Investors continue to react to the stress test results, with Citigroup ( C) feeling the heat. The bank's board was caught by surprise by the Fed's rejection of its capital return plans, according to a report by the Wall Street Journal. Citi failed to meet the minimum requirement of 5% Tier 1 Capital in a hypothetical stress scenario assuming it went ahead with its capital deployment plans. This might be a case of Citigroup being overly ambitious in its dividend or buyback plans or perhaps over promising shareholders. But some analysts have expressed concerns on Citigroup's loan portfolios that performed poorly under stress. "I was very surprised," Jason Goldberg, a bank analyst at the brokerage Barclays Capital, who had expected Citi to increase its quarterly dividend to 10 cents per share from 1 cent told the Associated Press. "The Fed gets to see much more financial data than any of us and has taken a much harsher view of Citi's loan portfolio." Bank of America ( BAC) meanwhile passed the test and saw its shares climb higher Wednesday.
Fitch Ratings gave voice to some nervousness about the United Kingdom's Triple-A status on Wednesday,