagreements,tradingaccountassets,investmentsecurities,andotherassets.AsofDecember31,2020,totalliabilitiesofCEPwere$60billion,consistingprimarilyofdeposits,tradingaccountliabilities,otherborrowings,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CEPwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingnetincome.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCEP,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CEPconductsactivitiesaspartoftheinternationalconsumerandglobalcorporatebankingbusinesses.UndertheObjectsofSaleDivestitureStrategy,Citi’sinternationalconsumeroperationswouldbesoldinaseriesofprivatetransactions,whileCiti’sglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransaction.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CEPisprimarilyfundedthroughacombinationofretailandcorporatedeposits,aswellascustomerliabilitiesrelatedtotheTreasuryandTradeSolutionsandSecuritiesServicesbusinesses.CEPisfurthersupportedbyinteraffiliateborrowingsandplacementspredominatelywithCBNAUK.CEPreliesonacombinationofcapitalprovidedbyitsdirectparentandretainedearningstomeetitsregulatorycapitalrequirements.
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UndertheCSA,theOperatingMLEs,includingCEP,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
CEPhasoperationalinterconnectionswithotherCitiaffiliates,bothasaproviderandasarecipientofservices.Thekeyinterconnectionsrelatetooperationalandtechnologyfunctions(includinginfrastructure),globalfunctions,applicationsandassociatedsupportservices,andrealestate,corporatefunctionsandbusinesssupportservices.ProvidersofservicestoCEPincludeCBNAUK,CBNAHomeOffice,andCGML.UsersofservicesprovidedbyCEPincludeCBNAUK,CGML,andCBNAHomeOffice.
FollowingtransfertotheReorganizationTrust,CEPwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.c.CSL
Introduction
CSLisasubsidiaryofCBNAandalicensedbankinSingaporeandconductsafullrangeofconsumerbankingactivities,includingcommercialbankingactivitiesforsmallandmedium-sizedenterprises.
AsofDecember31,2020,totalassetsofCSLwere$35billion,primarilyconsistingofloansandleases,depositswithbanks,interaffiliatelending,andinvestments.AsofDecember31,2020,totalliabilitiesofCSLwere$32billion,primarilyconsistingofdeposits.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CSLwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCSL,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CSLconductsactivitiesaspartofCiti’sinternationalconsumerbusiness.UndertheObjectsofSaleDivestitureStrategy,Citi’sinternationalconsumeroperationswouldbesoldinaseriesofprivatetransactions.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
ThetwomainsourcesoffundingforCSLarecapitalandcustomerdeposits.Capitalconsistsofcommonstock,retainedearningsandcapitalreserve.CSL’sprimaryfundingconnectioniswithCBNASingapore.
UndertheCSA,theOperatingMLEs,includingCSL,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sresolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
CSLisinterconnectedwithotherCitiaffiliatesfromanoperationalandtechnologyperspectiveandusestheservicesofCitiaffiliates.Inaddition,CSLprovidescertaintransactionprocessingservicestoCitiaffiliates.ProvidersofservicestoCSLincludeCBNASingapore,CTI,andCBNAHomeOffice.UsersofservicesprovidedbyCSLincludeCBNASingaporeandCBNAHomeOffice.
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FollowingtransfertotheReorganizationTrust,CSLwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.d.CHKL
Introduction
CHKLisasubsidiaryofCBNAandafullylicensedbankinHongKong.CHKLprovidesgeneralbankingandwealthmanagementproductsandsolutionstoretailclientsinHongKong,includingmortgage,portfoliofinance,deposits,andinvestmentproductssuchasmutualfunds,bonds,foreigncurrencyandstocktradingandinsuranceproducts.CHKLalsooffersabroadrangeofcreditcardproducts.
AsofDecember31,2020,totalassetsofCHKLwere$38billion,primarilyconsistingofloans,depositswithbanks,tradingaccountassets,andinvestments.AsofDecember31,2020,totalliabilitiesofCHKLwere$35billion,primarilyconsistingofdeposits.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CHKLwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCHKL,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CHKLconductsactivitiesaspartofCiti’sinternationalconsumerbusiness.UndertheObjectsofSaleDivestitureStrategy,Citi’sinternationalconsumeroperationswouldbesoldinaseriesofprivatetransactions.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CHKL’sfinancialinterconnectionsstemlargelyfrominteraffiliateplacementsanddeposit-takingactivities.CHKLholdsaccountsatCBNAHongKongforvariouspaymentandsettlementpurposes.
UndertheCSA,theOperatingMLEs,includingCHKL,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sresolutiontoexecutetheSPOEStrategy.
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OperationalInterconnections
CHKLisoperationallyinterconnectedwithCitiaffiliates,bothasservicerecipientandprovider.CHKLreceivesfunctionsandservicesfromCitiaffiliatesinsupportofitsbusinessactivities.CHKLalsoprovidesfunctionsandservicestosupportbusinessactivitiesofCitiaffiliates.ProvidersofservicestoCHKLincludeCBNASingapore,CBNAHongKongandCBNAHomeOffice.UsersofservicesprovidedbyCHKLincludeCBNAHongKongandCBNAHomeOffice.
FollowingtransfertotheReorganizationTrust,CHKLwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.e.CBNAUK
Introduction
CBNAUKisCiti’smainbankingvehicleintheUnitedKingdomandCBNA’slargestnon-U.S.branch.CBNAUKisoneofthemaincentersfortheInstitutionalClientsGroupbusinessinWesternEurope,withnumerousofferings,including:
• TreasuryandTradeSolutions,includingGlobalPayments,LiquidityManagementServices,ExportandAgencyFinance;
• Banking,CapitalMarketsandAdvisoryincludingCorporateLending,IssuerServicesandDebtCapitalMarkets;
• MarketsandSecuritiesServices,includingGlobalCustody,DirectCustodyandClearing,SecuritiesFinance,FundServices,G10Rates,G10MarketTreasury,ForeignExchangeandLocalMarketsandSpreadProducts;and
• CitiPrivateBank,offeringbankingandcashmanagement,lending,investmentstrategiesandtrustandwealthadvisoryforcustomersoriginatingintheUKandnon-EuropeanUnion(EU)countrieswithintheEurope,MiddleEast,andAfricaregion.
AsofDecember31,2020,totalassetsofCBNAUKwere$253billion,primarilyconsistingofdepositswithbanks,tradingaccountassets,loans,investments,resaleagreements,andotherassets.AsofDecember31,2020,totalliabilitiesofCBNAUKwere$253billion,primarilyconsistingofdeposits,tradingaccountliabilities,repurchaseagreements,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAUKwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCBNAUK,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
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CBNAUKconductsactivitiesaspartoftheglobalcorporateandconsumerbankingbusinessaswellasotherInstitutionalClientsGroupbusinesslines.UndertheObjectsofSaleDivestitureStrategy,Citi’sglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransaction.Citi’sotherInstitutionalClientsGroupbusinessesoperatingthroughthebankingentitieswouldbesegmentedalongtheirproductofferingsandsoldinprivatetransactions.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CBNAUKisprimarilyfundedthroughthird-partydepositsandlong-termandshort-termunsecuredinteraffiliateborrowings.FundsarepredominantlyusedbyCBNAUKforlending(externalaswellasinternal)andinvestmentactivities.TheprimaryentitiestowhichCBNAUKisconnectedincludeCBNA,CBNAHongKong,andCEP.Asignificantportionoftotalfundingisusedforconsumerandcorporatelendingandalsolendingtogroupcompanies.CBNAUKalsohasaninvestmentportfolio,whichisrepresentedbytradingandinvestmentsecurities.
UndertheCSA,theOperatingMLEs,includingCBNA,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
CBNAUKsharessupportservices,suchasinformationtechnology,backoffice,middleoffice,risk,finance,legal,compliance,andhumanresources,withCitiaffiliates.CBNAUKalsoprovidesservicestoCitiaffiliates,includingfinance,riskmanagement,enterpriseinfrastructureandoperations.ProvidersofservicestoCBNAUKincludeCGML,CEP,andCBNAHomeOffice.UsersofservicesprovidedbyCBNAUKincludeCBNAHomeOffice,CGML,andCEP.
FollowingtransfertotheReorganizationTrust,CBNAUKwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.f.CBNAJapan
Introduction
Citi'sbankingoperationsinJapanareconductedexclusivelythroughCBNAJapan.CBNAJapanisalicensedbankbranchengagedinprovidingbankingservicestogovernmentalinstitutions,financialinstitutions,multinationalcorporations,andinstitutionalinvestorsacrossarangeofcorporatebanking,lending,transactionservicesandmarketsbusinesses.
AsofDecember31,2020,totalassetsofCBNAJapanwere$30billion,primarilyconsistingofdepositswithbanks,loans,resaleagreements,andtradingaccountassets.AsofDecember31,2020,totalliabilitiesofCBNAJapanwere$29billion,primarilyconsistingofdepositsandtradingaccountliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAJapanwasdesignatedanOperatingMLEbecauseitmetcertainqualitativeassessmentcriteria.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCBNAJapan,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CBNAJapanconductsactivitiesaspartofCiti'sglobalcorporatebankingbusiness.UndertheObjectsofSaleDivestitureStrategy,Citi’sglobalcorporatebankingoperations,includingactivitiesconductedbyCBNAJapan,wouldbesoldasasingleunitthroughaprivatetransaction.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CBNAJapan'sfinancialinterconnectionsstemlargelyfromitsroleasthemainclearerofallJapaneseYen-relatedactivitywithinCiti.CBNAJapan'sprimaryfundingconnectionsarewithCBNA.
UndertheCSA,theOperatingMLEs,includingCBNA,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sresolutiontoexecutetheSPOEStrategy.
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OperationalInterconnections
CBNAJapanisoperationallyinterconnectedwithCitiaffiliates,bothasaservicerecipientandasaserviceprovider.CBNAJapanreceivesfunctionsandservicesfromCitiaffiliatesinsupportofitsbusinessactivities,includingwithrespecttorealestate,operations,andtechnology.CBNAJapanalsoprovidesfunctionsandservicestosupportbusinessactivitiesofCitiaffiliates.ProvidersofservicestoCBNAJapanincludeCSJ,CBNAHomeOffice,andCBNASingapore.UsersofservicesprovidedbyCBNAJapanincludeCBNAUKandCBNAHomeOffice.
FollowingtransfertotheReorganizationTrust,CBNAJapanwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.g.CBNAHongKong
Introduction
CBNAHongKongisCBNA’slicensedbranchinHongKong.CBNAHongKongprovidescorporatelendinganddeposittakingservices,securitiesandfundservices,cashmanagementandtradeservices,privatebankingactivities,andengagesinforeignexchangetradingandotherstructuredproductsforinstitutionalclients.
AsofDecember31,2020,totalassetsofCBNAHongKongwere$65billion,primarilyconsistingofdepositswithbanks,loans,tradingaccountassets,investments,cashandduefrombanks,andotherassets.AsofDecember31,2020,totalliabilitiesofCBNAHongKongwere$65billion,primarilyconsistingofdeposits,tradingaccountliabilities,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAHongKongwasdesignatedanOperatingMLEbecauseitmetcertainqualitativeassessmentcriteria.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCBNAHongKong,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CBNAHongKongconductsactivitiesaspartofCiti’sglobalcorporatebankingbusinesses.UndertheObjectsofSaleDivestitureStrategy,Citi’sglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransaction.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CBNAHongKong’sfinancialinterconnectionsstemlargelyfrominteraffiliateplacementsanddeposit-takingactivities.CBNAHongKong’sprimaryconnectionsarewithCBNAandCBNAUK.
UndertheCSA,theOperatingMLEs,includingCBNA,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
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OperationalInterconnections
CBNAHongKongisinterconnectedwithCitiaffiliatesfromanoperationalperspective,bothasaservicerecipientandasaserviceprovider.CBNAHongKongreceivesfunctionsandservicesfromCitiaffiliatesinsupportofitsbusinessactivities.CBNAHongKongalsoprovidesfunctionsandservicestosupportbusinessactivitiesofCitiaffiliates.ProvidersofservicestoCBNAHongKongincludeCBNASingaporeandCBNAHomeOffice.UsersofservicesprovidedbyCBNAHongKongincludeCBNASingaporeandCBNAHomeOffice.
FollowingtransfertotheReorganizationTrust,CBNAHongKongwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.h.CBNASingapore
Introduction
CBNASingaporeisCBNA’slicensedbranchinSingapore.CBNASingaporeprovidessecuritiesservices,cashmanagementandtradeservices,andprivatebankingactivitiesandengagesinforeignexchangeandderivativestradingforinstitutionalclients.
AsofDecember31,2020,totalassetsofCBNASingaporewere$81billion,primarilyconsistingofdepositswithbanks,loans,investments,tradingaccountassets,cashandduefrombanks,andotherassets.AsofDecember31,2020,totalliabilitiesofCBNASingaporewere$81billion,primarilyconsistingofdeposits,tradingaccountliabilities,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNASingaporewasdesignatedanOperatingMLEbecauseitmetcertainqualitativeassessmentcriteria.
