America’s eight banking giants revealed their capital management plans late Friday after the US Federal Reserve had cleared them in the latest stress test of the health of the country’s financial system.
Higher dividends and buybacks were announced after the 4 pm close on Friday for Wall Street, as per a directive from the Fed.
It’s a repeat of what ANZ, CBA, Westpac, and NAB have done this year with their collective buybacks of $5.5 billion and higher dividends.
In other words, our banks and America’s major banks are in robust health.
JPMorgan Chase & Co., Goldman Sachs, and Bank of America Corp. were among the firms that announced the increases two days after the Fed’s 2024 stress test showed that all 31 banks examined would maintain enough capital to withstand a hypothetical economic downturn.
Citigroup, Wells Fargo & Co., and Morgan Stanley also boosted their dividends by between 6% and 14%.
JPMorgan and Morgan Stanley approved stock repurchase programs of as much as $30 billion and $20 billion, respectively.
Morgan Stanley needs to boost confidence with its investors; its shares are only up 3.5% so far this year against a 17.5% rise for JPMorgan.
Bank of America’s dividend will rise to 26 cents a share from 24 cents, and Citigroup’s will increase to 56 cents from 53 cents.
Morgan Stanley also boosted its dividend to 92.5 cents a share from the current 85 cents.
JPMorgan showed its strength with the higher dividend and new buyback, even as its capital ratio rose to 12.3% from 11.9% a year ago.