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		Citi-08.14.2014-Corresp

John C. Gerspach

Chief Financial Officer

 Citigroup Inc.

399 Park Avenue

New York, NY 10022

August 14, 2014

VIA EDGAR CORRESPONDENCE

Suzanne Hayes

Securities and Exchange Commission

100 F Street, NE

Mail Stop 4561

Washington, DC 20549-7553

Re:    Citigroup Inc.

Form 10-K for the Fiscal Year Ended December 31, 2013

Filed March 3, 2014

File No. 001-09924

Dear Ms. Hayes:

Enhancement of Citigroup’s disclosures is an objective that we share with the staff (“Staff”) of the Securities and Exchange Commission (“SEC”) and one that we consider in all of our filings. This letter sets forth the responses of Citigroup to the comments of the Staff contained in the Staff’s letter dated July 31, 2014.

For your convenience, the text of the Staff’s comments is set forth in bold below, followed in each case by our response.

Management’s Discussion and Analysis…, page 5

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 As noted in the Board’s letter to shareholders, included with the annual meeting proxy statement, Mr. Corbat has set reducing expenses as one of the key elements of your three-year plan. Similarly, you discuss the importance of expense reductions in the first full risk factor on page 67. We also note that on page 6 you indicate that essentially overall expenses have remained relatively unchanged in 2013 over 2012. Please tell us, with a view towards revised disclosure in future filings, if your overall expense reduction strategy has changed since you set the 2013-2015 goals and discuss any challenges you have met in implementing the strategy for Citigroup as a whole, or with regard to your key business segments.

Citigroup confirms for the Staff that its overall expense reduction strategy has not changed since Citigroup established its 2015 ROA and efficiency targets in March of 2013. In fact, as recently as the second quarter of 2014 earnings call on July 14, 2014 (“earnings call”), Citigroup reconfirmed its commitment to achieving its 2015 ROA and efficiency targets.  Citigroup continues to be committed to these targets because it continues to implement its disciplined expense management strategy and has taken significant actions to improve the efficiency in its businesses.  These previously-disclosed actions include, among others:

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 the successful completion of the significant repositioning efforts announced on December 5, 2012 (see Citigroup’s Form 8-K filed on such date);

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 the continued execution of its efficient resource allocation strategy, including the exit of markets, client segments or products where Citigroup believes that its ROA or efficiency targets are unlikely to be achieved (e.g., as disclosed in its 2013 Annual Report on Form 10-K (“2013 Form 10-K”) and Second Quarter of 2014 Form 10-Q (“2Q’14 10-Q”), as applicable, the sale of the Credicard business in Brazil, the sale of consumer operations in Honduras, the substantial completion of the

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repositioning of the consumer franchise in Korea and the resizing of the North America mortgage operations); and

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 ongoing efforts to simplify and streamline the organization, including reducing management layers in the institutional franchise, rationalizing consumer support sites and branch locations and driving the businesses to common processes and platforms.

We note for the Staff that p. 5 of the 2013 Form 10-K specifically highlights Citigroup’s continued progress on its efficient resource allocation and disciplined expense management execution priorities.

As the Staff notes, however, implementing these expense reduction priorities have not come without challenges.  These challenges have primarily included elevated legal and related expenses, the higher repositioning charges needed to implement its significant repositioning efforts and higher regulatory and compliance costs.  It is largely because of these challenges that Citigroup’s expenses were relatively unchanged from 2012 to 2013, as noted by the Staff and as disclosed on p. 6 of the 2013 Form 10-K.  Excluding legal and related expenses and repositioning costs in both years, operating expenses declined by $1.0 billion, or 2%, from 2012 to 2013.

While Citigroup continues to expect legal and related expenses and repositioning charges to be somewhat elevated, at least during the remainder of 2014, Citigroup was able to achieve a significant milestone relating to its legacy legal expenses in Citi Holdings with the settlement with the DOJ, FDIC and state attorneys general in the second quarter of 2014.  This achievement, along with the expense savings from Citigroup’s completed and ongoing repositioning actions and continued execution of its resource allocation and expense reduction strategy, as described above, form the basis as to why Citigroup remains committed to its 2015 ROA and efficiency targets.  To the extent Citigroup determines it is no longer committed or able to achieve these targets in the future, it will make the appropriate disclosure, including the reasons why, at such time.  However, because all of the above has been previously disclosed, Citigroup does not believe any additional disclosure is necessary in its future filings at this time.

