PROVIDENCE – Citizens Financial Group Inc. will repurchase up to $750 million of its common stock in the first quarter of 2021, the company announced in its most recent earnings release.
The stock repurchase plan, authorized by the company’s board of directors, was announced in conjunction with a $1.1 billion 2020 profit and a first-quarter common stock dividend of 39 cents per share. In a call following the earnings report, Chairman and CEO Bruce Van Saun pointed to favorable credit metrics and “ample liquidity and capital” as reasons for the company’s strong performance and relaunch of its stock repurchase program.
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Citizens, like many other financial institutions, in March temporarily suspended its stock buyback program in order to make additional capital and liquidity available to customers. Although Van Saun in interviews repeatedly assured investors that the dividend was “safe,” the buyback program remained on hiatus through 2020.
The Federal Reserve continued to cap dividends and ban stock buybacks from the largest banks through the third quarter, but in December announced that major financial institutions could resume their repurchase programs after the latest round of stress tests.
Stock repurchases typically comprise about 70% of industry payouts to shareholders.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
