Banks Are Buying Back Stock Hand Over Fist, Including These 3 Names

Key Points

• Banking stocks have put up strong performance over the past year and a half, with a key ETF beating the S&P 500.
• Buybacks have been central to the strategy of many banks, and several top names just increased their capacity greatly.
• The Trump administration's policies have been a notable driver of increased buyback activity.

While many investors have focused heavily on the artificial intelligence trade lately, the banking industry has quietly performed well too. One commonly used proxy of the industry’s performance is the Invesco KBW Bank ETF NASDAQ: KBWB. Over the last 12 months, the fund has delivered a total return of around 35%, exceeding the S&P 500’s approximately 27% return over that period.

Notably, large-scale share buybacks have been a common theme among many bank stocks. After engaging in big-time buyback spending over the past several quarters, these three names are loading up again. All have huge buyback capacity equal to more than 10% of their market capitalizations. This allows these firms to continue lowering their outstanding share counts, adding a tailwind to per-share metrics.

Citigroup’s Buyback Capacity Hits 14% Amid Turnaround Success

First up is one of the most well-known banking institutions in the world, Citigroup NYSE: C. The stock has gone on an extremely strong run, delivering a total return above 70% over the last 12 months. This comes as Citi’s turnaround plan has been progressing well. In 2025, Citi saw record revenues across all of its five main business lines, and four out of five posted double-digit growth in Q1 2026. Overall, 2025 revenue hit a record $86.4 billion.

Citi has also made judicious use of buybacks recently, spending $13 billion on repurchases in 2025—around four times what it spent in 2024. The company’s buyback pace continues to accelerate, with $6.3 billion of repurchases in Q1 2026, or nearly half of its 2025 spending in just one quarter.

Now, the company has filled its buyback chest to the brim, authorizing a new $30 billion repurchase program. The firm noted, “This reflects both our earnings power and our confidence in the trajectory of our business." The size of this program is very significant, equal to 14% of Citi’s market capitalization near $210 billion.

This gives the firm a significant ability to continue lowering its share count, which it has reduced by more than 15% over the past five years.

KeyCorp Announces $3B Buyback Plan as Investment Banking Shows Out

KeyCorp NYSE: KEY shares have also performed well, but to a much lesser extent than Citi. Shares have delivered a total return of about 40% in the last year. Notably, KeyCorp's investment banking business had its second-best year ever in 2025, and ended the year saying that its pipelines are at historically elevated levels. In Q1 2026, the company reiterated this, saying that pipelines were up 5% from year-end and that merger-and-acquisition pipelines were at record levels.

The company’s buyback spending has also been higher than expected. KeyCorp spent $200 million on repurchases in Q4 2025, double what it anticipated.

In Q1 2026, KeyCorp spent nearly $400 million, well more than the $300 million it set out for. The company currently says that it expects to spend $1.3 billion on buybacks in 2026—but specifically notes that this is a floor estimate.

Pursuant to this, the company just added $3 billion in buyback capacity. This buyback program is also very large, equal to just under 13% of KeyCorp’s market capitalization near $23.5 billion.

Notably, KeyCorp also returns a significant amount of capital through its dividend program. Overall, the company’s indicated dividend yield sits near 3.8%.

M&T Makes Strong Progress on Improving Loan Quality, Spends Big on Buybacks

Last up is M&T Bank NYSE: MTB, which has delivered decent but not impressive performance over the last 12 months, up about 20%. Sizeable gains have been made over the past six months, as M&T has made strong progress in reducing its criticized loan balance. These are loans where the risk has increased relative to original expectations, putting the lender in an unfavorable position.

Notably, M&T reduced its criticized commercial loans by 27% in 2025. Progress continued in Q1 2026, with its criticized loan balance falling by $700 million to $6.6 billion.

Buybacks have also been a key part of M&T’s strategy, with the firm noting that it repurchased 9% of its outstanding shares in 2025. As part of its $5 billion buyback authorization, the company recorded $1.25 billion in repurchases during Q1 2026. This was equal to 3.5% of its outstanding shares versus the end of 2025. With this, the company now has around $3.75 billion in buyback capacity remaining.

Despite already undertaking big-time repurchases, its buyback firepower remains large. Overall, M&T’s capacity is equal to around 12% of its approximately $31 billion market capitalization.

Trump Policies Help Big-Bank Buybacks Hit Historic Levels

Notably, elevated buyback activity isn’t confined to these three names; it is characterizing much of the banking industry. In Q1, the largest U.S. banks hit a quarterly record for buyback spending at $33 billion. Analysts note that the Trump administration’s deregulatory stance has been a boon for buybacks as companies have to lock up less of their capital.