U.S. banks send cash to investors after stress-test successes
BNN Bloomberg
Morgan Stanley and Goldman led the way as U.S. banks boosted dividends and share buybacks in response to their success in clearing this year’s stress tests. JPMorgan held its dividend steady at US$1 a share.
Goldman Sachs said its quarterly dividend would jump 25 per cent to US$2.50 a share from US$2. Morgan Stanley boosted its payout to 77.5 cents a share from 70 cents, according to a statement Monday.
“Our client-oriented strategy will continue to diversify the firm’s franchise and provide a strengthened return profile,” Goldman Sachs Chairman and Chief Executive Officer David Solomon said in a statement. “We will continue to dynamically manage capital and remain well-positioned to support our clients.”
The biggest US banks began outlining their plans for distributing capital after passing the Federal Reserve tests, effectively giving them the green light to return billions of dollars to investors in dividends and share buybacks. All lenders cleared the examination last week, showing that they had enough capital to handle a severe economic meltdown with surging unemployment, collapsing real-estate prices and a plunge in stocks.
