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Citigroup Cuts Capital Ratio Target to 9.5% Under New Rules (1) 

February 24, 2014
Michael J. Moore, Bloomberg

Citigroup Inc. (C:US) lowered its target for the firm’s capital ratio after the Federal Reserve made the bank increase the portion of its equity that supports operational risks.

Citigroup cut its target Basel III Tier 1 common capital ratio to 9.5 percent from 10 percent, the New York-based company said today in a statement. The ratio’s current level stands at 10.1 percent, and the bank will still be above required minimums for common capital as well as the proposed supplementary leverage ratio, Citigroup said. The ratios are designed to ensure banks have a big enough cushion to withstand losses.

The Fed required the bank to boost its tally of risk-weighted assets (C:US) that reflect operational matters to $288 billion from $232 billion, citing “the overall operating environment for the banking industry,” Citigroup said. The increase was a stipulation for approval of the bank’s ability to use a more flexible “advanced approach” to estimate risk-weighted assets.

 

Read more: Bloomberg

 
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