Citigroup Said to Seek Stock Buybacks in Capital Plan, WSJ Says

Citigroup Inc. (C), the third-biggest U.S. bank, will seek Federal Reserve approval to boost shareholder returns by buying back a small amount of stock under an annual capital plan, the Wall Street Journal reported.

The bank probably won’t request a dividend increase and the buyback request may be “minimal,” according to the Journal, which cited unidentified people familiar with the plan.

The biggest Wall Street firms are preparing to submit capital plans to the Fed as the central bank carries out stress tests of the lenders’ financial safety. Citigroup Chief Executive Officer Michael Corbat is seeking to avoid a repeat of last year, when the lender failed to get permission to increase rewards for shareholders.

Edward Skyler, a spokesman for New York-based Citigroup, declined to comment.

Directors ousted Corbat’s predecessor Vikram Pandit in October, partly because of last year’s capital plan failure, a person familiar with the matter said at the time. Pandit, who scrapped the bank’s dividend in 2009 before reintroducing a 1- cent quarterly payout in 2011, had said that the firm was ready to “return capital” to shareholders.

JPMorgan Chase & Co. (JPM), the biggest U.S. bank, may request a dividend boost, the Journal said, citing a person it didn’t identify. Analysts surveyed by Bloomberg estimate the bank will announce a quarterly dividend increase in March to 37 cents a share from 30 cents. The Bloomberg Dividend Forecast, compiled from data including company guidance, analysts’ forecasts and other trends, predicts a payout of 35 cents a share.

Joseph Evangelisti, a JPMorgan spokesman, declined to comment.

Morgan Stanley (MS)’s request to the Fed is likely to focus on winning approval to purchase the rest of its brokerage joint venture with Citigroup, a person familiar with the matter told Bloomberg News in October. Morgan Stanley pledged to buy Citigroup’s remaining 35 percent stake in the unit, previously known as Morgan Stanley Smith Barney, by June 2015.

To contact the reporter on this story: Donal Griffin in New York at dgriffin10@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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