(L-R) Michael Corbat, chief govt officer of Citigroup Inc., Jamie Dimon, chief govt officer of JPMorgan Chase & Co., James Gorman, chief govt o
(L-R) Michael Corbat, chief govt officer of Citigroup Inc., Jamie Dimon, chief govt officer of JPMorgan Chase & Co., James Gorman, chief govt officer of Morgan Stanley, Brian Moynihan, chief govt officer of Financial institution of America Corp., Ron O’Hanley, president and chief govt officer of State Road Corp., Charles Scharf, chief govt officer of Financial institution of New York Mellon Corp., and David Solomon, chief govt officer of Goldman Sachs & Co., are sworn in earlier than a Home Monetary Providers Committee listening to on April 10, 2019 in Washington, DC.
Alex Wroblewski | Getty Photos
Almost the entire largest U.S. banks mentioned Monday that they carried out effectively sufficient on the Federal Reserve’s most-recent stress check to keep up their present quarterly dividend.
Goldman Sachs, Financial institution of America, Morgan Stanley, JPMorgan Chase and Citigroup all mentioned they are going to keep their present dividend. Wells Fargo mentioned the Fed’s evaluation of its enterprise will warrant a discount to its quarterly payout.
Whereas the nation’s largest banks had been fast to drop inventory buybacks on the onset of the coronavirus pandemic, the group is usually detest to chop its dividend funds, that are considered as a gradual supply of revenue for buyers.
The business was compelled to slash dividends after the 2008 monetary disaster and has solely slowly constructed them up because the Fed first allowed banks to boost dividends in 2011. Given the unprecedented stress Covid-19 has placed on the American financial system, the Fed final week introduced new restrictions on the U.S. banking business.
Here is what Goldman Sachs, Financial institution of America, Wells Fargo, Citigroup, JPMorgan and Morgan Stanley mentioned:
Goldman Sachs
- Per-share dividend for quarter ended March 31: $1.25
- New dividend: $1.25
- Notable commentary:
“Our sturdy earnings profile, continued efficiency, and extremely liquid stability sheet permit us to serve our purchasers, keep our dividend, and ship for all our stakeholders,” mentioned Chairman and CEO David Solomon. “We’ve got a monitor document of rebuilding capital when vital, and have introduced our standardized CET1 ratio above 13% as this quarter involves a detailed. We totally intend to proceed this dynamic capital administration whereas serving to our purchasers proceed to navigate difficult markets.”
Citigroup
- Per-share dividend for quarter ended March 31: 51 cents
- New dividend: 51 cents
- Notable commentary:
“Whereas we are going to proceed to guage our deliberate capital actions relative to the latest monetary and macroeconomic situations, we consider we’re effectively positioned to proceed to assist our prospects and the broader financial system, whereas additionally persevering with with our deliberate capital actions,” mentioned CEO Michael Corbat. “The deliberate capital actions embody widespread dividends of $0.51 per share within the third quarter and over the 4 quarters lined by the 2020 CCAR cycle (i.e., 4Q 2020 – 3Q 2021), topic to the most recent monetary and macroeconomic situations.”
Morgan Stanley
- Per-share dividend for quarter ended March 31: 35 cents
- New dividend: 35 cents
- Notable commentary:
The outcomes “affirm our robust capital place and mirror the steadiness of our enterprise mannequin. … We anticipate persevering with to pay our quarterly widespread inventory dividend of $0.35 per share,” mentioned CEO James Gorman. “We voluntarily suspended our share repurchases in March and have continued to accrete capital. The up to date capital guidelines present us flexibility to deploy our extra capital, and we are going to reevaluate our capital actions when now we have extra confidence within the form and path of the financial restoration.”
Wells Fargo
- Per-share dividend for quarter ended March 31: 51 cents
- New dividend: Diminished. Actual payout to be decided.
- Notable commentary:
“We count on our second quarter outcomes will embody a rise within the allowance for credit score losses considerably larger than the rise within the first quarter,” mentioned CEO Charlie Scharf. “Wells Fargo continues to have one of many strongest capital positions relative to regulatory minimums among the many world’s monetary providers companies as demonstrated by our stress check outcomes. These are definitely extraordinarily difficult occasions for a lot of and we stay dedicated to supporting our prospects and communities, and we are going to proceed to take acceptable measures to keep up robust capital and liquidity ranges and to enhance the earnings capability of the corporate.”
Financial institution of America
- Per-share dividend for quarter ended March 31: 18 cents
- New dividend: 18 cents
- Notable commentary:
“Financial institution of America is dedicated to returning capital to shareholders over time, in extra of what’s wanted throughout financial cycles to develop the corporate and assist purchasers, communities and the worldwide financial system. The corporate intends to keep up the quarterly widespread inventory dividend on the present fee of $0.18 till additional discover, topic to approval by Financial institution of America’s Board of Administrators.”
JPMorgan Chase
- Per-share dividend for quarter ended March 31: 90 cents
- New dividend: 90 cents
- Notable commentary:
“Right now, utilizing each JPMorgan Chase’s and the Federal Reserve’s base case financial outlook, the Agency can proceed to pay its dividend in future quarters whereas sustaining wholesome capital and liquidity positons. If there’s a vital deterioration sooner or later outlook, the Agency will, after all, think about decreasing dividends,” mentioned CEO Jamie Dimon. “The Agency had already discontinued its inventory repurchase program and has not supposed to renew this system till the precise financial outcomes enhance considerably.”
In an effort to ensure the continued survival of the banks and guarantee enough capital within the system, the Fed mentioned it’s capping dividend funds within the third quarter. The regulator mentioned third-quarter financial institution dividends can be capped on the quantity paid within the second quarter and that it might select to scale back the payouts additional primarily based on every agency’s latest earnings.
Fed officers, citing an abundance of warning, additionally barred the banks from shopping for again shares within the third quarter and mentioned it can require banks to undergo ongoing quarterly opinions at some point of the disaster. Many of the nation’s largest banks already agreed to halt share repurchases in the course of the second quarter to shore up their capital positions.
Subscribe to CNBC PRO for unique insights and evaluation, and stay enterprise day programming from around the globe.