Citigroup Residential Mortgages – Representations and Warranties Repurchase Reserve, page 92

2.

 We note your disclosure here and your response to our prior comment regarding the June 28, 2013 agreement you reached with Fannie Mae. Please file the agreement or expand your analysis to discuss why entering into the settlement itself, regardless of the dollar amount of the settlement, is not a material agreement. Your expanded analysis should also include a discussion of what, if any, accruals for litigation and regulatory matters that were settled as a result of this agreement.

While Citigroup continues to believe that the agreement entered into with Fannie Mae on June 28, 2013 is not an agreement required to be filed with the SEC under Item 601(b)(10) of Regulation S-K or otherwise, Citigroup will file the agreement, as requested by the Staff, as an exhibit to its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014.

3.

 We note your disclosure here as well as previous disclosures regarding the September 25, 2013 agreement you reached with Freddie Mac to resolve potential future repurchase claims for breaches of representations and warranties on 3.7 million residential first mortgage loans sold to Fannie Mae that were originated between 2000 and 2012. Please file this agreement or provide us with a thorough analysis as to why you are not required to file this agreement.

While Citigroup believes that the agreement entered into with Freddie Mac on September 25, 2013 is not an agreement required to be filed with the SEC under Item 601(b)(10) of Regulation S-K or otherwise, Citigroup will file the agreement, as requested by the Staff, as an exhibit to its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014.

Item 9A. Controls and Procedures, page 147

4.

 We note your disclosure in Note 29 that you recorded a $235 million after-tax ($360 million pretax) charge resulting from a fraud discovered in Banco Nacional de Mexico (Banamex)

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related to your accounts receivable financing program. Additionally, per page 218 of your Form 10-Q for the quarter ended March 31, 2014, we note that you incurred an additional $165 million of incremental credit costs related to the Pemex supplier program, which includes some incremental credit costs associated with an additional supplier to Pemex within the Pemex supplier program that was found to have similar issues. Please address the following:

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 Tell us how the identification of this fraud impacted your conclusion on the effectiveness of your disclosure controls and procedures and internal control over financial reporting (ICFR) as of December 31, 2013. As part of your response, please explain how you considered whether locations other than Banamex have controls that are similar in design to those that failed at your Banamex location.

With respect to Citigroup’s disclosure controls and procedures, we note for the Staff that Citigroup believes its disclosure controls were properly designed and functioned as they had been designed.  Specifically, as soon as Citigroup became aware of the fraud in Banamex on February 20, 2014, Citigroup’s CEO and CFO were notified and Citigroup began to immediately analyze and process the information so that appropriate decisions regarding required disclosure could be made.  As a result, Citigroup’s management, with the participation of the CEO and CFO, concluded that Citigroup’s disclosure controls and procedures were effective as of December 31, 2013 and indeed were effective with respect to the discovery and disclosure of the Banamex fraud.

With respect to ICFR, as disclosed at the time, upon becoming aware of the fraud on February 20, 2014, Citigroup immediately initiated an internal inquiry to determine, among other things, whether or to what extent its ICFR had failed and whether its ICFR was effective as of December 31, 2013.

We note for the Staff that Citigroup’s trade finance businesses, and its accounts receivable financing programs specifically, have historically operated with highly effective controls and minimal losses. In the days after becoming aware of the fraud, however, Citigroup determined that certain processes had been modified in the Pemex accounts receivable financing program, resulting in the elimination of some basic operating controls in the execution of that program.  In summary, although the Pemex accounts receivable financing program was reflected internally at Citigroup as a “buyer centric” program that was approved based on the credit rating of Pemex and the understanding that Pemex was irrevocably obligated to repay Banamex for funds advanced to Oceanografia, Citigroup discovered that the program in fact was operated as “seller centric,” in reliance on Oceanografia’s ability and willingness to pay back any advanced funds.  Under the program as operated, (a) because of a lack of effective review and approval and segregation of duties, Banamex extended credit to Oceanografia based on documentation (invoices and work estimates purportedly approved by Pemex) provided by Oceanografia with no effective confirmation from Pemex or otherwise that the documents were valid or that Pemex intended to pay the amounts owed; and (b) because of a lack of effective reconciliation, when Pemex did pay Banamex for advances made to Oceanografia, all reconciliation of those payments and prior advances was performed by one Banamex employee in consultation with Oceanografia and without consultation with or confirmation from Pemex.

