Citibank 2009 Annual Report Download - page 203

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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, 2009 and 2008, all of Citigroup’s U.S. insured
subsidiary depository institutions were “well capitalized.”
At December 31, 2009, 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 $127,034 $ 96,833
Total Capital (1) 165,983 110,625
Tier 1 Capital ratio 4.0 % 6.0% 11.67% 13.16%
Total Capital ratio (1) 8.0 10.0 15.25 15.03
Leverage ratio (2) 3.0 5.0 (3) 6.89 8.31
(1) Total Capital includes Tier 1 Capital and Tier 2 Capital.
(2) Tier 1 Capital divided by adjusted average total 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—Constraints on Dividends
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. Currently, 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.
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. Citigroup did not receive any dividends from
its banking subsidiaries during 2009.
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) $10,886 $10,218
Citigroup Global Markets Limited United Kingdom’s
Financial
Services
Authority $ 6,409 $ 3,081