Banks--- Betting on the recovery Message Board

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Non-Tech : Banks--- Betting on the recovery

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From: David C. Burns	3/13/2012 6:53:20 PM
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Citigroup fails Federal Reserve stress test Citigroup and three other US banks have failed Federal Reserve “stress tests” to assess whether they were healthy enough to return more capital to shareholders, the central bank said. Tuesday’s decision by the Fed is a disappointment to Citi, which had pledged to increase its dividend above a notional 1 cent a share for the first time since its near collapse during the financial crisis. “We intend to move forward with some force in 2012,” Dick Parsons, Citi’s chairman, had told the Financial Times on Friday. Most of the 19 largest US banks were allowed to distribute more capital to shareholders in the form of dividends and buybacks. JPMorgan Chase announced on Tuesday it would buy back up to $15bn of its shares and increase its dividend by 5 cents to 30 cents a share this quarter. Shares in the bank rose by more than 7 per cent to their highest level for 10 months. Bank of America, which suffered reputational damage last year when its plan to pay a dividend was vetoed, passed the test but had not asked permission to increase its payout. Other than Citi, MetLife, SunTrust and Ally Financial could not demonstrate that their core tier one capital ratios would remain above 5 per cent of risk-weighted assets under a Fed “stress scenario”. ft.com

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