Wall Street gets ready to hand out billions in dividends

The largest US banks will issue $130bn in dividends and stock buybacks as the Fed ends pandemic restrictions on returns.

Morgan Stanley, JPMorgan, Bank of America, Goldman Sachs and Wells Fargo said on Monday they were raising their capital payouts after the US Federal Reserve gave them a clean bill of health following their annual “stress tests” last week. Analysts and investors had expected the country’s largest lenders to start issuing as much as $130bn in dividends and stock buybacks from next month after the Fed last week ended emergency pandemic-era restrictions on how much capital they could give back to investors. Morgan Stanley delivered the biggest surprise to investors, however, saying it would double its dividend to 70 cents a share in the third quarter of 2021. Some analysts had been expecting a boost to about 50 cents.