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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

CITIGROUP INC.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

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PRELIMINARY COPY

Citigroup Inc.

399 Park Avenue

New York, NY 10043

[                    ], 2009

Dear Holder of Public Preferred Depositary Shares:

This proxy statement is being delivered to you in connection with the Exchange Offers (as defined below). We are writing to you as a holder of depositary shares (Public Preferred Depositary Shares) representing our 8.500% Non-Cumulative Preferred Stock, Series F; 8.400% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E; 8.125% Non-Cumulative Preferred Stock, Series AA; and 6.500% Non-Cumulative Convertible Preferred Stock, Series T (collectively, the Public Preferred Stock) as of [    ], 2009 (the Record Date) to request that you grant your proxy to execute a written consent in favor of the following proposed amendments to our restated certificate of incorporation and the certificates of designation of each series of the Public Preferred Stock, in each case, that have been unanimously approved and declared advisable by the board of directors:

In order to save the expense associated with a special meeting, the board of directors has elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the Delaware General Corporation Law (DGCL), rather than by calling a meeting of stockholders. We are soliciting proxies to grant written consents from all of our holders of record as of the Record Date of Public Preferred Depositary Shares and common stock.

Granting your proxy to execute a written consent to approve the Public Preferred Stock Amendments is important for the success of the transactions that we announced on February 27, 2009 to strengthen our tangible

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common equity (TCE). We are pleased to report that we have already made great progress in implementing the proposed transactions (the Transactions):

At the time the proxies that we are soliciting by the enclosed proxy statement are exercised, we will have completed the Exchange Offers and we anticipate that the USG will have exchanged shares of preferred stock for warrants and Interim Securities with an aggregate liquidation preference equal to the aggregate liquidation value of the Public Preferred Depositary Shares and Trust Preferred Securities tendered and accepted for exchange in the Exchange Offers or, if less, $12.5 billion. Any remaining preferred stock held by USG will be exchanged into a new series of trust preferred securities.

We believe that the Public Preferred Stock Amendments are in the best interests of our stockholders and important to achieving the overarching goal of increasing our TCE. The Dividend Blocker Amendment, if it becomes effective, will allow us to pay dividends on our common stock even if full dividends on the Public

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Preferred Stock have not been paid or declared and set apart for payment, which we believe will enhance the price and liquidity of our common stock. The Director Amendment, if it becomes effective, will eliminate the possibility that non-exchanging holders of Public Preferred Depositary Shares could exercise a level of influence and control over the governance and the management of our company that is disproportionate to their remaining economic interest. The Retirement Amendment and the Authorized Preferred Stock Increase, if they become effective, will allow us greater flexibility in deciding the terms of securities to be issued in any future financing and in otherwise taking steps to maximize the efficiency of our overall capital structure.

If the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase are approved by the requisite vote of each of the Public Preferred Depositary Shares and the common stock, the amendments to the restated certificate of incorporation and the certificates of designation will not become effective unless we consummate an Exchange Offer. As an additional condition, the changes proposed by the Director Amendment will not take effect unless and until we delist any Public Preferred Depositary Shares that remain outstanding following the completion of the Exchange Offers. We currently intend to seek to delist and/or, to the extent permitted by law, deregister the Public Preferred Depositary Stock after completion of the Exchange Offers.

The board of directors has unanimously approved and declared advisable each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase and unanimously recommends that you grant your proxy to execute a written consent in favor of each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase.

This letter is being sent to you as a holder of Public Preferred Depositary Shares. Please note that in order to validly tender your Public Preferred Depositary Shares in the Exchange Offers, you must:

If you are a beneficial owner of Public Preferred Depositary Shares that are held by or registered in the name of a bank, broker, custodian or other nominee and you wish to tender your Public Preferred Depositary Shares you should contact your bank, broker, custodian or other nominee promptly and instruct it to tender your Public Preferred Depositary Shares and agree to the terms of the letter of transmittal including the voting agreement and your proxy contained therein authorizing the execution of a written consent with respect to such Public Preferred Depositary Shares in favor of the Public Preferred Stock Amendments.

The proxy statement enclosed with this letter provides you with important information about the matters for which we are seeking your proxy to grant your consent. We encourage you to read the entire proxy statement carefully. You may also obtain additional information about us from documents we have filed with the Securities and Exchange Commission (SEC) and on our website at www.citigroup.com.

Thank you for your support of Citi.

Sincerely,

Richard D. Parsons

Chairman of the Board

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Citigroup Inc.

399 Park Avenue

New York, NY 10043

[                    ], 2009

Dear Common Stockholder:

We are writing to you as a holder of common stock as of [    ], 2009 (the Record Date) to request that you grant your proxy authorizing the individuals pre-printed on the enclosed proxy card to execute a written consent in favor of the following proposed amendments to our restated certificate of incorporation and the certificates of designation of each of our 8.500% Non-Cumulative Preferred Stock, Series F; 8.400% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E; 8.125% Non-Cumulative Preferred Stock, Series AA; and 6.500% Non-Cumulative Convertible Preferred Stock, Series T (collectively, the Public Preferred Stock), in each case, that have been unanimously approved and declared advisable by the board of directors:

In order to save the expense associated with a special meeting, the board of directors has elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the Delaware General Corporation Law (DGCL), rather than by calling a meeting of stockholders. We are soliciting proxies to grant written consents from all of our holders of record as of the Record Date of Public Preferred Depositary Shares and common stock.

Granting your proxy authorizing the individuals pre-printed on the enclosed proxy card to execute a written consent to approve the Public Preferred Stock Amendments is important for the success of the transactions that

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we announced on February 27, 2009 to strengthen our tangible common equity (TCE). We are pleased to report that we have already made great progress in implementing the proposed transactions (the Transactions):

At the time the written consents described above are executed, we will have completed the Exchange Offers and we anticipate that the USG will have exchanged shares of preferred stock for Interim Securities and warrants with an aggregate liquidation preference equal to the aggregate liquidation value of the Public Preferred Depositary Shares and Trust Preferred Securities tendered and accepted for exchange in the Exchange Offers or, if less, $12.5 billion. Any remaining preferred stock held by USG (including the FDIC) will be exchanged into a new series of trust preferred securities.

We believe that the Public Preferred Stock Amendments are in the best interests of our stockholders and important to achieving the overarching goal of increasing our TCE. The Dividend Blocker Amendment, if it

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becomes effective, will allow us to pay dividends on our common stock even if full dividends on the Public Preferred Stock have not been paid or declared and set apart for payment, which we believe will enhance the price and liquidity of our common stock. The Director Amendment, if it becomes effective, will eliminate the possibility that non-exchanging holders of Public Preferred Depositary Shares could exercise a level of influence and control over the governance and the management of our company that is disproportionate to their remaining economic interest. The Retirement Amendment and the Authorized Preferred Stock Increase, if they become effective, will allow us greater flexibility in deciding the terms of securities to be issued in any future financing and in otherwise taking steps to maximize the efficiency of our overall capital structure. As a holder of our common stock, it is in your best interest to give your proxy to execute a written consent in favor of each of the Public Preferred Stock Amendments to allow the board of directors greater flexibility in deciding to reinstate dividends on your common stock even if we have not paid dividends for our Public Preferred Stock.

If the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase are approved by the requisite vote of each of the Public Preferred Depositary Shares and the common stock, the amendments to the restated certificate of incorporation and the certificates of designation will not become effective unless we consummate an Exchange Offer. As an additional condition, the changes proposed by the Director Amendment will not take effect unless and until we delist any Public Preferred Depositary Shares that remain outstanding following the completion of the Exchange Offers. We currently intend to seek to delist and/or, to the extent permitted by law, deregister the Public Preferred Depositary Shares after completion of the Exchange Offers.

The board of directors has unanimously approved and declared advisable each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase and unanimously recommends that you grant your proxy to execute a written consent in favor of each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase.

If you are a holder of common stock outstanding and entitled to vote on the Record Date you are urged to complete, date and sign the enclosed proxy card and promptly return it in the enclosed postage-prepaid envelope or vote by telephone or internet by following the instructions on the enclosed proxy form. To be counted, your properly completed written proxy card must be received at or before 5:00 p.m. New York Time, on [            ], subject to extension by the board of directors. If you hold your common stock through a bank, broker, custodian or other nominee please contact your bank, broker, custodian or other nominee to instruct it to submit a proxy on your behalf to execute a written consent in favor of each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase.