Before Citigroup determined the classification of the control deficiencies, however, further information was sought and considered, as described below.

First, as publicly disclosed at the time, Citigroup designed and performed a “rapid review” of its worldwide portfolio of accounts receivable financing facilities to test whether any of its other facilities operated in a similar manner to the Pemex accounts receivable financing program and thus exhibited similar process and control failures.  The rapid review involved hundreds of Citigroup employees contributing to the effort worldwide. Standardized lists of questions (referred to internally as “scorecards”) were prepared for all buyer centric and seller centric accounts receivable financing facilities, and responses were prepared for each facility.  The responses were reviewed and certified by each country head, regional head and, ultimately, senior members of Citigroup’s risk, product and business groups.

Through this rapid review, Citigroup reviewed all of its approximately 1,100 accounts receivable financing facilities prior to filing the 2013 Form 10-K.  One other supplier facility within the Pemex

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accounts receivable financing program was identified as having an operational structure similar to the Pemex accounts receivable financing program with Oceanografia; the outstanding additional credit exposure under this facility (as of January 31, 2014) was approximately $13.1 million.  In addition, Citigroup concluded that it should further investigate the structure of three additional Banamex facilities which individually and in the aggregate were not material.  The rapid review identified no other programs where execution activities replicated those of the Pemex accounts receivable financing program with Oceanografia.

In light of the comprehensive nature of the rapid review, together with the prior history of effective controls within Citigroup’s worldwide accounts receivable financing programs, management concluded that the process breakdowns associated with the Pemex accounts receivable program were isolated.

Second, Citigroup evaluated the credit approval process to determine whether it had adequately protected Citigroup from quantitatively material losses associated with the Pemex accounts receivable financing program.

The amount available for lending to Oceanografia under the Pemex accounts receivable financing program was capped by credit limits set by Citigroup at an amount substantially below quantitative materiality for Citigroup.  The total credit available to Oceanografia under the Pemex accounts receivable financing program as of December 31, 2013 was $624 million.  While Oceanografia did not draw down the full amount of credit available to it under the program (as of December 31, 2013, it had drawn approximately $585 million, as was disclosed in the 2013 Form 10-K), even if it had done so and Citigroup had been unable to recover any funds, the losses would not have been quantitatively material to Citigroup.

The limit on credit available to Oceanografia was particularly important to Citigroup’s conclusion that no material weakness in ICFR existed because (a) the credit approval processes with respect to Oceanografia’s use of the Pemex accounts receivable financing program had been followed; (b) monitoring of the credit limits had been effective; and (c) in September 2013, management had agreed to develop a comprehensive product program establishing lower credit limits specifically applicable to the Pemex accounts receivable financing program (due in part to concerns about concentration of risk and overall size of the line), as well as setting new credit limits to concentrations of individual Pemex suppliers.  Accordingly, there was no reasonable possibility that Oceanografia would have been able to receive advances of more than $624 million as of December 31, 2013 (or any time thereafter) under the Pemex accounts receivable financing program.

Third, Citigroup took into account the fact that the individual identified within Banamex who was responsible for validating factoring documents that facilitated the fraud (a) did not have a financial reporting oversight role or any role in Citigroup’s ICFR, (b) did not have responsibility or oversight for other customer relationships, except for the one additional supplier relationship within the Pemex accounts receivable financial program discussed above and (c) did not have responsibility or authority to increase the credit limits available to Oceanografia.

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1Subsequent to the date of filing Citigroup’s 2013 Form 10-K, Citigroup confirmed that only the other Pemex supplier facility referenced above (and not the three additional Banamex facilities that had been identified for further review) reflected execution activities and process breakdowns similar to that of the Pemex accounts receivable program with Oceanografia. It is the incremental credit costs associated with this additional supplier that are included in the $165 million of incremental credit costs referenced in the First Quarter of 2014 Form 10-Q (“1Q’14 10-Q”), as noted by the Staff. As disclosed in the 1Q’14 10-Q, the vast