JPMorgan, Wells Fargo, Morgan Stanley to pay higher dividends

BLOOMBERG 

JPMorgan Chase & Co, Wells Fargo & Co, Morgan Stanley and Goldman Sachs Group Inc led US banks in announcing higher dividends after every lender subject to this year’s Federal Reserve stress tests passed the exam.
The banking giants announced the increases after the close of trading, as regulators freed the industry to update shareholders on payouts following this year’s exams. Even Citigroup Inc, which faces a higher capital requirement because of its test results, boosted its quarterly dividend by two cents.
The findings posted by the Fed showed all 23 big US lenders examined can withstand a severe global recession and turmoil in real estate markets. In typical years, clearing the exam sets the stage for banks to return billions of dollars to investors through dividends and buying back stock.
Still, banks are expecting a bevy of additional regulatory scrutiny in the months ahead — from the unveiling of the long-awaited Basel III rules to an overhaul of the Fed’s supervision efforts in the aftermath of the collapse of four regional banks this year. That’s left most banks warning investors that, beyond bumping up dividends, they may hold off on committing to big share buybacks until they get more clarity on what’s to come.
Shares of JPMorgan and Wells Fargo rose this week after both firms showed an improved resiliency in this year’s test. The criteria for the exam were announced before March’s regional bank turmoil, so it didn’t test banks on the kind of fallout from rising rates that shook midsize lenders just months ago. Meanwhile, results at some other firms were less resilient, with Capital One Financial Corp also saying it will have to meet a higher capital requirement.
Citigroup was prompted to accrue capital for a more stringent requirement after last year’s stress tests.