EXECUTIVE SUMMARY

Second Quarter of 2014—Continued Progress on Execution Priorities and Strategy Despite Ongoing Challenging Operating Environment

Citi’s results of operations for the second quarter of 2014 were significantly impacted by a $3.8 billion charge ($3.7 billion after-tax) related to the settlement announced on July 14, 2014 with the U.S. Department of Justice, several state attorneys general and the Federal Deposit Insurance Corporation regarding certain of Citi’s legacy RMBS and CDO activities (for additional information, see Note 25 to the Consolidated Financial Statements). While significantly impacting second quarter results, the settlement represented a significant milestone in Citi’s ability to put its legacy legal and regulatory issues behind it and get Citi Holdings to break-even (see discussion below).

Excluding the impact of the mortgage settlement, Citi’s second quarter of 2014 results continued to reflect a challenging operating environment, particularly in the fixed income and equities markets businesses within the Institutional Clients Group (ICG) , where macro-uncertainty and historically low volatility reduced client activity. Despite these challenges, corporate lending and investment banking revenues within ICG each increased from the prior-year period, and treasury and trade solutions revenues continued to grow as volumes continued to increase. Within Global Consumer Banking (GCB) , year-over-year comparisons continued to be impacted by the lower mortgage refinancing activity in North America GCB as well as the repositioning of Citi’s consumer franchise in Korea within Asia GCB , although Citi continues to believe that each such business has stabilized as of the end of the current quarter.

Citi also continued to make progress on its execution priorities during the second quarter, including:

During the remainder of 2014, Citi intends to remain focused on these and its other execution priorities, particularly as macroeconomic uncertainties and challenges, including in certain emerging markets, persist.

Second Quarter of 2014 Summary Results

Citigroup

Citigroup reported second quarter net income of $181 million or $0.03 per diluted share, compared to $4.2 billion or $1.34 per share in the second quarter of 2013. As noted above, reported net income included the $3.8 billion pretax charge related to the mortgage settlement, which consisted of $3.7 billion of legal expenses and a $55 million loan loss reserve build, each recorded in Citi Holdings. Results in the second quarter of 2014 also included a credit valuation adjustment (CVA) on derivatives (counterparty and own-credit), net of hedges, and debt valuation adjustment (DVA) on Citi’s fair value option debt of negative $33 million (negative $20 million after-tax), compared to positive $477 million (positive $293 million after-tax) in the second quarter of 2013.

Excluding the impact of the mortgage settlement in the second quarter of 2014 and CVA/DVA in both periods, Citi reported net income of $3.9 billion in the second quarter of 2014, or $1.24 per diluted share, compared to $3.9 billion, or $1.25 per share, in the prior-year period. The year-over-year increase of 1% in net income was driven by increased net interest revenues, lower operating expenses and a decline in credit costs, partially offset by lower non-interest revenues.

Citi’s revenues, net of interest expense, were $19.3 billion in the second quarter of 2014, down 6% versus the prior-year period. Excluding CVA/DVA, revenues were $19.4 billion, down 3% from the second quarter of 2013, as revenues in Citicorp declined 5% while Citi Holdings revenues increased 35% compared to the prior-year period. Net interest revenues of $11.9 billion were 2% higher than in the prior-year period, mostly driven by lower funding costs in Citi Holdings. Excluding CVA/DVA, non-interest revenues were $7.4 billion, down 11% from the prior-year period, principally driven by lower revenues in ICG and North America GCB in Citicorp, partially offset by higher non-interest revenues in Citi Holdings.

Operating Expenses

Citigroup expenses increased 28% versus the prior-year period to $15.5 billion. Excluding the impact of the mortgage settlement, operating expenses declined 3% to $11.8 billion, driven by efficiency savings, the overall decline in Citi Holdings assets and lower legal and related expenses, partially offset by higher regulatory and compliance costs, which Citi expects to continue, and higher repositioning charges in the current quarter, primarily due to repositioning in Korea in Asia GCB . Excluding the impact of the mortgage settlement, Citi incurred legal and related costs of $402 million (compared to $832 million in the prior-year period) and repositioning

charges of $397 million (compared to $75 million in the prior-year period). Excluding the impact of the mortgage settlement, other legal and related costs, repositioning charges and the impact of foreign exchange translation into U.S. dollars for reporting purposes (FX translation), which increased reported expenses by approximately $17 million in the second quarter of 2014 as compared to the prior-year period, operating expenses were $11.0 billion compared to $11.2 billion in the prior-year period. Consistent with its execution priorities, Citi currently expects its repositioning charges in the second half of 2014 to be roughly in line with the $608 million of repositioning charges recorded in the first half of 2014.

