UPDATE 1-Nearly all of Citi's Q4 profit came from Asia -memo

Thu Jan 27, 2011 4:47am EST

* APAC institutional deposits at all-time high

* Profit growth led by consumer banking and GTS

* Nearly half of Citi's 2010 earnings came from Asia-Pacific (Adds details and quote from the memo)

By Michael Flaherty and Nishant Kumar

HONG KONG, Jan 27 (Reuters) - Nearly all of Citigroup Inc's (C.N) fourth-quarter profit came from its Asia-Pacific unit, according to an internal memo seen by Reuters, further evidence of the growth Wall Street and European banks are seeing in the region, particularly in commercial banking.

Much of Citi's fourth-quarter results focused on its return to profit for the full year, combined with a drop in bond trading revenue that caused the bank to miss profit estimates.

Very little attention was paid to the size of the contribution that a single region contributed to Citi's bottom line, a fact that Asia-Pacific Chief executives Stephen Bird and Shirish Apte highlighted in a memo on Thursday.

Quarterly net income for the region was $1.02 billion, the memo said, or 78 percent of the bank's total, $1.3 billion fourth-quarter figure.

"This region was the largest contributor to Citi's global net income for the quarter and for 2010," the memo said.

The CEOs also cited Asia's growth to the bank's Global Transaction Services group, the part of the bank that handles cash management and custodial services for companies.

Citi's steady Asia business resembles that of Standard Chartered Plc (2888.HK)(STAN.L) and HSBC Holdings Plc (0005.HK) (HSBA.L) -- two Britain-based banks that do most of their business in Asia. StanChart's Asia CEO told Reuters in an interview last year that 80 percent of the bank's business and headcount was now in Asia.

Last quarter's performance was primarily driven by Citi's Regional Consumer Bank, whose $2.1 billion in full-year net income rose 52 percent, the memo said.

Institutional deposits for 2010 in Asia-Pacific stood at an all-time high of $130 billion, according to the memo.

The majority of Citi's $86.6 billion in 2010 revenue was earned outside Asia, which contributed $14.4 billion for the year. Asia-Pacific contributed $4.6 billion, or nearly half, of Citi's $10.6 billion in net income for the year.

The bank, which took $45 billion in U.S. bailout funds during the financial crisis, saw its shares surge by about 50 percent since the beginning of 2010 -- a year CEO Vikram Pandit said would be the year the bank "turned the corner".

Fourth-quarter figures showed that while the bank returned to profit, it still faces challenges throughout its sprawling business, particularly with its securities and trading unit. (Editing by Chris Lewis)