Summary
Citizens Financial Group, Inc. (CFG) announced on August 10, 2020, that the Federal Reserve has completed its review of the company's request regarding its preliminary Stress Capital Buffer (SCB). The Federal Reserve has determined that the final SCB requirement for CFG will remain at 3.4 percent, effective October 1, 2020. This outcome means that CFG's 2020 Capital Plan remains unchanged. Investors should note that this decision confirms the previously communicated SCB level, providing clarity on the company's capital requirements and its ability to execute its capital plans without adjustment due to stress test results. The company issued a press release detailing this information, which is attached as an exhibit to the filing.
Key Highlights
- 1Federal Reserve confirms CFG's Stress Capital Buffer (SCB) remains at 3.4%.
- 2The final SCB requirement is effective October 1, 2020.
- 3CFG's 2020 Capital Plan is unchanged.
- 4The company's request for reconsideration of its preliminary SCB was reviewed.
- 5This filing is primarily a Regulation FD disclosure regarding the SCB decision.
- 6A press release dated August 10, 2020, is attached as Exhibit 99.1.
Frequently Asked Questions
The Stress Capital Buffer (SCB) is a requirement set by the Federal Reserve that dictates the minimum amount of capital banks must hold based on the results of stress tests. For CFG, maintaining a stable SCB is crucial as it impacts their capital planning, dividend capacity, and share repurchases, influencing overall financial flexibility and investor returns.
The Federal Reserve reviewed CFG's request to reconsider its preliminary SCB and decided to keep the final SCB requirement at 3.4 percent. This means CFG's capital requirements, as determined by the stress tests, will not change from the preliminary assessment.
Since the SCB requirement remains unchanged, CFG's 2020 Capital Plan is also unchanged. This provides certainty for the company's strategic capital allocation, including potential dividends and share buybacks, allowing them to proceed as originally planned without adjustments due to stress test outcomes.
The final Stress Capital Buffer (SCB) requirement of 3.4 percent will be effective for Citizens Financial Group, Inc. starting October 1, 2020.