ResolutionStrategy
Aswiththeotherentitiesdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCBNASingapore,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CBNASingaporeconductsactivitiesaspartofCiti’sglobalcorporatebankingbusinesses.UndertheObjectsofSaleDivestitureStrategy,Citi’sglobalcorporatebankingoperationswouldbesoldasasingleunitthroughaprivatetransaction.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
ThemainsourceoffundingforCBNASingaporeiscustomerdeposits.CBNASingaporealsohasinteraffiliatetransactionspredominatelywithCSLandCBNA.
UndertheCSA,theOperatingMLEs,includingCBNA,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
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OperationalInterconnections
CBNASingaporeisoperationallyinterconnectedwithCitiaffiliates,bothasaservicerecipientandasaserviceprovider.CBNASingaporereceivesfunctionsandservicesfromCitiaffiliatesinsupportofitsbusinessactivities.CBNASingaporealsoprovidesfunctionsandservicestosupportbusinessactivitiesofCitiaffiliates.ProvidersofservicestoCBNASingaporeincludeCTIandCTI(HK)Ltd.UsersofservicesprovidedbyCBNASingaporeincludeCBNAHomeOfficeandCTI.
FollowingtransfertotheReorganizationTrust,CBNASingaporewouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.2.i.Citibanamex
Introduction
CitibanamexisalicensedcommercialbankinMexico.Citibanamexoffersabroadrangeofbankingandotherfinancialproductsandservicestargetedatbothindividualsandentities(publicandprivatesectors).Citibanamex’sbusinessactivitiesareorganizedunderbothGlobalConsumerBankingandtheInstitutionalClientsGroup.InGlobalConsumerBanking,Citibanamexoffersretailbanking,mortgages,creditcards,Citigoldpremierbankingservicesandcommercialbankingforsmallandmedium-sizedcompanies.IntheInstitutionalClientsGroup,CitibanamexoffersMarketsandSecuritiesServicesandcorporateandinvestmentbankingservices,aswellasprivatebankingservices.
AsofDecember31,2020,totalassetsofCitibanamexwere$65billion,primarilyconsistingofloansandleases,investments,tradingaccountassets,depositswithbanks,cashduefrombanks,andotherassets.AsofDecember31,2020,totalliabilitiesofCitibanamexwere$55billion,primarilyconsistingofdeposits,repurchaseagreements,tradingaccountliabilities,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CitibanamexwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
UndertheSPOEStrategy,CitibanamexwouldbestabilizedandtransferredtotheReorganizationTrust,whereitwouldcontinueasaviablegoingconcern.FollowingthestabilizationofCiti’sbankingoperationsintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
Citibanamexoperatesbothconsumerandinstitutionalbusinesslines.UndertheObjectsofSaleDivestitureStrategy,Citi’sinternationalconsumeroperationswouldbesoldinprivatetransactions.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
Historically,Citibanamexhasself-fundedwithdeposits(e.g.,depositaccounts,promissorynotes,andtimedeposits)fromclientsandothersourcesofsecuritiesfinancing(e.g.,repos).DepositscomprisethemajorityofthefundingbaseandCitibanamex’sdepositsaremainlydepositaccounts,promissorynotes,andtimedeposits.Nochangesareexpectedintheabilitytoself-financeinthemediumterm.Currently,Citibanamexhasahealthyshort-termandstructuralliquiditypositionthatexceedsinternalguidelines.
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UndertheCSA,theOperatingMLEs,includingCitibanamex,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
Globalfunctionsandservices,includingoperations,finance,ITandhumanresources,aresubstantiallyconductedwithinCitibanamex.FollowingtransfertotheReorganizationTrust,CitibanamexwouldnotrequirecontinuedsupportfromCiti’ssharedserviceproviders.
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F.3.BrokerDealerEntities
F.3.a.CGMI
Introduction
CGMIisCiti’sprimarybrokerdealerintheUnitedStates.CGMIisadealer,market-makerandunderwriterinequities,fixedincomesecuritiesandcommodities,andprovidesafullrangeofproductsandservices,includingsecuritiesservices,salesandtrading,institutionalbrokerage,underwriting,andadvisoryservicestoawiderangeofcorporate,institutional,publicsector,andhigh-net-worthclients.CGMI’sactivitiesalsoincludesecuritieslendingandrepurchaseagreements,primebrokerage,andoperationalsupportforclearingandsettlementactivities.
AsofDecember31,2020,CGMIhadtotalassetsof$366billionandtotalliabilitiesofapproximately$355billion,respectively.CGMI’smostsignificantassetsandliabilitiesincludesecuritiesborrowedorpurchasedunderagreementstoresell.Othersignificantassetsincludetradingaccountassetsandliabilitiesaswellasbrokerdealerreceivablesandpayables.
CGMIgeneratesalmostallofitsrevenueswithinNorthAmerica.CGMI’sprincipalrevenuescompriseinvestmentbankingfees,managedaccountfeesandcommissions,aswellasinterestanddividends.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CGMIwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingrevenues,netincome,andthird-partyassets.
ResolutionStrategy
CGMIwouldremainfullyoperationalandwouldnotenterinsolvencyproceedings.ThestabilizationofCGMIintheReorganizationTrustwouldensurethecontinuityofthebusinessandoperationsconductedthroughCGMI,therebypreventingdisruptiontoCGMI’sclientsandcounterpartiesaswellasthefinancialmarkets.
OnceintheReorganizationTrust,CGMIwouldundergoasolventwind-downthroughthesaleorrunoffofpositionsinanorderly,value-maximizingmanner.Aspartofthesolventwind-down,thebusinessesoperatingthroughCGMIwouldbediscontinued.Attheendofthesolventwind-down,CGMI’sassetswouldconsistalmostentirelyofcashandunencumberedsecurities.Afterallpositionswereliquidated,CGMIwouldbedissolvedandthefinalproceedsremittedtotheReorganizationTrust.
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FinancialInterconnections;CapitalandFunding
CGMIisfinanciallyandcontractuallyconnectedtotheCitinetworkfrombothalong-termfundingandashort-termfundingperspective.CGMI’sday-to-dayfundingandliquidityinterconnectednessismainlyderivedfromsecuredfundingoftradingandinventoryassets.
CGMI’sliquidityisprimarilyderivedfromthreesources:securedborrowings,unsecuredborrowings(includingsubordinateddebt),anditsowncapital.ThebusinessesthatoperateoutofCGMIpredominantlyusesecuredfinancingfromunaffiliatedthirdpartiestofundinventory.TheprimaryMLEfinancialinterconnectionsforCGMIarewithCGMLonasecuredbasisandwithCiticorponanunsecuredbasis.AllinteraffiliatesecuritieslendingtradesbetweenCGMIandotherCitientitiesareconductedonanarm’s-lengthbasis.Interaffiliatesecuritieslendingtransactionsareundertakentofacilitatemovementofcollateralformatchedbook,shortcover,orsecuritieslendingpurposes.
UndertheCSA,theOperatingMLEs,includingCGMI,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
ThebusinessesthatoperateoutofCGMIrelyontheoperationalcapabilitiesofinternalCitifunctions,includingemployees,realestate,technology,middleoffice,andbackoffice.ProvidersofservicestoCGMIincludeCBNAHomeOffice,CTI,andCGML.UsersofservicesprovidedbyCGMIincludeCBNAHomeOfficeandCGML.
FollowingtransfertotheReorganizationTrustandthroughoutthesolventwind-down,CGMIwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.3.b.CGML
Introduction
CGMLisCiti’sprimarybrokerdealerintheUKheadquarteredinLondonandoperatingglobally,generatingthemajorityofitsbusinessintheEurope,MiddleEast,andAfricaregion,withtheremaindercomingfromAsiaandtheAmericas.
CGMLisadealer,market-makerandunderwriterinequities,fixedincomesecurities,andcommodities,andprovidesinvestmentbankingandadvisoryservicestoawiderangeofcorporate,institutionalandgovernmentclients.CGML’stradingactivities,whicharepartofCiti’sMarketsandSecuritiesServicesdivisionwithintheInstitutionalClientsGroup,encompasscashplusexchange-tradedandover-the-counterderivativemarkets.CGML’smajorcounterpartiesarebanks,otherinvestmentfirms,investmentmanagers,insurers,andhedgefunds.
AsofDecember31,2020,CGMLhadtotalassetsof$268billion.Theseweremadeupprimarilyofresaleagreementsandtradingaccountassets,andcashcollateralpledged.AsofDecember31,2020,CGMLhadtotalliabilitiesof$249billion.Thiswasmadeupprimarilyofrepurchaseagreementsandtradingaccountliabilities,cashcollateralheld,bankloans,andoverdrafts.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CGMLwasdesignatedanOperatingMLEbecauseitmetcertainassessmentcriteriathresholds,includingthird-partyassets.
ResolutionStrategy
CGMLwouldremainfullyoperationalandwouldnotenterinsolvencyproceedings.ThestabilizationofCGMLintheReorganizationTrustwouldensurethecontinuityofthebusinessandoperationsconductedthroughCGML,therebypreventingdisruptiontoCGML’sclientsandcounterpartiesaswellasthefinancialmarkets.
OnceintheReorganizationTrust,CGMLwouldundergoasolventwind-downthroughthesaleorrunoffofpositionsinanorderly,value-maximizingmanner.Aspartofthesolventwind-down,thebusinessesoperatingthroughCGMLwouldbediscontinued.Attheendofthesolventwind-down,CGML’sassetswouldconsistalmostentirelyofcashandunencumberedsecurities.Afterallpositionswereliquidated,CGMLwouldbedissolvedandthefinalproceedsremittedtotheReorganizationTrust.
FinancialInterconnections;CapitalandFunding
CGMLfundsitselfthroughacombinationofsecuredfinancing,equity,long-termsubordinateddebt,andlong-termandshort-termunsecuredborrowings.Long-termstructuralliquidityisfundedthroughsubordinateddebt,stockholders’equity,andinteraffiliateloanswithamaturityofgreaterthanoneyear.
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Thisfinancingmodelrequiresilliquidassetstobefinancedbylong-termliabilitiessuchasdebt,equity,orlong-termsecuredfunding.TheprimaryMLEfinancialinterconnectionsforCGMLarewithCGMIandCGMJonasecuredbasisandwithCiticorponanunsecuredbasis.AllinteraffiliatesecuritieslendingtradesbetweenCGMLandotherCitientitiesareconductedonanarm’s-lengthbasis.interaffiliatesecuritieslendingtransactionsareundertakentofacilitatemovementofcollateralformatchedbook,shortcover,orsecuritieslendingpurposes.
UndertheCSA,theOperatingMLEs,includingCGML,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
CGMLhasoperationalinterconnectionswithotherCitiaffiliates,bothasaproviderandrecipientofservices.Thekeyinterconnectionsrelatetofrontofficetradersandinvestmentbankers,operationalandtechnologyfunctions(includinginfrastructure),globalfunctions,applicationsandassociatedsupportservices,andrealestate,corporatefunctionsandbusinesssupportservices.ProvidersofservicestoCGMLincludeCBNAUKandCitigroupParent.UsersofservicesprovidedbyCGMLincludeCBNAUK,CBNAHomeOffice,andCGMI.
FollowingtransfertotheReorganizationTrustandthroughoutthesolventwind-down,CGMLwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.3.c.CGMJ
Introduction
CGMJisCiti’sbrokerdealerinJapan.ThroughtheCitiMarketsandSecuritiesServicesbusinessandInvestmentBankingbusiness,CGMJprovidesprimaryandsecondaryfinancialproductsandservicestoacross-sectionofcorporate,institutional,andpublicsectorclients.
AsofDecember31,2020,totalassetsofCGMJwere$31billion,primarilyconsistingprimarilyofresaleagreements,tradingaccountassets,anddepositswithbanks.AsofDecember31,2020,totalliabilitiesofCGMJwere$29billion,primarilyconsistingofrepurchaseagreementsandotherborrowingsandtradingaccountliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CGMJwasdesignatedanOperatingMLEbecauseitmetcertainqualitativeassessmentcriteria.
ResolutionStrategy
CGMJwouldremainfullyoperationalandwouldnotenterinsolvencyproceedings.ThestabilizationofCGMJintheReorganizationTrustwouldensurethecontinuityofthebusinessandoperationsconductedthroughCGMJ,therebypreventingdisruptiontoCGMJ’sclientsandcounterpartiesaswellasthefinancialmarkets.
OnceintheReorganizationTrust,CGMJwouldundergoasolventwind-downthroughthesaleorrunoffofpositionsinanorderly,value-maximizingmanner.Aspartofthesolventwind-down,thebusinessesoperatingthroughCGMJwouldbediscontinued.Attheendofthesolventwind-down,CGMJ’sassetswouldconsistalmostentirelyofcashandunencumberedsecurities.Afterallpositionswereliquidated,CGMJwouldbedissolvedandthefinalproceedsremittedtotheReorganizationTrust.
FinancialInterconnections;CapitalandFunding
CGMJfundsitselfthroughacombinationofsecuredfinancing,equity,long-termsubordinateddebt,andlong-termandshort-termunsecuredborrowings.Long-termstructuralliquidityisfundedthroughsubordinateddebt,stockholder’sequity,andinteraffiliateloanswithamaturityofgreaterthanoneyear.