PLEASE NOTE THAT THIS SOLICITATION IS IN ADDITION TO THE SOLICITATION YOU HAVE RECEIVED WITH RESPECT TO THE 2009 ANNUAL STOCKHOLDER MEETING. COMPLETING THE PROXY CARD ENCLOSED WITH THE 2009 ANNUAL STOCKHOLDER MEETING SOLICITATION WILL HAVE NO EFFECT ON THE APPROVAL OF THE DIVIDEND BLOCKER AMENDMENT, THE DIRECTOR AMENDMENT, THE RETIREMENT AMENDMENT OR THE AUTHORIZED PREFERRED STOCK INCREASE. IN ORDER TO PARTICIPATE IN THIS SOLICITATION, YOU MUST COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE OR VOTE BY TELEPHONE OR INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY FORM.

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The proxy statement enclosed with this letter provides you with important information about the matters for which we are seeking your proxy to grant your consent. We encourage you to read the entire proxy statement carefully. You may also obtain additional information about us from documents we have filed with the Securities and Exchange Commission (SEC) and on our website at www.citigroup.com.

Thank you for your support of Citi.

Sincerely,

Richard D. Parsons

Chairman of the Board

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Citigroup Inc.

399 Park Avenue

New York, NY 10043

Notice of Solicitation of Written Consents

Dear Stockholder:

This proxy statement is furnished to you by Citigroup Inc. in connection with the solicitation on behalf of the board of directors of proxies from the holders of our common stock and holders of depositary shares (Public Preferred Depositary Shares) representing our 8.500% Non-Cumulative Preferred Stock, Series F; 8.400% Fixed Rate / Floating Rate Non-Cumulative Preferred Stock, Series E; 8.125% Non-Cumulative Preferred Stock, Series AA; and 6.500% Non-Cumulative Convertible Preferred Stock, Series T (collectively, the Public Preferred Stock). The board of directors is requesting that our holders of outstanding Public Preferred Depositary Shares and of our common stock as of [                    ], 2009 (the Record Date) grant their proxy to execute a written consent in favor of the following proposed amendments to our restated certificate of incorporation and to each of the certificates of designation of each series of the Public Preferred Stock, in each case, that have been unanimously approved and declared advisable by the board of directors:

In order to save the expense associated with a special meeting, the board of directors has elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the Delaware General Corporation Law (DGCL), rather than by calling a meeting of stockholders. We are soliciting proxies to grant written consents from all of our holders of record as of the Record Date of Public Preferred Depositary Shares and common stock.

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The board of directors has unanimously approved and declared advisable each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase and unanimously recommends that you grant your proxy to execute a written consent in favor of each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase.

By order of the Board of Directors

Michael S. Helfer

Corporate Secretary

[    ], 2009

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FORWARD-LOOKING STATEMENTS

This document and the information incorporated by reference in this document include forward-looking statements. These forward-looking statements are based on Citigroup’s management’s beliefs and assumptions and on information currently available to Citigroup’s management and involve external risks and uncertainties, including, but not limited to, those described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008. Forward-looking statements include information concerning Citigroup’s possible or assumed future results of operations and statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. Factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those discussed elsewhere in this document and the documents incorporated by reference in this document. You should not put undue reliance on any forward-looking statements. Except as required by applicable law or regulation, Citigroup does not have any intention or obligation to update forward-looking statements after it distributes this document.

References to “Citigroup”, “Citi”, “we” and “us” shall refer to Citigroup Inc.

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QUESTIONS AND ANSWERS ABOUT THE PROXY SOLICITATION MATERIALS AND THE PROXY SOLICITATION

Q: Is this the same as the 2009 Annual Meeting Proxy?

A: No. This proxy statement is related to the Exchange Offers and the USG/Private Holders Transactions. The authorization sought pursuant to these proxies is very important to the success of the Exchange Offers, the USG/Private Holders Transactions and our efforts to increase our TCE in order to enhance public and market perception of our financial strength. Therefore we urge you to grant your proxy with respect to the Public Preferred Stock Amendments as well as your proxy card for the 2009 annual meeting of the stockholders of Citi enclosed with the 2009 annual meeting proxy statement.

Q: Who is soliciting my proxy?

A: The board of directors of Citi is providing these proxy solicitation materials to you in connection with its solicitation of written consents for approval of certain amendments to our restated certificate of incorporation and to each of the certificates of designation for our Public Preferred Stock. The board is providing this proxy statement to holders of our common stock and Public Preferred Depositary Shares beginning on or about [    ], 2009. This proxy statement and the Notice of Solicitation of Written Consents will also available starting on [    ] on our website at www.citigroup.com. This proxy statement contains important information for you to consider when deciding how to vote on this matter. Please read it carefully.

Q: Who is entitled to grant a proxy?

A: The board of directors set the close of business on [    ], 2009 as the record date (the Record Date) for determining holders of Public Preferred Depositary Shares and common stock entitled to grant a proxy to execute a written consent with respect to the Public Preferred Stock Amendments. If you are holder of record on the Record Date of our common stock or Public Preferred Depositary Shares you are entitled to give your proxy with respect to the Public Preferred Stock Amendments.

Q: Are holders of Public Preferred Depositary Shares required to vote in favor of the proposals if they wish to participate in the Exchange Offers?

A: If you are a holder of Public Preferred Depositary Shares and you plan to participate in the Exchange Offers, in order to validly tender your Public Preferred Depositary Shares in the Exchange Offers, you must:

These voting and certification procedures are integrated into the letter of transmittal to be delivered by stockholders participating in the Exchange Offers. Accordingly, if you are a holder of Public Preferred Depositary Shares, in order to submit your proxy in respect of these matters, you need only to comply with the requirements for participating in the Exchange Offers set forth in our Offer to Exchange dated [    ], 2009, a copy of which is being distributed with the enclosed proxy statement. The Offer to Exchange is also included in our Registration Statement on Form S-4, filed with the SEC on [    ]. No additional documentation needs to be submitted.

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If you are a holder of common stock or a holder of Public Preferred Depositary Shares not participating in the Exchange Offers, these procedures will not apply and you will be able to give or withhold your proxy, or abstain on each proposal for every share that you held on the Record Date. You may give your proxy on behalf of all such shares owned by you as of the Record Date that are held directly in your name as the stockholder of record. You may instruct your bank, broker, custodian or other nominee to give your proxy on behalf of shares held for you as the beneficial owner in street name through your bank, broker, custodian or other nominee.

Q: Will there be a special meeting of the stockholders?

A: No, there will not be a special meeting. In order to save the expense associated with a special meeting, the board of directors has elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the DGCL, rather than by calling a meeting of stockholders. We are soliciting proxies to grant written consents from all of our holders of record as of the Record Date of Public Preferred Depositary Shares and common stock.

Q: What am I being asked to give my proxy to?

A: You are being asked to give your proxy to execute a written consent in favor of the following amendments to our restated certificate of incorporation and the certificates of designation of each series of the Public Preferred Stock, in each case, that have been unanimously approved and declared advisable by the board of directors:

Q: What portion of shares must give their consent in order to adopt the proposals?

A: Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of (1) each of two-thirds of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve each of the Dividend Blocker Amendment, the Director Amendment and the Retirement Amendment and (2) a majority of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Authorized Preferred Stock Increase.

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Q: How can I submit my proxy if I am a holder of common shares?

A: To submit your proxy as a holder of common shares, you must:

You may give your proxy on behalf of all shares of common stock owned by you as of the Record Date that are held directly in your name as the stockholder of record. If you hold shares of common stock that you did not receive in the Exchange Offers and the shares are held by a bank, broker, custodian or other nominee, you are considered the beneficial owner of the shares, and these proxy materials, together with a voting instruction form, are being forwarded to you by your bank, broker, custodian or other nominee. As a beneficial owner, you must instruct your bank, broker, custodian or other nominee how to vote. Your bank, broker, custodian or other nominee cannot vote your shares on your behalf without your instructions. Depending upon your bank, broker, custodian or other nominee, you may be able to vote either by toll-free telephone or by the Internet. Please refer to the enclosed voting form for instructions on how to vote electronically. You may also vote by signing, dating and returning any voting instruction form or other method of voting made available by your bank, broker, custodian or other nominee.

