
Banks in the United States, like JPMorgan Chase, Wells Fargo and Morgan Stanley, declared on Friday that they intend to increase their quarterly dividends after meeting the Federal Reserve's annual examination. JPMorgan stated in a press release that they plan to raise their payout to $1.05 per share, which is a 5 cent increase from the starting rate in the third quarter. Goldman Sachs released the highest dividend increase per share among the large banks, and Citigroup disclosed the tiniest.
Major U.S. banking institutions including JPMorgan Chase, Wells Fargo and Morgan Stanley reported Friday that they are planning to up their quarterly dividends after passing the Federal Reserve's yearly stress test. JPMorgan intends to raise its dividend to $1.05 per share from $1 per share, pending board approval, the New York-headquartered bank stated in a press release.CEO Jamie Dimon of JPMorgan mentioned in the statement that "the Fed's 2023 stress test results show that banks remain resilient even when faced with extreme shocks and are continuing to function as a secure and reliable source of strength for the financial system and global economy."On Wednesday, the Fed released the results of its yearly exercise, with all 23 banking institutions that participated managing to clear the regulatory requirements. The test determines how much capital the banks can give back to shareholders through share buybacks and dividend payments. One of this year's exams involved a "severe global recession" with an unemployment rate of 10%, a 40% decrease in the value of commercial real estate, and a 38% drop in housing prices.Subsequent to passing the test, Wells Fargo declared it will increase its dividend to 35 cents per share from 30 cents a share, and Morgan Stanley proclaimed it would be raising its dividend to 85 cents per share from 77.5 cents per share. Goldman Sachs announced the most considerable per share boost of all the big banks, bumping its dividend to $2.75 per share from $2.50 per share.
Citigroup stated that it would be increasing its dividend to 53 cents a share from 51 cents a share, a modest rise compared to those of its peers. This likely reflects the fact that whereas JPMorgan and Goldman Sachs delivered astonishing results that allowed them to accumulate smaller capital buffers, Citigroup's buffers actually rose with the stress tests. Nevertheless, Jane Fraser, the CEO of Citigroup, remarked that their results still depicted the bank's financial stability in any economic situation. All major banks declined to provide information on upping share repurchases, apart from JPMorgan and Morgan Stanley which mentioned they would utilize previous repurchase plans, while Wells Fargo explicitly commented on their capacity to purchase common stock over the coming year. Market experts have claimed that the banking sector is inclined to be more guarded with its capital-return plans this year. This is due to the finalization of international banking regulations, which is set to boost the capital levels of major banks like JPMorgan, regional banks being held to higher standards in the wake of Silicon Valley Bank's downfall in March, plus the probable recurrence of elevated loan losses in the event of a recession.
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