Regulatory Capital Requirements and Capital Ratios

12 Months Ended

Dec. 31, 2019

Regulatory Capital Requirements and Capital Ratios

Regulatory Capital Requirements and Capital Ratios

30. REGULATORY CAPITAL 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. 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 Banking Agencies with the Basel III Final Rule which was effective for the Bancorp on January 1, 2015. It established quantitative measures defining minimum regulatory capital requirements as well as the measure of “well-capitalized” status. Additionally, the Banking Agencies issued similar guidelines for minimum regulatory capital requirements and “well-capitalized” measurements for banking subsidiaries.

PRESCRIBED CAPITAL RATIOS

	Minimum			Well-Capitalized
CET1 capital:
Fifth Third Bancorp		4.50	%		N/A
Fifth Third Bank, National Association		4.50			6.50
Tier I risk-based capital:
Fifth Third Bancorp		6.00			6.00
Fifth Third Bank, National Association		6.00			8.00
Total risk-based capital:
Fifth Third Bancorp		8.00			10.00
Fifth Third Bank, National Association		8.00			10.00
Tier I leverage:
Fifth Third Bancorp		4.00			N/A
Fifth Third Bank, National Association		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, the Basel III Final Rule includes 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, National Association, 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, 2019 and 2018. 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:    

	2019				2018
($ in millions)	Amount		Ratio		Amount		Ratio
CET1 capital:
Fifth Third Bancorp	$	13,847		9.75 %	$	12,534		10.24 %
Fifth Third Bank, National Association		16,704		11.86		14,435		11.93
Tier I risk-based capital:
Fifth Third Bancorp		15,616		10.99		13,864		11.32
Fifth Third Bank, National Association		16,704		11.86		14,435		11.93
Total risk-based capital:
Fifth Third Bancorp		19,661		13.84		17,723		14.48
Fifth Third Bank, National Association		18,968		13.46		16,427		13.57
Tier I leverage:(a)
Fifth Third Bancorp		15,616		9.54		13,864		9.72
Fifth Third Bank, National Association		16,704		10.36		14,435		10.27

(a) 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 Banking Agencies determines should be deducted from Tier I capital.