Citi Saw Better Than Expected Stress Test Results From The Banks They Cover

All 18 banks covered by Citi received approval for their capital plans when the Federal Reserve published the results of its Comprehensive Capital Analysis and Review, also known as the stress test.

Ouf of those 18, there were 16 that unveiled details of their plans for capital returns to shareholders. Six of those came in better than Citi’s expectations, listed here:

• M&T Bank Corporation (NYSE: MTB)
• Comerica Incorporated (NYSE: CMA)
• Citizens Financial Group (NYSE: CFG)
• JPMorgan Chase & Co (NYSE: JPM)
• Morgan Stanley (NYSE: MS)
• The Bank of New York Mellon Corporation (NYSE: BK)

Related Link: Stress Test Finale: Everything You Need To Know About Banks Returning Profits To Shareholders

M & T was the only bank to take a “mulligan” this year, a term for a special extension the Fed grants when a bank doesn’t initially meet its capital requirements. Citi views this as a positive for M & T, however, believing M & T will use the mulligan to optimize their capital return.

Another interesting tidbit from Wednesday’s results is that the Fed did indeed allow banks to plan a payout ratio greater than 100 percent, which M & T, Comerica, and the Bank of New York Mellon, are estimated to have.