Thisfinancingmodelrequiresilliquidassetstobefinancedbylong-termliabilitiessuchasdebt,equity,orlong-termsecuredfunding.TheprimaryMLEfinancialinterconnectionsforCGMJarewithCGMLonasecuredbasisandwithCiticorponanunsecuredbasis.AllinteraffiliatesecuritieslendingtradesbetweenCGMJandotherCitientitiesareconductedonanarm’s-lengthbasis.Interaffiliatesecuritieslendingtransactionsareundertakentofacilitatemovementofcollateralformatchedbook,shortcover,orsecuritieslendingpurposes.
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Onalong-termbasis,CGMJisconnectedtotheCitinetworkviaadditionalpaid-incapitalandunsecureddebt.CGMJhasnothird-partycapital.Subordinatedlong-termdebtisattributabletointeraffiliatedebt,whilenon-subordinatedlong-termdebtisattributabletothird-partydebtandinteraffiliatedebt.
AlthoughCGMJislargelyself-fundingonaday-to-daybasis,overallcapitalisultimatelyderivedfromotherentitiesinCiti.
UndertheCSA,theOperatingMLEs,includingCGMJ,wouldreceivecapitalandliquiditysupport,asnecessary,fromCiticorpthroughoutCiti’sResolutiontoexecutetheSPOEStrategy.
OperationalInterconnections
BusinessesoperatingoutofCGMJrelyontheoperationalcapabilitiesofCitiinternalfunctions,includingrealestateandoperationsandtechnology.ProvidersofservicestoCGMJincludeCSJ,CGMI,andCBNAHomeOffice.UsersofservicesprovidedbyCGMJincludeCBNAUK,CGMI,andCGML.
FollowingtransfertotheReorganizationTrustandthroughoutthesolventwind-down,CGMJwouldrequirecontinuedsupportfromCiti’ssharedserviceorganizationandCSJinparticular.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.3.dCGMHI
Introduction
CGMHIwasdesignatedasaMLEinJuly2020.CGMHI,acorporationdulyincorporatedandexistingunderthelawsofthestateofNewYork,isadirectsubsidiaryofCitigroupParent,whichindirectlyownsbroker-dealerentities,includingtheU.S.andUKbrokerdealerMLEs,CGMIandCGML.
AsofDecember31,2020,totalassetsofCGMHIwere$87billion.AsofDecember31,2020,totalliabilitiesofCGMHIwere$52billion.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CGMHIistheprimarystructurednotesissuerforCitiandprovidesasignificantsourceoffunding.
ResolutionStrategy
InsupportofitspreferredSPOEStrategy,CitigroupParententeredintotheCSAwitheachofitsOperatingMLEs.TheCSAisalegallyenforceablecontractrequiringCitigroupParentandCiticorp,astheIHC,toprovidesufficientcapitalandliquiditysupporttotheOperatingMLEstoensuretheavailabilityofadequateresourcestoaffectCiti’spreferredresolutionstrategy.AfterbeingdesignatedasanoperatingMLE,CGMHIexecutedajoindertotheCSAandtherelatedSecurityAgreementandthusbecameapartytobothagreements.
FinancialInterconnections;CapitalandFunding
CGMHIisfinanciallyandcontractuallyconnectedtotheCitinetworkfrombothalong-termandashort-termfundingperspective.ThemainsourcesofCGMHI’sfundingareunsecuredborrowingsfromCitiaffiliatesanditsowncapital.CGMHIisnotaregulatedU.S.entity,andassuchitisnotrequiredtomaintainminimumcapitallevelssetforthbyU.S.regulators.Itsday-to-dayfundingandliquidityinterconnectednessismainlyderivedfromunsecuredfunding.CGMHIholdsstructurednotesdebtissuanceprogramandplacestheissuanceproceedsintointeraffiliatenetwork.CGMHIistheprimarystructurednotesissuerforCitiandprovidesasignificantsourceoffunding.
OperationalInterconnections
Otherthanservingastheprimarystructurednotesissuer,CGMHIengagesinnootheroperatingbusinessactivities.TheactivitythatoperatesoutofCGMHIreliesontheoperationalcapabilitiesofinternalCitifunctions,includingemployees,realestate,technology,middleoffice,andbackoffice.
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FollowingtransfertotheReorganizationTrust,CGMHIwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
AportionoftheproceedsofanyissueofsecuritieswillbeusedbyCGMHIand/oritssubsidiariesforgeneralcorporatepurposes.
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F.4.ServiceMLEs
F.4.a.CTI
Introduction
CTIisaU.S.serviceproviderlegalentityforotherlinesofbusinesswithinCiti.CTIprovidescertaincriticalBackOfficeand/orMiddleOfficeICGservicestoCiti’sCBLsandCOs.Inaddition,CTIhousestheU.S.criticalRealEstateproperties(inclusiveofdatacenters)andmanagementservicesandResourceManagementOrganization,inclusiveofU.S.AccountsPayable.
CTIisanon-risk-takingandnon-client-facingentity.CTIdoesnotengageinanybanking,lending,ordeposit-takingactivitiesorinanysecuritiesactivities.
AsofDecember31,2020,totalassetsofCTIwere$6billion,primarilyconsistingofcash,premises(landandleaseholdassets),equipment,software,andprepaidexpenses.AsofDecember31,2020,totalliabilitiesofCTIwere$5billion,primarilyconsistingofaccruedexpenses,accountspayable,otherliabilities,capitalleases,andinteraffiliateborrowings.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CTIwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CTIisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CTIwouldremainsolventandwouldcontinuetooperatethroughoutResolution.CTIwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.CTIhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
UndertheObjectsofSaleDivestitureStrategy,partsofCTIwouldbedivestedinanassetsale.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CTIderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCTIincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
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Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CTIalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
OperationalInterconnections
CTIdependsoncertaincentralizedfunctionssuchashumanresources,legal,compliance,andfinance,whicharehousedinentitiesoutsideofCTI.ProvidersofservicestoCTIincludeCBNAHomeOffice,CBNASingapore,andCBNAUK.UsersofservicesprovidedbyCTIincludeCBNAHomeOfficeandCGMI.
AsaServiceMLE,CTIprovideskeyservicestoitsaffiliateswhichwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.b.CMI
Introduction
CMIisasubsidiaryofCBNAandheadquarteredinMissouri.CMIisresponsibleformanagingtheservicingandmasterserviceofanationwideportfolioofresidentialhomemortgagesandalsooriginatesloansforhomepurchaseandrefinancetransactionsintheU.S.
AsofDecember31,2020,totalassetsofCMIwere$9billion,consistingprimarilyofconsumerloansandleases,shorttermborrowings,andotherassets.AsofDecember31,2020,totalliabilitiesofCMIwere$4billion,consistingprimarilyofinteraffiliatelong-termdebtandotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CMIwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
Asdescribedabove,undertheSPOEStrategyCBNAanditsbranchesandsubsidiaries,includingCMI,wouldbestabilizedandtransferredtotheReorganizationTrust,wheretheywouldcontinueasviablegoingconcerns.FollowingthestabilizationofCBNAanditssubsidiariesandbranchesintheReorganizationTrust,theywouldbesegmentedanddivestedthroughaseriesofM&AandIPOtransactionsthatretainthevalueofthefranchisesfortheCitigroupParentbankruptcyestate.
CMIoperatesaspartofCiti’sU.S.consumerbusiness.UndertheObjectsofSaleDivestitureStrategy,Citi’sU.S.consumeroperationswouldbeofferedtothepublicinanIPO.TheObjectsofSaleDivestitureStrategywasdevelopedbasedontheparticularrequirementsandchallengesofthespecifiedhypotheticalidiosyncraticfailurescenarioandassociatedassumptionsmandatedtoCitibyregulators.
FinancialInterconnections;CapitalandFunding
CMI’sbusinessisdependentuponCBNAforliquidity,capitalandfunding.Theday-to-dayfundingneedsofthebusinessareprovidedbyCBNAviaageneralfundingpoolwhichiscentrallymanagedbyCitiTreasury.CMI’seligiblemortgageassetsarepledgedtothesecuredborrowingprogramsoftheFederalHomeLoanBank(FHLB)ofNewYorkandtheFederalReserveBankofNewYork,whichcanbeaccessed,asrequired,tomeetCiti’soverallfundingstrategy.AsaServiceMLE,CMIisprefundedwithatleastsixmonthsofworkingcapital.
OperationalInterconnections
CMIreliesupontheservicesofCitiaffiliatesandmanagestheservicingofmortgagesownedbyCBNAandcertainotheraffiliates.ProvidersofservicestoCMIincludeCCSIUSA,CTI,andCBNAHomeOffice.UsersofservicesprovidedbyCMIincludeCBNAHomeOffice.
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FollowingtransfertotheReorganizationTrust,CMIwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAsothatsharedserviceproviderswillcontinuetoprovidekeyservicesinResolution.
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F.4.c.CTI(HK)Ltd
Introduction
CTI(HK)LtdistheprincipalHongKonglegalentityforapredominanceofCiti’stechnologyinfrastructureintheAsiaPacificregion.CTI(HK)LtdisincorporatedanddomiciledinHongKongandsupportstheoperationsofMLEsandotheraffiliates.Itprovidesend-usersupporttoaffiliatesfordesktop,voice,andvideoservicesandalsoprovidesservicessuchasbusinesscontinuityservices,networkinfrastructure,anddatacenterproductionsupportservicestoCBNASingaporeandentitiesthatCBNASingaporesupports.CTI(HK)LtdholdsnoassetsoutsideofHongKong.
AsofDecember31,2020,CTI(HK)Ltdhadtotalassetsof$291million,consistingprimarilyoffixedassets(e.g.,computerhardware),cash,andprepaidexpenses.AsofDecember31,2020,CTI(HK)Ltdhadtotalliabilitiesof$169million,consistingprimarilyoffundsborrowed,long-termdebt,anddeferredtaxliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CTI(HK)LtdwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CTI(HK)Ltdisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CTI(HK)LtdwouldremainsolventandwouldcontinuetooperatethroughoutResolution.CTI(HK)Ltdwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.CTI(HK)Ltdhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CTI(HK)LtdoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CTI(HK)Ltdderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCTI(HK)Ltdincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CTI(HK)Ltdalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
CTI(HK)LtdisinterconnectedwithCitiaffiliatesfromanoperationalperspective,bothasservicerecipientandprovider.CTI(HK)LtdreceivesfunctionsandservicesfromCitiaffiliatesinsupportofitsbusinessactivities.CTI(HK)LtdalsoprovidesfunctionsandservicestosupportbusinessactivitiesofCitiaffiliates.UsersofservicesprovidedbyCTI(HK)LtdincludeCBNASingapore.
AsaServiceMLE,CTI(HK)LtdprovideskeyservicestoitsaffiliateswhichwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.d.CCSIUSA
Introduction
CCSIUSAisanon-banksubsidiaryofCBNAintheUnitedStates.CCSIUSAprovidesinteraffiliateservicestoCiti’sretailbanking,mortgage,andcreditcardbusinesses,includingdecisionmanagement,newaccountsetup,authorizations,disputeprocessing,underwriting,customerservice,productdevelopment,riskmanagement,technology,andbusinessanalyticsservices.CCSIUSAalsoprovidescertainservicestonon-U.S.subsidiariesofCBNA,includingworkforcemanagement,statementsandletterprinting,andpaymentprocessingaspartoftheglobalpaymentutility.However,mostofCCSIUSA’sservicerecipientsarebasedinNorthAmerica.
AsofDecember31,2020,totalassetsofCCSIUSAwere$4billion,primarilyconsistingofdepositswithbanks,cash,accountsreceivable,premises,technologyequipment,andsoftware.AsofDecember31,2020,totalliabilitiesofCCSIUSAwere$3billion,primarilyconsistingofprovisionfortaxes,interaffiliatepayables,andotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CCSIUSAwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CCSIUSAisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CCSIUSAwouldremainsolventandwouldcontinuetooperatethroughoutResolution.CCSIUSAwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CCSIUSAoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CCSIUSAderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCCSIUSAincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
CCSIUSAhasreliedontheissuanceofcorporateguaranteesbyCBNAandCitigroupParentinconnectionwithcertainfacilityleases.
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Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CCSIUSAalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
OperationalInterconnections
CCSIUSAprovidesservicestoCBLs,includingU.S.RetailBank,U.S.CommercialBank,U.S.BrandedCards,U.S.ConsumerMortgages,andU.S.RetailServices,aswellasotherU.S.andinternationalbusinesseswithinCiti.CCSIUSAalsoreliesonthesharedservicesofCiti’sglobalfunctions,includinglegal,humanresources,realtyservices,treasury,finance,andenterprisetechnology.ProvidersofservicestoCCSIUSAincludeCTIandCBNAHomeOffice.UsersofservicesprovidedbyCCSIUSAincludeCBNAHomeOfficeandCMI.
