Some of the country’s largest banks have said they will increase their dividends after passing the Federal Reserve’s annual stress test earlier this week.
The Fed wanted banks to wait at least two days after the stress tests to announce their capital plans. After markets closed on Friday, JPMorgan Chase (ticker: JPM) announced that it would increase its quarterly payout to $1.05 per share from $1. Morgan Stanley (MS) increased its dividend from 77.5 cents to 85 cents per share. Wells Fargo (WFC) increased its payout by 5 cents to 35 cents a…
Some of the country’s largest banks have said they will increase their dividends after passing the Federal Reserve’s annual stress test earlier this week.
The Fed wanted banks to wait at least two days after the stress tests to announce their capital plans. After markets closed on Friday, JPMorgan Chase (ticker: JPM) announced that it would increase its quarterly payout to $1.05 per share from $1. Morgan Stanley (MS) increased its dividend from 77.5 cents to 85 cents per share. Wells Fargo (WFC) increased its payout by 5 cents to 35 cents per share. Goldman Sachs (GS) increased its quarterly dividend to $2.75 per share from $2.50. And Citigroup (C) increased its payout by 2 cents to 53 cents a share.
Every year the Fed tests the banking giants to see if their balance sheets are strong enough to withstand the severe stresses in the economy and financial markets. The results, released Wednesday, suggest that all 23 participating banks would have enough capital to absorb up to $541 billion in losses in a doomsday scenario, even if unemployment hits 10% and the stock market plummets 45% would collapse.
Bank stocks have underperformed the broader market of late as the collapse of some mid-sized banks earlier this year sparked widespread concerns about the overall health and stability of the sector.
The recent stress test has given the market renewed confidence and a nice boost to the group.
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JPMorgan stock is up 4.9% since the close on Wednesday, Wells Fargo stock is up 5.1%, Morgan Stanley stock is up 1.7% and Goldman Sachs stock is up 2 .8% up.
However, shares of Citigroup are down 0.4% since Wednesday, an outlier for the group.
Write to Evie Liu at [email protected]