America’s top banks just got a green light from the Fed, and rewarded shareholders right away.

America’s top banks just got a green light from the Fed, and rewarded shareholders right away.
Sarah Silbiger
Finance

Is your bank safe? Here’s how the financial giants passed the toughest test of the year

Calum Roche
Sports-lover turned journalist, born and bred in Scotland, with a passion for football (soccer). He’s also a keen follower of NFL, NBA, golf and tennis, among others, and always has an eye on the latest in science, tech and current affairs. As Managing Editor at AS USA, uses background in operations and marketing to drive improvements for reader satisfaction.
Update:

After weathering the Federal Reserve’s toughest annual stress test, America’s biggest banks are feeling confident enough to hand out bigger dividends and buy back billions in stock.

JPMorgan, Bank of America, Wells Fargo...

JPMorgan Chase led the charge, hiking its dividend from $1.40 to $1.50 a share and announcing a massive $50 billion share repurchase program, as reported by Reuters. CEO Jamie Dimon called it “sustainable” and said it reflects “strong financial performance.”

Other heavyweights followed. Bank of America bumped its payout 8% to 28 cents, Wells Fargo moved from 40 to 45 cents, Citigroup from 56 to 60 cents, and Goldman Sachs took the biggest leap – $3 to $4 a share. Morgan Stanley also raised its dividend to $1 and approved a $20 billion buyback plan.

These moves came after the Fed’s stress test showed all major banks could survive a hypothetical economic crisis, including soaring unemployment and market crashes, while maintaining capital levels far above the required minimum. On average, they held a common equity Tier 1 capital ratio of 11.6%, more than double the 4.5% threshold.

What next for the Fed and banks?

So, yes, your bank passed. But next year’s test might be even harder to ace. The Fed is reworking the rules to average results over two years, which could force banks to hold more capital. That rule change is still in progress.

For now, though, Wall Street’s biggest lenders have a clean bill of health... and shareholders are cashing in.

Related stories

Get your game on! Whether you’re into NFL touchdowns, NBA buzzer-beaters, world-class soccer goals, or MLB home runs, our app has it all.

Dive into live coverage, expert insights, breaking news, exclusive videos, and more – plus, stay updated on the latest in current affairs and entertainment. Download now for all-access coverage, right at your fingertips – anytime, anywhere.

Tagged in:

Comments
Rules

Complete your personal details to comment

We recommend these for you in Latest news