PROVIDENCE – The Federal Reserve’s 2023 preliminary stress test of Citizens Financial Group Inc., found the that the banking institution’s Stress Capital Buffer stands at 4%.
Citizens’ regulatory minimum Common Equity Tier 1 ratio – a figure implied by the SCB – is now 8.5%, up from 7.9%. The CET1 ratio compares a bank’s capital against its risk-weighted assets to determine its ability to withstand financial distress. Regulators require commercial banks to maintain a minimum capital ratio of 8%, 6% of which must be CET1.
In a news release last week, Citizens said it expects the second quarter 2023 CET1 ratio to be approximately 175 basis points, or 1.75%, above the implied regulatory minimum.
“We are pleased that the Federal Reserve’s stress test results illustrate Citizens’ strong capital position well in excess of our regulatory minimum and the resilience of our balance sheet and business model,” said John F. Woods, vice chairman and chief financial officer.
“In addition, we take further comfort in the fact that our company-run stress test results imply significantly lower capital drawdown than the Federal Reserve’s models.”
Contact PBN staff writer Sam Wood at Wood@PBN.com.
