Question: I was wondering what the relationship between Citibank here in Australia (who we have our mortgage with) and the global Citigroup. What impact, if any, are the troubles in America or Europe likely to have on our mortgage security? Fiona
Answer: We have gone right to the source on this one and received a response from Citibank.
“To cut a very long story short, Citi is still a strong financial institution. As a locally incorporated institution, Citigroup Pty Ltd (Australia) is regulated by Australian banking laws and the Australian Prudential Regulation Authority (APRA).
This means Citigroup Pty Ltd complies with the same high standards [required of] all Australian banks. For example, customers of Citigroup Pty Limited with deposits of $1m or less are automatically covered by the Australian Government’s deposit guarantee. Furthermore:
- Citi globally and in Australia continues to be highly rated by the three global ratings agencies, and we are one of the most financially sound banks in the world
- Citi has a Tier 1 capital ratio in excess of 11.9% globally – well above required levels and among the highest in the industry, and substantially higher than the big four banks in Australia
- Citi’s balance sheet is in excess of US$2trn
- Citi has more than US$780bn in deposits worldwide
- We have operations in more than 100 countries, have operated for more than 200 years and we have been in Australia for close to a quarter of a century
- We have more than 200 million customer accounts around the world
- In Australia, Citi must meet the same strict liquidity requirements as local banks set out by APRA
Hopefully this clarifies our financial position, both globally and here in Australia.
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