Citibank Hungary's earnings before tax in 2011 rose 26.4 percent in a challenging environment

April 4, 2012

Citibank Hungary posted a HUF 16.44 billion of earnings before tax in 2011 showing a 26.4 percent increase over the previous year under local GAAP. The after tax profit of HUF 10.84 billion absorbing the special bank levy resulted in a return on assets (ROA) of 1.5% on total assets of HUF 813.35 billion.

Batara Sianturi, Citi Country Officer for Citibank Hungary said, "Citibank Hungary rests on solid foundations. Our 2011 performance was outstanding across the Consumer, SME and Corporate Bank businesses with strong year-on-year top line growth and positive operating leverage. We have effectively optimized our expense base, and have managed the credit risks across the franchise. Our liquidity remained at a high level with one of the lowest loan to deposit ratios in the Hungarian banking sector."

"In 2011, we celebrated the 25th anniversary of our presence, ingenuity and leadership in Hungary and we are also very excited about 2012 that marks the 200th anniversary of Citi serving our clients and the community around the globe. As part of a unique global institution with an unmatched history of 200 years, global network and expertise we are offering our clients access to world-class products and services, and banking innovations available from around the world," added Mr. Sianturi.

Journalists and Citibank Hungary seniors are listening to CCO Batara Sinturi announcing Citibank Hungary's 2011 financial results and key achievements, at a press event on 4 April

Recognition from Clients and Industry Leaders

The commitment to increase service levels and enhance technology continued to be recognized by clients through record high satisfaction results in client and industry awards, including:

• Citibank Hungary's Zero Fee Bank Account for the fourth consecutive year was voted the Best Bank Account Award in the MasterCard - Bank of the Year Competition. Citibank was also selected among the top 3 Best Banks in Hungary and recognized for the fourth time in the Best Bank for CSR category.
• The Best Corporate and Institutional Internet Bank in Hungary by Global Finance magazine for the fifth consecutive year
• The Best Investment Bank in Hungary by emeafinance magazine for the third consecutive year
• The Best Cash Management Bank in Hungary for the second consecutive year in Euromoney's annual cash management survey
• Top Rated by Global Custodian Magazine in both the Leading and Cross-Border/Non-Affiliated Clients category of its 2011 Agent Banks in Emerging Markets Survey.

Corporate Banking Business

The corporate banking business remained focused in supporting large Hungarian corporations, multinationals, financial institutions and public sector entities. Capitalizing on its global footprint in 101 countries, Citi provides linkage for its clients and access to international capital markets. 2011 was a good year in all business lines: treasury, global transaction services and global banking.

Fixed Income, Currencies & Commodities

• FICC offers a wide range of Treasury products to corporate clients to help them effectively conduct their day-to-day activities and manage their business related risks. Citibank Hungary's highly experienced Treasury team helped clients in selecting the products that best support their business needs. The trust in Citibank from clients who were looking for complex solutions remained strong and the bank maintained its leading position in derivatives trading on the local market.
• CitiFX Pulse, the award winning real time web-based foreign exchange trading platform was further developed in 2011 to include initiation of online FX orders as well as a daily market commentary that clients can also access via their iPhones and iPads. This platform continued to attract an increasing number of clients from all business segments, including SMEs that were granted access last April. CitiFX Pulse saw an increase in deal volumes with over 21,000 transactions in 2011, 43% up compared to 2010.

Global Transaction Services

• The GTS team introduced the innovative CitiDirect® BE Mobile service – a mobile browser-based application allowing corporate clients to receive notifications and authorize payments related to their corporate accounts right from their smart phones.

Securities & Fund Services

• The SFS business grew in 2011 in every aspect. Despite a volatile market investors remained committed to the Hungarian market, which helped the team to achieve a double-digit growth both in assets under custody and transaction volumes on a year-on-year basis. As a result, they maintained the profitability of this business and strengthened their market position as top-tier service provider. The product offering was further expanded targeting clients with potential for organic growth. Broadening the product scale and client base placed Citibank in a strong position to efficiently manage the expected changes in the markets.

Global Subsidiaries Group

• Serving the subsidiaries of Citi's global clients remained a focus area in 2011. The team further strengthened and enhanced their relationships with these multinational clients and continued the marketing of the successful Global Commercial Charge Card program. The increased focus of large Hungarian and multinational corporations on supply chain management were addressed by offering comprehensive supplier and receivables finance programs enabling them to effectively mitigate risks, optimize cash-flow and strengthen their competitiveness.

Top tier local corporates and the public sector

• Citibank's global banking business remained focused on supporting the strategic business and financial efforts of large Hungarian corporations, financial and public sector institutions and the government. Capitalizing on its global platform, Citi provides access for its customers to international capital markets. In addition to various structured financing solutions, equity capital markets and investment banking services, the bank also offers market-leading global transaction services to its clients in the areas of treasury, trade finance and liquidity management. Citi's global footprint, coupled with extensive knowledge and experience, makes the Hungary team a trusted partner for clients in supporting their international strategic expansion endeavors.

Consumer and SME Business

In 2011, Citibank's team continued to leverage the business opportunities they identified in the challenging economic environment and their results were well balanced in the Cards, Wealth Management, Loans and SME businesses.

