Major US banks are raising dividends significantly

Major US banks have decided to increase dividends and repurchase shares after the Fed's central bank eased its restrictions in this area last week. It did so after all the monitored banks passed the stress test. Virtually all banks changed their dividend policy, with Morgan Stanley being the most surprised by investors. It announced that it would double its quarterly dividend to 70 cents / share. Some analysts expected an increase to 50 cents / share. JPMorgan, Bank of America, Goldman Sachs and Wells Fargo also announced dividend increases. Goldman Sachs said it plans to increase the dividend from $ 1.25 to $ 2 / share and Bank of America wants to increase it by 17% to 21 cents. JPMorgan Chase again announced that the dividend will increase from 90 cents to 1 USD / share. Morgan Stanley also said it would increase its share repurchase costs, with plans to buy back the shares for $ 12 billion (€ 10.08 billion) by the end of June 2022. The same move was announced by Wells Fargo, who said it plans to buy back shares for $ 18 billion in four quarters, starting in September. The US banks reacted to the decision of the Federal Reserve system that thanks to the latest successful result of the stress test, the Fed will lift restrictions on the payment of dividends and share repurchases. The central bank introduced the new coronavirus after the onset of the pandemic. According to the Fed last week, based on the results of the stress test, 23 large banks in the USA would record a loss of $ 474 billion in the event of a significant economic downturn. However, they would still have about twice as much capital left as the volume required by the central bank.