NOTE: On March 12, 2019, the press release was corrected as follows: In the list of upgrades for Associates Corporation of North America, changed the actions for the LT
Issuer Rating and Senior Unsecured Regular Bond/Debenture to “Upgraded to A3, Stable, from Baa1, Rating Under Review.” Revised release follows.
New York, February 21, 2019 -- Moody's Investors Service ("Moody's") has upgraded the ratings for long-term
debt, deposits and counterparty risk of Citigroup Inc. (Citigroup
senior debt to A3 from Baa1) and certain subsidiaries as well as the baseline
credit assessment (BCA) of its principal bank subsidiary Citibank,
N.A (deposits to Aa3 from A1, BCA to baa1 from baa2).
Moody's has affirmed all short-term ratings and assessments of
Citigroup and those subsidiaries. The ratings outlook is stable.
This concludes a review commenced on November 29, 2018. A
complete list of affected ratings and entities can be found at the end
of this press release.
RATINGS RATIONALE
The upgrade of Citibank's BCA to baa1 from baa2 reflects the successful
execution of management's multi-year strategy to simplify
Citigroup's operations, reduce its global consumer footprint,
enhance its safety and soundness and pursue sustainable growth.
Citigroup's sweeping reengineering since the global financial crisis places
the bank on a sounder strategic footing with a more cogent business model
and more targeted base of institutional and consumer customers.
Although Citigroup's footprint is smaller in a number of businesses,
it retains strong economies of scale in its global cards and institutional
businesses. Citigroup now has a more durable solvency profile.
Moody's expects Citigroup to continue to produce the steady earnings
required for investment in order to harness the digital forces reshaping
retail and institutional financial services, while continuing to
reinforce its strong brand with its customers.
Citigroup's strategy is unique compared to its US based universal
banking peers. Citigroup now targets affluent and emerging affluent
consumers in nineteen countries, while operating a branch-light
footprint within the US. Citigroup's US consumer franchise is more
reliant on credit card lending than its US peers. At the same time,
the firm has refocused that business primarily on a prime customer base
reflecting a material shift in risk appetite relative to the pre-crisis
period. Increasingly, Citigroup has adopted a global digital
operating model for the acquisition and servicing of consumer customers.
Citigroup's institutional strategy centers on delivering cash management
and operating services through the bank's still ubiquitous global
network spanning 98 countries and the world's major trade corridors.
Accordingly, Citigroup is a leader in transaction and securities
services. When these operating services are combined with Citigroup's
extensive market making capabilities, this produces a robust stream
of transaction and related trading revenues from global corporates ,
as well as a growing stock of core institutional LCR-friendly deposits.
Although Citigroup remains a large and complex organization, its
risk management, risk appetite and corporate governance are significantly
improved since the financial crisis and are well aligned with its strategy.
Therefore, Moody's thinks it is unlikely that Citigroup will
materially increase market, credit or operational risks or deviate
from its client driven strategy. This strategy delivered $16.9
billion in net income to common shareholders and a 9.4%
return on average common equity in 2018. This strategy (when combined
with capital returns) has the potential to further strengthen returns
for Citigroup shareholders. This should obviate the need to increase
risks in pursuit of higher equity returns.
The upgrade of the BCA, as well as the anticipated liability structure
and the application of Moody's advanced loss-given-failure
(LGF) framework drove the upgrades of various debt, deposit and
counterparty risk ratings (as listed below).
WHAT COULD MOVE THE RATINGS UP/DOWN
After the upgrade, the ratings outlook on Citigroup's debt
and deposits is stable. Eventually, if Citigroup can deepen
relationships with existing retail customers and gain market share,
while maintaining its risk disciplines, resulting in a stronger
and more diversified consumer banking franchise in the US, then
this could lead to an upgrade of the BCA.
Citigroup's ratings may be downgraded if the bank experiences a significant
deterioration in its capital or liquidity levels or demonstrates a marked
increase in its risk appetite, or were to experience a sizeable
operational risk charge or control failure.
