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Citi Announces 2023 Dodd-Frank Act Stress Test and Stress Capital Buffer Results
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NEW YORK--(BUSINESS WIRE)--
Citi announced today that it has completed the Federal Reserve’s 2023 Comprehensive Capital Analysis and Review (“CCAR”) stress test process. The Firm’s indicative Stress Capital Buffer (“SCB”) requirement is 4.3%, up from the current 4.0%, and the Firm’s preliminary Standardized Common Equity Tier 1 (CET1) capital ratio regulatory requirement is 12.3%, up from the current 12.0%, effective October 1, 2023.
As of March 31, 2023, Citi's Standardized CET1 capital ratio, which includes a 100-basis-point management buffer, stood at 13.44%, above the new regulatory requirement. The Federal Reserve will provide the Firm with its final SCB requirement by August 31, 2023, and that requirement will become effective on October 1, 2023, and will remain in effect until September 30, 2024.
Citi’s Board of Directors approved a plan to increase the current quarterly common stock dividend of $0.51 to $0.53 per share for the third quarter of 2023. The Firm’s quarterly common stock dividends are subject to approval by the Board of Directors at the customary times that those dividends are declared.
Jane Fraser, Citi CEO, said: “While we would have clearly preferred not to see an increase in our stress capital buffer, these results still demonstrate Citi’s financial resilience through all economic environments, including the severely adverse scenario envisioned in the Federal Reserve’s stress test. Our robust capital and liquidity position, as well as the diversification of our funding and our business model, allow Citi to continue to be a source of strength for our clients and navigate challenging macro environments securely.
“We repurchased $1 billon of common stock during the second quarter, intend to increase our dividend and we will continue to evaluate capital actions on a quarter-by-quarter basis. We are completely committed to simplifying Citi, improving returns and delivering value to our shareholders,” Ms. Fraser concluded.
Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.
Certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Citi’s final Stress Capital Buffer requirement and actual capital levels and capital actions (including common stock dividends) may differ materially from those included in these statements due to a variety of factors. These factors include, among others: elevated interest rates and the impacts on macroeconomic conditions, customer and client behavior, as well as Citi’s funding costs; potential recessions in the U.S., Europe and other countries; revisions to the U.S. Basel III rules; continued elevated levels of inflation and its impacts; Citi’s ability to execute against its transformation and other strategic initiatives, including consummation of its remaining exits and wind-downs; potential increased regulatory requirements and costs, and potential impacts to macroeconomic conditions, as a result of recent bank failures; and the precautionary statements included in this release. These factors also consist of those contained in Citi's filings with the U.S. Securities and Exchange Commission, including without limitation the "Risk Factors" section of Citi's 2022 Form 10-K. Any forward-looking statements made by or on behalf of Citi speak only as to the date they are made, and Citi 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.
