However, Citi Chief Executive Vikram Pandit warned in a prepared statement that the company’s road to recovery could remain shaky.
“I think Vikram has nothing to lose by being conservative,” explained Schutz.
“There’s no doubt that regulatory legislative headwinds are so strong it’s hard for them to predict.”
“We also need to make sure that this economy gets off the ground and Citi’s got lots of reserves and lots of capital now but profitability’s going to be contingent upon continued growth,” he continued.
Currently, Citi’s capital ratio is at more than 11 percent. Until financial regulation passes, Schutz said having high capital ratios would be part of large banks’ “investment thesis.”
“If you have too much, you can return it to shareholders again through stock buybacks and dividends,” he said. “I think that’s going to be a theme in the second half of the year, that’s going to be very powerful.”
- Watch Schutz's Previous Appearance on CNBC (Mar. 17, 2010)
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Schutz doesn’t have any position in Goldman Sachs. Schutz owns shares of C, JPM and BAC in his funds.