Here's How Citigroup Will Reward Shareholders in 2022
In 2021, Citigroup (NYSE: C) was one of the few large banks that did not raise its dividend. It also caught shareholders off guard when it revealed that it had paused share repurchase in the fourth quarter of 2021 to deal with a new regulatory capital rule that just went into effect at the beginning of this year. Given these events, let's take a look at how Citigroup is planning to reward shareholders this year.
Because Citigroup currently trades below its tangible book value (TBV), which is what a bank would be worth if it were liquidated, buying back stock is incredibly beneficial right now because the math works out so that repurchases grow TBV per share. A growing TBV is beneficial for banks because their stocks tend to trade relative to TBV, so when TBV grows, the stock price can often follow. This is likely why investors were so frustrated with Citigroup's announcement about its share repurchases.
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Source Fool.com