Citi employees may receive their proxy cards separately.

Q: How can I submit my proxy if I am a holder of Public Preferred Depositary Shares?

A: Each Public Preferred Depositary Share is held through our depositary, BONY. If you are a holder of record of Public Preferred Depositary Shares, these proxy materials, together with a voting instruction form, are being forwarded to you by BONY. If your shares are held in a brokerage account or by another nominee you are considered the beneficial owner of the Public Preferred Depositary Shares and BONY has forwarded these proxy materials, together with a voting instruction form to your broker or other nominee and you are receiving these materials from them. Since BONY must vote the Public Preferred Depositary Shares on your behalf, you must instruct BONY or your broker or other nominee, who will forward your vote to BONY, on how to vote. BONY will aggregate your vote with all other fractional depositary share votes resulting from requests with the same voting instructions and will vote the Public Preferred Stock according to the number of whole votes resulting from such aggregation in accordance with the instructions on the proxy card.

Q: What is the deadline for sending my proxy?

A: If you are participating in the Exchange Offers, you must have validly tendered your Public Preferred Depositary Shares prior to the expiration date of the Exchange Offers, which is set forth in the Offer to Exchange. This deadline may be extended in accordance with applicable law. If you hold your Public Preferred Depositary Shares through a bank, broker, custodian or other nominee, due to the time required for your nominee to complete the required actions on your part, we urge you to contact your bank, broker, custodian or other nominee at least five business days prior to the expiration date of the Exchange Offers. We are not providing for guaranteed delivery procedures and therefore you must allow sufficient time to tender your proxy, and comply with the other procedures set forth in the Offer to Exchange prior to the expiration date.

Other holders of common stock as of the Record Date must return their proxy by the close of business on the expiration date of the Exchange Offer (the Proxy Deadline). The board of directors may extend the Proxy Deadline in its sole discretion. If you hold your shares of common stock through a bank, broker, custodian or other nominee, due to the time required for your nominee to complete the required actions on your part, we urge you to contact your bank, broker, custodian or other nominee at least five business days prior to the Proxy Deadline.

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Q: How will the Exchange Offers affect the amendments described in this proxy statement?

A: In connection with the Transactions, on [    ], we launched the Exchange Offers, by which we offered to exchange Public Preferred Depositary Shares and Trust Preferred Securities into shares of our common stock. For more information on the Exchange Offers, please see our Registration Statement on Form S-4, dated [    ], on file with the SEC. Public Preferred Depositary Shares and Trust Preferred Securities that are accepted for exchange in the Exchange Offers will be exchanged for common stock.

If you are a holder of Public Preferred Depositary Shares and you plan to participate in the Exchange Offers, in order to validly tender your Public Preferred Depositary Shares in the applicable Public Preferred Depositary Share Exchange Offer, you must:

If you are a beneficial owner of Public Preferred Depositary Shares that are held by or registered in the name of a bank, broker, custodian or other nominee and you wish to tender your Public Preferred Depositary Shares you should contact your bank, broker, custodian or other nominee promptly and instruct it to tender your Public Preferred Depositary Shares and agree to the terms of the letter of transmittal, including the voting agreement and your proxy contained therein, authorizing the execution of a written consent with respect to such Public Preferred Depositary Shares in favor of the Public Preferred Stock Amendments.

Accordingly, if you are a holder of Public Preferred Depositary Shares, in order to submit your proxy in respect of these matters (and in order to be permitted to participate in the Exchange Offers), you need to comply with the requirements for participating in the Exchange Offers set forth in our Offer to Exchange dated March [    ], 2009, a copy of which is being distributed with the enclosed proxy statement. The Offer to Exchange is also included in our Registration Statement on Form S-4, filed with the SEC on [    ]. No additional documentation needs to be submitted.

If you were a holder of record of Public Preferred Depositary Shares on the Record Date but no longer own your Public Preferred Depositary Shares and are not participating in the Exchange Offers you can still give or withhold your proxy, or abstain on each of the Public Preferred Stock Amendments.

The consummation of the Exchange Offers is subject to a number of conditions that must be satisfied, or waived by us, on or prior to the expiration date. If the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase are approved by the requisite vote of each of the Public Preferred Depositary Shares and the common stock, the amendments to the restated certificate of incorporation and the certificates of designation will not become effective unless we consummate an Exchange Offer. As an additional condition, the changes proposed by the Director Amendment will not take effect unless and until we are able to successfully delist any Public Preferred Depositary Shares that remain outstanding following the completion of the Exchange Offers. We currently intend to seek to delist and/or, to the extent permitted by law, deregister the Public Preferred Depositary Shares after completion of the Exchange Offers.

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Q: Can I change or revoke my proxy?

A: If you have tendered Public Preferred Depositary Shares in exchange for common stock in connection with the Exchange Offers and we accept your Public Preferred Depositary Shares for exchange, your voting agreement and your proxy authorizing the execution of a written consent in favor of the Public Preferred Stock Amendments will become irrevocable, and you will be unable to change or revoke your proxy after we have accepted your Public Preferred Depositary Shares for exchange. You may withdraw your Public Preferred Depositary Shares at any time prior to the expiration date of the Exchange Offers. Valid withdrawal of your tender will automatically revoke your voting agreement and proxy with respect to the Public Preferred Stock Amendments with respect to such Public Preferred Depositary Shares.

It you hold shares of common stock, you may change or revoke your proxy at any time before we receive enough proxies authorizing written consents in favor of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase. If you wish to revoke or withhold your previously given proxy, you may do so by:

After the expiration date of the Exchange Offers, all proxies to execute written consents previously executed and delivered and not revoked will become irrevocable.

Q: What if I don’t indicate my decision with respect to some of the proposals listed on my proxy card or letter of transmittal?

A: If you return a signed proxy card or letter of transmittal without indicating your decision on a proposal, in accordance with the board’s recommendation, you will be deemed to have given your proxy authorizing the individuals pre-printed on your proxy card or letter of transmittal to execute a written consent for each of the Public Preferred Stock Amendments.

Q: Is my proxy card confidential?

A: In 2006, the board adopted a confidential voting policy as a part of its Corporate Governance Guidelines. Under the policy, all proxies, ballots, and vote tabulations are kept confidential for registered stockholders who request confidential treatment. If you are a registered stockholder and would like your vote kept confidential, please check the appropriate box on the proxy card or follow the instructions when submitting your vote by telephone or by the Internet. If you hold your shares in “street name” or through an employee benefit plan, your vote already receives confidential treatment and you do not need to request confidential treatment in order to maintain the confidentiality of your vote.

The confidential voting policy will not apply in the event of a proxy contest or other solicitation based on an opposition proxy statement. For further details regarding this policy, please see the Corporate Governance Guidelines attached as Annex A to the definitive proxy statement for our 2009 annual stockholders meeting, dated [    ], 2009.

Q: What happens if I do not grant my proxy?

A: Because we need a majority of the outstanding shares of common stock and two-thirds of the outstanding Public Preferred Depositary Shares on the Record Date to give a proxy to execute a written consent for the Public Preferred Stock Amendments, if you do not grant a proxy, it will have the effect of withholding consent for the Public Preferred Stock Amendments.

If you are a beneficial owner, you must instruct your bank, broker, custodian or other nominee how to vote. Your bank, broker, custodian or other nominee cannot vote your shares on your behalf without your instructions.

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Failure to provide the record holder of your Public Preferred Depositary Shares or common stock with voting instructions on a matter, such that your bank, broker, custodian or other nominee is unable to vote on the matter, will be equivalent to a vote against the Public Preferred Stock Amendments.

Q: Is Citi conducting any other proxy solicitations?

A: Yes. On [    ], 2009, in connection with the Exchange Offers, we mailed a separate Notice of Solicitation of Consents and accompanying proxy statement to holders of our Public Preferred Depositary Shares and Trust Preferred Securities, seeking their proxies to execute written consents to amend our restated certificate of incorporation to increase the number of authorized shares of common stock and amend certain of the voting rights of holders of our common stock pertaining to preferred stock, and to permit the board of directors to conduct a reverse stock split (the Common Proxy Statement). Giving your proxy with respect to the matters described in the Common Proxy Statement will not affect your proxy with respect to the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase, and giving your proxy with respect to the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase will not affect your proxy with respect to the matters described in the Common Proxy Statement.

