JPMorgan Chase and Morgan Stanley have announced significant increases in both dividend payouts and share repurchases. JPMorgan, the largest U.S. bank by assets, plans to raise its quarterly dividend by 8.7% to $1.25 per share, alongside authorizing a new $30 billion share repurchase program. On the other hand, Morgan Stanley, a key player in wealth management, is boosting its dividend by 8.8% to 92.5 cents per share, while also authorizing a $20 billion repurchase plan.
In contrast, Citigroup and Bank of America have made more modest announcements in terms of dividend increases and share repurchases. Citigroup stated that it would be raising its dividend by 5.7% to 56 cents per share and will be “continuing to assess share repurchases” on a quarterly basis. Whereas Bank of America is increasing its dividend by 8% to 26 cents per share, with no mention of any share repurchases in their release.
The announcements from these big banks come after passing the annual stress test administered by the Federal Reserve. All 31 banks involved in this year’s exam demonstrated to regulators that they could withstand a severe hypothetical recession. JPMorgan, however, disclosed on Wednesday that it could potentially face higher losses than initially found by the Fed. Despite this, the bank stated that it would not affect its capital-return plan. JPMorgan CEO, Jamie Dimon, emphasized the company’s ability to invest in future growth, pay sustainable dividends, and return excess capital to shareholders as deemed appropriate.
It is noteworthy that JPMorgan’s dividend increase marks the second one this year, showcasing a dedication to rewarding shareholders and maintaining financial strength. The strategic moves by these major banks reflect a commitment to growth, stability, and continued innovation in the ever-evolving financial landscape. As the industry evolves, these institutions are positioning themselves to adapt and thrive in a competitive market.