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

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.

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