Each of the Common Proxy Statement and this proxy statement contain important information that you should read carefully. You must complete both the proxy card attached to the Common Proxy Statement to give your proxy with respect to the matters described in the Common Proxy Statement to give your proxy to execute a written consent with respect to the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase. Your proxy, regardless of the number of shares you own, is important. Please do not forget to grant your proxy prior to the expiration of the Exchange Offer, or your proxy may not be counted.

In addition, on [    ], 2009, we mailed our proxy statement for our 2009 annual meeting of stockholders to our holders of common stock. If you are a holder of common stock, this solicitation is in addition to the solicitation you have received with respect to the 2009 annual stockholder meeting. Completing the proxy card enclosed with the 2009 annual stockholder meeting solicitation will have no effect on the approval of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment or the Authorized Preferred Stock Increase. In order to participate in this solicitation, you must complete, date and sign the enclosed proxy card and promptly return it in the enclosed postage-prepaid envelope or fax it to [ ].

Q: How can I access Citi’s consent solicitation materials and annual report electronically?

A: This proxy statement and the 2008 annual report are available on Citi’s website at www.citigroup.com. Click on “About Citi,” then “Corporate Governance,” then “Financial Disclosure,” and then “Annual Reports & Proxy Statements.” Most stockholders can elect not to receive paper copies of future Proxy Solicitation Statements and annual reports and can instead view those documents on the Internet.

If you are a stockholder of record, you can choose this option and save Citi the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your Citi stock through a bank, broker or other holder of record, please refer to the information provided by that entity for instructions on how to elect not to receive paper copies of future proxy solicitation statements and annual reports.

If you choose not to receive paper copies of future proxy statements and annual reports, you will receive an e-mail message next year containing the Internet address to use to access Citi’s Proxy Solicitation Statement and annual report. Your choice will remain in effect until you tell us otherwise. You do not have to elect Internet access each year. To view, cancel or change your enrollment profile, please go to www.InvestorDelivery.com.

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Q: Who can help answer my questions?

A: If you have any questions about how to give or revoke your proxy, you should contact our information agent:

Morrow & Co., LLC

470 West Avenue

Stamford, CT 06902

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Holders Call Toll Free: (800) 445-0102

If you need additional copies of this proxy statement or proxy cards, please contact Morrow & Co., LLC as described above.

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INFORMATION ON VOTING SECURITIES

The board of directors has elected to obtain stockholder approval of the amendments described above by written consent pursuant to Section 228 of the DGCL, rather than by calling a meeting of stockholders. We are soliciting proxies to grant written consents from all of our holders of record as of the Record Date of Public Preferred Depositary Shares and common stock.

Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of (1) each of two-thirds of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve each of the Dividend Blocker Amendment, the Director Amendment and the Retirement Amendment and (2) a majority of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Authorized Preferred Stock Increase. While there are other shares of preferred stock outstanding, as a consequence of the USG/Private Holders Transactions we do not believe that any such stock currently held (or stock to be issued in exchange therefor) will be outstanding both as of the Record Date and as of the date of the written consent in respect of the Public Preferred Stock Amendments.

When voting on the Dividend Blocker Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase, the Public Preferred Stock votes by number of shares, with holders being entitled to one vote per share of Public Preferred Stock. When voting on the Director Amendment, the Public Preferred Stock votes by liquidation preference and each share of Series F, Series E and Series AA preferred stock is entitled to 25,000 votes and each share of Series T preferred stock is entitled to 50,000 votes. Pursuant to depositary agreements entered into by the holders of the Public Preferred Depositary Shares and The Bank of New York Mellon (BONY), BONY will vote the shares of each series of Public Preferred Stock in accordance with the votes of the relevant series of Public Preferred Depositary Shares.

As of the close of business on the Record Date, there were [    ] shares of common stock issued and outstanding and entitled to consent to the Public Preferred Stock Amendments. In addition to the required vote of the Public Preferred Depositary Shares, the written consent of a majority, or [    ] shares of common stock will be required to approve each of the Dividend Blocker Amendment, the Director Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase.

As of the close of business on the Record Date, there were [    ] shares of Public Preferred Depositary Shares issued and outstanding. In addition to the required vote of our common stockholders, the written consent of two-thirds of the outstanding Public Preferred Depositary Shares will be required to approve each of the Dividend Blocker Amendment, the Director Amendment and the Retirement Amendment. The written consent of a majority of the Public Preferred Depositary Shares will be required to approve the Authorized Preferred Stock Increase. The table below lists the following information with respect to the Public Preferred Depositary Shares, in each case as of the Record Date: number of fractional shares of underlying Preferred Stock represented by each Preferred Depositary Share, number of underlying shares for each series of Public Preferred Shares, the liquidation preference for each series of underlying Public Preferred Shares, and the number of shares outstanding for each series of Public Preferred Depositary Shares.

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Each Series F, Series AA and Series T Preferred Depositary Share represents a 1/1,000^th fractional interest in a share of Series F, Series AA or Series T preferred stock and each Series E Preferred Depositary Share represents a 1/25^th fractional interest in a share of Series E preferred stock. Accordingly, when voting on the Dividend Blocker Amendment, the Retirement Amendment and the Authorized Preferred Stock Increase, the holder of each Series F, Series AA and Series T Preferred Depositary Share is entitled to 1/1,000^th of a vote per Public Preferred Depositary Share held as of the Record Date and the holder of each Series E Preferred Depositary Share is entitled to 1/25^th of a vote per Public Preferred Depositary Share held as of the Record Date. When voting on the Director Amendment, the holder of each Series F and Series AA Preferred Depositary Share is entitled to 25 votes per Preferred Depositary Share held as of the Record Date, the holder of each Series E Preferred Depositary Share is entitled to 1,000 votes per Preferred Depositary Share held as of the Record Date, and the holder of each Series T Preferred Depositary Share is entitled to 50 votes per Preferred Depositary Share held as of the Record Date. Fractional votes of each Preferred Depositary Share on each matter will be aggregated with the fractional votes of other Public Preferred Depositary Shares submitting the same voting instructions on that matter, and BONY will grant or withhold written consents or abstain on each matter for the number of whole shares resulting from such aggregation in accordance with the instructions on the proxy cards.

This letter is being sent to you as a holder of Public Preferred Depositary Shares. Please note that in order to validly tender your Public Preferred Depositary Shares in the Exchange Offers, you must:

If you are a beneficial owner of Public Preferred Depositary Shares that are held by or registered in the name of a bank, broker, custodian or other nominee and you wish to tender your Public Preferred Depositary Shares you should contact your bank, broker, custodian or other nominee promptly and instruct it to tender your Public Preferred Depositary Shares and agree to the terms of the letter of transmittal, including the voting agreement and your proxy contained therein, to execute a written consent with respect to such Public Preferred Depositary Shares in favor of the Public Preferred Stock Amendments.

Accordingly, if you are a holder of Public Preferred Depositary Shares, in order to submit your proxy in respect of these matters (and in order to be permitted to participate in the Exchange Offers), you need to comply with the requirements for participating in the Exchange Offers set forth in our Offer to Exchange dated March [    ], 2009, a copy of which is being distributed with the enclosed proxy statement. The Offer to Exchange is also included in our Registration Statement on Form S-4, filed with the SEC on [    ]. No additional documentation needs to be submitted.

If you were a holder of record of Public Preferred Depositary Shares on the Record Date but no longer own your Public Preferred Depositary Shares and are not participating in the Exchange Offers you can still grant a proxy to give or withhold your proxy, or abstain on each of the Public Preferred Stock Amendments.

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BACKGROUND FOR THE TRANSACTIONS

Generally

On February 27, 2009, we announced that we would exchange certain series of our preferred stock held by the USG and the Private Holders for Interim Securities and warrants to purchase common stock, as described below, and that we would commence the Exchange Offers.

Citigroup is subject to risk-based capital ratio guidelines issued by the FRB. One such ratio, Tier 1 Capital is considered “core capital.” Tier 1 Capital is stated as a percentage of risk-weighted assets. To be “well capitalized” under FRB regulations, a financial institution must have a Tier 1 Capital Ratio of at least 6%.

In the past, Citigroup (and its regulators, including the FRB) have focused on Tier 1 Capital as the most important measure of risk capital for financial institutions, and based on Citigroup’s Tier 1 Capital Ratio of 11.9% as of December 31, 2008, Citigroup has been very well capitalized. However, a view has recently developed in the market that TCE is an important metric for analyzing the financial condition of a financial institution.

