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Citigroup, Banco Santander Moving After Latest Round Of Fed Stress Tests

Citigroup, Banco Santander Moving After Latest Round Of Fed Stress Tests
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This year's results of the Fed's annual stress tests revealed that a majority of the 31 top banks are in the green.

Each bank cleared the 5 percent minimum required Tier 1 common ratio. However, it wasn't all sunshine and rainbows.

As Wall Street Journal reporter Victoria McGrane tweeted during the results announcement, "Big takeaway - six-plus years after the financial crisis, big banks still struggle with the stress tests."

The Fed reportedly approved the capital plans of 28 banks, but failed to accept two from Deutsche Bank AG (NYSE:DB) and Banco Santander, due to their "widespread and substantial weaknesses across their capital planning processes."

Related Link: The 10 Best Fed Stress Test Scores

The spotlight also landed on Bank of America Corp. (NYSE: BAC), as it only managed to receive conditional approval.

Due to certain weaknesses in its capital spending plan, the Fed has given Bank of America a deadline of September 30 to resubmit a modified spending plan. If the bank fails to comply by then, there's a chance the Fed could put a limit on its capital distributions.

Last year, the major banks that failed the Fed's stress tests included Citi, HSBC and Royal Bank of Scotland.

Below are a few of the most-discussed bank stocks after the latest results were released:

  • Banco Santander, S.A. (ADR) (NYSE: SAN), up 1.2 percent pre-market
  • Bank of America, down 0.2 percent pre-market
  • Citigroup Inc (NYSE: C), up 3.1 percent pre-market
  • Deutsche Bank AG, up 0.2 percent pre-market
  • JPMorgan Chase & Co (NYSE: JPM), up 0.4 percent pre-market

Image credit: Dan Smith, Wikimedia

Posted-In: News Events Federal Reserve Movers Best of Benzinga


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