Safe and Sound

Citibank, National Association

Sioux Falls, SD
4
Star Rating
Citibank, National Association is a Sioux Falls, SD-based, FDIC-insured bank dating back to 1812. As of June 30, 2017, the bank had equity of $148.64 billion on $1.401 trillion in assets.

U.S. bank customers have $474.78 billion on deposit at 718 offices in multiple states run by 175,473 full-time employees. With that footprint, the bank holds loans and leases worth $604.81 billion, $156.97 billion of which are for real estate.

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 breakdown of how the bank fared on the three major criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial resilience. It works as a cushion against losses and affords protection for accountholders when a bank is experiencing financial instability. When it comes to safety and soundness, more capital is better.

Citibank, National Association fell short of the national average of 11.67 on our test to measure the adequacy of a bank's capital, racking up 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Citibank, National Association's Tier 1 capital ratio was 12.41 percent, above the 6 percent level regulators consider adequate, but under the national average of 12.50 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, Citibank, National Association held equity amounting to 10.57 percent of its assets, which was lower than the national average of 13.94 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these types of assets means a bank could eventually have to use capital to cover losses, diminishing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, Citibank, National Association scored 40 out of a possible 40 points, beating the national average of 38.67 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.15 percent of Citibank, National Association's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.24 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." That reserve's size can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic 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 has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's test of earnings, Citibank, National Association scored 18 out of a possible 30, coming in below the national average of 20.00.

One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Citibank, National Association's most recent annualized quarterly return on equity was 8.68 percent, below the national average of 9.24 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $6.36 billion on total equity of $148.64 billion. 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 1.13 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.