The primary purpose of the Exchange Offers and the USG/Private Holders Transactions is to make Citigroup one of the strongest capitalized banks on a TCE basis. TCE is an important measure of a bank’s financial strength, and is equal to (a) stockholder’s equity, less (b) intangible assets, less (c) goodwill, less (d) preferred stock. Assuming 100% participation in the Exchange Offers and the USG/Private Holders Transactions, our TCE would increase to up to $81 billion upon completion of the Exchange Offers and the USG/Private Holders Transactions, compared to $29.7 billion as of December 31, 2008.

The USG/Private Holders Transactions

In the USG/Private Holders Transactions, we will exchange certain series of our preferred stock held by the USG and the Private Holders for Interim Securities at an exchange price (referred to herein as the related offers exchange ratio) of $3.25 per share (relative to the aggregate liquidation preference of the preferred stock exchanged) and for warrants. The material terms of the Interim Securities and warrants are described below. We expect each of the USG/Private Holders Transactions to be settled concurrently with each other.

The Interim Securities are a new class of stock to be created from our blank check preferred stock authority, to be designated as “Series M Common Stock Equivalent.” The following are the material terms of the Interim Securities:

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Warrants to purchase our common stock will be issued to each of the USG and the Private Holders. The following are the material terms of the warrants:

Other material terms of the USG/Private Holders Transactions include the following:

The consummation of the USG/Private Holders Transactions is also expected to be subject to certain conditions, including the receipt of material regulatory approvals and the accuracy of representations and warranties of each party. We cannot assure you that the Authorized Share Increase will be approved by our stockholders or that the USG/Private Holders Transactions will be consummated on the terms or schedule described above.

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We are also commencing the Exchange Offers, pursuant to which we are offering to exchange newly issued shares of our common stock (a) for any and all issued and outstanding Public Preferred Depositary Shares, and (b) for Trust Preferred Securities, subject to an overall cap of $15 billion in liquidation preference. In the case of our Trust Preferred Securities, due to a limitation on the number of our authorized but unissued shares of common stock, we will be able to accept only a limited amount of Trust Preferred Securities for exchange in the Exchange Offers. Specifically, we will be able to accept for exchange a number of Trust Preferred Securities with a liquidation preference equal to $76,35 million plus the approximate amount of the liquidation preference of any Public Preferred Depositary Shares that are not tendered and accepted for exchange in the Exchange Offers subject to an overall cap of $15 billion in liquidation preference.

Common Stock Proposals

We are also seeking approval from our common stockholders of record on the settlement date of the Exchange Offers, to amend our restated certificate of incorporation:

Approval of the Common Stock Proposals requires the affirmative written consent of a majority of the shares of our common stock outstanding at the close of business on the record date for the common stock Proposals. The record date will be the settlement date of the Exchange Offers.

The foregoing is just a summary of the Common Stock Proposals and may not contain all of the information that is important to you and is qualified in its entirety by reference to the proxy statement on Schedule 14A filed on [            ], 2009, describing the Common Stock Proposals, which is incorporated herein by reference.

NYSE Rule 312.05 Waiver

Ordinarily, stockholders would be required to approve the Exchange Offers and the issuance of the Interim Securities because Rule 312.03(c)(1) of the Listed Company Manual of the New York Stock Exchange (NYSE) requires us to obtain stockholder approval to issue common stock if the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance, or if the common stock is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance. Assuming 100% participation in the Exchange Offers, the issuance of common stock in exchange for Public Preferred Depositary Shares or Trust Preferred Securities pursuant to the Exchange Offers, and the issuance of the Interim Securities, would satisfy both of these tests. However, pursuant to an exception in Section 312.05 of the NYSE Listed Company Manual, the Audit and Risk Management Committee approved our obtaining a waiver in lieu of seeking stockholder approval that would otherwise have been required under Section 312.03. We believe that speed and certainty in consummating the Transactions on the announced structure (without delay for stockholder approval or other conditions) is crucial, taking into account the new emphasis on TCE, the agreements we have with our regulators (including the FRB), and the belief that prompt execution of the Transactions is critical for protecting market confidence in Citi. We received approval from the NYSE for the use of the exception, and in connection with such exception, mailed the requisite letter to all stockholders notifying them of our intention to issue the securities without prior stockholder approval. Therefore, we have not and will not be seeking stockholder approval for the issuance of common stock in connection with the Exchange Offers or for the issuance of the Interim Securities.

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DIVIDEND BLOCKER AMENDMENT

On [                 ], 2009, the board of directors adopted resolutions (1) declaring that an amendment to Citi’s restated certificate of incorporation and the certificates of designation of the Public Preferred Stock modifying certain rights of the Public Preferred Stock was advisable and (2) directing that a proposal to approve the Dividend Blocker Amendment be submitted to the holders of our common stock and Public Preferred Depositary Shares for their written consent.

The form of the proposed amendment to our restated certificate of incorporation and the certificates of designation for each series of Public Preferred Stock to modify the terms of our Public Preferred Stock to reflect the changes imposed by the Dividend Blocker Amendment is attached to this proxy statement as Annex A.

Currently, our restated certificate of incorporation and the certificates of designation for each of the series of Public Preferred Stock provide that, as to a dividend payment date, unless Citi pays or declares and sets apart for payment full dividends on shares of each series of preferred stock, Citi may not declare, set aside or pay dividends on, make any distributions relating to, or redeem, purchase, acquire or make any liquidation payment relating to, shares of stock of any class or series that is junior to that series of preferred stock anytime during the next succeeding dividend period. In addition, Citi may not declare, pay or set aside dividends for the holders of common stock before full dividends have been declared, paid or set aside on the preferred stock. The certificates of designation of the Public Preferred Stock also currently require Citi to declare dividends proportionally on all Public Preferred Stock and all securities ranking equally with such series of Public Preferred Stock if dividends are not paid in full on such series of Public Preferred Stock.

The proposed Dividend Blocker Amendment will not change the other terms of any series of Public Preferred Stock relating to dividends, including the rate at which dividends accrue, the payment dates for dividends or provisions of our restated certificate of incorporation that require us upon a liquidation or dissolution or winding up of Citi to pay the full preferential amounts to the holder of each series of Public Preferred Stock pro rata, based, in part, on the respective amounts of unpaid dividends that are payable on each such share of Public Preferred Stock for such period.

Background and Reasons for the Dividend Blocker Amendment

On February 27, 2009, we announced that we will suspend the payment of dividends on our Public Preferred Stock. The suspension of dividends on the Public Preferred Stock requires that we also suspended dividends on our common stock.

The Dividend Blocker Amendment is integral to our goal of making Citi one of the best capitalized banks on a TCE basis. The Dividend Blocker Amendment will permit the board greater flexibility in reinstating the common dividend without incurring additional dividend expense related to any Public Preferred Depositary Shares that remain outstanding after the settlement of the Exchange Offers. This would permit us to strengthen our common stock and significantly enhance our ability to maximize the efficiency of Citi’s capital structure going forward. The board believes that reinstating the common dividend is an important corporate objective, as it will make our common stock more attractive to a number of institutional investors, some of which are prohibited from investing in stock that does not pay a dividend. Making our common stock more attractive to these investors, as well as other investors who wish to realize gain through dividends, we believe will increase the price and liquidity of our common stock and strengthen our common stock as a long-term investment instrument. The Dividend Blocker Amendment permits this and at the same time saves the expense of paying dividends on any remaining Public Preferred Depositary Shares.

Under agreements previously entered into with the USG, Citi is not permitted to pay dividends in excess of $0.01 per share. While we have no current plans to reinstate the common dividend, we believe that payment of even a $0.01 dividend could potentially enhance the value of our common stock in the market. The annual cost of such a dividend, assuming consummation of all of the Transactions (including the USG/Private Holders

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Transactions and conversion of all Interim Securities into common stock) would range from $7.1 million per quarter (if a reverse stock split of 30:1 is effected) to $213.9 million per quarter (if no reverse stock split is effected), assuming 100% participation in the Exchange Offers. However, if the Dividend Blocker Amendment is not approved, this cost would increase by the amount of dividends payable in respect of the Public Preferred Stock that remains outstanding after the Exchange Offers. Assuming the participation of 66 ²/3% of the Public Preferred Depositary Shares in the Exchange Offers, the amount of such dividends in respect of the Public Preferred Depositary Shares, as shown in the table below, could be as much as $395 million annually if the Dividend Blocker Amendment is not approved. Potentially paying out such a large amount of preferred dividends would add significantly to the cost of a $0.01 common dividend and is inconsistent with our goal of strengthening TCE.

