SecProbe.io

VIA EDGAR CORRESPONDENCE Securities and Exchange Commission F Street, NE Mail Stop 4561 Washington, DC 20549-7553

Dear Mr. Nolan:

This letter sets forth the responses of Citigroup Inc. (“Citigroup,” “Citi” or “we”) to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) contained in the Staff’s letter dated April 26, 2010.

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

1. Your response indicates that you identified certain repurchase agreements and securities lending transactions that were inappropriately accounted for as sales transactions. You further indicated that the maximum amount of the error during the past three years relating to the repurchase agreement error and securities lending was $9.2 billion and 1.9 billion, respectively. You have concluded that the error is not material. To support your assertion, please provide us with your materiality analysis for all periods that would be impacted that considers among other factors the criteria in SAB 99.

The error in reporting certain repurchase and securities lending agreements as sales, isolated to Citi’s U.K. broker-dealer entities in the immaterial amounts described in the tables below, was the result of an unintentional oversight. As previously explained to the Staff in our letter dated April 13, 2010 (Prior Response), we believe the margining practice was inadvertently changed, such that daily margining was being charged to the counterparty despite provisions in the agreements stating that daily maintenance margin could only be called once the ratio of the fair value of the securities transferred to the cash received exceeded 110% (at which point, maintenance margin could be called to reinstate the ratio of 110%). This was an inadvertent, unintentional error, which resulted from a control deficiency that did not rise to the level of a significant deficiency or a material weakness in Citi’s internal control over financial reporting, as further described below.

With respect to Citi’s materiality analysis, as the Staff notes above, Citi has determined that the error is not material to Citi’s financial statements for any of the periods impacted.

Presented below is a detailed analysis for each quarter of 2007, 2008, and 2009 of the effects of the error on each balance sheet account affected as well as on total assets and total liabilities.

ERROR ANALYSIS: Impact on Line Items

In millions

2007 Q1

2007 Q2

2007 Q3

2007 Q4

Balance Sheet Caption -

Federal Funds sold and securities borrowed or purchased under agreements to resell:

As Reported

$

303,925

$

348,129

$

383,217

$

274,066

Error

$

1,525

$

2,031

$

2,302

$

2,359

% of Error to Federal Funds sold and securities borrowed or purchased under agreements to resell

0.5

%

0.6

%

0.6

%

0.9

%

Balance Sheet Caption -

Trading Account Assets:

As Reported

$

460,065

$

538,316

$

581,220

$

538,984

Error

$

7,675

$

7,169

$

2,598

$

6,241

% of Error to Trading Account Assets

1.7

%

1.3

%

0.4

%

1.2

%

Balance Sheet Caption -

Federal Funds purchased and securities loaned or sold under agreements to repurchase:

As Reported

$

393,670

$

394,143

$

440,369

$

304,243

Error

$

9,200

$

9,200

$

4,900

$

8,600

% of Error to Federal Funds purchased and securities loaned or sold under agreements to repurchase

2.3

%

2.3

%

1.1

%

2.8

%

Balance Sheet Caption -

Total Assets:

As Reported

$

2,020,966

$

2,220,866

$

2,358,266

$

2,187,480

Total Error

$

9,200

$

9,200

$

4,900

$

8,600

% of Error to Total Assets

0.5

%

0.4

%

0.2

%

0.4

%

Balance Sheet Caption -

Total Liabilities:

As Reported

$

1,898,883

$

2,093,112

$

2,231,153

$

2,074,033

Total Error

$

9,200

$

9,200

$

4,900

$

8,600

% of Error to Total Liabilities

0.5

%

0.4

%

0.2

%

0.4

%

In millions

2008 Q1

2008 Q2

2008 Q3

2008 Q4

Balance Sheet Caption -

Federal Funds sold and securities borrowed or purchased under agreements to resell:

As Reported

$

239,006

$

220,169

$

225,409

$

184,133

Error

$

2,498

$

2,009

$

2,635

$

% of Error to Federal Funds sold and securities borrowed or purchased under agreements to resell

1.0

%

0.9

%

1.2

%

0.5

%

Balance Sheet Caption -

Trading Account Assets:

