Reuters: Regulatory News: UPDATE 1-U.S. Fed says it does not object to new BB&T capital plan

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UPDATE 1-U.S. Fed says it does not object to new BB&T capital plan Aug 23rd 2013, 16:24 Fri Aug 23, 2013 12:24pm EDT WASHINGTON Aug 23 (Reuters) - The U.S. Federal Reserve said on Friday it would not object to a new 2013 capital plan submitted by BB&T Corp after the bank's initial plan was rejected earlier this year. The biggest banks must submit plans to buy back shares or pay dividends to shareholders to the Fed each year as part of regular tests of the firms' health. Regulators began subjecting banks to regular testing in the aftermath of the financial crisis and the 2010 Dodd-Frank law expanded the regime. The Fed vetoed a submission by BB&T in March, and the bank said on Friday that it submitted its new plan in June and would maintain the current quarterly dividend of 23 cents per share. "In light of several factors, we approached the re-submission conservatively and did not request a further increase in capital deployment at this time," BB&T chief executive Kelly S. King said in a statement. The Fed can prevent a bank from moving forward with capital distributions if regulators think the plan would leave the firm vulnerable to a major market shock, or if they take issue with the bank's capital planning process. Regulators rejected plans from BB&T and Ally Financial in March, and they warned Goldman Sachs Group Inc and JPMorgan Chase & Co to fix flaws in the way they determine capital payouts. The Fed said when it rejected the BB&T plan that it was based on unspecified "qualitative" concerns. The bank said it believed the decision was not related to BB&T's "capital strength, earnings power or financial condition." The next round of Fed-administered stress tests begins this fall. King said BB&T would re-evaluate its capital position before it submitted a new plan to regulators in January 2014. Link this Share this Digg this Email Reprints

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