Under Moody's advanced Loss-Given-Failure (LGF) framework,
upward or downward rating pressure could develop for various debt tranches
at the operating subsidiaries or the holding company if there is a sustained
change in the thickness of tranches or the subordination underneath tranches,
relative to tangible banking assets and losses estimated in the framework.
The following ratings actions were taken:
Upgrades:
..Issuer: Citigroup Inc.
.... Senior Unsecured Medium-Term Note
Program, Upgraded to (P)A3 from (P)Baa1
.... Subordinate Medium-Term Note Program,
Upgraded to (P)Baa2 from (P)Baa3
.... Senior Unsecured Shelf, Upgraded
to (P)A3 from (P)Baa1
.... Subordinate Shelf, Upgraded to
(P)Baa2 from (P)Baa3
.... Pref. Stock Non-cumulative,
Upgraded to Ba1 (hyb) from Ba2 (hyb)
.... Subordinate Regular Bond/Debenture,
Upgraded to Baa2 from Baa3
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to A3,Stable, from Baa1, Rating under Review
..Issuer: Citibank, N.A.
.... Adjusted Baseline Credit Assessment,
Upgraded to baa1 from baa2
.... Baseline Credit Assessment, Upgraded
to baa1 from baa2
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Counterparty Risk Rating, Upgraded
to Aa3 from A1
.... LT Issuer Rating, Upgraded to Aa3,Stable,
from A1, Rating under Review
.... Senior Unsecured Medium-Term Note
Program, Upgraded to (P)Aa3 from (P)A1
.... Deposit Note/CD Program, Upgraded
to Aa3,Stable, from A1, Rating under Review
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to Aa3,Stable, from A1, Rating under Review
.... LT Deposit Rating, Upgraded to
Aa3,Stable, from A1, Rating under Review
..Issuer: Citibank Europe plc
.... Adjusted Baseline Credit Assessment,
Upgraded to baa1 from baa2
.... Baseline Credit Assessment, Upgraded
to baa1 from baa2
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Counterparty Risk Rating, Upgraded
to Aa3 from A1
.... LT Deposit Rating, Upgraded to
Aa3,Stable, from A1, Rating under Review
..Issuer: Citibank International Limited
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to Aa3,Stable, from A1, Rating under Review
..Issuer: Citibank, N.A. (Sydney
Branch)
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Counterparty Risk Rating, Upgraded
to Aa3 from A1
..Issuer: Citibank, N.A.,
London Branch
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Counterparty Risk Rating, Upgraded
to Aa3 from A1
.... Senior Unsecured Medium-Term Note
Program, Upgraded to (P)Aa3 from (P)A1
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to Aa3,Stable, from A1, Rating under Review
..Issuer: CitiFinancial Credit Company
.... LT Issuer Rating, Upgraded to A3,
Stable, from Baa1, Rating under Review
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to A3, Stable, from Baa1, Rating under Review
..Issuer: Citigroup Global Markets Deutschland AG
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... Issuer Rating, Upgraded to A1,
Stable, from A2
..Issuer: Associates Corporation of North America
.... LT Issuer Rating, Upgraded to A3,
Stable, from Baa1, Rating Under Review
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to A3, Stable, from Baa1, Rating Under Review
..Issuer: Citigroup Capital III
.... Pref. Stock, Upgraded to
Baa3 (hyb) from Ba1 (hyb)
..Issuer: Citigroup Capital XIII
.... Pref. Stock, Upgraded to
Baa3 (hyb) from Ba1 (hyb)
..Issuer: Citigroup Capital XVIII
.... Pref. Stock, Upgraded to
Baa3 (hyb) from Ba1 (hyb)
..Issuer: Citigroup Finance Canada Inc
.... Senior Unsecured Medium-Term Note
Program, Upgraded to (P)A3 from (P)Baa1
..Issuer: Citigroup Funding, Inc.
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to A3, Stable, from Baa1, Rating Under Review
..Issuer: Citigroup Global Markets Holdings Inc.
