Citibank 2015 Annual Report Download - page 235

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19. REGULATORY CAPITAL
Citigroup is subject to risk-based capital and leverage standards issued by the
Federal Reserve Board. Citi’s U.S. insured depository institution subsidiaries,
including Citibank, are subject to similar standards issued by their respective
primary federal bank regulatory agencies. These standards 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.
The following table sets forth Citigroup’s and Citibank’s regulatory
capital tiers, total risk-weighted assets, quarterly adjusted average total
assets, Total Leverage Exposure, risk-based capital ratios and leverage
ratios in accordance with current regulatory standards (reflecting Basel III
Transition Arrangements):
Citigroup Citibank
In millions of dollars, except ratios
Stated
minimum
Well
capitalized
minimum
December 31,
2015
Well
capitalized
minimum (1)
December 31,
2015
Common Equity Tier 1 Capital $ 173,862 $ 126,496
Tier 1 Capital 176,420 126,496
Total Capital (Tier 1 Capital + Tier 2 Capital) 198,746 148,916
Total risk-weighted assets 1,190,853 998,181
Quarterly adjusted average total assets (2) 1,732,933 1,297,733
Total Leverage Exposure (3) 2,326,072 1,838,114
Common Equity Tier 1 Capital ratio (4) 4.5% N/A 14.60% 6.5% 12.67%
Tier 1 Capital ratio (4) 6.0 6.0% 14.81 8.0 12.67
Total Capital ratio (4) 8.0 10.0 16.69 10.0 14.92
Tier 1 Leverage ratio 4.0 N/A 10.18 5.0 9.75
Supplementary Leverage ratio (5) N/A N/A 7.58 N/A 6.88
(1) Beginning January 1, 2015, an insured depository institution, such as Citibank, must maintain minimum Common Equity Tier 1 Capital, Tier 1 Capital, Total Capital, and Tier 1 Leverage ratios of 6.5%, 8%, 10% and
5%, respectively, to be considered “well capitalized.”
(2) Tier 1 Leverage ratio denominator.
(3) Supplementary Leverage ratio denominator.
(4) As of December 31, 2015, Citigroup’s reportable Common Equity Tier 1 Capital, Tier 1 Capital, and Total Capital ratios were the lower derived under the Basel III Advanced Approaches framework. As of December 31,
2015, Citibank’s reportable Common Equity Tier 1 Capital, Tier 1 Capital, and Total Capital ratios were the lower derived under the Basel III Standardized Approach framework.
(5) Commencing with 2015, Citi and Citibank are required to publicly disclose their Supplementary Leverage ratios. Beginning on January 1, 2018, Citi and Citibank will be required to maintain a stated minimum
Supplementary Leverage ratio of 3%, and Citibank will be required to maintain a Supplementary Leverage ratio of 6% to be considered “well capitalized.”
N/A Not Applicable
As indicated in the table above, Citigroup and Citibank were “well
capitalized” under the current federal bank regulatory definitions as of
December 31, 2015.
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. The approval of the Office
of the Comptroller of the Currency 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 received $13.5 billion and
$8.9 billion in dividends from Citibank during 2015 and 2014, respectively.