DOW JONES NEWSWIRES
State Street Corp. (STT) raised its quarterly dividend by 33%
and said it plans to buy back up to $1.8 billion worth of its
stock, making it the latest financial institution to disclose such
actions after receiving the results of the Federal Reserve's latest
stress tests.
State Street, one of the country's largest trust banks, hiked
its quarterly payout to shareholders to 24 cents a share, up from
18 cents paid out previously.
The bank noted that the increase restores the dividend to its
previous split-adjusted high of 24 cents a share, last paid in
January 2009. The increase will cost the bank roughly an added
$29.3 million a quarter.
The stock buyback program, meanwhile, will allow State Street to
make up to $1.8 billion worth of repurchases through March 31,
2013. The new program follows a previous authorization completed in
November under which it purchased roughly $675 million worth of its
stock.
Most of the largest U.S. banks passed the latest round of
"stress tests" administered by federal regulators to see whether
banks would have enough capital on hand to keep lending even if
another deep economic slump or financial crisis were to strike.
The results have marked a milestone in the recovery from the
financial crisis and clear the way for investors to receive tens of
billions of dollars in increased bank dividends and share
buybacks.
State Street in January reported its fourth-quarter earnings
more than quadrupled from a prior-year period weighed down by
charges, though the trust bank's revenue from fees weakened.
State Street's shares were recently up 1.5% to $44.51.
--By Mia Lamar, Dow Jones Newswires; 212-416-3207;
mia.lamar@dowjones.com