MetLife Announces Its First Share Buyback Since 2008
Bloomberg News
, the largest U.S. life insurer, announced its first stock buybacks since 2008 as Chief Executive Officer Steven Kandarian seeks to reward investors.
The insurer will as much as $1 billion of common stock, New York-based MetLife said today in a statement. The company also said it would raise $1 billion later this year as equity units issued to fund its purchase of American Life Insurance Co. convert into common shares.
Kandarian, 62, had previously refrained from buybacks at MetLife while preparing for the prospect of increased oversight from U.S. regulators. The insurer is in the final stage of consideration to be designated systemically important, a finding that would subject the firm to increased scrutiny from the Federal Reserve.
'Our philosophy is that excess capital belongs to our shareholders,' Kandarian said in today's statement. 'The challenge is to strike the right balance between adherence to our philosophy and recognition that MetLife's required capital levels remain unknown.'
MetLife has 1.4 percent this year in New York, while smaller rival Financial Inc. has dropped 3 percent. Prudential, based in Newark, New Jersey, has already been designated a non-bank systemically important financial institution, or SIFI.
The Fed could impose stricter capital, leverage and liquidity requirements on SIFIs, and demand stress testing for crisis scenarios, though the central bank hasn't yet described how it may adapt regulations for insurers that get the tag. American International Group Inc. and General Electric Co.'s finance unit have also been deemed non-bank SIFIs.
The U.S. Senate approved a bill last week to give regulators more flexibility in how they apply capital standards to insurers. To become law, the bill would need to be approved by the House of Representatives and signed by President Barack Obama.
MetLife is scheduled to hold an investor conference today beginning at 8:45 a.m. New York time.
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net Keith Campbell, Jon Menon
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