Citi Announces 2021 Stress Capital Buffer Requirement

Rhea-AI Summary

The Federal Reserve has announced an increase in Citigroup's 2021 Stress Capital Buffer (SCB) requirement from 2.5% to 3.0% for the period of 4Q 2021 to 3Q 2022. This raises the minimum regulatory requirement under the Standardized Approach to 10.5%, while the Advanced Approaches requirement remains at 10.0%. As of Q1 2021, Citi's Common Equity Tier 1 Capital ratio was 11.8%. CEO Jane Fraser affirmed Citi's strong capital position and commitment to returning capital to shareholders through dividends and share repurchases, contingent on financial conditions and Board approval.

Positive

• Citi's Common Equity Tier 1 Capital ratio of 11.8% exceeds minimum requirements.
• Citi plans to return capital to shareholders with dividends of at least $0.51 per share and continued share repurchases.

Negative

• Increase in SCB requirement to 3.0% raises minimum capital requirement under the Standardized Approach to 10.5%.

The Federal Reserve Board communicated that Citi’s 2021 Stress Capital Buffer (SCB) requirement will increase from the currently effective requirement of 2.5% to 3.0% for the four quarter window of 4Q 2021 – 3Q 2022. Incorporating this SCB, and a GSIB surcharge of 3.0%, results in a minimum regulatory requirement of 10.5% under the Standardized Approach, effective October 1, 2021. Citi’s minimum regulatory requirement under the Advanced Approaches (using the fixed 2.5% Capital Conservation Buffer) will remain unchanged at 10.0%. As of the first quarter of 2021, Citi’s Common Equity Tier 1 Capital ratio was 11.8% under both the Standardized and Advanced Approaches.

Based on Citigroup’s updated regulatory capital requirements, Citi continues to believe that a targeted Common Equity Tier 1 Capital ratio of approximately 11.5% represents the amount necessary to prudently operate and invest in Citi’s franchise.

Jane Fraser, Citi CEO, said: “The latest CCAR results further demonstrate Citi’s resiliency, as well as the strength of our capital position to withstand a variety of changing risks and circumstances. Throughout this crisis we have served as a source of strength for our customers, clients and communities and have embraced the opportunity to help lead the economic relief and recovery efforts. Our targeted Common Equity Tier 1 Capital ratio already contemplates periodic volatility in regulatory capital requirements under the SCB framework. We look forward to continuing with our planned capital actions, including common dividends of at least $0.51 per share, and to continuing share repurchases, which are particularly attractive when our stock price is below tangible book value per share. Citi remains committed to continuing to invest in our franchise as part of the firm’s broader strategy refresh as well as continuing to return any excess capital to shareholders given the flexibility provided by the SCB framework.”

By the end of the first two quarters of this year, Citi will have returned to shareholders the maximum amount of capital permitted under Federal Reserve rules. All planned capital actions are subject to financial and macroeconomic conditions, and approval by Citi’s Board of Directors.

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn:www.linkedin.com/company/citi

Certain statements in this release are “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences. Actual results and capital and other financial condition may differ materially from those included in these statements due to a variety of factors, including, among others, the ongoing or forecasted impact to Citigroup’s results of operations and financial condition due to the COVID-19 pandemic, regulatory requirements and the precautionary statements included in this release. These factors also consist of those contained in Citigroup’s filings with the SEC, including without limitation the “Risk Factors” section of Citigroup’s 2020 Form 10-K. Any forward-looking statements made by or on behalf of Citigroup speak only as to the date they are made, and Citigroup does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210628005818/en/

FAQ

What is Citigroup's updated Stress Capital Buffer requirement for 2021?

Citigroup's 2021 Stress Capital Buffer requirement has increased to 3.0%.

What is the minimum regulatory capital requirement for Citigroup under the Standardized Approach?

The minimum regulatory capital requirement for Citigroup under the Standardized Approach is now 10.5%.

What is Citigroup's Common Equity Tier 1 Capital ratio as of Q1 2021?

As of Q1 2021, Citigroup's Common Equity Tier 1 Capital ratio was 11.8%.

What dividends does Citigroup plan to distribute to shareholders?

Citigroup plans to distribute dividends of at least $0.51 per share.

What capital actions is Citigroup planning for shareholders?

Citigroup is planning share repurchases as part of its capital actions.