By Matthias Rieker
The Federal Reserve approved the revised capital-adequacy
assessments of Citigroup Inc. (C) and SunTrust Banks Inc. (STI),
the two banks said Wednesday.
Both, along with Fifth Third Bancorp (FITB), resubmitted their
"stress tests," which is required by the Fed annually. In March,
the three banks' original tests were rejected in part and their
requests to pay out capital to shareholders were denied.
Citi had originally asked to buy back stock. The bank said in
June it didn't ask for buybacks when it resubmitted the test.
Still, a rejection of the capital-adequacy assessment required the
banks to resubmit the test regardless of their requests for capital
distribution.
Citi "will make decisions regarding the 2013 capital plan later
this year," a spokeswoman for the bank said Wednesday.
SunTrust had also previously disclosed that it didn't ask for a
dividend increase or share repurchases this year. "SunTrust expects
to re-evaluate its capital-deployment alternatives" as part of next
year's stress test, the Atlanta bank said in a press release.
In November, the Fed said it will evaluate annually big banks'
internal capital adequacy along with their plans to make capital
distributions, and "will approve dividend increases or other
capital distributions only for companies...able to demonstrate
sufficient financial strength" to sustain an economic slump.
A Fed spokeswoman declined to comment about the approved
resubmissions Wednesday.
Fifth Third said late Tuesday that the Fed approved a 25%
dividend increase, to 10 cents a share per quarter, and up to $600
million in stock buybacks through the first quarter of 2013.
Ally Financial Inc. also failed the Fed's stress test in March
and submitted a revised plan in June. "The company continues to
have active, frequent, and constructive discussions with its
regulators about the progress of these actions," Ally said in a
statement Wednesday.
--Andrew R. Johnson contributed to this article.
Write to Matthias Rieker at matthias.rieker@dowjones.com.