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Citi changes expense verification method

by Reporter9 minute read
Citi changes expense verification method

Citi has announced that it has changed the method it uses to assess customer expenditure reports. 

Citi has announced that it has replaced the use of the Henderson Poverty Index benchmark with the new Household Expenditure Measure (HEM) to determine whether the expenses reported by loan applicants are reasonable. 

The expenses covered by HEM include: owner-occupied property utilities, rates and related costs; insurance; groceries; medical and health; telephone, internet, TV and other subscriptions; clothing and personal care; recreation and entertainment; transport; public education (under $1,000 per month); and childcare. 

Expense categories in Citi applications that are not covered by HEM include child maintenance, private education and other living expenses. 


The non-major bank said there is no change to how rent and board are entered into its serviceability calculator, even though it is considered an itemised expense. 

Citi has announced another update to its policy that will require gross rental income to be discounted by the higher of: investment property expenses declared in living expenses (including body corporate, building insurance, utilities and land tax) or 15 per cent of gross rent. 

The annualised amount will need to be placed in the “total declared property expenses” section of Citi’s manual serviceability calculator, which has been revised to accommodate the latest policy changes. 

The global investment bank had recently announced plans to expand its commercial footprint in Australia by offering mid-sized companies – operating in Australia and overseas – with access to its full suite of banking products and services, which include liquidity and global cash management, online digital hedging platforms, and access to financing options.

Alex Syhanath, head of Citi Commercial Bank Australia, claimed at the time of the launch that the new strategy would boost efficiency and reduce costs for the bank’s clients.

[Related: Non-major banks pass on full rate cut]

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