Citibank 2008 Annual Report Download - page 179

Regulatory Capital
Citigroup is subject to risk-based capital and leverage guidelines issued by
the Board of Governors of the Federal Reserve System (FRB). Its U.S. insured
depository institution subsidiaries, including Citibank, N.A., are subject to
similar guidelines issued by their respective primary federal bank regulatory
agencies. These guidelines are used to evaluate capital adequacy and include
the required minimums shown in the following table.
The regulatory agencies are required by law to take specific prompt
actions with respect to institutions that do not meet minimum capital
standards. As of December 31, 2008 and 2007, all of Citigroup’s U.S. insured
subsidiary depository institutions were “well capitalized.”
At December 31, 2008, regulatory capital as set forth in guidelines issued by
the U.S. federal bank regulators is as follows:
In millions of dollars
Required
minimum
Well-
capitalized
minimum Citigroup (3) Citibank, N.A. (3)
Tier 1 Capital $118,758 $ 70,977
Total Capital (1) 156,398 108,355
Tier 1 Capital Ratio 4.0% 6.0% 11.92% 9.94%
Total Capital Ratio (1) 8.0 10.0 15.70 15.18
Leverage Ratio (2) 3.0 5.0 (3) 6.08 5.82
(1) Total Capital includes Tier 1 and Tier 2.
(2) Tier 1 Capital divided by adjusted average assets.
(3) Applicable only to depository institutions. For bank holding companies to be “well capitalized,” they
must maintain a minimum Leverage Ratio of 3%.
Banking Subsidiaries
There are various legal limitations on the ability of Citigroup’s subsidiary
depository institutions to extend credit, pay dividends or otherwise supply
funds to Citigroup and its non-bank subsidiaries. The approval of the Office
of the Comptroller of the Currency, in the case of national banks, or the
Office of Thrift Supervision, in the case of federal savings banks, is required if
total dividends declared in any calendar year exceed amounts specified by
the applicable agency’s regulations. State-chartered depository institutions
are subject to dividend limitations imposed by applicable state law.
As of December 31, 2008, Citigroup’s subsidiary depository institutions
can declare dividends to their parent companies, without regulatory
approval, of approximately $69 million. In determining the dividends, each
depository institution must also consider its effect on applicable risk-based
capital and leverage ratio requirements, as well as policy statements of the
federal regulatory agencies that indicate that banking organizations should
generally pay dividends out of current operating earnings.
Non-Banking Subsidiaries
Citigroup also receives dividends from its non-bank subsidiaries. These
non-bank subsidiaries are generally not subject to regulatory restrictions on
dividends.
The ability of CGMHI to declare dividends can be restricted by capital
considerations of its broker-dealer subsidiaries.
In millions of dollars
Subsidiary Jurisdiction
Net
capital or
equivalent
Excess over
minimum
requirement
Citigroup Global Markets Inc. U.S. Securities and
Exchange
Commission
Uniform Net
Capital Rule
(Rule 15c3-1) $2,490 $1,639
Citigroup Global Markets Limited United Kingdom’s
Financial
Services
Authority $3,888 $3,888
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