Citibank stock buyback
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Citigroup Has Bought Back Million Shares So Far in Should Investors Be Happy? -- The Motley Fool
On Thursday afternoon, the Federal Reserve published the results from the second round of this year's stress test. C passed, which paves the way for the nation's fourth biggest bank by assets to increase its dividend and stock repurchase plan.
It also marks only the second time since the financial crisis that the bank has boosted its payout.
Citi Announces Planned Capital Actions
Shares of the New York-based bank were up 4. They're up an additional 2. Its disappointing performance on previous tests undoubtedly played into this, leading investors to question the competency of its management.
Its CEO went so far last year as to intimate that he would step down if it failed two years in a row, which it didn't. Its inability to increase its dividend also contributed to its depressed valuation, as a substantial amount of capital accumulated on its balance sheet.
This weighed on its return on equity, which was only 7. This implies that Citigroup is eroding shareholder value. And if it's able to follow this up on July 15 with a positive second-quarter earnings performance, investors can reasonably expect its stock to go even higher. John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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