AsaServiceMLE,CCSIUSAprovideskeyservicestoitsaffiliateswhichwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.e.Citishare
Introduction
Citishareisanon-banksubsidiaryofCBNAthatisorganizedintheUnitedStates.CitishareprovidesservicestoCiti’sretailandcardbusinessesglobally,primarilyasaninternalprocessorofATManddebitpointofsaletransactions.Citishareconnectstotenpaymentnetworks,twoATMprocessors,andtwoauthorizationprocessors,providingaccesstoavastinternationalnetworkofATMs.
AsofDecember31,2020,totalassetsofCitisharewere$41million,primarilyconsistingofdepositswithbanksandcashandduefrombanks.AsofDecember31,2020,totalliabilitiesofCitisharewere$6million,primarilyconsistingofotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CitisharewasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
Citishareisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CitisharewouldremainsolventandwouldcontinuetooperatethroughoutResolution.Citisharewouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.Citisharehassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CitishareoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
Citisharederivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.Inaddition,Citisharederivesrevenuesthroughfeesfromthirdparties(allofwhichweretheresultofCitidivestitures)towhichitprovidesservices.IfandtotheextentthatthereisadelaybetweenthetimewhenCitishareincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.Citisharealsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
InadditiontoprovidingservicestoCitiaffiliates,Citisharedependsoncertaincentralizedfunctionssuchashumanresources,legal,compliance,treasury,credit,risk,operationsandtechnology,andfinance,whicharehousedinentitiesoutsideofCitishare.ProvidersofservicestoCitishareincludeCTIandCBNAHomeOffice.
AsaServiceMLE,CitishareprovideskeyservicestoitsaffiliateswhichwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.f.CSJ
Introduction
CSJistheprincipalJapaneselegalentityforCiti’ssharedOperations&Technologyservices,includingthesubleasingofofficespacesandinfrastructureinJapan.CSJprovidesabroadrangeofsharedservicestosupporttheoperationsofCBNAJapan,CGMJandotherCitisubsidiariesinJapanandoverseas.WhileCSJ’scustomersaremostlyCitiaffiliates,italsoservescertainunaffiliatedthird-partiesinJapan.
Someofthesharedservicesprovidedaretechnologyservices(includingsoftwaredevelopmentandsupport,end-usertechnology,anddatacenterservices),informationsecurityandbusinesscontinuityservices,securitiesservices,fraudpreventions,transitionservices,andbusinessoffice,administration,executiveandprivacyservices.
AsofDecember31,2020,totalassetsofCSJwere$337million,consistingprimarilyofcashandfixedassets.AsofDecember31,2020,totalliabilitiesofCSJwere$267million,consistingprimarilyoffundsborrowed.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CSJwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CSJisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CSJwouldremainsolventandwouldcontinuetooperatethroughoutResolution.CSJwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.CSJhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CSJoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CSJderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCSJincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CSJalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
InadditiontoprovidingservicestoCitiaffiliates,CSJdependsoncertaincentralizedfunctionssuchastechnology,whichareprovidedbyotherCitientities.ProvidersofservicestoCSJincludeCTIandCBNAROHQ.UsersofservicesprovidedbyCSJincludeCGMJandCBNAJapan.
AsaServiceMLE,CSJprovideskeyservicestoitsaffiliateswhichwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.g.CBSCostaRica
Introduction
CBSCostaRicaisanon-banksubsidiaryofCBNAorganizedinCostaRica.CBSCostaRicaispartoftheCitiServiceCenterbusiness,whichoperatesinmultiplecountriesprovidingsharedservicestoCitibusinessesworldwide.CBSCostaRicaprovidesservicestoCitiaffiliatessolelyinNorthAmericaandLatinAmerica.TheseservicesincludeFinance&RiskOperations,HumanResourcesSharedServices,FinancialPlanningandAnalysis,EnterpriseSupplyChain,KYCsupportunits,ProductControl,RegionalControllership,SecurityandInvestigativeServices,InternalAudit,GeneralandRealtyServices,andCitiTechnologyInfrastructure.
AsofDecember31,2020,totalassetsofCBSCostaRicawere$149million,consistingprimarilyofcash.AsofDecember31,2020,totalliabilitiesofCBSCostaRicawere$62million,consistingprimarilyofinteraffiliateborrowings.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBSCostaRicawasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportOperatingMLEssuchasCBNAHomeOfficeandCitibanamex.
ResolutionStrategy
CBSCostaRicaisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CBSCostaRicawouldremainsolventandwouldcontinuetooperatethroughoutResolution.CBSCostaRicawouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.CBSCostaRicahassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CBSCostaRicaoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CBSCostaRicaderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCBSCostaRicaincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CBSCostaRicaalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
CBSCostaRicaprovidesavarietyofservicestoCitiaffiliatesinNorthAmericaandLatinAmerica.CTIistheprimaryproviderofservicestoCBSCostaRica.UsersofservicesprovidedbyCBSCostaRicaincludeCBNAHomeOfficeandCitibanamex.
AsaServiceMLE,CBSCostaRicaprovideskeyservicestoitsaffiliatesthatwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.h.CSIPL
Introduction
CSIPLisanon-banksubsidiaryofCBNAincorporatedinandoperatingsolelyinIndia.CSIPLprovidesavarietyofanalytics,technology,andothersharedservicestoCitiaffiliatesinvariousregions.CSIPL’sservicesincludeaccounting,financialreporting,managementreporting,applicationdevelopment,fundreportingandaccounting,analytics,decisionsupport,compliancemonitoring,andvendoroversightservices.OthersignificantoperationsareprovidedbytheResearchandAnalyticscentersofexcellence,whichsupportInstitutionalClientsGroup,Consumer,Operations&TechnologyandGlobalFunctionswithresearch,advancedanalytics,decisionmanagement,riskanalytics,financialreporting,andfinancialplanningandanalysisservices,amongothers.AllofCSIPL’scustomersareCitiaffiliates.
AsofDecember31,2020,totalassetsofCSIPLwere$585million,consistingprimarilyofcashforoperatingfunds,fixedassets,accountsreceivable,andprepaidexpenses.AsofDecember31,2020,totalliabilitiesofCSIPLwere$243million,consistingprimarilyofaccruedexpensesandotherliabilities.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CSIPLwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CSIPLisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CSIPLwouldremainsolventandwouldcontinuetooperatethroughoutResolution.CSIPLwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.CSIPLhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CSIPLoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CSIPLderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCSIPLincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CSIPLalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
InadditiontoprovidingservicestoCitiaffiliates,CSIPLdependsoncertaincentralizedfunctionssuchastechnology,whichareprovidedbyotherCitientities.ProvidersofservicestoCSIPLincludeCBNASingaporeandCTI.UsersofservicesprovidedbyCSIPLincludeCBNAHomeOffice,CBNASingapore,andCBNAUK.
AsaServiceMLE,CSIPLprovideskeyservicestoitsaffiliatesthatwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.i.RBBIL
Introduction
RBBILisprincipallyaspecialpurposevehicleanddoesnotundertakeanybankingorfinancialservicesactivity.AsofDecember31,2020,totalassetsofRBBILwere$1,655million.AsofDecember31,2020,totalliabilitiesofRBBILwere$88million.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.RBBILwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportCBNAUK,CGML,andCEP.
ResolutionStrategy
RBBILisanon-risk-takingServiceMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,RBBILwouldremainsolventandwouldcontinuetooperatethroughoutResolution.RBBILwouldprovideservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.RBBILhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,RBBILoritsassetswouldeitherbesoldwiththecorrespondingbusinessorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
RBBILderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenRBBILincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.RBBILalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
OperationalInterconnections
AsaServiceMLE,RBBILprovideskeyservicestoitsaffiliatesthatwouldbeneededinResolution.SurvivingoperatingentitieswouldcontinuetopayforservicesreceivedpursuanttotheexistinginteraffiliateserviceagreementsduringCiti’sresolution.Additionally,theServiceMLEshavebeenprefundedwithatleastsixmonthsofworkingcapitalsothattheycancontinuetooperateevenintheeventthatinteraffiliatepaymentsaredelayedintheinitialperiodfollowingCiti’sentryintoResolution.
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F.4.j.CBNAIreland
Introduction
CBNAIrelandisaservicebranchofCBNA.CBNAIrelandprovideskeymiddle-andback-officefunctionsforcertainofCiti’sAgencyandTrustSecuritiesServicesandTreasuryandTradeSolutionsbusinesses.CBNAIrelandalsoprovidestechnologysupportandrealtyandfacilitiesmanagementservicesforpropertythatprimarilyhousesCBNAIrelandandCEPemployees.CBNAIrelandisaserviceentityonlyanddoesnotundertakeanybankingorfinancialservicesactivities.
AsofDecember31,2020,totalassetsofCBNAIrelandwere$292million,primarilyconsistingofproperty,plantandequipment,andinteraffiliateassets.AsofDecember31,2020,totalliabilitiesofCBNAIrelandwere$297million,primarilyconsistingofinteraffiliateborrowings.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAIrelandwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CBNAIrelandisanMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CBNAIrelandwouldremainsolventandwouldcontinuetooperatethroughoutResolutionprovidingservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.WhileitisexpectedthataffiliateswillcontinuetopayforservicesinResolution,CBNAIrelandhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CBNAIrelandoritsassetswouldeitherbesoldwiththecorrespondingbusinessesorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CBNAIrelandderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCBNAIrelandincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.CBNAIrelandalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
CBNAIrelandhasoperationalinterconnectionswithotherCitiaffiliates,bothasaproviderandrecipientofservices.Thekeyinterconnectionsrelatetooperationalandtechnologyfunctions(includinginfrastructure),applicationsandassociatedsupportservices,andrealestate,corporatefunctionsandbusinesssupportservices.ProvidersofservicestoCBNAIrelandincludeCBNAUKandCBNAHomeOffice.UsersofservicesprovidedbyCBNAIrelandincludeCEP,CBNAUK,andCTI.
FollowingtransfertotheReorganizationTrust,CBNAIrelandwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.4.k.CBNAROHQ
Introduction
CBNAROHQisaPhilippinesservicebranchofCBNA.CBNAROHQprovidesservicestoCBNA’saffiliates,subsidiaries,andbranches.CBNAROHQdoesnotprovidebankingservicesoracceptdeposits,orotherwiseengagedirectlywiththepublic.
CBNAROHQ’sservicesinclude,butarenotlimitedto,financialreporting,vendormanagement,humanresourcessharedservices,andtechnology.
AsofDecember31,2020,totalassetsofCBNAROHQwere$165million,primarilyconsistingofcashdepositedwithCBNAPhilippines(CBNA’sbankingbranchinthePhilippines),fixedassetsrequiredtosupportitsoperations,receivablesfromrelatedparties,deferredtaxassetsandothercurrentassets.AsofDecember31,2020,totalliabilitiesofCBNAROHQwere$71million,primarilyconsistingofinteraffiliateborrowings,accruedexpenses,andtaxes.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAROHQwasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CBNAROHQisanMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CBNAROHQwouldremainsolventandwouldcontinuetooperatethroughoutResolutionprovidingservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.WhileitisexpectedthataffiliateswillcontinuetopayforservicesinResolution,CBNAROHQhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CBNAROHQoritsassetswouldeitherbesoldwiththecorrespondingbusinessesorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CBNAROHQderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCBNAROHQincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CBNAROHQalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
CBNAROHQdependsoncertaincentralizedfunctionssuchastechnology,humanresources,compliance,financeandrealtyserviceswhichareprovidedbyCitiaffiliates.ProvidersofservicestoCBNAROHQincludeCBNASingaporeandCTI.UsersofservicesprovidedbyCBNAROHQincludeCBNASingaporeandCBNAHomeOffice.
FollowingtransfertotheReorganizationTrust,CBNAROHQwouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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F.4.l.CBNAGermany
Introduction
CBNAGermanyisabranchofCBNAandholdsabanklicenseinGermany.ThemainactivitiesofCBNAGermanyare:(i)providingbackupdatacenterservicesforCBNAUK;(ii)renderingofIT-infrastructureservices;and(iii)providingloanportfoliomanagementfortheextensionofcreditfacilitiestoclientsinallindustrysectors,includingtocorporateclients,financialinstitutionsandbanksaswellasorganizationsinthepublicsector.
AsofDecember31,2020,totalassetsofCBNAGermanywere$25billionintotalassets,primarilyconsistingofdepositswithbanks.AsofDecember31,2020,totalliabilitiesofCBNAGermanywere$25billion,primarilyconsistingofdeposits.
MLEDesignation
MLEsareentities,includingforeignofficesandbranches,thataresignificanttothemaintenanceofaCOorCBL.TodetermineitsMLEs,Citianalyzedeachoperatingentity’ssignificancetocorrespondingCOsandCBLsbasedoncertainassessmentcriteria,includingrevenues,netincome,third-partyassets,amongothers.Citiseparatelyevaluatedeachserviceentitybasedonthealignmentofserviceassets,includingemployees,technology,vendors,andrealestate.CBNAGermanywasdesignatedaServiceMLEbecauseitholdsserviceassetsneededtosupportanOperatingMLE.
