By Tess Stynes
A number of big U.S. banks announced plans for dividends and
stock buybacks following the latest round of stress tests.
Among the biggest U.S. banks--a group that includes Citigroup
Inc. (C) and Wells Fargo & Co. (WFC) as well as JP Morgan Chase
& Co. (JPM), Bank of America Corp. (BAC), Goldman Sachs Group
Inc. (GS) and Morgan Stanley (MS)--that received the green light on
their capital plans were:
Bank of America's board approved the repurchase of $5 billion of
its shares and the redemption of about $5.5 billion in preferred
stock. The lender's capital plan didn't include a request to raise
its quarterly dividend.
JP Morgan was authorized to buyback an additional $6 billion of
stock starting in April and the board plans to raise the company's
quarterly dividend to 38 cents a share as of the second
quarter.
Wells Fargo said its capital plan was approved and confirmed
that it includes a proposed quarterly dividend of 30 cents a share
for the second quarter and stepped up share repurchases over 2012
levels, which were about nearly $4 billion of its stock.
Meanwhile, Morgan Stanley said that the go-ahead from the Fed
allows Morgan to buy the rest of its wealth-management joint
venture from Citigroup.
The Federal Reserve last week said the annual stress test showed
that 17 of the 18 largest U.S. banks have enough capital to keep
lending in a hypothetical sharp economic downturn, a sign the
financial system is better prepared to weather the storm far better
than during the financial crisis. The signs of the financial
industry's improving health also potentially cleared the way for
large U.S. banks to funnel tens of billions of dollars to investors
through increased dividend payments and share buybacks.
U.S. trust banks--a group that includes State Street Corp.
(STT), Bank of New York Mellon Corp. (BK) and Northern Trust Corp.
(NTRS)--that received the green light on their capital plans and
unveiled plans were:
BNY Mellon's board approved the repurchase of $1.35 billion of
its stock, starting in the second quarter. The lender said that its
capital plan includes a 15% increase in its second-quarter stock
dividend, which the board is expected to consider next month.
Among credit-card lenders, American Express Co. (AXP) plans to
raise its quarterly dividend to 23 cents and repurchase as much as
$3.2 billion of its stock during the last three quarters of
2013.
Capital One Financial Corp. (COF) plans to boost its quarterly
dividend to 30 cents a share from the previous nickel a share
starting with the first quarter, subject to final board
approval.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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