Citibank 2015 Annual Report Download - page 60

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Capital Resources of Citigroup’s Subsidiary U.S. Depository
Institutions Under Current Regulatory Standards
Citigroup’s subsidiary U.S. depository institutions are also subject to
regulatory capital standards issued by their respective primary federal
bank regulatory agencies, which are similar to the standards of the Federal
Reserve Board.
The following tables set forth the capital tiers, total risk-weighted
assets, risk-based capital ratios, quarterly adjusted average total assets,
Total Leverage Exposure and leverage ratios under current regulatory
standards (reflecting Basel III Transition Arrangements) for Citibank, Citi’s
primary subsidiary U.S. depository institution, as of December 31, 2015 and
December 31, 2014.
Citibank Capital Components and Ratios Under Current Regulatory Standards (Basel III Transition Arrangements)
December 31, 2015 December 31, 2014 (1)
In millions of dollars, except ratios
Advanced
Approaches
Standardized
Approach
Advanced
Approaches
Standardized
Approach (2)
Common Equity Tier 1 Capital $126,496 $126,496 $128,262 $ 128,262
Tier 1 Capital 126,496 126,496 128,262 128,262
Total Capital (Tier 1 Capital + Tier 2 Capital) (3) 137,935 148,916 139,246 151,124
Total Risk-Weighted Assets 897,892 998,181 945,407 1,044,768
Common Equity Tier 1 Capital ratio (4) 14.09% 12.67% 13.57% 12.28%
Tier 1 Capital ratio (4) 14.09 12.67 13.57 12.28
Total Capital ratio (4) 15.36 14.92 14.73 14.46
In millions of dollars, except ratios December 31, 2015 December 31, 2014 (1)
Quarterly Adjusted Average Total Assets (5) $1,297,733 $1,366,910
Total Leverage Exposure (6) 1,838,114 1,954,833
Tier 1 Leverage ratio 9.75% 9.38%
Supplementary Leverage ratio 6.88 6.56
(1) Restated to reflect the retrospective adoption of ASU 2014-01 for LIHTC investments, consistent with current period presentation.
(2) Pro forma presentation to reflect the application of the Basel III 2015 Standardized Approach, consistent with current period presentation.
(3) Under the Advanced Approaches framework eligible credit reserves that exceed expected credit losses are eligible for inclusion in Tier 2 Capital to the extent the excess reserves do not exceed 0.6% of credit risk-
weighted assets, which differs from the Standardized Approach in which the allowance for credit losses is eligible for inclusion in Tier 2 Capital up to 1.25% of credit risk-weighted assets, with any excess allowance for
credit losses being deducted in arriving at credit risk-weighted assets.
(4) As of December 31, 2015 and December 31, 2014, 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) Tier 1 Leverage ratio denominator.
(6) Supplementary Leverage ratio denominator.
As indicated in the table above, Citibank’s capital ratios at December 31,
2015 were in excess of the stated minimum requirements under the U.S.
Basel III rules. In addition, Citibank was also “well capitalized” as of
December 31, 2015 under the revised PCA regulations which became effective
January 1, 2015.
Further, Citibank is required to conduct the annual Dodd-Frank Act
Stress Test. The annual stress test consists of a forward looking quantitative
evaluation of the impact of stressful economic and financial market
conditions under several scenarios on Citibank’s regulatory capital. This
program serves to inform the Office of the Comptroller of the Currency (OCC)
how Citibank’s regulatory capital ratios might change during a hypothetical
set of adverse economic conditions and to ultimately evaluate the reliability
of Citibank’s capital planning process.