ResolutionStrategy
CBNAGermanyisanMLEprovidinginteraffiliateservicesbasedonformalinteraffiliateserviceagreementswitharm’s-lengthpricing.FollowingthetransfertotheReorganizationTrust,CBNAGermanywouldremainsolventandwouldcontinuetooperatethroughoutResolutionprovidingservicesonarm’s-lengthtermstootherMLEsforaslongasnecessarytofacilitatetheirownResolutionstrategies.WhileitisexpectedthataffiliateswillcontinuetopayforservicesinResolution,CBNAGermanyhassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
AstheReorganizationTrustsoldorwounddowntheOperatingMLEs,CBNAGermanyoritsassetswouldeitherbesoldwiththecorrespondingbusinessesorwounddownifnolongerneededtosupportOperatingMLEs.
FinancialInterconnections;CapitalandFunding
CBNAGermanyderivesitsprimaryfundingthroughfeesfromaffiliatesfortheservicesitprovides.IfandtotheextentthatthereisadelaybetweenthetimewhenCBNAGermanyincursoperatingcostsandthetimeitrecoversthosecostsfromitscustomers,italsohasaccesstoaninteraffiliatecreditline.
Citi’sServiceMLEswouldbeabletomaintaintheirinteraffiliatefundingflowsasneededinResolutionundertheSPOEStrategy.CBNAGermanyalsohassufficientworkingcapitaltomaintainoperationsforatleastsixmonths,intheeventofadelayinrecoveriesfromaffiliatesinResolution.
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OperationalInterconnections
CBNAGermanydependsoncertaincentralizedfunctionssuchastechnology,humanresources,compliance,finance,realtyservicesandgeneralsupportandserviceswhichareprovidedbyCitiaffiliates.ProvidersofservicestoCBNAGermanyincludeCBNAUKandCGML.UsersofservicesprovidedbyCBNAGermanyincludeCBNAUK.
FollowingtransfertotheReorganizationTrust,CBNAGermanywouldrequirecontinuedsupportfromCiti’ssharedserviceproviders.CitihasplacedthevastmajorityofitscriticalsharedservicesstaffandassetsinServiceMLEsorCBNAandprefundeditsServiceMLEswithatleastsixmonthsofworkingcapitalsothatsharedserviceproviderswouldcontinuetoprovidekeyservicesinResolution.
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ResolutionPlanningCorporateGovernanceStructureand
Processes
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G.ResolutionPlanningCorporateGovernanceStructureandProcesses
CitigroupParentBoardofDirectors
TheCitigroupParentBoardofDirectorsoverseesCiti'scompliancewithsafeandsoundbankingpractices,isresponsiblefortheapprovalofCiti’sResolutionPlanpriortosubmissiontoregulators,andreviewsandapprovesCiti’sResolutionplanningstrategiesandcapabilities.Tofacilitatetheseresponsibilities,theBoardofDirectorshasdesignatedtheRiskManagementCommitteetooverseethedevelopmentofCiti’sannualResolutionPlansubmissionandiskeptwellinformedofprogressoftheannualsubmissionviaregularupdatesbytheHeadofCapitalPlanning.
RiskManagementCommitteeoftheCitigroupBoardofDirectors
TheRiskManagementCommitteeisacommitteeoftheCitigroupParentBoardofDirectorstaskedwithprovidingoversightandstrategicdirectiononCiti’sannualResolutionPlansubmission,includingrecommendingtheplanbesubmittedtotheBoardofDirectorsforfinalapproval.TheRiskManagementCommitteereceivesregularupdatesfromtheHeadofCapitalPlanningonCiti’sResolutionplanningefforts,including(i)thelatestprogressontheResolutionPlansubmission,(ii)workeffortsnecessarytomeetregulatoryguidance,and(iii)updatesonkeystrategicissues.
CitigroupParentCapitalCommittee
TheCapitalCommitteeisaseniormanagementcommitteethatmonitorsCiti'saggregatecapitalstructure,capitalratios,andCCARsubmissions,andmakesdecisionsimpactingcapital,includingrecommendationstotheBoardofDirectorsregardingcapitaldistributions.TheCapitalCommitteereceivesregularupdatesontheviewsoftheRatingAgenciesandconsiderssuchviewsinitsrecommendationsregardingCiti'soverallcapitalassessment.Inaddition,theCapitalCommitteeprovidesoversightofCiti’sResolutionPlanandrelatedcapabilities,including(i)developmentoftheResolutionPlan,(ii)engagementwiththeappropriatelegalentity,business,regional,andfunctionalmanagementteamstofacilitateResolutionplanning,and(iii)theinstructionoftheseteamstotakeappropriateactionsandtheimplementationofResolutionplanningcapabilities.
Citi’sRecoveryandResolutionSteeringGroup
TheRecoveryandResolutionSteeringGroupisaseniormanagementgroupthatmeetsonaregularbasistotracktheongoingRecoveryandResolutionPlanningprocessandprovidesguidanceanddirectiononkeystrategicissuesrelatedtoCiti'sRecoveryandResolutionplanningefforts.TheRecoveryandResolutionSteeringGroupconsistsofCitigroupParent’sChiefFinancialOfficer,ChiefRiskOfficer,GeneralCounsel,Treasurer,aswellastheCFOofCBNAandotherseniormanagementpersonnel.PriortosubmissiontotheCapitalCommittee,theResolutionPlanundergoesseniorreviewbymembersoftheRecoveryandResolutionSteeringGroup.
RecoveryandResolutionExecutiveWorkingGroup
TheRecoveryandResolutionExecutiveWorkingGroupconsistsofseniorleadersandistaskedwithdevelopingCiti’sResolutioncapabilities.ThegroupprovidesoversightofthedevelopmentofCiti’sResolutionPlanwithclearly-definedmilestonesanddeliverables.
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CapitalPlanning/RecoveryandResolutionPlanningTeam
TheCapitalPlanning/RecoveryandResolutionPlanningTeamsupportsarangeofhigh-profileregulatoryinitiativescentraltothesafetyandsoundnessofCiti.Theseregulatoryprogramspredominantlyincludesupportinthedevelopment,maintenance,andimplementationofCiti’sRecoveryandResolutionplanningprocessesandcapabilities.TheteamprovidessignificantprogramandprojectstructureandcontrolsfortheRecoveryandResolutionPlansby:
• Developingcomprehensiveprojectplans
• MaintainingacentralProgramManagementOffice(PMO)tocoordinateplandevelopment
• Maintainingcentralstandardsandtemplatestobeusedforplandevelopment
• Developingaformalreviewandapprovalprocessforeachbusinessandforseniormanagementrelatingtokeyelementsoftheplans
• CoordinatingwithinternationalprojectteamstoensureintegrationofResolutionPlanactivitiesbeingexecutedlocally(e.g.,intheUK)withtheU.S.basedglobalteam(seeadditionaldetailsbelow)
• Coordinatingnumerousmeetings,workshops,andplanningsessionsbyandacrossbusinessunits,O&T,andCiti'sGlobalFunctions
• LeadingweeklyResolutionPlanningstatusmeetingswiththeRecoveryandResolutionExecutiveWorkingGroupandcoreteam,andfortheextendedprojectteam,includinginternationalresources
• DrivingcontinuousenhancementstotheCitigroupResolutionPlansandembeddingitintotheBAUprocessesandgovernance
CitihasfurtherstrengthenedthelinkagebetweenhomeandhostRecoveryandResolutionPlans,inordertodriveconsistencyacrossthestresscontinuum,whilerecognizingtheevolvingregulatoryrequirementsofhomeandhostregulators.Citi’sInternationalRRPteamfunctionsacrossacomplexglobalregulatorylandscapetofacilitateacommonunderstandingofCiti'sglobalRRPstrategyandengagesbothhomeandhostjurisdictionregulatorstofurtheremphasizetheneedforaconsistentandglobalapproachtomanagingtheFirmduringRecoveryandResolution.
InternalAudit
Citi'sInternalAudit(IA)isresponsiblefordevelopingandexecutinganauditprogramtoassessthedesignandoperatingeffectivenessofthekeycontrolssupportingtheresolutionplanningcapabilitiesandresolutionplanproduction.For2021,IAhasdevelopedacomprehensiverisk-basedassessmentofthecontrolenvironmentsurroundingthe2021CitigroupResolutionPlanandmanagement’sresponsetoregulatoryguidance.InternalAudit’sapproachconsistsoffourprimarycomponents:anannualriskassessment,quarterlybusinessmonitoring,continuousauditproceduresandtworisk-basedauditsconcurrenttothepreparationanddevelopmentofthePlan.
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SummaryFinancialInformationRegardingAssets,Liabilities,Capital,andMajorFunding
Sources
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H.SummaryFinancialInformationRegardingAssets,Liabilities,Capital,andMajorFundingSources
H.1.FinancialSummary-CitiConsolidated3
Netrevenues($millions) 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020
GlobalConsumerBanking 7,037 7,305 7,173 7,339 8,174
InstitutionalClientsGroup 12,220 9,279 10,353 12,137 12,484
Corporate/Other 70 (85) (224) 290 73
TotalCitigroup 19,327 16,499 17,302 19,766 20,731
GlobalConsumerBanking 2,174 1,299 974 (658) (741)
InstitutionalClientsGroup 5,972 3,373 2,919 1,880 3,626
Corporate/Other (169) (347) (716) (165) (337)
ContinuingOperations 7,977 4,325 3,177 1,057 2,548
DiscontinuedOperations (2) 6 (7) (1) (18)
NoncontrollingInterests 33 22 24 0 (6)
TotalCitigroup 7,942 4,309 3,146 1,056 2,536
Netincome($millions) 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020
Citiconsolidated($millions) 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020
Totalassets 2,314,266 2,260,090 2,234,459 2,232,799 2,220,114
Totalliabilities 2,110,993 2,059,890 2,039,864 2,040,413 2,026,788
Totalequity 203,273 200,200 194,595 192,386 193,326
CapitalSummary
BaselIIIratios 1Q2021 4Q2020 3Q2020 2Q2020 1Q2020
CommonEquityTier1CapitalRatio4,5 11.78% 11.73% 11.66% 11.50% 11.11%
Tier1CapitalRatio3,4 13.49% 13.31% 13.15% 12.98% 12.54%
TotalCapitalRatio3,4 15.64% 15.61% 15.54% 15.45% 14.97%
SupplementaryLeverageRatio3,6 6.96% 7.00% 6.82% 6.64% 5.96%
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3“Citigroup”referstoCitigroupInc.anditsconsolidatedsubsidiaries.4CommencingJanuary1,2020,Citigroup’scapitalratiosreflectcertaindeferralsbasedonthemodifiedregulatorycapitaltransitionprovisionrelatedtotheCurrentExpectedCreditLoss(CECL)standard.Foradditionalinformation,seethe“CapitalResources”sectioninCiti’s2020AnnualReportonForm10-K.5Citi’sreportableCommonEquityTier1(CET1)Capital,Tier1CapitalandTotalCapitalratioswerethelowerderivedundertheBaselIIIAdvancedApproachesforallperiodspresented.ThisreflectstheU.S.BaselIIIrequirementtoreportthelowerofrisk-basedcapitalratiosunderboththeStandardizedApproachandAdvancedApproachesinaccordancewiththeCollinsAmendmentoftheDodd-FrankWallStreetReformandConsumerProtectionAct.6Commencingwiththesecondquarterof2020,Citigroup’sTotalLeverageExposure(SupplementaryLeverageratiodenominator)temporarilyexcludedU.S.TreasuriesanddepositsatFederalReservebanks.ThistemporarySupplementaryLeverageratioreliefexpiredasscheduledonMarch31,2021.Foradditionalinformation,seethe“CapitalResources”sectioninCiti’s2020AnnualReportonForm10-K.
H.2.FundingandLiquidity
Overview
AdequateanddiversesourcesoffundingandliquidityareessentialtoCiti'sbusinesses.Fundingandliquidityrisksarisefromseveralfactors,manyofwhicharemostlyorentirelyoutsideCiti’scontrol,suchasdisruptionsinthefinancialmarkets,changesinkeyfundingsources,creditspreads,changesinCiti’screditratingsandmacroeconomic,geopoliticalandotherconditions.
Citi’sfundingandliquiditymanagementobjectivesareaimedat(i)fundingitsexistingassetbase,(ii)growingitscorebusinesses,(iii)maintainingsufficientliquidity,structuredappropriately,sothatCiticanoperateunderavarietyofadversecircumstances,includingpotentialCompany-specificand/ormarketliquidityeventsinvaryingdurationsandseverity,and(iv)satisfyingregulatoryrequirements.
Citi’sprimarysourcesoffundinginclude(i)depositsviaCiti’sbanksubsidiaries,whichareCiti’smoststableandlowestcostsourceoflong-termfunding,(ii)long-termdebt(primarilyseniorandsubordinateddebt)primarilyissuedattheparentandcertainbanksubsidiaries,and(iii)stockholders’equity.Thesesourcesmaybesupplementedbyshort-termborrowings,primarilyintheformofsecuredfundingtransactions.
Citi’sfundingandliquidityframeworkensuresthatthetenorofthesefundingsourcesisofsufficientterminrelationtothetenorofitsassetbase.ThegoalofCiti’sasset/liabilitymanagementistoensurethatthereissufficientliquidityandtenorintheliabilitystructurerelativetotheliquidityprofileoftheassets.Thisreducestheriskthatliabilitieswillbecomeduebeforeassetsmatureoraremonetized.ThisexcessliquidityisheldprimarilyintheformofHQLA.
