March 12 (Reuters) - Citigroup Inc Chief Executive Mike Corbat told employees that the bank’s stress test work is “far from over”, despite the Federal Reserve raising no objections to Citi’s capital plan.
Citi failed the so-called stress tests in 2012 and 2014. Corbat has staked his job on the bank never failing them again.
“We all must recognize that our efforts are far from over”, he wrote in an internal memo seen by Reuters on Thursday.
Corbat also said Barbara Desoer, CEO of Citibank N.A., would lead the next stress test submissions.
Desoer, who joined Citi in 2013, worked at Bank of America Corp for 35 years. She was most recently president of BoA’s home-loan division.
The annual tests were launched in 2011 under the 2010 Dodd-Frank financial reform bill to determine how much capital banks can use for dividends or stock buybacks.
Citi said on Wednesday that it would raise its quarterly dividend to 5 cents per share from the penny per share payout it had to adopt during the financial crisis. The bank also announced plans to buy back $7.8 billion of stock over five quarters.
The bank’s shares were up 2.5 percent at $53.69 in early afternoon trading on the New York Stock Exchange. (Reporting by Neha Dimri in Bengaluru; Editing by Simon Jennings)