Some of the largest banks in the country have announced plans to increase dividends after passing the Federal Reserve’s annual stress test earlier this week.
The Fed wants banks to wait at least two days after the stress test to release their capital plans. After the market closes on Friday,
(ticker: JPM) said it would increase its quarterly payout to $1.05 per share, up from $1.05 per share.
(MS) increased its dividend to 85 cents per share from 77.5 cents.
(WFC) increased its payout by 5 cents to 35 cents per share.
(GS) increased its quarterly dividend from $2.50 to $2.75 a share. And
(C) increase the payout by 2 cents to 53 cents per share.
Every year, the Fed examines banking companies to see if their balance sheets are solid enough to withstand severe pressures in the economy and financial markets. Results released Wednesday show that all 23 participating banks would have enough capital to absorb losses of up to $541 billion — in an apocalyptic scenario — even if the unemployment rate rises. 10% and the stock market plunged 45%.
Bank stocks have been lagging behind the broader market recently as the collapse of several midsize banks earlier this year sparked widespread concern about the overall health and stability of the industry.
The latest stress test brought new confidence to the market and gave the team a nice boost.
JPMorgan stock is up 4.9% since Wednesday’s close.
rose 5.1%, Morgan Stanley stock rose 1.7% and
shares rose 2.8%.
however, shares have fallen 0.4% since Wednesday, an outlier of the bunch.
Write to Evie Liu at [email protected]