High-QualityLiquidAssets(HQLA)
Assetforthinthetablebelow,Citi’saverageHQLAfor1Q2021were$534.8billion,comparedto$544.8billionasofDecember31,2020.
$billionsCitibank Non-BankandOther Total
1Q2021 4Q2020 1Q2021 4Q2020 1Q2021 4Q2020
Availablecash 276.6 304.3 3.0 2.1 279.6 306.4
U.S.Sovereign 85.0 77.8 67.7 64.8 152.7 142.6
U.S.Agency/AgencyMBS 37.0 31.8 6.3 6.5 43.3 38.3
ForeignGovernmentDebt7 43.6 39.6 13.7 16.2 57.3 55.8
OtherInvestmentGrade 1.4 1.2 0.6 0.5 2.0 1.7
TotalHQLA(average) 443.6 454.7 91.3 90.1 534.8 544.8
AsofMarch31,2021,Citigrouphadapproximately$957billionofavailableliquidityresourcestosupportclientandbusinessneeds,includingend-of-periodHQLAassets;additionalunencumberedsecurities,includingexcessliquidityheldatbankentitiesthatisnon-transferabletootherentitieswithinCitigroup;andavailableassetsnotalreadyaccountedforwithinCiti’sHQLAtosupportFHLBandFederalReserveBankdiscountwindowborrowingcapacity.
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7Foreigngovernmentdebtincludessecuritiesissuedorguaranteedbyforeignsovereigns,agenciesandmultilateraldevelopmentbanks.ForeigngovernmentdebtsecuritiesareheldlargelytosupportlocalliquidityrequirementsandCiti’slocalfranchisesandprincipallyincludegovernmentbondsfromHongKong,Singapore,Korea,Taiwan,India,MexicoandBrazil.
Inadditiontointernal30-dayliquiditystresstestingperformedforCiti'smajorentities,operatingsubsidiariesandcountries,CitialsomonitorsitsliquiditybyreferencetotheLCR.
Generally,theLCRisdesignedtoensurethatbanksmaintainanadequatelevelofHQLAtomeetliquidityneedsunderanacute30-daystressscenario.TheLCRiscalculatedbydividingHQLAbyestimatednetoutflowsoverastressed30-dayperiod,withthenetoutflowsdeterminedbyapplyingprescribedoutflowfactorstovariouscategoriesofliabilities,suchasdeposits,unsecuredandsecuredwholesaleborrowings,unusedlendingcommitmentsandderivatives-relatedexposures,partiallyoffsetbyinflowsfromassetsmaturingwithin30days.Banksarerequiredtocalculateanadd-ontoaddresspotentialmaturitymismatchesbetweencontractualcashoutflowsandinflowswithinthe30-dayperiodindeterminingthetotalamountofnetoutflows.TheminimumLCRrequirementis100%.Asof1Q2021,Citi’saverageLCRwas115%.
FundingSources
Deposits
Citigroup’send-of-perioddepositsasofMarch31,2021were$1,301billion.End-of-perioddepositsincreased10%year-over-yearand2%sequentially.
Onanaveragebasis,depositsincreased17%year-over-yearandwerelargelyunchangedsequentially.ExcludingtheimpactofforeigncurrencytranslationintoU.S.dollarsforreportingpurposes(FXtranslation),averagedepositsgrew15%fromtheprior-yearperiodanddeclined1%sequentially.Theyear-over-yearincreasereflectedcontinuedclientengagementaswellastheelevatedlevelofliquidityinthefinancialsystem.Onthisbasis,averagedepositsinGCBincreased18%,withstronggrowthacrossallregions.
ExcludingtheimpactofFXtranslation,averagedepositsinICGgrew15%year-over-year,primarilydrivenbygrowthinTreasuryandtradesolutions(TTS),aswellascontinuedgrowthintheprivatebankandsecuritiesservices.
Long-TermDebt
Long-termdebt(generallydefinedasdebtwithoriginalmaturitiesofoneyearormore)representsthemostsignificantcomponentofCiti’sfundingfortheCitigroupparentcompanyandCiti'snon-banksubsidiariesandisasupplementarysourceoffundingforthebankentities.
Long-termdebtisanimportantfundingsourcedueinparttoitsmultiyearcontractualmaturitystructure.
Theweighted-averagematurityofunsecuredlong-termdebtissuedbyCitigroupanditsaffiliates(includingCBNA)witharemaininglifegreaterthanoneyearwasapproximately8.9yearsasofMarch31,2021,comparedto9.0yearsasoftheprioryearand8.6yearsasofthepriorquarter.Theweighted-averagematurityiscalculatedbasedonthecontractualmaturityofeachsecurity.Forsecuritiesthatareredeemablepriortomaturityattheoptionoftheholder,theweighted-averagematurityiscalculatedbasedontheearliestdateanoptionbecomesexercisable.
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Citi’slong-termdebtoutstandingattheCitigroupparentcompanyincludesbenchmarkseniorandsubordinateddebtandwhatCitireferstoascustomer-relateddebt,consistingofstructurednotes,suchasequity-andcredit-linkednotes,aswellasnon-structurednotes.Citi’sissuanceofcustomer-relateddebtisgenerallydrivenbycustomerdemandandcomplementsbenchmarkdebtissuanceasasourceoffundingforCiti’snon-bankentities.Citi’slong-termdebtatthebankincludesbanknotes,FHLBadvancesandsecuritizations.
AsofMarch31,2021,totallong-termdebtoutstandingwas$256.3billion,comparedto$271.7billionasofDecember31,2020and$266.1billionasofMarch31,2020.Citi’stotallong-termdebtoutstandingdecreasedyear-over-year,primarilydrivenbydeclinesinunsecuredbenchmarkseniordebt,FHLBborrowingsandsecuritizationsatthebank,partiallyoffsetbytheissuanceofunsecuredbenchmarkseniordebtandcustomer-relateddebtatthenon-bankentities.
Citi'sexternalTLACandlong-termdebttotaledapproximately$313billionand$138billion,respectively.AsofMarch31,2021,CitiexceededeachoftheminimumTLACandlong-termdebtrequirements.
SecuredFundingTransactionsandShort-TermBorrowings
Citisupplementsitsprimarysourcesoffundingwithshorttermfinancingsthatgenerallyinclude(i)securedfundingtransactionsconsistingofsecuritiesloanedorsoldunderagreementstorepurchase,i.e.,repos,and(ii)toalesserextent,short-termborrowingsconsistingofcommercialpaperandborrowingsfromtheFHLBandothermarketparticipants
SecuredFundingTransactions
SecuredfundingisprimarilyaccessedthroughCiti’sbrokerdealersubsidiariestofundefficientlyboth(i)securedlendingactivityand(ii)aportionofthesecuritiesinventoryheldinthecontextofmarketmakingandcustomeractivities.Citialsoexecutesasmallerportionofitssecuredfundingtransactionsthroughitsbankentities,whicharetypicallycollateralizedbygovernmentdebtsecurities.Generally,dailychangesinthelevelofCiti’ssecuredfundingareprimarilyduetofluctuationsinsecuredlendingactivityinthematchedbook(asdescribedbelow)andsecuritiesinventory.
Securedfundingof$219billionasofMarch31,2021declined1%fromtheprior-yearperiodandincreased10%sequentially.ExcludingtheimpactofFXtranslation,securedfundingdeclined6%fromtheprior-yearperiodandincreased12%sequentially,bothdrivenbynormalbusinessactivity.Theaveragebalanceforsecuredfundingwasapproximately$235billionforthequarterendedMarch31,2021.
Theportionofsecuredfundinginthebrokerdealersubsidiariesthatfundssecuredlendingiscommonlyreferredtoas“matchedbook”activity.Themajorityofthisactivityissecuredbyhigh-quality,liquidsecuritiessuchasU.S.Treasurysecurities,U.S.agencysecuritiesandforeigngovernmentdebtsecurities.Othersecuredfundingissecuredbylessliquidsecurities,includingequitysecurities,corporatebondsandasset-backedsecurities,thetenorofwhichisgenerallyequaltoorlongerthanthetenorofthecorrespondingmatchedbookassets.
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Theremainderofthesecuredfundingactivityinthebrokerdealersubsidiariesservestofundsecuritiesinventoryheldinthecontextofmarketmakingandcustomeractivities.Tomaintainreliablefundingunderawiderangeofmarketconditions,includingunderperiodsofstress,Citimanagestheseactivitiesbytakingintoconsiderationthequalityoftheunderlyingcollateralandestablishingminimumrequiredfundingtenors.TheweightedaveragematurityofCiti’ssecuredfundingoflessliquidsecuritiesinventorywasgreaterthan110daysasofMarch31,2021.
Citimanagestherisksinitssecuredfundingbyconductingdailystressteststoaccountforchangesincapacity,tenor,haircut,collateralprofileandclientactions.Inaddition,Citimaintainscounterpartydiversificationbyestablishingconcentrationtriggersandassessingcounterpartyreliabilityandstabilityunderstress.Citigenerallysourcessecuredfundingfrommorethan150counterparties.
Short-TermBorrowings
Citi’sshort-termborrowingsof$32billiondecreased42%year-over-year,primarilydrivenbyadeclineinFHLBadvances.Sequentially,short-termborrowingsincreasedby9%,drivenbycustomer-relateddebtissuance.
LiquidityStressTesting
LiquiditystresstestingisperformedforeachofCiti’smajorentities,operatingsubsidiariesand/orcountries.Stresstestingandscenarioanalysesareintendedtoquantifythepotentialimpactofanadverseliquidityeventonthebalancesheetandliquidityposition,andtoidentifyviablefundingalternativesthatcanbeutilized.Thesescenariosincludeassumptionsaboutsignificantchangesinkeyfundingsources,markettriggers(suchascreditratings),potentialusesoffundingandmacroeconomicandgeopoliticalandotherconditions.TheseconditionsincludeexpectedandstressedmarketconditionsaswellasCompany-specificevents.
Liquiditystresstestsareperformedtoascertainpotentialmismatchesbetweenliquiditysourcesandusesoveravarietyoftimehorizonsandoverdifferentstressedconditions.Tomonitortheliquidityofanentity,thesestresstestsandpotentialmismatchesarecalculatedwithvaryingfrequencies,withseveraltestsperformeddaily.
Giventherangeofpotentialstresses,Citimaintainscontingencyfundingplansonaconsolidatedbasisandforindividualentities.Theseplansspecifyawiderangeofreadilyavailableactionsforavarietyofadversemarketconditionsoridiosyncraticstresses.
FormorediscussionofCiti’sfundingandliquidity,seethe2020AnnualReportonForm10-K(2020Form10-K)andQuarterlyReportonForm10-QforthequarterlyperiodendedMarch31,2021(1Q2021Form10-Q)filedwiththeSecuritiesandExchangeCommission(SEC).
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I.DescriptionofDerivativeandHedgingActivities
Overview
Intheordinarycourseofbusiness,Citiprovidesclientswithvariousservicesandproducts,includingderivatives,tohelpthemefficientlymanagetheirrisks.Citiusessimilarproductstomanageitsownrisksaspartofitscommitmenttotheongoingsafetyandsoundnessofthecompany.
CustomerNeeds
Inordertomeettheneedsofitsclients,Citiincludesanappropriaterangeofderivativesinitsproductofferings.Citi’sclientsrequireawidevarietyofriskmanagementstrategies,suchastheneedtotransfer,modifyorreduceinterestrate,foreignexchangeandothermarket/creditrisks,aswellasproductstofacilitatetheclients’ownpermissibletradingpurposes.
Citihascontrolsinplacetoevaluatewhetheraparticularproductorstrategyisappropriateforagivenclientandincompliancewithlocalregulatoryrequirements.Aspartofthisprocess,Citiconsiderstherisksassociatedwiththetransaction,aswellastheclient’sbusinesspurposeforthetransaction.Citialsooverseestheactivitiesassociatedwithmanagingthepossiblerisksundertakeninthecourseofofferingderivativestoclients,suchasbookingoffsettingtrades.Thisoversightincludes(i)centralizedpriceverification;(ii)credit,market,liquidity,andoperationallimits;and(iii)frequentreportingofrisksandstressresultstoseniormanagersandperiodicallytotheRiskManagementCommitteesofCitigroupParent’sandCBNA’sBoardsofDirectors.
Hedging
Aspartofitscommitmenttomanagethesafetyandsoundnessofthecompany,Citifollowsavarietyofstrategiestomanagecertainrisksthatariseinthenormalcourseofitsbankingandmarket-makingactivities.Theserisksinclude:
• Interestraterisk:Arisingfrommismatchesthatoccurinassetandliabilitycashflows.
• Creditrisk:Citiusesproductsdesignedtohedgecreditexposurestoclientsorcounterparties;tolimitlossesfromexposurestogroupsofsimilarclientorcounterpartytypes;ortolimitlossesfromexposurestocertaincountriesorregions.
• Foreignexchangerisk:Productsareusedtomanageexposurestocurrencyfluctuationsrelatedtoinvestmentsmadeinnon-U.S.subsidiariesorothernon-U.S.dollar-denominatedassets.
