Citibank Romania Increases Operating Performance

Citibank Romania announced today that its net profit increased by 141% to RON 59 million for the fiscal year 2006. The net interest income was 34 % higher compared to 2005, reaching RON 137 million, while the net trading profit increased 48% to RON 28 million. This has largely been driven by loan volumes increase, coupled with launch of new products on the market (such as FX options, cash management products, trading products, corporate finance loans, etc).

"I am satisfied with the results, as they reconfirm our performance, and our client first strategy. We see high growth potential in our corporate, SME and CitiFinancial business. We also expect to continue to play a leading role with the Romanian capital markets", stated Shahmir Khaliq, Citi Country Officer.

Financial highlights

As of December 31, 2006, Citibank Romania's total assets were of RON 2,412 million, 4.30% lower than at year-end 2005, mainly due to the client focus driven shift from securities to customer loans. Last year, the loan portfolio registered a 41% increase compared to 2005, reaching RON 1,085 million, 45% of total assets.  The corporate finance loan volumes were of RON 750 million - 28.86% higher than in 2005. The SMEs loan portfolio was of RON 113 million - approximately 60% increase compared to 2005. CitiFinancial, Citibank's consumer finance division, doubled its loan portfolio, reaching RON 223 million.

By year-end 2006, liabilities totaled RON 2,091 million, out of which client liabilities represent 77%. Equity increased by 22%, to RON 320 million.

Both return on assets (ROA) and return on equity (ROE) registered increases, with ROA increasing to 2.29% (from 0.99% in 2005), and ROE increasing to 19.19% from 9.68% in 2005. Net provisions also increased given the significant raise in consumer portfolio last year - the ratio calculated as net provisions / total loan portfolio reached 0.77% from 0.34% in 2005.

As of December 31, 2006, Citibank Romania had 471 employees, and 39 units, out of which 8 corporate banking branches and 31 CitiFinancial branches. Additionally, CitiFinancial served its clients through 31 direct sales centers. At the end of last year, the bank provided services for 51,343 clients (50,272 individuals, 571 SMEs, 500 corporate clients).

Last year, Citi arranged Romania's first-ever private sector local currency syndicated loan. Citi was also lead arranger syndicated loan for EUR 100 million for A&D Pharma, EUR 45 million facility for Luxten. In 2006, Citi also arranged and placed the longest maturity RON denominated Eurobond on the Romanian market

In addition, Citibank Romania has invested significantly in its consumer finance during 2006.  As of December 2006, CitiFinancial attained nationwide coverage, tripling its branch network. In 2006, CitiFinancial launched 20 new branches, located in Bucuresti (2), Pitesti, Craiova, Constanta (the second branch) Bacau, Braila, Galati (the second branch), Brasov (the second branch), Arad, Oradea, Timisoara, Iasi, Buzau, Targu Mures, Sibiu, Piatra Neamt, Cluj (the second branch), Ramnicu Valcea and Drobeta Turnu Severin, and 5 new direct sales centers in Targoviste, Ploiesti, Targu Jiu, Iasi and Slobozia. CitiFinancial's sales force increased from 300 to 500 people, being the largest one on the Romanian banking market. Active account grew with 72%, and the balance sheet grew with 95%.

"CitiFinancial's results show that our retail concepts of convenience, accessibility, and flexibility are successful. Last year's focus was on network expansion. Our branches provide our clients with the ability to receive the loan within the same day of making the application. Our direct sales centers offer complete financial counseling and application support, both within our premises and at the client's location - whether at the workplace or at home - upon our customer's preference", says John Hays, CitiFinancial Country Business Manager. "This year's focus is on further expanding the distribution and taking advantage of the growth opportunities provided by the relaxation of the legislative environment and by Romania's accession to the EU."