Citicorp’s expenses were $11.0 billion, up 4% from the prior-year period, primarily reflecting higher legal and related expenses ($387 million in the current quarter, compared to $128 million in the prior-year period) and higher repositioning costs ($376 million in the current quarter, compared to $72 million in the prior-year period), partially offset by efficiency savings. Citi expects legal and related expenses in Citicorp will likely remain somewhat elevated and episodic in nature going forward. Citi Holdings’ expenses were $4.5 billion compared to $1.6 billion in the second quarter of 2013. Excluding the impact of the mortgage settlement, Citi Holdings’ expenses decreased 51% versus the prior-year period to $765 million, driven by lower legal and related expenses and the 15% reduction in assets.

Credit Costs and Allowance for Loan Losses

Citi’s total provisions for credit losses and for benefits and claims of $1.7 billion declined 15% from the second quarter of 2013. Excluding the impact of the mortgage settlement, Citi’s total provisions for credit losses and for benefits and claims declined 17% to $1.7 billion versus the prior-year period. Net credit losses of $2.2 billion were down 16% versus the prior-year period. Consumer net credit losses declined 15% to $2.2 billion, reflecting continued improvements in the North America mortgage portfolio within Citi Holdings, as well as North America Citi-branded cards in Citicorp. Corporate net credit losses decreased 76% to $11 million from the prior-year period reflecting improvements in ICG.

The net release of allowance for loan losses and unfunded lending commitments was $641 million in the second quarter of 2014. Excluding the impact of the mortgage settlement, the net release of allowance for loan losses and unfunded lending commitments was $696 million compared to a $784 million release in the prior-year period. Citicorp’s net reserve release increased 42% to $442 million, primarily due to a higher reserve release in North America GCB and ICG, partially offset by a net reserve build in international GCB , primarily reflecting portfolio growth and seasoning in Latin America GCB. Citi Holdings’ net reserve release, excluding the impact of the mortgage settlement, decreased 46% to $254 million, substantially all of which related to the North America mortgage portfolio.

Citigroup’s total allowance for loan losses was $17.9 billion at quarter end, or 2.70% of total loans, compared to $21.6 billion, or 3.38%, at the end of the prior-year period. The decline in the total allowance for loan losses reflected the

continued wind down of Citi Holdings and overall continued improvement in the credit quality of Citi’s loan portfolios.

The Consumer allowance for loan losses was $15.5 billion, or 4.04% of total consumer loans, at quarter end, compared to $18.9 billion, or 4.95% of total loans, at June 30, 2013. Total non-accrual assets fell to $8.3 billion, an 18% reduction compared to June 30, 2013. Corporate non-accrual loans declined 43% to $1.2 billion, while Consumer non-accrual loans declined 12% to $6.7 billion, both reflecting the continued improvement in credit trends.

Capital

Despite the impact of the mortgage settlement, Citi continued to grow its regulatory capital versus the prior-year period, primarily through net income and a further reduction of its DTAs. Citigroup’s estimated Tier 1 Capital and Tier 1 Common ratios under Basel III, on a fully implemented basis, were 11.4% and 10.6% as of June 30, 2014, respectively, compared to 10.4% and 10.0% as of June 30, 2013. Citigroup’s estimated Basel III Supplementary Leverage ratio as of June 30, 2014 was 5.7% compared to 4.9% as of June 30, 2013. For additional information on Citi’s estimated Basel III Tier 1 Common ratio, Supplementary Leverage ratio and related components, see “Capital Resources” below.

Citicorp

Citicorp net income decreased 23% from the prior-year period to $3.7 billion. CVA/DVA, recorded in the ICG , was negative $32 million (negative $20 million after-tax) in the second quarter of 2014, compared to positive $462 million (positive $284 million after-tax) in the prior-year period (for a summary of CVA/DVA by business within ICG for the second quarters of 2014 and 2013, see “ Institutional Clients Group ” below).

Excluding CVA/DVA, Citicorp’s net income was $3.7 billion, down 18% from the prior-year period, as lower revenues and higher expenses, primarily due to higher legal and repositioning costs, were partially offset by an improvement in credit.

Citicorp revenues, net of interest expense, decreased 8% from the prior-year period to $17.9 billion. Excluding CVA/DVA, Citicorp revenues were $17.9 billion in the second quarter of 2014, down 5% from the prior-year period. GCB revenues of $9.4 billion declined 3% versus the prior-year period. North America GCB revenues declined 5% to $4.8 billion, driven by lower retail banking revenues, partially offset by higher revenues in Citi-branded cards and Citi retail services. Retail banking revenues declined 26% to $1.2 billion versus the prior-year period, primarily reflecting the lower U.S. mortgage refinancing activity. Citi-branded cards revenues of $2.0 billion were up 3% versus the prior-year period as purchase sales grew and lower average loans were partially offset by an improvement in spreads driven by a continued reduction in promotional rate balances. Citi retail services revenues increased 7% to $1.6 billion, mainly reflecting the impact of the Best Buy portfolio acquisition. North America GCB average deposits of $171 billion grew 4% year-over-year and average retail loans of $46 billion grew 11%. Average card loans of $109 billion increased 4%, and purchase sales of $64 billion increased 7% versus the prior-

year period. For additional information on the results of operations of North America GCB for the second quarter of 2014, see “ Global Consumer Banking—North America GCB ” below.

