UPDATE 1-Fed grants four banks more time to submit capital plans
(Adds comments from banks, background on stress tests)
WASHINGTON, June 24 (Reuters) - The U.S. Federal Reserve on Tuesday gave four banks more time to resubmit capital distribution plans it had earlier objected to, saying this would give the firms more time to address capital planning weaknesses.
The four banks, which had asked for the extension, are Citigroup Inc, HSBC North America Holdings, Inc., RBS Citizens, Inc and Santander Holdings USA, Inc. .
The banks were originally scheduled to submit their plans by June 26, but now have until Jan. 5, 2015.
The firms will not be able to increase their capital distributions to shareholders, such as dividends and share buy-backs, until the new plans are approved.
Citigroup Chief Executive Mike Corbat has said that the bank would not make a new request this year for permission to buy back stock and pay more dividends.
Instead, it would focus on preparing its application for next year's scheduled review of its capital plan.
RBS, HSBC and Santander had no immediate comment.
Banks need to ask the Fed for approval if they plan to increase shareholder payouts, part of a set of new rules to make banking safer after the financial crisis.
As part of the Fed's annual 'stress tests' - or Comprehensive Capital Analysis and Review (CCAR) - the banks must submit capital plans that disclose whether they intend to pay dividends of buy back shares.
The deadline to submit the next round of stress tests to the Fed is also Jan. 5, 2015. (Reporting by Douwe Miedema, Additional reporting by David Henry in New York, Sarah White in Madrid and Steve Slater in London; Editing by Andrea Ricci)
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