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Investors conquered the rewards of Lichen Bank monitoring when the largest banks in Wall Street terminated a flood by shareholder payments on Tuesday, after regulatory “stress tests” were carried out, which imposed simpler conditions than in previous years.
JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley and others said they would increase quarterly dividend payments to shareholders, and JPMorgan and Morgan Stanley also said that they would buy their value of billion dollars back. Shares.
Goldman said it would increase its dividend by 33 percent to $ 4 per share. JPMorgan said it would increase its quarterly regular share dividend to $ 1.50 per share in the next quarter, compared to USD 1.40 per share. The Bank of America said it would increase its quarterly regular share dividend to $ 0.28 per share from the same quarter.
JPMorgan also said that it would approved the purchase of its own shares worth up to $ 50 billion.
The higher payouts reflect Banks After more than a decade of narrow restrictions after the 2008 financial crisis.
The share prices were hardly changed after the announcements on Tuesday, but have booked profits in the past few days when investors have recorded news about the requirements of the easier stress test.
The FED confirmed last week that 22 banks – from the largest such as JPMorgan and Goldman Sachs to smaller actors, including PNC and BNY – have successfully passed annual tests that rate their resistance to potential economic and market crises.
Banks use the results to calculate the minimum capital that you need in relation to your risk-controlled assets-what in turn can influence the amount of the excess capital that you return to the shareholders. The capital is used by banks to absorb losses.
This year’s stress tests have been the first since the Fed loosened its scenario with a less severe theoretical recession than in the previous year. While the new test was attributed to US President Donald Trump, he corresponds to the more relaxed bank regulation that has committed his administration.
Morgan Stanley analysts had explained that the results of the FED were “even better than expected” because they marked methodology changes that led to lower hypothetical losses, including changes to the way the regulatory authority measures the exposure of private equity.
“A new era for banking is here,” wrote Morgan Stanley analysts in an indication of the beginning of this week.
The FED said this year’s tests would be the overall capital quota of the banks, their main pillow against losses, to advance 1.8 percentage points-under the decline of 2.8 percent points in the last annual loss.
In the coming weeks, the FED will clarify whether it will use stress tests with the average of the past two years to calculate the capital requirements of the banks.
As part of a broader advance to facilitate the banking regulation, the FED and two other guard dogs announced plans last week to reduce the improved supplementary leverage ratio, which requires capital against its total assets.