As Reported

$

578,437

$

505,439

$

457,462

$

377,635

Error

$

3,602

$

3,291

$

$

1,419

% of Error to Trading Account Assets

0.6

%

0.7

%

0.2

%

0.4

%

Balance Sheet Caption -

Federal Funds purchased and securities loaned or sold under agreements to repurchase:

As Reported

$

279,561

$

246,107

$

250,419

$

205,293

Error

$

6,100

$

5,300

$

3,500

$

2,300

% of Error to Federal Funds purchased and securities loaned or sold under agreements to repurchase

2.2

%

2.2

%

1.4

%

1.1

%

Balance Sheet Caption -

Total Assets:

As Reported

$

2,199,848

$

2,100,385

$

2,050,131

$

1,938,470

Total Error

$

6,100

$

5,300

$

3,500

$

2,300

% of Error to Total Assets

0.3

%

0.3

%

0.2

%

0.1

%

Balance Sheet Caption -

Total Liabilities:

As Reported

$

2,071,629

$

1,963,980

$

1,924,069

$

1,794,448

Total Error

$

6,100

$

5,300

$

3,500

$

2,300

% of Error to Total Liabilities

0.3

%

0.3

%

0.2

%

0.1

%

In millions

2009 Q1

2009 Q2

2009 Q3

2009 Q4

Balance Sheet Caption -

Federal Funds sold and securities borrowed or purchased under agreements to resell:

As Reported

$

179,603

$

179,503

$

197,357

$

222,022

Error

$

$

$

$

% of Error to Federal Funds sold and securities borrowed or purchased under agreements to resell

0.4

%

0.2

%

0.3

%

0.4

%

Balance Sheet Caption -

Trading Account Assets:

As Reported

$

335,222

$

325,037

$

340,697

$

342,773

Error

$

$

2,956

$

4,123

$

4,881

% of Error to Trading Account Assets

0.3

%

0.9

%

1.2

%

1.4

%

Balance Sheet Caption -

Federal Funds purchased and securities loaned or sold under agreements to repurchase:

As Reported

$

184,803

$

172,016

$

178,159

$

154,281

Error

$

1,600

$

3,400

$

4,800

$

5,700

% of Error to Federal Funds purchased and securities loaned or sold under agreements to repurchase

0.9

%

2.0

%

2.7

%

3.7

%

Balance Sheet Caption -

Total Assets:

As Reported

$

1,822,578

$

1,848,533

$

1,888,599

$

1,856,646

Total Error

$

1,600

$

3,400

$

4,800

$

5,700

% of Error to Total Assets

0.1

%

0.2

%

0.3

%

0.3

%

Balance Sheet Caption -

Total Liabilities:

As Reported

$

1,676,651

$

1,694,365

$

1,745,650

$

1,701,673

Total Error

$

1,600

$

3,400

$

4,800

$

5,700

% of Error to Total Liabilities

0.1

%

0.2

%

0.3

%

0.3

%

As set forth in the Prior Response and above, the quantitative analyses show that the error was not more than 0.5% of total assets and total liabilities in any quarter of 2007, 2008 and 2009, which is immaterial to Citi’s balance sheet, and had no impact on reported stockholders’ equity. Because these contracts are short-lived, each period-end error also represents the cumulative effect of the error on total assets at the respective period end and thus was also immaterial. In addition, the error comprised less than 4% of each balance sheet account affected by the error in every period in 2007, 2008 and 2009. Thus, no line item on the balance sheet was misstated by an amount considered quantitatively material. The error also had no impact on Citi’s reported earnings for any of the quarterly or annual reporting periods in 2007, 2008 and 2009.

In accordance with SEC guidance, Citi also considered the following qualitative factors in reaching our conclusion that this error is clearly immaterial to Citi’s financial statements:

· Earnings trends were not masked as the error amounts did not affect earnings during any of the periods at issue.

· The error did not have any significant impact on capital ratios, credit ratings, compliance with loan covenants or management’s (or any other person’s) incentive compensation.

· As described above, the error did not involve any concealment or unlawful transaction.

In summary, taking into account both quantitative and qualitative factors, the error is not material to Citi’s consolidated financial statements during the periods at issue.

