Citizens to buy back $1B of its stock

PROVIDENCE – Citizens Financial Group Inc. is preparing to spend major cash on its own stocks.

The parent company for Citizens Bank recently announced an increase in its stock buyback program to $1 billion, up from the $750 million limit authorized by its board of directors in January 2021.

The decision to spend excess cash on its own stocks comes after credit analysis by the U.S. Federal Reserve System, which published the results of its annual “stress test” for major banks on June 23, according to a news release.

The stress test illustrated the company’s strong capital position and “resilience of our balance sheet and business model,” John Woods, vice chairman and chief financial officer, said in a statement.

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The massive share buyback plan comes after many banks, including Citizens, temporarily suspended their stock repurchase programs in 2020 during the onset of the COVID-19 pandemic. However, stock repurchases rebounded, with companies in the S&P 500 setting a record for buybacks in 2021, and projections suggesting even larger purchases this year, the Wall Street Journal reported.

Citizens’ stock buybacks may be in the open market or private transactions, with all purchases subject to consideration and approval by its board of directors.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.