In addition, eliminating the clause in each certificate of designation requiring that dividends be declared on a proportional basis with respect to all equally ranking series of preferred shares will also give us more flexibility in future financings involving preferred stock, as new series of preferred stock could be issued that give the holders thereof preferential rights to dividends. As preferred stock has historically been an important part of our Tier 1 regulatory capital, which we believe remains an important measure of our financial strength, we think this flexibility is also important to our ability to maximize the efficiency of our capital structure going forward.

We believe that a large majority of the holders of Public Preferred Depositary Shares will find the economic terms of the applicable Exchange Offer attractive and will tender their securities. If, as we anticipate, more than two-thirds of the record holders of the Public Preferred Depositary Shares tender their shares in the Exchange Offers, and the Dividend Blocker Amendment is approved in accordance with the terms of the relevant certificate of designation and Delaware law, only a fraction of our current holders of Public Preferred Depositary Shares will be affected by this change in the terms of their securities.

To the extent that the Dividend Blocker Amendment provides further encouragement to holders to tender their Public Preferred Depositary Shares in the Exchange Offers, this is also positive for the company, as greater participation in our Exchange Offers will lead to a more optimal capital structure by increasing our TCE. We believe this will enhance our standing with our regulators and improve public and market perception of our financial strength.

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Effect of the Dividend Blocker Amendment on Stockholders

Upon effectiveness of the Dividend Blocker Amendment, each series of Public Preferred Depositary Shares will no longer be entitled to receive dividends prior to payment of dividends to holders of common stock. Additionally, new series of preferred stock could be created which could be senior to the Public Preferred Stock in rights to dividends.

Public Preferred Depositary Shares that are tendered and accepted for exchange in the Exchange Offers will be exchanged for shares of common stock on the settlement date of the Exchange Offers. Therefore, although holders of these securities will be entitled to vote on the Public Preferred Stock Amendments as holders of Public Preferred Depositary Shares because the Record Date will occur prior to the settlement date, they will only be affected by the Dividend Blocker Amendment, if approved, as holders of common stock. Holders of any Public Preferred Depositary Shares that are not tendered, or that are not accepted, for exchange in the Exchange Offers will be affected by these amendments as holders of Public Preferred Depositary Shares.

The table below shows the liquidation value of Public Preferred Depositary Shares that will be affected by the Dividend Blocker Amendment, based on the levels of acceptance of our Exchange Offers indicated below:

Approximately [    ] shares of common stock were issued and outstanding on the Record Date. Each of these shares of common stock will be affected by the Dividend Blocker Amendment. The proposed Dividend Blocker Amendment would eliminate each of the other restrictions described above and allow Citi to declare and pay dividends on shares of common stock or any other series of junior stock or make other payments to holders of junior or parity stock without paying or setting apart for payment any dividends on shares of any series of Public Preferred Stock.

No Appraisal Rights

Under Delaware law and our restated certificate of incorporation, neither holders of our common stock nor holders of Public Preferred Depositary Shares will be entitled to dissenter’s rights or appraisal rights with respect to the Dividend Blocker Amendment.

Required Vote and Recommendation

Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of each of two-thirds of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Dividend Blocker Amendment.

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DIRECTOR AMENDMENT

On [                ], 2009, the board of directors adopted resolutions (1) declaring that an amendment to Citi’s certificates of designation of the Public Preferred Stock (effective upon the delisting of such stock) modifying the right of holders of Public Preferred Stock to appoint directors if dividends had not been declared in six or more quarterly dividend periods (or, in the case of the Series E Public Preferred Stock, for three semi-annual dividend periods) was advisable and (2) directing that a proposal to approve the Director Amendment be submitted to the holders of our common stock and Public Preferred Depositary Shares for their written consent.

The form of the proposed amendment to the certificates of designation for each of the series of Public Preferred Stock to modify the terms of our Public Preferred Stock to reflect the changes imposed by the Director Amendment is attached to this proxy statement as Annex B.

Currently, the certificates of designation for each of our series of Public Preferred Stock provide that, if dividends on such series of Public Preferred Stock remain unpaid for six or more quarterly dividend periods (or, in the case of the Series E Public Preferred Stock, for three semi-annual dividend periods), whether or not consecutive, the number of directors on the board of directors will automatically increase by two and the holders of that series of Public Preferred Stock, voting as a single class together with any other series of Public Preferred Stock will be entitled to elect two directors. The term of these two directors will end, and the number of directors will automatically decrease by two, at such time as all dividends on shares of each series of Public Preferred Stock have been paid in full or declared and set apart for payment for at least four consecutive quarterly periods following non-payment of a dividend (and has paid cumulative dividends in full with respect to an equally ranked series of cumulative preferred stock).

Background and Reasons for the Director Amendment

On February 27, 2009, we announced that we will suspend the payment of dividends on our Public Preferred Stock.

If the Director Amendment is not approved, and dividends are not paid on Public Preferred Depositary Shares for six quarterly dividend periods (or, in the case of the Series E Public Preferred Stock, for three semi-annual dividend periods), whether or not consecutive, the holders of our Public Preferred Depositary Shares remaining after the consummation of the Exchange Offers, voting as a single class, will be able to appoint two directors to the board of directors. The board of directors is currently composed of 15 directors and, given the possibility that only a fraction of our current holders of Public Preferred Depositary Shares could remain outstanding upon completion of the Exchange Offers, the right to appoint two of our directors would afford the remaining Public Preferred Depositary Shares a disproportionate influence over our governance and decision-making, compared to their economic investment.

This is especially true given that we expect the Exchange Offers to significantly reduce the number of outstanding Public Preferred Depositary Shares. If the Director Amendment is approved by two-thirds of the Public Preferred Stock, we believe it very likely that the approving holders of the Public Preferred Depositary Shares will have tendered their Public Preferred Depositary Shares in the Exchange Offers, thereby reducing the number of outstanding Public Preferred Depositary Shares by at least two-thirds and perhaps more. The more successful the Exchange Offers are, the more disproportionate the influence of the non-tendering holders of Public Preferred Depositary Shares would be, potentially creating an incentive for holders not to tender their shares in the Exchange Offers. This incentive is removed if the Director Amendment is approved.

Effect of the Proposal on Stockholders

Upon the effectiveness of the proposed Director Amendment and delisting of the applicable series of Public Preferred Stock, such delisted series of Public Preferred Stock will no longer have the right to appoint directors to Citi’s board upon Citi’s failure to pay dividends for six or more quarterly dividend periods (or, in the case of the Series E Public Preferred Stock, for three semi-annual dividend periods).

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As noted above, Public Preferred Depositary Shares that are tendered and accepted for exchange in the Exchange Offers will be exchanged for shares of common stock on the settlement date of the Exchange Offers. Therefore, although holders of these securities will be entitled to vote on the Preferred Amendments as holders of Public Preferred Depositary Shares because the Record Date will occur prior to the settlement date, they will only be affected by the Director Amendment, if approved, as holders of common stock. Holders of any Public Preferred Depositary Shares that are not tendered, or that are not accepted, for exchange in the Exchange Offers will be affected by these amendments as holders of Public Preferred Depositary Shares.

Approximately [    ] shares of common stock were issued and outstanding on the Record Date. Each of these shares of common stock will be affected by the Public Preferred Stock Amendments in that the Director Amendment would ensure that management of Citi remains with a board of directors elected by the holders of the common stock in the event that Citi determines that it is not in its best interest or the best interest stockholders to pay dividends on the Public Preferred Depositary Shares.

