CKI capital increases USD 800 MM
Citibank Korea said the purpose of the capital increase is to further differentiate Citibank Korea’s strong capital position by issuing common stocks, particularly in an environment where local banks are finding difficulty raising capital through stock issuance. The bank said that this could contribute to the stabilization of the foreign currency market as the capital will be in US dollars denomination.
60% of the capital injection will be used for Tier-1 common stocks while the remaining 40% will be for subordinated debentures, both to be acquired by Citigroup.
Citibank Korea’s core capital increase by way of issuing common stocks is a different approach from other banks which increase their BIS ratio by issuing hybrid bonds, subordinated bonds or other types of debts rather than core capital. It is also significant that the full amount is coming from Citigroup proving that Citibank Korea is a key strategic and important subsidiary of Citigroup.
With the capital injection, the bank’s BIS capital ratio at Basel-1 is expected to exceed 13% from 10.8% and Tier-1 ratio is expected to exceed 11% from 9.74%.
(Under Basel-2, CKI adopts the Standardized Approach that Citigroup uses globally, unlike most local banks that use Internal Ratings Based Approach. Normally BIS and Tier-1 ratio calculated by the Internal Ratings Based Approach are 1.5%-2.0% better than those using the Standardized Approach. Accordingly it is not apple to apple comparison between CKI’s BIS/Tier-1 ratio by Standardized Approach vs other banks BIS/Tier-1 ratio by Internal Ratings Based Approach. However, CKI’s BIS ratio and Tier-1 ratio will exceed well above 11% and 9% respectively by Standardized Approach under Basel 2)
“Our Tier-1 ratio was much higher than other banks even before the recapitalization. Citigroup’s investment this time will further strengthen our capital position, making us the strongest bank in terms of capital base. With sound assets portfolio and a strong capital position, we will pursue better customer satisfaction, reinforcing our credit creation capacity,” said CKI CEO YK Ha.
Citibank Korea is the largest Citigroup subsidiary in Asia Pacific in terms of capital and assets, and now becomes one of the biggest subsidiaries of Citigroup.
About Citibank Korea Inc.
Citibank had opened its first branch in Korea in 1967, and was born newly as Citibank Korea Inc. (CKI) through integration with KorAm Bank for which Citigroup invested U$3.1 billion, the largest Citigroup investment in Asia Pacific in 2004. CKI serves customers at 231 branches (as of end of September 2008) in Korea by providing the first class financial products and services based on the various products and know-how of Citi with global network including more than 100 years of history and 200 million customers in more than 100 countries. CKI delivers new financial world to the customers through development of innovative financial products and services, encompassing from corporate and investment banking to consumer banking, private banking, and wealth management. Furthermore, Citibank Korea Inc., as a responsible corporate citizen, conducts diverse community activities in the areas of financial education, next generation education, woman, diversity, community, and environment consistently in cooperation with sound non-profit organizations.
웹사이트: http://www.citibank.co.kr
연락처
Lee, Yong Shik. CKI Communication Dept. Head (☎ 3455-2326)
올인원 PR 플랫폼
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2010년 8월 15일 10:43
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