.... LT Issuer Rating, Upgraded to A3,
Stable, from Baa1, Rating Under Review
.... Senior Unsecured Medium-Term Note
Program, Upgraded to (P)A3 from (P)Baa1
.... Senior Unsecured Regular Bond/Debenture,
Upgraded to A3, Stable, from Baa1, Rating Under Review
.... Senior Unsecured Shelf, Upgraded
to (P)A3 from (P)Baa1
..Issuer: Citigroup Global Markets Inc.
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Issuer Rating, Upgraded to A1,
Stable, from A2, Rating Under Review
.... Senior Secured Medium-Term Note
Program, Upgraded to (P)A1 from (P)A2
..Issuer: Citigroup Global Markets Limited
.... LT Counterparty Risk Assessment,
Upgraded to Aa3(cr) from A1(cr)
.... LT Issuer Rating, Upgraded to A1,
Stable, from A2, Rating Under Review
Affirmations:
..Issuer: Citibank Europe plc
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Deposit Rating, Affirmed P-1
..Issuer: Citibank, N.A.
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Deposit Rating, Affirmed P-1
.... Other Short Term Medium-Term Note
Program, Affirmed (P)P-1
..Issuer: Citibank, N.A. (Sydney
Branch)
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... Commercial Paper, Affirmed P-1
..Issuer: Citibank, N.A.,
London Branch
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... Other Short Term Medium-Term Note
Program, Affirmed (P)P-1
..Issuer: Citigroup Global Markets Deutschland AG
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Issuer Rating, Affirmed P-1
..Issuer: Citigroup Inc.
.... Commercial Paper, Affirmed P-2
.... Other Short Term Medium-Term Note
Program, Affirmed (P)P-2
..Issuer: Citigroup Global Markets Holdings Inc.
.... Other Short Term Senior Unsecured Regular
Bond/Debenture, Affirmed P-2
..Issuer: Citigroup Global Markets Inc.
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Issuer Rating, Affirmed P-1
..Issuer: Citigroup Global Markets Limited
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Issuer Rating, Affirmed P-1
Outlook Actions:
..Issuer: Citibank Europe plc
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citibank, N.A.
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citibank, N.A.,
London Branch
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: CitiFinancial Credit Company
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Global Markets Deutschland AG
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Inc.
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Associates Corporation of North America
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Finance Canada Inc
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Global Markets Holdings Inc.
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Global Markets Inc.
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citigroup Global Markets Limited
....Outlook, Changed To Stable From
Rating Under Review
..Issuer: Citibank International Limited
....Outlook, Changed To No Outlook From
Rating Under Review
..Issuer: Citibank, N.A. (Sydney
Branch)
....Outlook, Changed To No Outlook From
Rating Under Review
..Issuer: Citigroup Capital III
....Outlook, Changed To No Outlook From
Rating Under Review
..Issuer: Citigroup Capital XIII
....Outlook, Changed To No Outlook From
Rating Under Review
..Issuer: Citigroup Capital XVIII
....Outlook, Changed To No Outlook From
Rating Under Review
..Issuer: Citigroup Funding, Inc.
....Outlook, Changed To No Outlook From
Rating Under Review
The principal methodology used in rating Citigroup Inc.,
Citigroup Capital III, Citigroup Capital XIII, Citigroup Capital
XVIII, Citibank International Limited, Citigroup Funding,
Inc., Citigroup Global Markets Holdings Inc.,
Citibank, N.A., Citibank Europe plc, Citibank,
N.A. (Sydney Branch), Citibank, N.A.,
London Branch, CitiFinancial Credit Company, Associates Corporation
of North America, and Citigroup Finance Canada Inc was Banks published
in August 2018. The principal methodologies used in rating Citigroup
Global Markets Deutschland AG, Citigroup Global Markets Limited,
and Citigroup Global Markets Inc. were Banks published in August
2018, and Securities Industry Market Makers published in June 2018.
Please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Peter E. Nerby
Senior Vice President
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Ana Arsov
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
