Oppenheimer: Fed Offers CCAR Results, Mostly Good News For The Banking Industry

Oppenheimer on Thursday issued a report on the financial services industry following the Federal Government's release of its Comprehensive Capital Analysis and Review (CCAR) results. One of the biggest stories was that Citigroup Inc C was approved for a $7.8 billion share buyback vs. a $6.4 billion estimate.

Oppenheimer analysts Chris Kotowski, Rachel Hirsch, Ben Chittenden, and L. Allison Taylor offered three takeaways from the Federal Government's CCAR:

• 1. Most capital return plans were higher than expected and Citigroup passed its stress test review.
• 2. The Fed seems comfortable with a higher percentage of earnings being returned. The 30 percent cap of dividend payouts seemed breached in a number of cases, and in one case, American Express Company AXP, there appears to be a breach of 100 percent for total payout vs. 2015 consensus earnings expectations.
• 3. The government does not feel comfortable with the trading business. Banks such as Goldman Sachs Group Inc. GS had to resubmit a lower capital return "ask."

Citigroup closed Wednesday at $52.33.