The distribution network was strengthened by opening a Citibank Mini Branch at the SkyCourt Terminal of the Budapest Liszt Ferenc International Airport and the marketing efforts were extended to include tailored offers to customers via their account statements – a unique solution in the Hungarian market.

Building on the 25-year tradition of innovation in Hungary, in 2011 Citibank launched a great number of innovative products and services and enhanced existing ones.

Credit Cards

The Cards business was very successful in 2011, with various product launches including unique propositions such as:

• Ultima Card – the most exclusive card in market circulation providing access to 600 Airport VIP Lounges across the globe
• Citi Life Card with PayPass – the innovative, "multi partner" rewards card with 20 partners and 700 outlets.

With its Internet Secure Code Service for the credit card holder customers Citibank redefined the standard of security in the market and made a significant step in achieving its goal to become the world's and Hungary's leading global digital bank.

Digital Banking

Citibank's state-of-the-art digital banking services launched last year also included:

• Citibank Mobile Banking – a service bringing secure banking right into the palm of the clients' hands
• Citi Global Transfers – a service enabling real-time account transactions between Citi accounts held in other Citi countries around the world
• CitiChat – the first live chat service in the Hungarian Banking Sector, providing customers with real-time information and assistance in online applications.

Wealth Management

• Citibank revolutionized its world-class Citigold Wealth Management proposition last September by launching the CitiPlanner, a technology based new analysis tool that supports the highly skilled Citigold personal bankers in setting up and managing the individual investment portfolios of Citigold customers.
• Citibank Hungary was the first financial institution to offer J.P. Morgan Asset Management's 16 mutual funds to its customers last December. With this new strategic partnership, the bank expanded the portfolio diversification opportunities it provides to its customers, with 183 different mutual funds from 13 fund houses and asset management partners on offer.
• In 2011, a series of Citigold Investment Seminars were held with great success. At these events, experts from Citibank's internationally renowned fund house and asset management partners provided investment information and market overviews to the Citigold customers. These seminars were preceded by Thought Leadership Media Roundtable Events.
• Since December 2011, Citibank's customers can apply for the convenient new Citi Plus product package combining an attractive preferential offer for a Citibank Zero Fee Bank Account, the Citi Plus Savings Account and the innovative multi-partner Citi Life credit card. This compelling proposition covers the basic banking needs of a consumer customer with a free bank account to manage all their domestic local currency transactions on all channels without any fees. This is complemented by high on-demand interest rate on the Citi Plus Savings Account and the renewed Citi Life credit card with preferential conditions.

Personal Loans

• Citibank's Personal Installment Loan offer for online applications launched in 2010 remained the most competitive offer on the market in its category.

SME Business

• The SME team continued to serve their clients with a reenergized focus and due to the consistent risk management approach the bank successfully maintained the SME portfolio quality. Last year the business was expanded to include middle-market customers posting up to HUF 100 billion net annual sales. The wide range offering extends to cash management, transactional as well as financing, trade and treasury products and services.
• In September 2011, Citibank was among the first financial institutions to join the Combined Credit with Guarantee Program announced by Hungary's National Development Office allowing the bank's SME clients to manage the whole process related to their investment projects subject to this program through Citibank in a convenient one-stop shop.
• As part of their educational initiatives, the SME team continued to organize Treasury Roadshows around the country, where Citibank's experts discussed the bank's FX risk management solutions with their existing and prospective SME clients. Citibank engaged in a series of thought leadership articles in partnership with online business portal www.penzcentrum.hu, sharing its expertise on topics such as current accounts and transaction services, lending and managing FX exposures.

Corporate Social Responsibility Programs

Citibank is committed to being an active and supportive member of the communities in which they do business. In line with Citi's global corporate social responsibility strategy Citibank Hungary's primarily focus is on financial education and building social enterprises. They partner with NGOs in order to enhance the impact of their community programs by leveraging their partners' expertise and long-term experience. Citibank employees are volunteering their time and knowledge to support the beneficiaries of their CSR programs.

Citibank's key achievements in major long-term CSR programs:

• More than 138,000 students in 336 elementary schools across Hungary served with technology-based teaching materials in the Citibank Financial Education School Program started in 2001 in partnership with Junior Achievement Hungary
• Around 1,160 university students impacted in the long-term partnership with Corvinus University of Budapest that was launched in 2004 to continuously increase the level of financial education through the Series of Citibank Lectures, the Citibank Case Study Competition and the Citibank Best Graduating Student Award
• More than 80 civil organizations and small businesses participated in the Social Enterprise Development Programs initiated in 2007 in partnership with NESsT
• 52,000 trees planted for Citibank's customers who switched from printed to paperless e-Statements, in the Plant-a-Tree Program launched in 2008
• 23 young business professionals supported in their postgraduate studies through the András Felkai Academic Award Fund co-founded by Citibank in 2002
• More than 700 underprivileged or disabled children are living and studying in an improved environment due to the work done by Citibank's local volunteering teams on the annual Citi Global Community Days since 2005
• Thousands of children across the country benefited from the Children Health Care Support Program started in 1998
• Hundreds of young Hungarian music students have enjoyed Citibank's support in building their talent through the partner program with the Association of Friends of Franz Liszt Music Academy since 2001.

Major financial data for Citibank Europe plc Hungarian Branch Office (as of December 31st, 2011, according to Hungarian Accounting Standards)