Safe and Sound

Citibank, National Association

Sioux Falls, SD
4
Star Rating
Sioux Falls, SD-based Citibank, National Association is an FDIC-insured bank started in 1812. As of June 30, 2017, the bank had equity of $148.64 billion on $1,401,303,000,000 in assets.

Thanks to the work of 175,473 full-time employees in 758 offices in multiple states, the bank currently holds loans and leases worth $604.81 billion, $156.97 billion of which are for real estate. U.S. bank customers currently have $474.78 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Citibank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It works as a cushion against losses and affords protection for depositors during periods of economic trouble for the bank. From a safety and soundness perspective, more capital is preferred.
Citibank, National Association came in below the national average of 13.38 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Citibank, National Association's Tier 1 capital ratio was 12.41 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, Citibank, National Association held equity amounting to 10.57 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these types of assets may eventually be forced to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, decreasing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, Citibank, National Association scored 40 out of a possible 40 points, beating the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 1.15 percent of Citibank, National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Citibank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.

Citibank, National Association scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 16.52.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Citibank, National Association's most recent annualized quarterly return on equity was 8.68 percent, below the national average of 9.28 percent.

The bank earned net income of $6.36 billion on total equity of $148.64 billion for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.93 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.








WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.