Citi’sriskreductionstrategiesincludetheuseofderivativessubjecttostrictpreventiveanddetectivecontrolswhichrestricttheproductsthatcanbebooked;thelegalentitiesonwhichtheycanbebooked;andtheemployeeswhocanbookthem.ThesecontrolsincluderestrictionsonthepermittedusageofCiti’slegalentities;desk-leveltradingmandates;andtrainingandsupervisionprogramscoveringtheemployeesauthorizedtotradederivativeproducts.Independentriskmanagementalsoprovidesoversightofthecredit,market,andoperationallimitsthatCitihasimplemented,anddevelopsandconductsregularstressteststoensurecompliancewiththespecifiedrisktolerances.
PleaseseeCiti’s2020Form10-Kand1Q2021Form10-QforadiscussionofCiti’sderivativeandhedgingactivities.
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ImpactoftheISDAProtocolsandtheQFCStayRules
TheISDAProtocols(theISDA2015UniversalResolutionStayProtocolandtheISDA2018U.S.ResolutionStayProtocol)arepartofaseriesofinitiativespromotedbyU.S.andnon-U.S.regulatorsandthefinancialindustrytocontractuallylimittheearlyterminationofQualifiedFinancialContracts(QFCs)ofU.S.G-SIBsandtheU.S.operationsofnon-U.S.G-SIBs.In2017,theFRB,theOfficeoftheComptrolleroftheCurrency(OCC),andtheFDICeachadoptedasetofrulesthatrequireU.S.G-SIBsandtheU.S.operationsofnon-U.S.G-SIBstoamendtheirQFCsto(i)includeanexpressrecognitionofthestatutorystaysandtransferpowersoftheFDICundertheFederalDepositInsuranceActandTitleIIoftheDodd-FrankWallStreetReformandConsumerProtectionAct,and(ii)prohibittheinclusionofcross-defaultsbased,directlyorindirectly,onanaffiliate'sentryintoinsolvencyorresolutionproceedings,aswellasanyrestrictionsthatcouldimpedethetransferinresolutionofguaranteesofQFCsfurnishedbyanaffiliate(theQFCStayRules).TheQFCStayRulesandtheISDAProtocolshelpmitigatetheriskthatMLEsarenotsubjecttosimultaneousliquidityoutflowsanddisorderlyliquidationsofcollateralasaresultofearlyclose-outsofQFCs.
DuringthecomplianceperiodundertheQFCStayRules,CitiactivelyengagedineffortstoconformitsQFCstotherequirementsoftherules.AsofJuly1,2021,CitigroupParentandover250ofitssubsidiaries,includingallofitsoperatingMLEs,haveadheredtotheISDA2020U.S.ResolutionStayProtocol,whichoperatestoextendthebenefitsoftheISDA2015UniversalResolutionStayProtocoltoabroadrangeofCiti'sQFCs.
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MembershipsinMaterialPayment,ClearingandSettlement
Systems
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J.MembershipsinMaterialPayment,ClearingandSettlementSystems
ContinuityofaccesstoFinancialMarketInfrastructures(FMIs)andAgentBankPayment,Clearing,andSettlement(PCS)services,aswellascontinuityofclientaccesstoCitiPCSservices,arebothmaterialcomponentsofCiti'sBAUoperationsaswellasCiti’spreferredResolutionstrategy.TheseFMIsservetolinktogetherCiti’sglobalnetwork,whichisthefoundationofthefirm’smissiontomeetthefinancialservicesneedsoflargemultinationalclientsandourretail,privatebanking,commercial,public-sectorandinstitutionalclientsaroundtheworld.Similartootherlargefinancialinstitutions,Citiparticipatesandmaintainsmembershipinanumberofpayment,clearingandsettlementsystems,virtuallyallofwhicharesubjecttoregulatorysupervisionandlocallicensingrequirements.
Citi’sPaymentsSystemsRiskManagementGroupprovidesaconsistentframeworkforassessing,measuring,approving,monitoring,reporting,andmitigatingrisksrelatedtoFMIs.PaymentsystemsriskistherisktoearningsorcapitalarisingfromCiti’sinvolvementwithFMIsthatfacilitatethetransferofvaluebyprovidingtrading,payments,clearing,settlement,ordepositoryservices.Suchservicesincludefundstransfersystems;securitiesandderivativesclearinghouses;securitiesdepositories;consumernetworks;paymentcardnetworks;andotherFMIsthatserveasequity,fixedincomeorderivativesexchanges.ListedbelowareCiti’sKeyFMIsasdescribedinthe2021ResolutionPlan:
PaymentsFMIs
• ClearingHouseAutomatedPaymentSystem• ClearingHouseInterbankPaymentsSystem• ElectronicPaymentsNetwork• EURO1System• FedACHServices• FedwireFundsService• Trans-EuropeanAutomatedReal-TimeGross-
SettlementExpressTransferSystem
ClearingandSettlementFMIs
• ChicagoMercantileExchange• TheDepositoryTrustCompany• EurexClearingAG• EuroclearBankSA/NV• EuroclearUK&Ireland• FedwireSecuritiesServices• FixedIncomeClearingCorporation• ICEClearCredit• ICEClearEurope• ICEClearUS• LCHLtd.• LCHSA• NationalSecuritiesClearingCorporation• OptionsClearingCorporation
InternationalMessagingUtility
• SocietyforWorldwideInterbankFinancialTelecommunication
PaymentCardNetworks
• Mastercard• Visa
FXSettlement
• CLSBankInternational
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K.DescriptionofForeignOperations
CitiprovidesbankingproductsandservicesthatsupporteconomicactivityintheU.S.andaroundtheworld.TheforeignoperationsofCiti’sBankingandMarkets&SecuritiesServicebusinesslineshelpU.S.companiespursuebusinessopportunitiesoutsidetheU.S.,andprovideafullsuiteofbankingservices—includingpayments,lendingandcapitalmarkets—thathelptodevelopandsustaintheirinternationalactivities.Theseforeignoperationsalsoservegovernmentsandnon-profits,aswellaslocalbusinessesandmultinationalcompanies,byprovidinginternationalfinancingandpaymentsservices.AsofMarch31,2021,GCBhad2,241branchesin19countriesandjurisdictions.ICG’sinternationalpresenceissupportedbytradingfloorsinapproximately80countriesandaproprietarynetworkin96countriesandjurisdictions.
Citi’sinternationalservicesforU.S.corporationsandotherinstitutionalandglobalclientsincludedeposittaking,payments,FX,tradefinance,lending,custody,andcapitalmarkets.Citi’snetworkenablestheinternationalactivitiesoftheseclientsbylinkingtheirvariousinternationallocationsthrougheffectivemanagementofliquidityandfacilitationoffinancialflowsandotherfinancialtransactions—including,forexample,thepaymentofemployeesoutsidetheU.S.andthehedgingofforeigncurrencyexposures.Citi’snetworkinturnconnectsthevariousinternationalhubsofthesemultinationalstotheirrespectivesuppliersandcustomers,enablingcommercialactivitybyfacilitatingpaymentsanddisbursements,tradefinanceandbalancesheethedging.Citiscalesitsinternationalnetwork,bothintermsoflocationsandcapabilities,tomatchtheneedsoftheseclients.
InternationalGovernance
Citimaintainsastrongglobalframeworkofgovernance,management,andoversightoftheactivitiesconductedineachcountry;supervisionistheresponsibilityofseniormanagementintheproductareas,theregionsandtheglobalfunctionmanagers.Thisinternationalfranchisemanagementstructureisdesignedtoensurethatacoresetofprocesses,procedures,andguidelinesgovernCiti’sinternationalfranchise.Thisstructureplaysanimportantroleinbalancinglocalfranchisegovernanceandmanagementwithoverallinstitutionalobjectivesbyhelpingalignlocalfranchiseobjectiveswithglobalplatformsandstrategies.
IneverycountrywhereCitihasfacilities,thereisaCitiCountryOfficerorGovernanceHeadwhoservesastheleadrepresentativeofCitiinthatcountry.TheCitiCountryOfficer’sresponsibilitiesincludeprotectingtheCitifranchiseandreputation,overseeingCountryRiskManagement,managingregulatoryrelationships,ensuringthatappropriatecontrols(legalentity,compliance,legalandaudit)areinplace,managingliquidity,crisismanagementandescalatingmaterialissuestoseniorregionalmanagement.
FinancialOverview
Asindicatedinthetablebelow,inthefirstquarterof2021,morethanhalfofCitigroup’srevenuewasearnedfrombankingoperationsoutsideofNorthAmerica.8ThefollowingtableshowsCitigroup’sfinancialresultsbygeographicregionforthefirstquarterof2021.
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8Forthesepurposes,NorthAmericaincludestheU.S.,Canada,andPuertoRico.
GeographicregionRevenues
Incomefromcontinuingoperations
Averageassets
$Million % $Million % $Billion %
NorthAmerica 9,326 48 4,655 58 1,261 54
EMEA 3,713 19 1,476 19 434 19
LatinAmerica 2,144 11 699 9 124 5
Asia* 4,074 21 1,396 16 407 18
Corporate/Other 70 — (169) (2) 91 4
TotalCiti 19,327 100 7,977 100 2,317 100
*AsiaGlobalConsumerBankingincludestheresultsofoperationsofGlobalConsumerBankingactivitiesincertainEMEAcountriesforallperiodspresented.
NorthAmerica
BusinessRevenues Incomefromcontinuingoperations
$Million $Million
InstitutionalClientsGroup 4,898 2,798
GlobalConsumerBanking 4,428 1,857
Europe,theMiddleEastandAfrica(EMEA)
EMEAincludesadiversemixofdevelopedandemergingmarkets.ThefollowingtableshowsabreakdownofEMEA’sfinancialresultsbybusinesssegmentforthefirstquarterof2021.
BusinessRevenues Incomefromcontinuingoperations
$Million $Million
InstitutionalClientsGroup 3,713 1,476
GlobalConsumerBanking* N/A N/A
*AsiaGlobalConsumerBankingincludestheresultsofoperationsofGlobalConsumerBankingactivitiesincertainEMEAcountriesforallperiodspresented.
LatinAmerica
CitihasprovidedbankingservicesinLatinAmericasince1904,whenthefirmstartedoperationsinPanama.CitioperatesinMexico,whereitssubsidiarybank,Citibanamex,isoneofthecountry’slargestbankswithmorethan30millioncustomeraccounts.ThefollowingtableshowsabreakdownofLatinAmerica’sfinancialresultsbybusinesssegmentforthefirstquarterof2021.
BusinessRevenues Incomefromcontinuingoperations
$Million $Million
InstitutionalClientsGroup 1,136 646
GlobalConsumerBanking* 1,008 53
*LatinAmericaGlobalConsumerBankingconsistsofCiti'sconsumerbankingbusinessinMexico.
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Asia(AsiaPacificandJapan)
Citi’slegacyintheAsiaregiondatesbackmorethanahundredyears.AsiacomprisesAsiaPacificandJapan(whichformanagementpurposesisaseparatelyreportingregion).ThefollowingtableincludesabreakdownofAsia’sfinancialresultsbybusinesssegmentforthefirstquarterof2021.
BusinessRevenues Incomefromcontinuingoperations
$Million $Million
InstitutionalClientsGroup 2,473 1,052
GlobalConsumerBanking* 1,601 264
*AsiaGlobalConsumerBankingincludestheresultsofoperationsofGlobalConsumerBankingactivitiesincertainEMEAcountriesforallperiodspresented.
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L.MaterialSupervisoryAuthorities
Overview
CitiissubjecttoregulationunderU.S.federalandstatelaws,aswellasapplicablelawsintheotherjurisdictionsinwhichthecompanydoesbusiness.ForadditionalinformationaboutCiti’ssupervisionandregulation,seeCiti’s2020Form10-K.
HoldingCompanySupervision
Asaregisteredbankholdingcompanyandfinancialholdingcompany,CitiisregulatedandsupervisedbytheFRB.
SubsidiaryBanks
Citi’snationallycharteredsubsidiarybanks,includingCBNA,areregulatedandsupervisedbytheOCCwhileCiti’sstate-chartereddepositoryinstitutionsareoverseenbytherelevantstatebankingdepartmentsandtheFDIC.TheFDICalsohasenforcementauthoritywithrespecttobankingsubsidiarieswhosedepositsitinsures.Inaddition,theFDIChasestablishedDivisionofComplexInstitutionSupervisionResolutionwhichhasresponsibilityforplanningforandexecutingtheFDIC'sresolutionmandateswithrespecttolargebanks.OverseasbranchesofCBNAareregulatedandsupervisedbytheFRBandOCC,andoverseassubsidiarybanksareregulatedandsupervisedbytheFRB.Overseasbranchesandsubsidiarybanksarealsoregulatedandsupervisedbyregulatoryauthoritiesinthehostcountries.CBNAisalsoprovisionallyregisteredwiththeCommodityFuturesTradingCommission(CFTC)asaswapdealer.
