1- If one in every five of Citibanks depositors decides to withdraw his or her funds, perhaps fearing that the bank may become insolvent, could the bank service this demand?

2- Calculate the Tier 1 capital ratio. Is the bank adequately capitalized? (Notes: Refer to the Basel II tables. Ignore off-balance sheet items and assume 100% weight in cases where you need a credit rating. Trust preferred securities count as Tier 1 capital.)

3- Assume Citigroup experiences further losses of $50 billion on its mortgage assets in 2008. How would this affect the Tier 1 ratio? Show your calculations.

CONSOLIDATED BALANCE SHEET December 31 2007 2006 in millions of dollars except shares Assets Cash and due from banks (including segregated cash and other deposits 38,206 26,514 Deposits with banks 42,522 69,366 Federal funds sold and securities borrowed or purchased under agreements to resell (including $84,305 at fair value at December31,2007) 274,066 282,817 Brokerage receivables 44,445 57359 Trading account assets (including $157,221 and $125,231 pledged to creditors at December 31, 2007 and December 31, 2006, respectively 393,925 538,984 Investments (including $21,449 and $16,355 pledged to creditors at December 31, 2007 and December 31, 2006, respectively) 215,008 273,591 Loans, net of unearned income Consumer 592,307 512,921 Corporate including $3,727 and $384 at December 31, 2007 and December 31, 2006, respectively, at fair value) 66,271 185,686 Loans, net of unearned income 777,993 679,192 Allowance for loan losses 16,11 8.94 otal loans, ne 761,876 670,252 41 204 33,415 Intangible assets (including $8,380 at fair value at December 31,200 22,687 15,901 Other assets (including $9,802 at fair value at December 31, 2007 168,875 00.936 Total assets $2,187,631 $1,884,318 Liabilities Non-interest-bearing deposits in US. offices 40,859 38,615 Interest-bearing deposits in US. offices (including $1,337 and $366 at December 31, 2007 and December 31,2006, respectively, at fair value) 225,198 95.002 Non-interest-bearing deposits in offices outside the US. 43,335 35,149 nterest-bearin ts in offices outside the US. including S2,261 and$472 at December 31, 2007 and December31, 2006, at fair val 516,838 443,275 otal deposits 8262300 712,041 Federal funds purchased and securities loaned or sold under agreements to repurchase including $199,854 at fair value at December 31, 2007 304,243 349,235 Brokerage payables 84,951 85,119 Trading account liabilities 182,082 45,887 146,488 Short-term borrowings (including $13,487 and $2,012 at 31, 2007 and December 31,2006, respectively, at fair value) 00,833 Long-term debt Gncluding $79,312 and $9,439 at December 31,2007 and December 31,2006, respectively, at fair value 427,112 288.494 Other liabilities (including$1,568 at fair value at December 31.2007 102,927 82,926 Total liabilities $2,074,033 $1,764,535 Stockholders' equity Preferred stock $1.00 par value, authorized shares: 30 million), at aggregate liquidation value Common stock (S0.01 par value; authorized shares: 15 billion), issued shares: and 2006 5,477,416,086 shares 55 Additional paid-in capital 18,007 18,253 Retained earnings 121,920 29,267 Treasury stock, at cost: 2007 482,834,568 shares and 2006 565,422,301 shares (21,724) (25,092) Accumulated other comprehensive income (loss) 4,660) 13,700) Total stockholders' equity 113.598 119,783 Total liabilities and stockholders' equity $2,187,631 $1,884,318 See Notes to the Consolidated Financial Statements. CONSOLIDATED BALANCE SHEET December 31 2007 2006 in millions of dollars except shares Assets Cash and due from banks (including segregated cash and other deposits 38,206 26,514 Deposits with banks 42,522 69,366 Federal funds sold and securities borrowed or purchased under agreements to resell (including $84,305 at fair value at December31,2007) 274,066 282,817 Brokerage receivables 44,445 57359 Trading account assets (including $157,221 and $125,231 pledged to creditors at December 31, 2007 and December 31, 2006, respectively 393,925 538,984 Investments (including $21,449 and $16,355 pledged to creditors at December 31, 2007 and December 31, 2006, respectively) 215,008 273,591 Loans, net of unearned income Consumer 592,307 512,921 Corporate including $3,727 and $384 at December 31, 2007 and December 31, 2006, respectively, at fair value) 66,271 185,686 Loans, net of unearned income 777,993 679,192 Allowance for loan losses 16,11 8.94 otal loans, ne 761,876 670,252 41 204 33,415 Intangible assets (including $8,380 at fair value at December 31,200 22,687 15,901 Other assets (including $9,802 at fair value at December 31, 2007 168,875 00.936 Total assets $2,187,631 $1,884,318 Liabilities Non-interest-bearing deposits in US. offices 40,859 38,615 Interest-bearing deposits in US. offices (including $1,337 and $366 at December 31, 2007 and December 31,2006, respectively, at fair value) 225,198 95.002 Non-interest-bearing deposits in offices outside the US. 43,335 35,149 nterest-bearin ts in offices outside the US. including S2,261 and$472 at December 31, 2007 and December31, 2006, at fair val 516,838 443,275 otal deposits 8262300 712,041 Federal funds purchased and securities loaned or sold under agreements to repurchase including $199,854 at fair value at December 31, 2007 304,243 349,235 Brokerage payables 84,951 85,119 Trading account liabilities 182,082 45,887 146,488 Short-term borrowings (including $13,487 and $2,012 at 31, 2007 and December 31,2006, respectively, at fair value) 00,833 Long-term debt Gncluding $79,312 and $9,439 at December 31,2007 and December 31,2006, respectively, at fair value 427,112 288.494 Other liabilities (including$1,568 at fair value at December 31.2007 102,927 82,926 Total liabilities $2,074,033 $1,764,535 Stockholders' equity Preferred stock $1.00 par value, authorized shares: 30 million), at aggregate liquidation value Common stock (S0.01 par value; authorized shares: 15 billion), issued shares: and 2006 5,477,416,086 shares 55 Additional paid-in capital 18,007 18,253 Retained earnings 121,920 29,267 Treasury stock, at cost: 2007 482,834,568 shares and 2006 565,422,301 shares (21,724) (25,092) Accumulated other comprehensive income (loss) 4,660) 13,700) Total stockholders' equity 113.598 119,783 Total liabilities and stockholders' equity $2,187,631 $1,884,318 See Notes to the Consolidated Financial Statements