C Citigroup Inc

Michael Corbat kicked off the Citigroup Inc. shareholder meeting with the topic that he said was on the forefront of his mind--the Federal Reserve's rejection of the bank's request to raise its dividend and expand its share buyback plan.

Mr. Corbat said the bank had proposed what it believed was a "moderate and appropriate level of capital to return" to shareholders. Making sure the bank passes next year's Federal Reserve stress test, Mr. Corbat said, would be his "highest priority" for the rest of 2014.

Mr. Corbat repeated statements he made during the bank's first-quarter earnings report last week: He does not believe that the Fed has problems with the bank's underlying business model, strategy or capital levels. But just what the Fed's problems might be, he didn't make clear. Mr. Corbat said the bank is "consulting close with the Fed" to identify "exactly where they believe our procedures fell short."

Write to Christina Rexrode at christina.rexrode@wsj.com

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