International GCB revenues (consisting of Asia GCB , Latin America GCB and EMEA GCB ) decreased 1% versus the prior-year period to $4.6 billion. Excluding the impact of FX translation, international GCB revenues rose 1% from the prior-year period, driven by 3% revenue growth in Latin America GCB , partially offset by a 2% decline in Asia RCB and a 1% decline in EMEA GCB (for the impact of FX translation on the second quarter of 2014 results of operations for each of EMEA GCB, Latin America GCB, and Asia GCB , see the table accompanying the discussion of each respective business’ results of operations below). This growth in international GCB revenues, excluding the impact of FX translation, mainly reflected volume growth in Latin America GCB, partially offset by ongoing regulatory changes, the franchise repositioning in Korea and lower investment sales revenues in Asia GCB, as well as the previously-disclosed market exits in EMEA GCB . For additional information on the results of operations of EMEA GCB, Latin America GCB and Asia GCB for the second quarter of 2014, see “ Global Consumer Banking ” below.

Year-over-year, international GCB average deposits increased 3%, average retail loans increased 8%, average card loans increased 3%, and card purchase sales increased 2%, while investment sales decreased 2%, all excluding the impact of FX translation.

ICG revenues were $8.5 billion in the second quarter of 2014, down 11% from the prior-year period. Excluding CVA/DVA, ICG revenues were $8.5 billion, or 7% lower than the prior-year period. Banking revenues of $4.4 billion increased 4% from the prior-year period, primarily reflecting growth in investment banking revenues. Investment banking revenues increased 16% versus the prior-year period, driven by a 17% increase in debt underwriting revenues to $748 million and a 31% increase in equity underwriting to $397 million, partially offset by a 10% decline in advisory revenues to $193 million. Private bank revenues, excluding CVA/DVA, increased 2% to $656 million from the prior-year period, as growth in client volumes was partially offset by the impact of spread compression. Corporate lending revenues decreased 4% to $410 million, including $44 million of mark-to-market losses on hedges related to accrual loans compared to a $23 million gain in the prior-year period. Excluding the mark-to-market impact on hedges related to accrual loans, corporate lending revenues rose 12% versus the prior-year period to $454 million, primarily reflecting growth in average loans. Treasury and trade solutions revenues were unchanged compared to the prior-year period. Excluding a gain of $50 million in the prior-year period, treasury and trade solutions revenues were up 3% versus the prior-year period as volume and fee growth more than offset the impact of spread compression globally.

Markets and securities services revenues of $4.1 billion, excluding CVA/DVA, declined 16% from the prior-year period. Fixed income markets revenues of $3.0 billion, excluding CVA/DVA, declined 12% from the prior-year

period, reflecting historically low volatility and continued macro-uncertainty in the current quarter, which led to lower market volumes, as well as the impact of gains in the prior-year period. Equity markets revenues of $659 million, excluding CVA/DVA, were down 26% versus the prior-year period, reflecting lower client activity and weak trading performance in EMEA . Securities services revenues were largely unchanged at $598 million versus the prior-year period as higher client activity was offset by a reduction in high margin deposits. For additional information on the results of operations of ICG for the second quarter of 2014, see “ Institutional Clients Group ” below.

Corporate/Other revenues decreased to $35 million from $114 million in the prior-year period, driven mainly by hedging activities. For additional information on the results of operations of Corporate/Other for the second quarter of 2014, see “ Corporate/Other ” below.

Citicorp end-of-period loans increased 8% versus the prior-year period to $585 billion, with 7% growth in consumer loans and 9% growth in corporate loans.

Citi Holdings

Citi Holdings’ net loss was $3.5 billion in the second quarter of 2014 compared to a net loss of $582 million in the second quarter of 2013. Excluding the impact of the mortgage settlement, Citi Holdings net income was $244 million, reflecting higher revenues, lower operating expenses and lower credit costs.

Citi Holdings’ revenues increased 33% to $1.5 billion from the prior-year period. Excluding CVA/DVA (negative $1 million in the current quarter, compared to a positive $15 million in the prior-year period), Citi Holdings revenues increased 35% to $1.5 billion from the prior-year period. Net interest revenues increased 24% year-over-year to $1.0 billion, largely driven by lower funding costs. Non-interest revenues, excluding CVA/DVA, increased to $492 million from $297 million in the prior-year period, driven by the absence of repurchase reserve builds for representation and warranty claims in the second quarter of 2014, as well as higher gains on asset sales. For additional information on the results of operations of Citi Holdings for the second quarter of 2014, see “Citi Holdings” below.

Citi Holdings’ assets were $111 billion, 15% below the prior-year period, and represented approximately 6% of Citi’s total GAAP assets and 16% of its estimated risk-weighted assets under Basel III (based on the “Advanced Approaches” for determining risk-weighted assets) as of quarter-end.