JPMORGAN CHASE and Wells Fargo led US banks that revealed dividend increases and stock buy-backs within hours of securing the Federal Reserve’s approval to return more cash to shareholders for the first time since 2009.
The capital payout plans were investigated by the Fed as part of a “comprehensive capital analysis and review” it shared with 19 of the largest financial institutions yesterday. The exercise was an update on the 2009 stress tests, which helped shore up investor confidence in the financial system.
The latest test results also appeared to cheer investors; by midday trading in New York banks that had announced higher dividend or buy-back plans saw their shares rally.
JPMorgan said that it would lift its quarterly payout to 25 cents a share, up from 5 cents, and won board approval to buy back $15 billion (€10.5 billion) in shares.
Wells Fargo raised its dividend from 5 cents to 12 cents a share and received the board’s permission to raise its common stock repurchase plan by 200 million shares. – (Copyright The Financial Times Limited 2011)