Delisting and Deregistration

Public Preferred Depositary Shares (other than Series E) are currently listed for trading on the NYSE. The Director Amendment provides that upon the delisting of a series of Public Preferred Stock, the right in each certificate of designation of holders of Public Preferred Stock to elect two directors if dividends have not been paid for six quarterly dividend periods (or, in the case of the Series E Public Preferred Stock, for three semi-annual dividend periods), whether or not consecutive, terminates. Because under NYSE Listing Rule 313 certificates of designation of preferred stock listed for trading on the NYSE are required to provide such governance rights to holders of preferred stock, we can only eliminate this right of Public Preferred Depositary Shares to elect directors if we delist the applicable series of Preferred Stock. We currently intend to delist each listed series of Public Preferred Depositary Shares that remains outstanding following completion of the Exchange Offers from trading on the NYSE and we do not intend to apply for listing any series of Public Preferred Depositary Shares any other national securities exchange. As a result, holders of Public Preferred Depositary Shares that remain outstanding following the Exchange Offers may be left with an illiquid security indefinitely. In addition, to the extent permitted by law, we currently intend to deregister each series of Public Preferred Depositary Shares under the Securities Exchange Act of 1934. If the Director Amendment is approved and becomes effective, the right in each certificate of designation of holders of Public Preferred Stock to elect two directors if dividends have not been paid for six quarterly dividend periods (whether or not consecutive) would be eliminated upon delisting of the applicable series of Public Preferred Stock.

No Appraisal Rights

Under Delaware law and our restated certificate of incorporation, neither holders of our common stock nor holders of Public Preferred Depositary Shares will be entitled to dissenter’s rights or appraisal rights with respect to the Director Amendment.

Required Vote and Recommendation

Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of each of two-thirds of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Director Amendment.

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RETIREMENT AMENDMENT

On [            ], 2009, the board of directors adopted resolutions (1) declaring that an amendment to Citi’s certificates of designation of each series of Public Preferred Stock to implement the Retirement Amendment was advisable and (2) directing that a proposal to approve the Retirement Amendment be submitted to the holders of our common stock and Public Preferred Depositary Shares for their written consent.

The form of the proposed amendment to the certificates of designation for each of the series of Public Preferred Stock to modify the terms of our Public Preferred Stock to reflect the changes imposed by the Retirement Amendment is attached to this proxy statement as Annex C.

Background and Reasons for the Retirement Amendment

The Retirement Amendment is a technical clarification to the certificates of designation of each series of Public Preferred Stock to clarify, in each certificate of designation, that any shares of any series of Public Preferred Stock that are redeemed or otherwise purchased or acquired by us may not be reissued by us as part of such series, and will instead be restored to the status of authorized but unissued shares of preferred stock without designation as to series. The purpose of the Retirement Amendment is to ensure that shares of preferred stock that the Company redeems or otherwise purchases or acquires are available to be reissued by the Company as part of a newly created series of preferred stock pursuant to the discretionary authority granted to the board of directors in Article FOURTH of our restated certificate of incorporation to issue shares of preferred stock in series.

The board of directors is authorized to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. We believe that the Retirement Amendment simply clarifies the status of shares of preferred stock that are redeemed, purchased or otherwise acquired by the Company, so that the board of directors can use the discretionary authority conferred by Article FOURTH with respect to shares of preferred stock so redeemed, purchased or otherwise acquired by the Company and not just with respect to shares of preferred stock that have been authorized, but never issued. The discretionary authority conferred by Article FOURTH upon the board of directors is important to allow the board to act efficiently in the best interests of our stockholders to issue new series of preferred stock in their efforts to maximize the efficiency of our capital structure.

The board also believes that the Retirement Amendment will enhance Citi’s flexibility to meet changing financial conditions and satisfy its future financing and capitalization needs. In addition, the authority of the board of directors to issue preferred stock could be used to discourage attempts by others to gain control of the company through a merger, tender offer, proxy or consent solicitation, or otherwise, by making such attempts more difficult to achieve and more costly.

The preferred shares being redeemed pursuant to the USG/Private Holders Transactions and the Exchange Offers could be up to [        ] shares of our preferred stock. The Retirement Amendment would accordingly return such shares to the status of authorized but unissued shares of preferred stock.

Effect of the Proposal on Stockholders

Holders of our common stock will be affected by the Retirement Amendment because the board of directors will have the ability, upon retiring shares of preferred stock that have been redeemed or otherwise purchased or acquired, to issue those shares as additional securities that are senior in rank to our common stock or that have voting rights that adversely affect the voting power of the existing holders of common stock. Similarly, holders of our preferred stock will be affected by the Retirement Amendment because the board will have the ability to issue additional series of preferred stock, that may be on terms that are more favorable than, less favorable than or different from the terms of the shares of preferred stock that are in existence today.

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No Appraisal Rights

Under Delaware law and our restated certificate of incorporation, neither holders of our common stock nor holders of Public Preferred Depositary Shares will be entitled to dissenter’s rights or appraisal rights with respect to the Retirement Amendment.

Required Vote and Recommendation

Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of each of two-thirds of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Retirement Amendment.

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AUTHORIZED PREFERRED STOCK INCREASE

On [            ], 2009, the board of directors adopted resolutions (1) declaring that an amendment to Citi’s certificate of incorporation to increase the number of authorized shares of our preferred stock from 30 million to 2 billion shares was advisable and (2) directing that a proposal to approve the Authorized Preferred Stock Increase be submitted to the holders of our common stock and Public Preferred Depositary Shares for their written consent.

The form of the proposed amendment to our restated certificate of incorporation to increase the number of authorized shares is attached to this proxy statement as Annex D. The Authorized Preferred Stock Increase will increase the number of authorized shares of our preferred stock from 30 million to 2 billion shares.

Background and Reasons for the Authorized Preferred Stock Increase

Citi is authorized under our current restated certificate of incorporation to issue up to 30 million shares of preferred stock having a par value of $1.00 per share. The board of directors has the authority to issue the preferred stock in one or more series and to fix the number of shares constituting such series, the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the holders of our common stock.

The board of directors believes that it is in the best interests of Citi and its shareholders to increase the amount of authorized preferred stock to a total of 2 billion shares to provide sufficient shares for general corporate purposes to be issued as deemed advisable by the board of directors without further action or authorization by the stockholders.

The board believes that the increase in authorized shares of preferred stock will enhance Citi’s flexibility to meet changing financial conditions and satisfy its future financing and capitalization needs. In addition, the authority of the board of directors to issue preferred stock could be used to discourage attempts by others to gain control of the company through a merger, tender offer, proxy or consent solicitation, or otherwise, by making such attempts more difficult to achieve and more costly.

Effect of the Proposal on Stockholders

Holders of our common stock will be affected by the Authorized Preferred Stock Increase because the board of directors will have the ability to issue the newly authorized preferred stock as preferred shares that may be senior in rank to our common stock, and that may have voting rights that adversely affect the voting power of the existing holders of common stock. Similarly, holders of our preferred stock will be affected by the Authorized Preferred Stock Increase because the board will have the ability to issue additional series of preferred stock, that may be on terms that are more favorable than, less favorable than or different from the terms of the shares of preferred stock that are in existence today.

In addition, the issuance of any additional shares of preferred stock may have the effect of diluting the percentage of stock ownership of the present stockholders.

No Appraisal Rights

Under Delaware law and our restated certificate of incorporation, holders of our common stock will not be entitled to dissenter’s rights or appraisal rights with respect to the Authorized Preferred Stock Increase.

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Required Vote and Recommendation

Under Delaware law and our restated certificate of incorporation, the affirmative written consent of holders, as of the close of business on the Record Date, of a majority of the Public Preferred Depositary Shares, voting together as a class, and a majority of the common stock, voting as a class, is required to approve the Authorized Preferred Stock Increase.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Citi has long encouraged stock ownership by its directors, officers and employees to align their interests with the long-term interests of stockholders. As part of our commitment to aligning employee and stockholder interests, members of the management executive committee members and members of the board of directors have agreed to hold 75% of the shares of common stock they acquire through Citi’s equity programs as long as they remain subject to the stock ownership commitment. Senior leadership committee members have agreed to hold 50% of the shares of common stock they acquire through Citi’s equity programs as long as they remain subject to the stock ownership commitment. Exceptions to the stock ownership commitment include gifts to charity, certain estate planning transactions, and certain other limited circumstances. In addition, the commitment relates to the net number of shares received in connection with the exercise of stock options or paying withholding taxes under other equity compensation programs.

The following tables shows the beneficial ownership of Citi common stock and preferred stock by our directors, nominees and certain executive officers as of the close of business on December 31, 2008:

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As of the close of business on February 27, 2009, no director, nominee or executive officer owned as much as 1% of Citi’s common stock. As of the close of business on February 27, 2009, all of the directors and executive officers as a group beneficially owned approximately 0.63% of Citi’s common stock.

