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Bond Market News

US Banks to Hike Dividends After Fed’s Stress Test

June 29, 2021

US banking majors announced plans to increase their dividends after the Fed’s stress-test results saw the central bank ease dividend and buyback restrictions imposed last year during the peak of the pandemic. The Fed’s results showed that the 23 banks covered by them could meet capital requirements comfortably even if they see a combined $500bn in losses. Morgan Stanley announced a doubling of their quarterly dividend to $0.7/share and increased its share buyback programme to $12bn from ~$10bn earlier. Goldman Sachs raised its dividend from $1.25 to $2/share, JPMorgan from $0.9 to $1/share, Wells Fargo from $0.1 to $0.2/share and Bank of America (BofA) from $0.18 to $0.21/share. Wells also announced its share buyback program of about $18bn starting Q3 this year. FT calculates a total increase of $2.08bn in dividends from the 13 banks that announced its plans.

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