(Adds context, Goldman Sachs, Wells Fargo)
BANGALURU/NEW YORK, June 27 (Reuters) – Morgan Stanley, Goldman Sachs, Bank of America and Wells Fargo raised their dividends on Monday while JPMorgan & Chase kept its payment flat, after U.S. banks completed their test of annual resistance last week.
The U.S. Federal Reserve said on Thursday that the nation’s biggest lenders could easily weather a severe economic downturn, giving them a healthy bill of health and clearing the way for them to redistribute excess capital to shareholders.
Dividend payouts at most major banks have risen this year despite the Fed’s tougher test than in 2021, raising some lenders’ required capital buffers more than expected.
Morgan Stanley raised its dividend 11% to $0.775 per share, while Goldman Sachs said it expects a dividend increase to $2.50 per share from $2.00. Bank of America raised its dividend 5% to $0.22 per share and Wells Fargo said it plans to raise its dividend to $0.30 from $0.25 per share.
JPMorgan, however, decided to keep its dividend at $1.00 per share, citing “higher future capital requirements.”
The test defines each bank’s “stress capital buffer” – an additional cushion of capital on top of the regulatory minimum – the size of which is determined by each bank’s hypothetical losses under the test.
Banks announced their new anti-stress capital buffers on Monday, although they will not come into force until later this year, giving them time to restructure their balance sheets. (Reporting by Carolina Mandl and Michelle Price in New York, and Manya Saini and Bhanvi Satija in Bangaluru, Editing by Megan Davies and Deepa Babington)