Citi Announces 2022 Stress Capital Buffer Requirement
New York – The Federal Reserve Board (FRB) communicated that Citigroup Inc.'s (Citi) Stress Capital Buffer (SCB) requirement would increase from the currently effective requirement of 3.0% to 4.0% for the four-quarter window of 4Q 2022 to 3Q 2023. Accordingly, effective October 1, 2022, Citi is required to maintain an 11.5% effective minimum Common Equity Tier 1 (CET1) Capital ratio under the Standardized Approach, incorporating this SCB and its current Global Systemically Important Bank (GSIB) surcharge of 3.0%. Citi's effective minimum CET1 Capital ratio under the Advanced Approaches (using the fixed 2.5% Capital Conservation Buffer) will remain unchanged at 10%. Commencing January 1, 2023, Citi's GSIB surcharge will increase from 3.0% to 3.5%, which will be applicable to both the Standardized Approach and the Advanced Approaches, resulting in a minimum CET1 regulatory requirement of 12% under the Standardized Approach and 10.5% under the Advanced Approaches, both as of such date. As of March 31, 2022, Citi's CET1 Capital ratio was 11.4% under both the Standardized and Advanced Approaches.
Jane Fraser, Citi CEO, said: "These results again demonstrate that Citi has the capital to withstand a severe economic downturn. We have capacity to maintain the current common dividend of $0.51 per share in a range of stress scenarios, including the one outlined in the FRB stress test. The combination of our earnings generation, divestitures, optimization efforts and management buffer - which was designed in part to temporarily address volatility - will be important tools as we manage toward our CET1 target over the coming quarters. We are committed to executing the strategy we presented at Investor Day, improving our returns and delivering excess capital to our investors."
A Form 8-K Current Report regarding this announcement can be found here.