Citi abandons plans for capital return Citigroup has abandoned efforts to return more capital to shareholders after opposition from the Federal Reserve, a decision likely to further strain relations between the company's executives and investors. The bank announced on Friday that it had "decided not to request any additional return of capital," three months after the Fed said it was too weak to launch a multi-billion dollar share buyback programme. Citi could have opted to scale back its request but it has instead decided to abandon it altogether. Executives feared another failure would be catastrophic coming after a series of embarrassments this year, including a majority of investors voting against a pay plan for VIkram Pandit and other senior employees. The Fed objected to the bank's plan as part of the annual "comprehensive capital analysis and review," a process started after the financial crisis to judge whether banks are healthy enough to withstand "stress scenarios," including a severe global recession. Citi was deemed to have sufficient capital to survive the stress scenario, which included a surge in the US unemployment rate to more than 13 per cent. But it narrowly failed to meet the Fed's capital requirements if it completed its planned distribution to shareholders. The bank was the most high profile failure in the process, though some banks, including Bank of America, did not ask for permission to increase their dividend. BofA's plan met with Fed objections last year. "We will make decisions regarding the 2013 capital plan later this year," Citibank said. In the meantime, we will continue to build additional capital through earnings and the ongoing reduction of non-core assets.