The shares of our common stock shown in the preceding table, all of which are deemed to be beneficially owned under rules promulgated by the SEC, some portion may not be held directly by the director or executive officer. The following table details the various forms in which directors or executive officers indirectly hold shares. Such indirectly-held shares may be shares:

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Owners of 5% or more of our common stock

The following table shows the beneficial ownership of Citi common stock or by each person known by Citi to beneficially own more than 5% of the outstanding shares of common stock as of the close of business on December 31, 2008.

Common Stock^*

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OTHER MATTERS

Submission of Future Stockholder Proposals

The next annual meeting of stockholders of Citi will be on April 21, 2009. Under SEC rules and Citi’s by-laws, stockholders may no longer present proposals for this meeting.

Under SEC rules, a stockholder who intends to present a proposal at the following (2010) annual meeting of stockholders and who wishes the proposal to be included in the proxy statement for that meeting must submit the proposal in writing to the Corporate Secretary of Citi at the address on the cover of this proxy statement. The proposal must be received no later than November 13, 2009.

Stockholders who do not wish to follow the SEC rules in proposing a matter for action at the following annual meeting must notify Citi in writing of the information required by the provisions of Citi’s by-laws dealing with stockholder proposals. The notice must be delivered to Citi’s Corporate Secretary between December 22, 2009 and January 21, 2010. You can obtain a copy of Citi’s by-laws by writing to the Corporate Secretary at the address shown on the cover of this proxy statement.

Householding

Under SEC rules, a single set of annual reports and proxy statements may be sent to any household at which two or more stockholders reside if they appear to be members of the same family. Each stockholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information stockholders receive and reduces mailing and printing expenses. In accordance with a notice sent to certain stockholders who shared a single address, only one annual report and proxy statement will be sent to that address unless any stockholder at that address requested that multiple sets of documents be sent. However, if any stockholder who agreed to householding wishes to receive a separate annual report or Proxy Solicitation Statement in the future, he or she may telephone toll-free 1-800-542-1061 or write to Broadridge Financial Services, Inc., Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Stockholders sharing an address who wish to receive a single set of reports may do so by contacting their banks or brokers, if they are beneficial holders, or by contacting Broadridge at the address set forth above, if they are record holders.

Cost of Proxy Solicitation

Citi pays the cost of soliciting proxies. In addition to soliciting proxies by mail, Citi may solicit proxies by personal interview, telephone and similar means. No director, officer or employee of Citi will be specially compensated for these activities. Citi also intends to request that brokers, banks and other nominees solicit proxies from their principals and will pay the brokers, banks and other nominees certain expenses they incur for such activities. Citi has retained Morrow & Co., LLC, a proxy soliciting firm, to assist in the solicitation of proxies, for an estimated fee of $50,000 plus reimbursement of certain out-of-pocket expenses.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following selected unaudited pro forma financial information has been presented to give effect to and show the pro forma impact of the Exchange Offers and the USG/Private Holders Transactions on Citigroup’s balance sheet as of December 31, 2008, and also describes the impact of the Exchange Offers and the USG/Private Holders Transactions on Citigroup’s earnings for the fiscal year ended December 31, 2008.

The unaudited pro forma financial information is presented for illustrative purposes only and does not necessarily indicate the financial position or results that would have been realized had the Exchange Offers and the USG/Private Holders Transactions been completed as of the dates indicated or that will be realized in the future when and if the Exchange Offers and the USG/Private Holders Transactions are consummated. The selected unaudited pro forma financial information has been derived from, and should be read in conjunction with, the summary historical consolidated financial information included elsewhere in this document and Citigroup’s historical consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC, which is incorporated by reference into this document.

Unaudited Pro Forma Balance Sheets

The unaudited pro forma consolidated balance sheets of Citigroup as of December 31, 2008 have been presented as if the Exchange Offers and the USG/Private Holders Transactions had been completed on December 31, 2008. We have shown the pro forma impact of a “High Participation Scenario” and a “Low Participation Scenario” prepared using the assumptions set forth below. In both scenarios, we have assumed stockholders have approved the Authorized Share Increase.

The “High Participation Scenario” assumes (i) the exchange of all outstanding shares of Series A1, B1, C1, D1, J1, K1, L2 and N1 convertible preferred stock held by the Private Holders and holders of all outstanding shares of Series T convertible preferred stock ($15.669 billion aggregate liquidation preference) into common stock, (ii) the exchange of all outstanding shares of Series E, F and AA non-convertible preferred stock ($11.755 billion aggregate liquidation preference) into common stock, (iii) the exchange of all outstanding shares of Series H preferred stock held by the U.S. Treasury ($25 billion aggregate liquidation preference) into common stock, (iv) the conversion of all outstanding shares of Series G and I preferred stock held by the U.S. Treasury and the Federal Deposit Insurance Corporation (the “FDIC”) ($27.059 billion aggregate liquidation preference) into newly issued 8% trust preferred securities and (v) none of the Trust Preferred Securities are exchanged for common stock.

The “Low Participation Scenario” assumes (i) the exchange of all outstanding shares of Series A1, B1, C1, D1, J1, K1, L2 and N1 convertible preferred stock held by the Private Holders ($12.5 billion aggregate liquidation preference) into common stock, (ii) the exchange of 50% of the outstanding shares of Series H preferred stock held by the U.S. Treasury ($12.5 billion aggregate liquidation preference) into common stock, (iii) the exchange of 50% of the outstanding shares of Series H preferred stock held by the U.S. Treasury ($12.5 billion aggregate liquidation preference) and all outstanding shares of Series I and G preferred stock held by the U.S. Treasury and the FDIC ($27.059 billion aggregate liquidation preference, for a total of $39.5 billion aggregate liquidation preference) into new 8% trust preferred securities, (iv) none of the outstanding shares of Series E, F and AA non-convertible preferred stock ($11.755 billion aggregate liquidation preference) or outstanding shares of Series T convertible preferred stock ($3.169 billion aggregate liquidation preference), are exchanged for common stock and (v) none of the Trust Preferred Securities are exchanged for common stock.

Although we have not included the exchange of any Trust Preferred Securities for common stock in the unaudited pro forma consolidated balance sheets below, assuming full exchange of all Public Preferred

Depositary Shares, an aggregate of up to approximately $76.35 million liquidation amount of Trust Preferred

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Securities may be exchanged for common stock, subject to prorationing and the order of acceptance in accordance with the Acceptance Priority Levels, as described in our Offer to Exchange, dated March [    ], 2009, a copy of which is being distributed with the enclosed proxy statement. The Offer to Exchange is also included in our Registration Statement on Form S-4, filed with the SEC on [                        ].

The column below captioned “U.S. Gov’t Guarantee-Related Non-Convertible Preferred Stock Issued in January 2009” gives effect as of December 31, 2008 to the issuance of Series G preferred stock (which was issued on January 15, 2009) to the U.S. Treasury and the FDIC as consideration for the asset loss-sharing agreement, which will be converted into new 8% trust preferred securities with a coupon of 8% as part of the transactions described in this document.

The pro forma impact to stockholders’ equity, additional paid-in capital and retained earnings generated by the Exchange Offers and the USG/Private Holders Transactions in both the High Participation Scenario and the Low Participation Scenario were determined based on $1.50, the closing price of Citigroup’s common stock on February 27, 2009 on the NYSE, the day that Citigroup announced the Exchange Offers. The actual determination will be made using the closing price of Citigroup’s common stock on the NYSE on the day the investors and Citigroup are legally committed to the exchange (“commitment date”).

High Participation Scenario

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Low Participation Scenario

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Pro Forma Earnings Implications

The following presents the pro forma impact of the Exchange Offers and the USG/Private Holders Transactions on certain statement of income items and earnings per share (“EPS”) for the fiscal year ended December 31, 2008 as if the Exchange Offers and USG/Private Holders Transactions had been completed on January 1, 2008. We have calculated the pro forma information below by (1) eliminating all the actual dividends paid to holders of preferred stock in 2008⁽¹⁾, (2) assuming the new 8% trust preferred securities were issued on January 1, 2008⁽²⁾ and (3) assuming that the new shares of common stock issuable in the Exchange Offers and the USG/Private Holders Transactions were issued on January 1, 2008.