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Accounting

Liabilities consist of deposits, both interest bearing and non-interest bearing payable by both foreign and domestic banking subsidiaries of Citibank. Deposits decreased by $52 billion in 2008. Reasons for this decrease are cited as the sale of certain German retail banking institutions and customers finding it necessary to use their excess cash reserves due to the basic decline of the world economy. Debt and other liabilities are also liabilities listed on the balance sheet. The company’s debt consists of both long term and short term liabilities, including commercial paper, loans from unaffiliated banks, and secured advances from the Federal Home Loan Bank. During 2008 total debt decreased by $88 billion. In 2007 the company ended the year with $2, 074 billion in liabilities. In 2008 total liabilities is $1,796 billion. This represents a 13% decrease in liabilities for a total of $278 billion.

Conclusion

With a loss of almost 28 billion in 2008, the highest priority in 2009 for Citi Corp is to return to profitability. Throughout 2008 in the middle of a global economic crisis Citi remained focused upon getting financially fit again. Significant progress was made by strengthening liquidity and capital position, reducing expenses and headcount, and decreasing risk throughout the organization. A restructuring was developed and thereby the corporation was split into two separate units: Citicorp and Citi Holdings. According to Vikram Pandit, CEO Citigroup Inc., “Every Citi employee is acutely aware of the challenges ahead. We all know people whose economic struggles are unprecedented and overwhelming. It is our commitment to Citi’s customers, shareholders, and employees to create solutions that mitigate the impact of these difficult times. With the top team in the industry, we will succeed”. (Pandit, 2008)