Citigroup at Barclays Conference Notes

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John Gerspach – CFO

Trading and underwriting revenue impacted

“For the quarter, we expect our underlying revenues for fixed income and equity markets to be down in the range of about 5% year-over-year in part reflecting strong rates and currencies’ performance in September of last year. Quarter-to-date, we’ve seen a greater impact from the market volatility on industry underwriting activity and of course actual results will depend on the market environment and our performance for the rest of the month.”

Do expect cost of credit to be higher given macro environment

“we do expect cost of credit to be higher versus last quarter driven by additional loan loss reserve bills given the macro environment, although we do not expect to see an increase in net credit losses.’

Credit provision driven by energy/emerging markets, but don’t expect increase in losses for now

“It’s all of what you mentioned. I mean again, we are involved with energy. As you saw last quarter we had a very modest build in our energy provisions last quarter, I think we added $43 million worth of reserve balances. We will have some level of growth in that related to energy this quarter. And as far as Brazil and China, there will be some additions for not necessarily specifically related to Brazil and China but just to the overall current environment. And again, we don’t expect to see any increase in our net credit losses. This is really just good sound credit management where you want to take your provisions early and then work your way through the issues.’

If you manage your business to one metric or another you’re going to run into trouble

“I think if you get overweigh to only managing your business on one metric or another you are going to run into trouble.”