As part of your analysis, please ensure your response addresses the following:

a. Whether the cause of the errors was intentional;

As confirmed by the analysis above, the cause of the error was not intentional, but rather we believe it resulted from a change in the process surrounding margining activities in the U.K.

b. Whether management outside of the business units where the errors were discovered was aware of the accounting practices being followed by the business unit for these transactions;

Finance management, both inside and outside of the business units where the error occurred, was not aware of the change to the daily margining practice. Management, including management in Treasury, Finance and Capital Markets Administration, was aware of the use of repurchase agreements and securities lending transactions intended to qualify for sales accounting. However, there is no indication that those who were aware that sales accounting was being applied were also aware that the margining practice had been changed or, conversely, that the U.K. Operations Department was aware of the impact of the margin arrangements on sales accounting for these transactions.

Moreover, this is a low risk area to Citi with respect to the reliability of Citi’s financial reporting. Specifically, given the immaterial amounts involved and the immaterial impact to the balance sheet, with no impact on net income or stockholders’ equity, this process was not subjected to ongoing review and monitoring by management responsible for Citi’s financial oversight.

c. Whether any key banking regulatory ratios or credit ratings of the Company or subsidiary(ies) would have been impacted; and

The application of sales accounting treatment to certain repurchase and securities lending transactions did not have any impact on Citigroup’s credit ratings and had no significant impact on any other key metrics. The impact to Citigroup’s regulatory capital ratios in any quarterly reporting period from 2007 to 2009 was de minimis, with the maximum impact on the leverage ratio being no more than 2 basis points and less than 1 basis point for the Tier 1 and Total Capital ratios. In addition, the error also did not impact Citi’s compliance with any debt covenants nor management’s (or any other person’s) incentive compensation.

d. Whether the cause of the errors was due to an internal control weakness, and if so, management’s plans to address these weaknesses.

Evaluation of control deficiencies requires consideration of all the facts and circumstances, including qualitative and quantitative factors, as well as the exercise of management’s professional judgment. The change in the process impacting the accounting for repurchase agreements and securities lending transactions in the U.K. broker-dealer entities was an unintentional oversight resulting from a control deficiency in Citi’s change control process; it does not rise to the level of a significant deficiency or a material weakness.

As defined by the SEC, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The error at issue involved an isolated set of transactions (involving immaterial amounts) and an isolated process in isolated broker-dealer subsidiaries of Citigroup in one country. This was not an area of Citi’s financial reporting that posed a high risk to the overall reliability of Citi’s financial reporting. In addition, in evaluating the severity of the deficiency, management appropriately considered the magnitude of the potential misstatement resulting from the deficiency. As set forth in our Prior Response and the response above, the financial statement amounts or total of transactions exposed to the deficiency, and the volume of activity or class of transactions exposed to the deficiency, were not material. Given the amounts involved and the immaterial impact to the balance sheet, with no impact on net income or stockholders’ equity, as well as the historic low levels of activity with respect to these transactions in the U.K. broker-dealer entities, there was no reasonable possibility that a material misstatement of Citi’s annual or interim financial statements would not be prevented or detected on a timely basis.

In addition, the error did not meet the four “indicators of material weaknesses” included in the literature of both the SEC and the Public Company Accounting Oversight Board, as follows:

(1) Identification of fraud, whether or not material, on the part of senior management: The error did not involve fraud.

(2) Restatement of previously issued financial statements to reflect the correction of a material misstatement: The error is clearly immaterial to Citi’s financial statements and does not involve a restatement.

(3) Identification by the auditor of a material misstatement of financial statements in the current period in circumstances that indicate that the misstatement would not have been detected by the company’s internal control over financial reporting: Citi management discovered the error, which is clearly immaterial.

(4) Ineffective oversight of the company’s external financial reporting and internal control over financial reporting by the company’s audit committee: These controls were effective.

Further, as defined by the SEC, a “significant deficiency” is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting. Importantly, this definition expressly does not include a “likelihood” component (i.e., reasonable possibility) as it was the SEC’s view that the definition of significant deficiency should allow for, and indeed encourage, sufficient and appropriate judgment by management to determine which deficiencies rise to the level of a significant deficiency. For all the qualitative and quantitative reasons described above, management has concluded that the deficiency does not rise to the level of a significant deficiency.

As stated in our Prior Response, the error was self-discovered. Management will continue to review Citi’s contro