Citi Memo From Pandit: Expect Meaningful Payout

Vikram Pandit, the CEO at Citigroup, told employees in a memo that they still should expect a meaningful payout.

“We still believe that our company has the capacity to return more capital to shareholders. We will work with the Federal Reserve to formulate a plan that returns meaningful capital while satisfying our regulators,” according to a quote from the memo that came to light in this Bloomberg television report online.

Citigroup (C) shares are down nearly 4%, or $1.42, to $35.02. The company pays one penny per quarter in dividends, for a yield of 0.10%.

Presuming Citi is a little less aggressive when it goes back to the Fed later this year with another capital plan, it’s likely to boost its payout. The Fed’s minimum Tier 1 Common ratio was 5% in the stress test, and Citi came in at 4.9%. Without capital actions — meaning payouts through the first quarter of 2012 — Citi’s Tier 1 ratio came in at 5.9%.

SunTrust Banks (STI) was slightly worse off with a 4.8% Tier 1 ratio.