BrokerDealers
Citiconductssecuritiesunderwriting,brokerage,anddealingactivitiesintheU.S.throughitsownershipofCGMI,itsprimarybrokerdealer.CGMIisregisteredwiththeSECasabrokerdealerandasaninvestmentadviser,registeredwiththeCFTCasafuturescommissionmerchantandcommoditypooloperator,andprovisionallyregisteredwiththeCFTCasaswapdealer.CGMIisalsoamemberoftheNewYorkStockExchangeandotherprincipalU.S.securitiesexchanges,aswellastheFinancialIndustryRegulatoryAuthority.CGMIisalsoaprimarydealerinU.S.TreasurysecuritiesandamemberoftheprincipalU.S.futuresexchanges.
OutsidetheU.S.,Citiconductssimilarsecuritiesactivities,principallythroughitsownershipofCGMLinLondon,whichisauthorizedandregulatedprincipallybytheUKPrudentialRegulationAuthorityandtheUKFinancialConductAuthority,andthroughCGMJinTokyo,whichisregulatedprincipallybytheFinancialServicesAgencyofJapan.
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M.PrincipalOfficersofCitigroupInc.
• PeterBabej,ChiefExecutiveOfficer,AsiaPacific
• JaneFraser,ChiefExecutiveOfficer,CitigroupInc.
• SunilGarg,ChiefExecutiveOfficer,Citibank,N.A.
• DavidLivingstone,ChiefExecutiveOfficer,Europe,MiddleEastandAfrica
• MarkMason,ChiefFinancialOfficer,CitigroupInc.
• MaryMcNiff,ChiefComplianceOfficer
• KarenPeetz,ChiefAdministrativeOfficer
• AnandSelva,ChiefExecutiveOfficer,GlobalConsumerBank
• ErnestoTorresCantu,ChiefExecutiveOfficer,LatinAmerica
• ZdenekTurek,ChiefRiskOfficer
• SaraWechter,HeadofHumanResources
• RohanWeerasinghe,GeneralCounselandCorporateSecretary
• MikeWhitaker,HeadofEnterpriseInfrastructureOperations&Technology
• PacoYbarra,ChiefExecutiveOfficer,InstitutionalClientsGroup
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N.OverviewofMaterialManagementInformationSystems
AspartofCiti’sResolutionplanningprocesses,inaResolutionscenario,eachCitibusinessunitandlegalentityisintendedtohaveongoingaccesstothesystemsanddataneededinordertocompleteanorderlyandvalue-maximizingresolution.
Citihasmadesignificantinvestmentsinsystemarchitectureanddataqualitytosupportenterprise-widedecision-makingandreportingneeds.Thisincludestheimplementationofstandards-baseddataarchitectureandstrategicplatformssupportingfirm-wideFinance,Risk,andComplianceprocesses.Sincethe2019submission,CitihascontinuedtomakeinvestmentsinitsMISplatforms.Citibelievesthattheseinvestmentshavecontinuedtoenhancethefirm’smaterialMISasevidencedbystrengthenedbusinessplanning,monitoring,reporting,andanalyticscapabilities.Inadditiontosupportingmanagement’sday-to-dayneeds,CitihasutilizeditsimprovedMISplatformstosupporttheinformationneedsassociatedwithResolutionplanning.
CitifurtherrecognizesthattheeffectivenessofitsMISrestsonwell-definedorganizationalaccountabilities,processes,andstandards.Therefore,thefirmmaintainsbothenterprisearchitectureandindustrystandarddatamanagementpracticesthatgovernhowsystemsaredesigned,built,andmanaged.
Akeycomponentofthedatamanagementpolicyfocusesonadherencetodataarchitecture,standards,andtargeteddataqualityobjectives.CitisupportsthispolicythroughtheChiefDataOfficeanditsuseofastandard,enterpriseend-to-enddataqualitymeasurementandmanagementprogram.Citi’senterprisedataarchitecturedefinesandmanagesthegovernanceofstrategicdatarepositories,whichserveasauthoritativesourcesofinformationcoveringareassuchaslegalentities,organization,customers,products,contracts,employees,andtransactions.
Citi’sMISplatformsarebuiltandmanagedincompliancewithallapplicabledataprivacylawsandregulations.CitihasdetailedandformalproceduresinplaceforsharingofdataacrosslegalentitiesanddifferentCitibusinesses.InaResolutionscenario,theseproceduresprovideaframeworktofacilitateongoinginformationsharinginordertoenableanorderlyandvalue-maximizingresolutionofeachofCiti’sCOs,CBLsandMLEs.Citi’sMISplatformsarebuilttocomplywithCiti’scontinuityofbusinesspolicywhichensuresresiliencyofallcriticalsystemsunderstress,andthatwouldfacilitatesmoothcontinuedoperationofthebusinessesinaResolutionscenario.
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ThefollowingareexamplesofmaterialMISandcapabilitiesthatarebasedonthisarchitecture.
ResolutionInformationSystem
Citi’sResolutioninformationsystemishousedwithinthecorestrategicarchitectureandintegratesfinancial,operationalandthird-partyrelationshipdataforoperationalResolutionplanningandexecutionacrossthefirm.ItpresentsadetailedviewofCiti’sMLEs,CBLs,COs,sharedfunctions,andObjectsofSale,aswellasservicesbetweenlegalentitiesandthoseprovidedbythirdparties.TheplatformintegratesdatafromCiti’sauthoritativedatasources,includingassets,financialposition,services,andoperationalresourcessuchaspersonnel,facilities,andinformationsystems.EachsourcesupportsacriticalmanagementprocessinCitiandhasadefinedprocessowner.TheresolutioninformationsystemassistsCitianditsregulatorsinobtainingcriticalinformationthatwouldbeneededleadinguptoandduringResolution.
MonitoringofCreditandMarketRisk
CitihasaconsolidatedenterpriseplatformsupportingWholesaleandRetailCreditRisk,MarketRisk,OperationalRisk,CollateralManagement,RiskWeightedAssets,andStressLossandForecastProjectionsacrossthefirm.DuringResolution,thisplatformwouldbeusedtomonitorinternalandexternalcreditexposures,aswellasgrossandnetriskpositions.Itprovidesgranularandholisticviewsofriskdataacrosslegalvehicle,geographic,andbusinessdimensionsforwholesaleandretailportfolios,andhastheabilitytoreportcreditandmarketexposuresfromavarietyofperspectives,includingbusinessunit,legalentity,counterparty,countryandindustry,mark-to-market,product,andissuerrisk.Theplatformalsohasthecapabilitytoidentifyoff-balancesheetexposuresandreportgrosspayablesandreceivablesbycounterparty.
Citi’sstrategicmanagementreportingplatformprovidesdashboardsthatwouldbeusedbyseniormanagersandanalyststodetectearlywarningalertstoatriggereventinResolution.Itdeliverscross-datasetintelligencearoundtrends,patterndetection,andothercorrelations,leveraginggoldensourcedata,datastandards,andstandardhierarchies.Itsdatacoveragespansfinancial,organizational,locationandsitestrategy,clientprofitability,creditexposureresults,firm-widesinglenameexposurereporting,operationallosses,andcomplianceandcontrolassessmentresults.
MonitoringofCapitalandLiquidity
Citi’sstrategicregulatoryreportingplatformconsolidatesfinance,riskandregulatorydata,includingbalancesheetandforecasts.Theplatformhasdrivenstandardizationinthefirm’sregulatoryreportingframework.InaResolutionscenario,thisplatformwouldbeusedtomonitordailyliquidityrequirementsformateriallegalentitiesandestimateliquiditypositioningrequirements,alongwiththeconstituentbalancesfordrill-downandanalysis.Resolutioncapitalrequirementsarealsomonitoredonthisplatform.
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Citi’sintradayliquidityriskmanagementtoolsprovidemultipleviewsintoCiti’sdailyfundingflowstomonitorintradayliquidityriskforitslegalentities.ThetoolsallowCititoeffectivelymanageitsfundingflowsandassociatedrisksduringaResolutionscenario.Citileveragesthesecapabilitiesto(i)viewintradayflows/positionsattheFMI,counterparty,andcustomerlevelatanypointthroughoutthesettlementday,and(ii)benchmarknearreal-timepositionsagainsthistoricalobservations,providingearlywarningindicatorsofnotablechangesincounterpartyorcustomerbehaviorand/ordisruptionsatFMIswhichmayimpactintradayliquidityrequirements.
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O.Forward-LookingStatements
Certainstatementsinthispublicsectionare“forward-lookingstatements”withinthemeaningoftherulesandregulationsoftheSEC.ThesestatementsarebasedonahypotheticalResolutionscenarioofCitigroupParent,certainassumptionsrequiredofCitipursuanttosuchhypotheticalresolution,andCiti’scurrentbeliefswithrespecttoaResolutionscenario.Thesestatementsaresubjecttorisks,uncertainties,andchangesincircumstancesandarenotbindingonabankruptcycourtorotherresolutionauthority.Thesestatementsarenotguaranteesoffutureresultsoroccurrences.Actualresultsandcapitalandotherfinancialconditionsmaydiffermateriallyfromthoseincludedinthesestatementsduetoavarietyoffactors,including,amongothers,regulatoryreviewofCiti’s2021ResolutionPlan,Citi’sabilitytosuccessfullyimplementtheSPOEStrategyaswellasactualmarketconditionsandmarket,creditor,andcounterpartyreactionstoanypotentialresolutionevent.ActualresultsandcapitalandotherfinancialconditionsmayalsodiffermateriallyduetotheprecautionarystatementsincludedhereinandthosecontainedinCitigroupParent’sfilingswiththeSEC,includingwithoutlimitationthe“RiskFactors”sectionofCitigroup’s2020AnnualReportonForm10-K.Anyforward-lookingstatementsmadebyoronbehalfofCitigroupParentspeakonlyastothedatetheyaremade,andCitigroupParentdoesnotundertaketoupdateforward-lookingstatementstoreflecttheimpactofcircumstancesoreventsthatariseafterthedatetheforward-lookingstatementsweremade.
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P.Glossary
2020Form10-K CitigroupParent’sAnnualReportonForm10-KfortheyearendedDecember31,2020
1Q2021Form10-Q CitigroupParent’sQuarterlyReportonForm10-QforthequarterlyperiodendedMarch31,2021
2019ResolutionPlanGuidance
RegulatoryguidanceissuedbytheFRBandFDIConDecember20,2018forthe2019§165(d)ResolutionPlansubmissionsoftheeightlargestandmostcomplexdomesticbankingorganizationspursuanttoTitleIoftheDodd-FrankWallStreetReformandConsumerProtectionAct
Citibanamex BancoNacionaldeMexico,S.A.
BCMA Banking,CapitalMarkets&Advisory
CBL CoreBusinessLine
CBNA Citibank,N.A.
CBNAGermany Citibank,N.A.Germany
CBNAHongKong Citibank,N.A.HongKong
CBNAIreland Citibank,N.A.Ireland
CBNAJapan Citibank,N.A.Japan
CBNAROHQ Citibank,N.A.ROHQ
CBNASingapore Citibank,N.A.Singapore
CBNAUK Citibank,N.A.UnitedKingdom
CBSCostaRica CitiBusinessServicesCostaRica
CCSIUSA CiticorpCreditServices,Inc.(USA)
CEP CitibankEuropeplc
CFTC CommodityFuturesTradingCommission
CGMHI CitigroupGlobalMarketsHoldingInc.
CGMI CitigroupGlobalMarketsInc.
CGMJ CitigroupGlobalMarketsJapanInc.
CGML CitigroupGlobalMarketsLtd.
CHKL Citibank(HongKong)Ltd.
Citicorp CiticorpLLC
CitigroupParent CitigroupInc.
Citishare CitishareCorp.
CMI CitiMortgage,Inc.
CO CriticalOperation
CSIPL CiticorpServicesIndiaPrivateLtd.
CSJ CitigroupServicesJapanG.K.
CSL CitibankSingaporeLtd.
CTI CitigroupTechnologyInc.
CTI(HK)Ltd CitigroupTechnologyInfrastructure(HongKong)Ltd.
EC EmergingCorporates
EMEA Europe,MiddleEast,andAfrica
FDIC FederalDepositInsuranceCorporation
FederalReserve BoardofGovernorsoftheFederalReserveSystem
FHLB FederalHomeLoanBank
FMI FinancialMarketInfrastructure
FRB BoardofGovernorsoftheFederalReserveSystem
HQLA High-QualityLiquidAsset
IHC IntermediateHoldingCompany
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IPO InitialPublicOffering
ISDA InternationalSwapsandDerivativesAssociation
LCR LiquidityCoverageRatio
M&A MergersandAcquisitions
MC MidCorporates
MIS ManagementInformationSystem
MLE MaterialLegalEntity
OCC OfficeoftheComptrolleroftheCurrency
OTC Over-the-Counter
RBBIL R.B.BishopsgateInvestmentsLimited
RCAP ResolutionCapitalAdequacyandPositioning
RCB RegionalConsumerBanking
RCEN ResolutionCapitalExecutionNeed
RLAP ResolutionLiquidityAdequacyandPositioning
RLEN ResolutionLiquidityExecutionNeed
SEC SecuritiesandExchangeCommission
SPOEStrategy SinglePointofEntryResolutionStrategy
TLAC TotalLoss-AbsorbingCapacity
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