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
Allowance for loan losses at beginning of year
Provision for credit losses—consumer
Provision for credit losses—corporate
Consumer credit losses
Corporate credit losses
Allowance for loan losses at end of year
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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