[ by Melanie Gretchen ] Citigroup announced it would not seek permission to repurchase shares this year, even though the bank has shored up its capital since it failed the Federal Reserve's "stress tests," back in March of this year.  The deadline for submitting a proposal to the Fed for buybacks was 6/11/12.  Analysts had expected Citi to submit such a proposal - probably for permission on a small level buyback.  However, that never happended  [CI Note: Perhaps it hasn't stood up to the stress test of Europe's sovereign-debt crisis?] Factors to Consider. At the time it conducted the Stress Test, the Fed rejected Citi's request to buy back as much as $8 billion of stock over 3 years, because the bank failed the test.  Since that date, Europe's economy has hit stateside, and JPMorgan's $2 billion loss has exacerbated slow growth in the U.S. The impact on Citigroup has been quite dramatic.  After rising as much as 46% earlier in the year, Citi shares have lost all the gains except for 5.6%.  The bank also is 25% down from its level a year ago.  To date, shares rose 86¢, or 3.2%, to $27.77 last week on Friday. "When you compare the mood of the market today with the first week of January, the environment is tougher.  Regulators are naturally recoiling from the J.P. Morgan trading loss, and that will influence their thinking on Citigroup." -- Gerard Cassidy, a managing director of equity research at RBC Capital Markets. Performance Report. During the crisis, Citi suspended share repurchases and eliminated its dividend, and had to accept $45 billion in government aid, which it has since repaid.  Though it reinstated its dividend at 1¢, it hasn't bought back stock since the 4th quarter of 2008, when its share count inflated as the bank sold billions of dollars in stock to repay government loans. More recently, Citi cut its stake in Akbank, a Turkish lender, and in February, abandoned its holdings in India's Housing Development Finance Corp.  This month, Citi is expected to sell its remaining 14% stake in the Morgan Stanley Smith Barney brokerage firm - a joint venture with Morgan Stanley - that will help boost Citi's capital ratios. Self-Preservation. By not buying back stock, Citi has chosen to shield itself against another rejection versus putting money in shareholders' pockets, according to Glenn Schorr, an analyst with Nomura Securities International.  Any amount the bank would have asked for would have been "immaterial," he said, yet:  "Ceremonially, it would have meant something to people." For further details, go to [WSJ, 6/8/12].