Summary
Citigroup Inc. (Citi) announced an upcoming increase in its Stress Capital Buffer (SCB) requirement by the Federal Reserve Board. Effective October 1, 2022, Citi's SCB will rise from 3.0% to 4.0%, necessitating an increase in its minimum Common Equity Tier 1 (CET 1) Capital ratio under the Standardized Approach to 11.5%. This is inclusive of its existing GSIB surcharge. Further adjustments are scheduled for January 1, 2023, when Citi's GSIB surcharge will increase from 3.0% to 3.5%, pushing the minimum CET 1 requirement to 12% under the Standardized Approach and 10.5% under the Advanced Approaches. Despite these regulatory capital requirement changes, Citi plans to maintain its current quarterly common dividend of $0.51 per share for the third quarter of 2022, subject to board approval and prevailing financial conditions. As of March 31, 2022, Citi's CET 1 Capital ratio stood at 11.4% under both approaches, indicating it was operating very close to its current required minimums. The company also provided forward-looking statements highlighting potential risks and uncertainties, including geopolitical events, inflation, interest rate changes, and pandemic impacts.
Key Highlights
- 1Federal Reserve Board increases Citigroup's Stress Capital Buffer (SCB) requirement from 3.0% to 4.0%, effective October 1, 2022.
- 2Minimum CET 1 Capital ratio requirement under Standardized Approach will increase to 11.5% from October 1, 2022 (including GSIB surcharge).
- 3GSIB surcharge to increase from 3.0% to 3.5% effective January 1, 2023, raising minimum CET 1 requirements to 12% (Standardized) and 10.5% (Advanced).
- 4Citigroup's CET 1 Capital ratio was 11.4% as of March 31, 2022, close to current regulatory minimums.
- 5Company plans to maintain the current common dividend of $0.51 per share for Q3 2022, subject to board approval.
- 6The company acknowledges various forward-looking risks including geopolitical events, inflation, interest rate changes, and pandemic impacts.