Analyzing the allowance account

The footnotes to the 2008 financial statements of Citigroup, the holding company for Citibank, contained the following information (dollars in millions):

Allowance for Credit Losses

2008

2007

2006

Allowance for loan losses at beginning of year

$ ?

$ ?

$9,782

Provision for credit losses—consumer

28,282

15,599

6,224

Provision for credit losses—corporate

5,392

1,233

96

Consumer credit losses

20,002

10,645

8,629

Corporate credit losses

1,922

948

312

Consumer recoveries

1,600

1,661

1,547

Corporate recoveries

149

277

232

Allowance for loan losses at end of year

?

?

? REQUIRED:

a. Fill in the missing values and comment on any trends across the three-year period.

b. As of the end of 2008, the company had outstanding loan receivables of $694,216: $519,673 in consumer loans and $174,543 in corporate loans. Which of the two categories appears to be the riskier? Why?

 

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As of the end of 2008, the company had outstanding loan receivables of $694,216: $519,673 in… was first posted on July 4, 2020 at 11:58 am.
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