finance news

COVID-19 pandemic compels Citi Bank to suspend stock buyback

COVID-19 pandemic compels Citi Bank to suspend stock buyback
COVID-19 pandemic compels Citi Bank to suspend stock buyback
  • The decision was announced in the Financial Services Forum that has some of the biggest names in the US bank fraternity.
     
  • Rampant coronavirus has hit bank stocks hard as the pandemic has derailed the economic activity in a myriad of industries.
     
  • Till March 13, Citi is reported to have returned around $57.4 bn capital in the last Comprehensive Capital Analysis and Review (CCAR) cycles.

Following the havoc and fear created by the COVID-19 pandemic, Citi has joined other leading U.S. banks in suspending stock buyback. The decision was announced in the Financial Services Forum that has some of the biggest names in the US bank fraternity.

Buybacks have been instrumental for companies to return capital to their shareholders and propel the stock price. Rampant coronavirus has hit bank stocks hard as the pandemic has derailed the economic activity in a myriad of industries.

Michael Corbat, CEO at Citi stressed that the bank is strongly placed in terms of capital flow and is using its capital to help stakeholders at the critical juncture. Corbat noted that Citi will continue to use its resources in underpinning clients via banking activities, such as lending to all its stakeholders.

The much needed step echoes the similar steps taken by Citi to server its clients. For instance, on March 6, the bank offered a slew of measures such as fee waivers for its customers, hardships programs and additional small business support, including extender banker availability.

Till March 13, Citi is reported to have returned around $57.4 bn capital in the last Comprehensive Capital Analysis and Review (CCAR) cycles in line with the goal framed at Investor Day in 2017 aimed at returning minimum $69 billion in capital. While there appears to be no change to Citi’s dividend policy, the bank had been given nod to return around $62.3 bn in capital in three-year period.

Stock repurchases will help the bank to use the capital and liquidity to further small businesses, individuals and wider economy through lending and other economic activities.

Source credit:

https://business.financialpost.com/pmn/press-releases-pmn/business-wire-news-releases-pmn/citi-joins-major-u-s-banks-in-suspending-stock-repurchases-to-support-clients-through-covid-19

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A qualified computer graduate, Bhushan Tambe always nurtured a passion for words. Post his education, he decided to transform his penchant of penning down poetry and stories into a full-time career. Presently, Bhushan writes numerous articles for cuereport.com and a few other websites, on subjects spanning business, finance, and the like.