Big banks start announcing dividend increases after Fed stress tests — Big banks are starting to announce their dividends and other capital plans now that the results of the Federal Reserve’s annual stress tests have been announced.

Wells Fargo & Company (NYSE:WFC) raises its dividend nearly 17% to 35 cents per share in the third quarter. The shares rose 0.1% in after-hours trading.

Wells said he expects his stress capital cushion to decrease to 2.9%, which is an additional percentage of capital he needs to hold above his minimum requirements.

The dividend increase of 30 cents per share is subject to board approval in July.

Wells also said that for the four-quarter period beginning in the third quarter of 2023 and going through the second quarter of 2024, it has the ability to repurchase common stock.

“This year’s CCAR stress test confirmed that Wells Fargo remains in a strong capital position, reflecting the value of our franchise and the benefits of our operating model,” CEO Charlie Scharf said in a statement.

JPMorgan emphasizes ‘fortress’ balance sheet

JPMorgan Chase&Co (NYSE:JPM) increases its payout by 5%, to $1.05 per share in the third quarter. Its stress capital cushion is 2.9%, compared to 4.0%.

JPMorgan added that it has a buyback program already approved by its board.

CEO Jamie Dimon said in a statement that the bank continues to “maintain a strengthened balance sheet with strong capital levels and robust liquidity, and we remain prepared for a wide range of potential outcomes, including potentially future capital requirements. higher from the finalization of the Basel Accord”. Capital rules III.

The shares rose 0.2%.

Morgan Stanley cites transformed business model

Morgan Stanley Inc (NYSE:MS) plans to increase its quarterly dividend by 9.6%, to 85 cents per share from 77.5 cents per share.

Its board of directors has reauthorized a share buyback program of up to $20 billion, starting in the third quarter. Morgan Stanley expects to be under a 5.4% capital stress cushion from October 1, 2023 through September 30, 2024. CEO James P. Gorman said the results “demonstrate the sustainability of our business model transformed”.

Morgan Stanley shares rose 1.3% in after-hours trading.

US bank anticipates future changes in capital requirements

US Bancorp Inc (NYSE:USB) expects a capital stress cushion of 2.5% from October. It also said its common stock repurchase program remains on hold following the acquisition of Union Bank and in anticipation of future changes to capital requirements.

“The results of this year’s stress test demonstrate that we are well capitalized and remain prepared to weather a severe economic downturn following the acquisition of Union Bank,” CEO Andy Cecere said.

US bank stocks fell 0.1%.

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