Citi Boosts Shareholder Value - Analyst Blog
April 29 2013 - 2:29PM
Zacks
Citigroup, Inc.’s (C) board of directors
approved a $1.2 billion share buyback program in the first quarter
of 2014. Additionally, the board announced an unchanged quarterly
dividend of one cent per share on its common shares. This will be
paid on May 24 to shareholders of record as of May 6.
These actions were part of Citi’s capital plan, which was approved
by the Federal Reserve under the 2013 Comprehensive Capital
Analysis and Review (CCAR). These were anticipated to mitigate the
probable dilution resulting from Citi’s annual incentive
compensation grants.
With the latest share repurchase announcement, Citi has come a long
way since 2008, when it took $45 billion of bail-out money to
survive the economic downturn. Through the latest share buyback
program, the company showed that its capital position has
significantly improved.
Further, it shows that Citi’s efforts to streamline its
operations are now bearing fruit. Over the past few years, the
company has been restructuring its business, retrenching employees,
selling assets and trimming costs to improve profitability.
The share buyback announcement will bring relief to investors of
the company. Citi suffered a setback last year when the Fed, after
considering the company’s capital plan, stated that Citi’s Tier 1
common capital ratio would fall to 4.9%. Hence, the regulator
rejected the company’s capital actions.
Citi currently carries a Zacks Rank #3 (Hold). Other better
performing bank stocks include JPMorgan Chase &
Co. (JPM), Fifth Third Bancorp (FITB) and
State Street Corp. (STT). All these stocks carry a
Zacks Rank #2 (Buy).
CITIGROUP INC (C): Free Stock Analysis Report
FIFTH THIRD BK (FITB): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
STATE ST CORP (STT): Free Stock Analysis Report
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