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Citigroup pauses buybacks briefly due to new capital rule

by Mike Robinson

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© Reuters. FILEPHOTO: Citigroup Inc. (Citi), logo seen at SIBOS Banking and Financial Conference in Toronto Ontario Canada, October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photograph

NEW YORK (Reuters) – Citigroup Inc (NYSE) will suspend buybacks this quarter because it is concerned about the impact of a new capital regulation related to derivatives risks. Chief Financial Officer Mark Mason stated Wednesday.

Mason stated that the new rule which banks have to adopt within the first quarter will increase Citigroup’s risk-weighted assets to $60 billion to $65 billion, and affect Citigroup’s CET1 capital ratio to 50-60 basis points.

Mason spoke at an investor conference and stated that the bank was taking measures to reduce the impact of the rule. The bank will restart its buybacks during the first quarter at levels “close to” the third quarter.

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