Regulatory Capital Requirements and Capital Ratios

12 Months Ended

Dec. 31, 2018

Regulatory Capital Requirements and Capital Ratios

Regulatory Capital Requirements and Capital Ratios

27. REGULATORYCAPITAL REQUIREMENTS AND CAPITAL RATIOS

The Board of Governors of the Federal Reserve System issued capital adequacy guidelines pursuant to which it assesses the adequacy of capital in examining and supervising a BHC and in analyzing applications to it under the BHCA of 1956, as amended. These guidelines include quantitative measures that assign risk weightings to assets and off-balance sheet items, as well as define and set minimum regulatory capital requirements. The regulatory capital requirements were revised by the Basel III Final Rule which was effective for the Bancorp on January 1, 2015, subject to phase-in periods for certain of its components and other provisions. It established quantitative measures defining minimum regulatory capital requirements as well as the measure of “well-capitalized” status. Additionally, the Board of Governors of the Federal Reserve System issued similar guidelines for minimum regulatory capital requirements and “well-capitalized” measurements for banking subsidiaries.

PRESCRIBED CAPITAL RATIOS
	Minimum		Well-Capitalized
CET1 capital	4.50	%	6.50
Tier I risk-based capital	6.00		8.00
Total risk-based capital	8.00		10.00
Tier I leverage	4.00		5.00

Failure to meet the minimum capital requirements or falling below the “well-capitalized” measure can initiate certain actions by regulators that could have a direct material effect on the Consolidated Financial Statements of the Bancorp. Additionally, when fully phased-in in 2019, the Basel III Final Rule will include a capital conservation buffer requirement of 2.5% in addition to the minimum capital requirements of the CET1, Tier I capital and Total risk-based capital ratios in order to avoid limitations on capital distributions and discretionary bonus payments to executive officers.

The Bancorp and its banking subsidiary, Fifth Third Bank, had CET1 capital, Tier I risk-based capital, Total risk-based capital and Tier I leverage ratios above the well-capitalized levels at both December 31, 2018 and 2017. To continue to qualify for financial holding company status pursuant to the Gramm-Leach-Bliley Act of 1999, the Bancorp’s banking subsidiary must, among other things, maintain “well-capitalized” capital ratios. In addition, the Bancorp exceeded the “capital conservation buffer” ratio for all periods presented.

The following table presents capital and risk-based capital and leverage ratios for the Bancorp and its banking subsidiary at December 31:
	2018				2017(a)
($ in millions)		Amount	Ratio			Amount	Ratio
CET1 capital:
Fifth Third Bancorp	$	12,534	10.24	%	$	12,517	10.61	%
Fifth Third Bank		14,435	11.93			14,008	12.06
Tier I risk-based capital:
Fifth Third Bancorp		13,864	11.32			13,848	11.74
Fifth Third Bank		14,435	11.93			14,008	12.06
Total risk-based capital:
Fifth Third Bancorp		17,723	14.48			17,887	15.16
Fifth Third Bank		16,427	13.57			16,126	13.88
Tier I leverage:(b)
Fifth Third Bancorp		13,864	9.72			13,848	10.01
Fifth Third Bank		14,435	10.27			14,008	10.32

• The regulatory capital data and ratios have not been restated as a result of the Bancorp’s change in accounting for qualifying LIHTC investments. For additional information refer to Note 1.
• Quarterly average assets are a component of the Tier I leverage ratio and for this purpose do not include goodwill and any other intangible assets and other investments that the FRB determines should be deducted from Tier I capital.