Fed Gives Four Banks Six Extra Months to Resubmit Capital Plans

   By Alan Zibel 
 

WASHINGTON--The U.S. Federal Reserve said Tuesday it would grant four large banks six more months to revise their capital plans after the banks requested more time.

The central bank granted the delay to Citigroup Inc. (C), and the U.S units of HSBC Holdings PLC (0005.HK), Royal Bank of Scotland Group PLC (RBS.LN) and Banco Santander USA. The banks, under "stress tests" conducted earlier this year, were required to submit revised capital plans and suspend dividend payments.

Instead of being required by June 26, the new plans will be required by Jan. 5, the central bank said.

The extensions, which the banks requested, "will give the firms additional time to address the capital planning weaknesses identified by the Federal Reserve," the central bank said. The banks won't be able to buy back shares or pay dividends until the Fed approves a new capital plan.

Zions Bancorp (ZION), the fifth bank that was rejected by the Fed, has already resubmitted its capital plan and didn't request a delay, a Fed spokeswoman said.

Zions Chairman and Chief Executive Harris Simmons said during an investor conference in May that the company submitted a new stress test to the Federal Reserve on April 30. Bank executives have since said they expected to receive a response from the Fed by July 15.

Write to Alan Zibel at [e-mail]