Today's rating action on Citigroup P/L concludes the review initiated on 21 February 2012. The ratings on Citibank Korea had not been on review.

A full list of affected ratings is provided at the end of the press release.

Today's announcement follows the two-notch downgrade of parent Citibank N.A.'s standalone assessment to D+ (which maps to baa3 on the long-term scale), from C-/baa1 (see seperate press release http://www.moodys.com/viewresearchdoc.aspx?docid=PR_248989). Citibank N.A.'s ratings carry a stable outlook.

RATINGS RATIONALE - Citigroup Pty Limited

The downgrade of Citigroup P/L is a direct result of the rating action taken on its parent, Citibank N.A. and reflects our concerns regarding the impact that weakness at the parent might have on the Australian subsidiary, given the interconnectedness between the two entities.

Citigroup P/L has a significant proportion of related party funding, which comprises approximately 32% of total funding. Given this strong interdependence of the bank with its parent, we believe that Citigroup P/L's current business model relies heavily on receiving surplus funds from Citibank N.A. We note that Citigroup P/L's loan/deposit ratio was a high 200% at end-2011. In the event of credit difficulties at Citibank N.A., Citigroup P/L would be challenged to replace such related party funding, either in the wholesale or deposit markets. There is also some degree of contagion risk because of shared branding.

Given these interlinkages between Citigroup P/L and Citibank N.A., Moody's has decided to position the standalone assessment of Citigroup P/L no higher than two notches above that of its parent. Given that the standalone assessment of Citigroup P/L is higher than that of Citibank N.A., Moody's has assumed no parental support in its ratings. Moreover, given its moderate market position in Australia, we have not incorporated any uplift from systemic support.

Citigroup P/L's standalone assessment remains higher than its parent's due its strong capital position, reflected by a Tier 1 ratio of 23.8% at FY11, as well as its strong asset quality metrics and low borrower concentrations.

WHAT COULD DRIVE THE RATINGS DOWN/UP

We see limited up-side potential for Citigroup P/L's long-term debt ratings absent a significant reduction in the bank's proportion of related party funding or an upgrade of Citibank N.A.'s standalone assessment. This is because Citigroup P/L's Baa1 standalone assessment is already two notches higher than Citibank N.A.'s.

Downward pressure on Citigroup P/L's ratings could arise if the bank's capital position were to deteriorate due to capital repatriation to the parent or an increase in contagion risk from the parent.

RATINGS RATIONALE - Citibank Korea

The affirmation of Citibank Korea's A2 long-term deposit rating at a level that is now one notch higher than that of its parent, Citibank N.A., primarily reflects two considerations.

First, while Citibank Korea does receive funding from Citibank N.A. and its affiliates, its reliance (12% of funding at March 2012) is far lower than that of Citigroup P/L. With a loan/deposit ratio of 96.7% at March 2012, Citibank Korea would be better positioned than its Australian affiliate to replace its parent as a source of funding in the event of Citibank N.A.'s credit stress.

Second, Citibank Korea has a deposit market share of 3.2%. Consistent with the ratings of other banks of its size in Korea, which we regard as a country in which systemic support for banks is high, we have incorporated three notches of systemic support in its rating above the standalone assessment of baa2.

Citibank Korea's standalone assessment reflects its strong capital position and relatively good asset quality. Its Tier 1 ratio was 13.5% at March 31, 2012, one of the highest in the Korean banking industry. Its NPL ratio of 1.21% was better than the industry average of 1.51%.

WHAT COULD DRIVE THE RATINGS DOWN/UP

We do not see much chance for Citibank Korea's long-term deposit rating to be upgraded, because the rating is already a notch higher than its parent and also enjoys a three-notch uplift from our assumption of the systemic support in Korea.

Downward pressure on Citibank Korea's long-term deposit rating could arise if we see a deterioration in asset quality, with NPLs rising to more than 4% of loans, or its share in the local banking market declining due to severe competition. Other developments that could lead to a rating downgrade include any noticeable increase in reliance on the parent for funding or an increase in contagion risk from the parent.

The methodologies used in these ratings were Bank Financial Strength Ratings: Global Methodology published in February 2007, and Incorporation of Joint-Default Analysis into Moody's Bank Ratings: Global Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Citigroup Pty Limited, headquartered in Sydney Australia had assets of AUD18.2billion (approximately USD17.8billion) at end-2011.

Citibank Korea, headquartered in Seoul Korea, had assets of KRW56.5 trillion (USD50 billion) at end-2011.

The resultant ratings and actions are listed below:

Citigroup P/L -- The long-term local currency senior unsecured debt rating was downgraded to Baa1 from A2. The short-term local and foreign currency ratings were downgraded to Prime-2 from Prime-1. The standalone assessment was lowered to C-/baa1 from C+/a2. All the ratings carry stable outlooks.

Citibank Korea -- All the ratings were affirmed: global local and foreign currency deposits of A2, short-term of Prime-1, and standalone assessment of C-/baa2. All the ratings carry stable outlooks.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating for Citigroup Pty Limited are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

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Daniel Yu Analyst Financial Institutions Group Moody's Investors Service Pty. Ltd. Level 10 1 O'Connell Street Sydney NSW 2000 Australia JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100 Stephen Long MD - Financial Institutions Financial Institutions Group JOURNALISTS: (852) 3758 -1350 SUBSCRIBERS: (852) 3551-3077 Releasing Office: Moody's Investors Service Pty. Ltd. Level 10 1 O'Connell Street Sydney NSW 2000 Australia JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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