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Citi, Morgan Stanley, BNY Mellon to resume buybacks in 2021

Written by Jasir Jawaid

Citigroup Inc., Morgan Stanley and Bank of New York Mellon Corp. will resume stock repurchases in 2021 after getting the green light from the Federal Reserve.

Morgan Stanley's board authorized the repurchases of outstanding common stock of up to $10 billion in 2021.

In addition to resuming repurchases, Citi would also pay a dividend of 51 cents per share from the first quarter of 2021 through the third quarter of that year.

BNY Mellon said it expects to maintain its common stock dividend, subject to the approval of the company's board, during the 2021 first quarter. It will resume open market repurchases in an amount up to that consistent with the modified distribution limitations.

Wells Fargo & Co. said it would have "modest capital distribution capacity" in the first quarter of 2021. The Fed authorized it to pay common stock dividends and make share repurchases that, in the aggregate, do not exceed an amount equal to the average of its net income for the four preceding calendar quarters. The bank can make share repurchases that equal the amount of share issuances related to expensed employee compensation.

State Street Corp. did not give an exact timeline as to when it would resume share buybacks, noting in an announcement that any capital management actions are subject to a review and approval by its board.

Citizens Financial Group Inc. said it exceeded all capital requirements under the Fed's severe stress scenarios and reiterated key aspects of its 2020 capital plan, which includes maintaining quarterly common dividends at the current level. Citizens continues to believe that the Fed's pre-provision net revenue model for the company remains inaccurate because it uses nonpredictive data from earlier periods when Citizens had a different business model and was under foreign bank ownership.

This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.


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