(Bloomberg) -- Deutsche Bank AG may not be able to pursue share buybacks for now if an ongoing audit by its top regulator results in deeper capital cuts, according to Citigroup analysts.

The German lender stopped short of announcing a buyback last week when it reported fourth-quarter results, citing the review as the main reason. While Chief Executive Officer Christian Sewing said he was optimistic about buybacks as early as this year, analysts at Citi including Andrew Coombs are skeptical.

The analysts decided to “remove buybacks” from their model because a review by the European Central Bank of the lender’s risk models could push its common equity Tier 1 ratio below a target of 13%, according to a note published Monday.

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Sewing has pledged to pay out about €8 billion ($8.6 billion) to investors over a five-year period, the centerpiece of his current strategy. Share buybacks are an integral part of his profit distribution plans.

But the ongoing ECB review already prompted changes in how Deutsche Bank models the risks in its portfolios of German retail loans and credit to mid-cap companies, resulting in an impact on assets weighted by risk of €2.5 billion last quarter, Chief Financial Officer James von Moltke said last week. The ECB is now looking at the risk models used for financial institutions and large companies, he said.

“We have argued for some time that Deutsche Bank’s corporate risk-weights appear low relative to European peers,” Coombs wrote in the note on Monday.

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The ECB evaluates the risk models used by the banks it supervises and asks for changes if it deems them too optimistic. Italian bank Intesa Sanpaolo SpA has faced a similar audit, prompting it to shed assets weighted by risk by €29 billion in the fourth quarter. 

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