Big banks hike dividends after passing Fed's stress test

Bank of America plans dividend hike, buybacks: CEO Moynihan

Bank of America chairman and CEO Brian Moynihan, in an exclusive interview with FOX Business’ Maria Bartiromo, said that he expects to increase dividends and share buybacks given ‘shareholders ought to benefit’ from the bank’s profitability.

Several major American banks announced dividend boosts on Monday, days after the Federal Reserve declared all big lenders passed their stress tests and said the heightened restrictions imposed due to COVID-19 would be lifted.

JPMorgan Chase, Bank of America, Wells Fargo and several other large U.S. lending institutions now plan to return billions to their shareholders over the next year.

TickerSecurityLastChangeChange %
JPMJPMORGAN CHASE & CO.154.33+0.28+0.18%
WFCWELLS FARGO & CO.45.79-0.59-1.27%
BACBANK OF AMERICA CORP.41.56-0.06-0.14%

JPMORGAN BUYS STAKE IN ROBERT KRAFT'S SPORTS-DATA COMPANY

Last week, the Fed reported that 27 of the nation's largest banks passed the stress test with flying colors, noting that the lenders now hold more than twice the average capital cushion requirement that had been imposed by the U.S. Treasury Department last year after the coronavirus hit.

In reaction, JPMorgan Chase announced Monday that they would hike their quarterly common stock dividend by 10 cents to $1.00 per share for third quarter, and Bank of America said they would boost their dividend by 17% to 21 cents per share in Q3 while continuing a $25 billion buyback. Wells Fargo doubled its dividend to 20 cents per share and announced a buyback of roughly $18 billion of its common stock.

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Morgan Stanley announced they would double their dividend from 35 to 70 cents per share and said they would buy back $12 billion of outstanding shares over the next year. PNC also joined the fray, announcing they would raise their dividend by 9% to $1.25 per share.

The moves by the big banks signal that lenders are ready to put money back in the pockets of their investors following 2020 losses brought on by the coronavirus pandemic.

The Associated Press contributed to this report.

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