JPMorgan Chase and Morgan Stanley have both made significant announcements regarding their dividend payouts and share repurchases. JPMorgan, as the largest U.S. bank by assets, has decided to raise its quarterly dividend by 8.7% to $1.25 per share. In addition, the company has authorized a new $30 billion share repurchase program. Meanwhile, Morgan Stanley, a key player in wealth management, has also decided to boost its dividend by 8.8% to 92.5 cents per share. The company has also authorized a $20 billion repurchase plan.
On the other hand, Citigroup and Bank of America have made more modest announcements. Citigroup has announced a 5.7% increase in its dividend to 56 cents per share. The company also stated that it would “continue to assess share repurchases” on a quarterly basis. Bank of America, meanwhile, has decided to increase its dividend by 8% to 26 cents per share. Interestingly, Bank of America’s release did not mention anything about share repurchases.
All four of these big banks have announced their plans to boost capital return to shareholders after successfully passing the annual stress test administered by the Federal Reserve. This test ensures that banks are able to withstand a severe hypothetical recession scenario. While all 31 banks in this year’s exam demonstrated their resilience, JPMorgan revealed that it could potentially face higher losses than initially predicted by the Fed. However, the bank reassured investors that this would not affect its capital-return plan.
JPMorgan CEO Jamie Dimon expressed confidence in the company’s ability to invest in future business growth, pay sustainable dividends, and return excess capital to shareholders. This sentiment was echoed by Dimon when he noted that this dividend increase was the second one made by JPMorgan this year. It remains to be seen how these strategic moves by the big banks will impact their overall financial performance and shareholder value in the long run.