8-KRegulation FDExhibits & Filings

CITIGROUP INC 8-K Report, Regulation FD Disclosure (Jun 27, 2022)

Filed June 27, 2022For Securities:CC-PNC-PR

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.

Frequently Asked Questions

This filing is to disclose an upcoming increase in Citigroup's regulatory capital requirements, specifically the Stress Capital Buffer (SCB) set by the Federal Reserve Board, and to inform investors about the company's dividend plans in light of these changes.

Effective October 1, 2022, the minimum CET 1 Capital ratio under the Standardized Approach will rise to 11.5%. This will further increase to 12% under the Standardized Approach and 10.5% under the Advanced Approaches starting January 1, 2023, due to an increased GSIB surcharge. As of March 31, 2022, Citi's CET 1 ratio was 11.4%, indicating it will need to manage its capital closely to meet these future requirements.

Citigroup currently plans to maintain its quarterly common dividend of $0.51 per share for the third quarter of 2022. However, the dividend is subject to approval by the Board of Directors and consideration of the latest financial and macroeconomic conditions.

Citigroup has outlined several forward-looking risks, including the ongoing impacts of Russia's military action in Ukraine (sanctions, geopolitical effects), rising inflation, higher interest rates and their effect on macroeconomic conditions and customer behavior, regulatory changes, and potential impacts from the COVID-19 pandemic.