Citigroup, 3 other big banks get another 6 months to revise capital plans after Fed rejection

WASHINGTON – The Federal Reserve said Tuesday that it is giving Citigroup Inc. and three other big banks another six months to amend their capital plans, changes required after they fell short in the Fed’s annual “stress tests.”

The Fed said it is extending to Jan. 5 the deadline for the third-largest U.S. bank and the U.S. divisions of Britain’s HSBC and Royal Bank of Scotland, as well as for Spain’s Banco Santander.

The original deadline was Thursday.

In the March stress tests, the Fed ruled that the banks’ capital plans were inadequate. That prevented them from raising their dividends or boosting their stock buybacks.

Citibank has been cutting jobs and trimming some businesses in an effort to improve its finances.

Thirty banks underwent the tests to determine if their capital buffers were sufficient to allow them to keep lending through another financial crisis.