MetLife Inc., the largest U.S. life insurer, got more time to submit a fresh capital plan to the Federal Reserve as the firm seeks to raise its dividend and resume buybacks after being twice blocked by the regulator.
The deadline was moved to Sept. 30 from June 12, the New York-based insurer said in a regulatory filing today.
“This is basically an acknowledgment by the Fed saying, ‘Look, we understand you’re an insurance company, we understand you’re not going to be a bank holding company,’” said Steven Schwartz, an analyst at Raymond James & Associates. The time extension “likely negates any need to possibly raise or build capital any further.”
Chief Executive Officer Steven Kandarian, 60, has been selling banking assets to reduce oversight from the Fed, which weighs the capital plans of the largest lenders, such as JPMorgan Chase & Co. Kandarian said in March that the insurer would no longer have bank status by the end of June, a prediction he declined to reiterate in April.
MetLife gained 5 percent to $30.88 at 4 p.m. in New York. The insurer has slumped 1 percent this year compared with the 8 percent gain for the Standard & Poor’s 500 Index.
The firm has kept its annual dividend at 74 cents a share since 2007. Prudential Financial Inc., the second-largest U.S. life insurer, lifted its annual payout in 2009, 2010 and 2011. The Newark, New Jersey-based company isn’t subject to the same Fed scrutiny.
The Fed has been reviewing how 19 of the nation’s largest lenders would fare in a severe economic slump. MetLife, Citigroup Inc., SunTrust Banks Inc. and Ally Financial Inc.’s capital plans were rejected in the regulator’s latest round of so-called stress tests in March.
Citigroup retreated this month from an effort to win Fed approval to boost payouts to shareholders this year. CEO Vikram Pandit, 55, had vowed in March to seek approval for a “meaningful” payout after the New York-based firm’s initial submission for 2012 was rebuffed.
Pandit scrapped Citigroup’s dividend in 2009 after the bank almost collapsed and took a $45 billion bailout from U.S. taxpayers. The lender has since repaid the rescue funds, and last year it resumed a 1-cent quarterly payment.