EXHIBIT 99.01
[CITIGROUP LOGO]
PUBLIC INFORMATION
For Immediate Release
October 8, 1998
CITIGROUP (CCI) TO BEGIN TRADING TODAY,
FOLLOWING COMPLETION OF MERGER OF CITICORP AND TRAVELERS GROUP
COMPANY DISCLOSES IMPACT OF ECONOMIC TURBULENCE ON THIRD QUARTER EARNINGS
New York--Common shares of Citigroup Inc. (NYSE: CCI) begin trading
today with the merger of Citicorp and Travelers Group Inc. taking effect
before the opening of business.
"The new company has an unparalleled capacity to serve the financial
needs of customers around the world with a broad array of products and
services through multiple distribution channels," said John S. Reed and
Sanford I. Weill, who share duties as Chairmen, in a statement on the
completion of the merger. "The recent economic turbulence in the world
further underscores our shared conviction in the strategic rationale of the
merger."
"Today major financial companies need not only customer, product and
geographic diversity but also unprecedented capital strength to deal with the
economic upheavals that can occur. Citigroup is unmatched in possessing all
these resources, including $44 billion of stockholders' equity. They are the
cornerstone of our stability and reliability for customers around the world.
They also enable us to deliver exceptional value to shareholders over time."
their statement continued.
The Chairmen said that conditions in financial markets would cause a
decline in the new company's combined net income for the 1998 third quarter,
to be reported later in the month. They said that results would be better
than last year for the Citibank consumer business and the Travelers Group
insurance and consumer activities, reflecting continued strength in those
areas as well as in Asset Management. But, they noted, the almost
unprecedented instability of global fixed income and emerging markets had a
severe effect on both Salomon Smith Barney and Citibank's corporate banking
activities in the quarter.
The merged company, they estimated, will have net income of
approximately $700 million for the 1998 third quarter, compared with pro
forma net income in the same 1997 quarter of $1.5 billion ($2.1 billion
excluding a 1997 restructuring charge) for the two predecessor companies.
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CITIGROUP (CCI) TRADING BEGINS OCTOBER 8, 1998
Among the factors affecting earnings in the quarter, they cited:
--Salomon Smith Barney will report a net loss in the quarter of
approximately $325 million, reflecting after-tax losses of
approximately $700 million related to Global Arbitrage and Russia
credit losses, which includes amounts previously announced.
--Citibank's corporate banking will report a net loss of approximately
$130 million largely due to approximately $240 million in after-tax
losses related to Russia, which includes amounts previously announced,
as well as approximately $100 million related to marking to market
fixed income inventories. Revenues understandably were also running
lower than normal. Venture capital and the sale of Brady bonds, which
have contributed significantly in past quarters, were essentially
break-even.
They also noted that the unrealized appreciation in the Travelers
Insurance portfolio increased to approximately $2 billion after taxes in the
quarter.
The Chairmen indicated: "Our focus is on bringing the two companies and
their managements together around a fully integrated 1999 business plan. On a
preliminary basis--subject to all the uncertainties of market conditions--we
expect 1999 core business results to be substantially above the pro forma
actuals for both 1998 and 1997, driven by strong performance in the consumer
and insurance franchises. The corporate businesses are likely to be operating
in choppy conditions, but their core franchises remain strong. "We will
continue to reduce risk and associated assets as appropriate, but to stay in
positions that represent good value in these markets as we work to integrate
the organizations."
"Because the near-term economic outlook remains uncertain and third
quarter results are disappointing, the path we must take is clear," they
said. "We will expand our reach and increase our efforts to serve our
customers better by taking every opportunity to cross-market products and
services throughout our distribution networks. We will continue to build
those businesses that provide our company with a stream of predictable and
recurring earnings, to mitigate the effects of the inevitable business cycles
and geographic disruptions. We will also manage our risk vigilantly on a
worldwide basis and strengthen control of operating expense, so that we
deliver on the promise of the unique global franchise that is Citigroup. We
are convinced that its value and power will become increasingly evident,"
they stated.
The Chairmen added they would recommend to the Citigroup directors, who
will hold their first meeting on October 20, that they declare an initial
quarterly dividend of $0.18 per common share to be paid in November ($0.72 on
an annual basis).
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CITIGROUP (CCI) TRADING BEGINS OCTOBER 8, 1998
The common shares of Citigroup will trade on the New York and
Pacific Stock Exchanges. As a result of the merger, Citicorp shares are
converted into Citigroup shares at the ratio of 2-1/2 Citigroup shares for
each Citicorp share; each Travelers Group share equals one Citigroup share.
Citigroup businesses produce a broad range of financial services --
asset management, banking and consumer finance, credit and charge cards,
insurance, investments, investment banking and trading -- and use diverse
channels to make them available to consumer and corporate customers around
the world. Among its businesses are Citibank, Commercial Credit, Primerica
Financial Services, Salomon Smith Barney, Salomon Smith Barney Asset
Management, Travelers Life & Annuity, and Travelers Property Casualty.
The merger followed approval by the Board of Governors of the
Federal Reserve System, as well as approvals by relevant banking, insurance,
and other regulatory authorities and approvals by the stockholders of both
companies.
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Media contacts: Jack Morris (212) 559-4285
Dick Howe (212) 559-9425
Investor contacts: Bill Pike (212) 816-8874
Sheri Ptashek (212) 559-4658
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