Balancing Digital Aspirations While Addressing Risk Management Fundamentals: Observations From Citi Treasury Diagnostics

20 RISK MANAGEMENT CONSTRUCTS: I/C SETTLEMENT NETTING CENTRE Revenue Demographics for Netting Clients 40% 60% 41% 59% 63% 37% Netting No Netting Less than $2 billion $2 — 10 billion $10 — 25 billion Greater than $25 billion 56% 44% Netting No Netting Daily Weekly Twice Monthly Monthly Quarterly Less than quarterly Netting Structure Netting Frequency 93% Netting 79% 21% 3% 4% 70% 14% 5% 4% 54% 46% KPIs used to measure/monitor Treasury performance Don’t use KPIs Less than half (46%) of those surveyed have a Netting Structure in place, those that do 93% have at least monthly process in place. Size Matters. Companies with revenues of more than $10 Billion are more inclined to implement a Netting Structure. Almost 1 in 3 (32%) operate a Netting Centre without an integrated TMS or ERP module to manage the I/C net obligations. Almost 1 in 3 (31%) have less than 50% of allowable entities participating. Automated Interface Manual Interface No Interface Interface with TMS/ERP 32% 22% 46% 68% 31% More than 75% 51-74% 26-50% Less than 25% Flows Participation 53% 18% 13% 16% I/C Netting Characteristics