A group of large US banks outlined dividend increases, and, in several cases, share repurchase plans after the Federal Reserve published its latest stress test results.
Under this year’s hypothetical scenario, banks absorbed more than $708bn in total loan losses.
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Aggregate capital declined by 1.6 percentage points but remained above minimum capital requirements.
The Board said the results published will not affect large bank capital requirements, in line with an earlier announcement.
Current capital requirements will remain in place until 2027, when the stress test is due to be run using loss-estimating models that incorporate public feedback.
All 32 banks tested stayed above their minimum common equity tier 1 capital requirements during this year’s hypothetical recession scenario, which the Board said was similar in severity to last year’s test.
Citigroup quarterly dividend will go up by 12% to 67 cents, while its multi-year $30 billion common stock buy-back plan will remain in place.
Goldman Sachs common dividend will increase by 11% to $5 a share from $4.50, starting next month.
Bank of America board will decide the level of the quarterly dividend at a meeting next month. The bank is also retaining its $40bn stock repurchase plan.
JPMorgan plans to raise its quarterly dividend to $1.65 a share from $1.50 and introduced a new $50bn common share buy-back programme.
Morgan Stanley raised its dividend by 15% to $1.15 a share. Its board approved a multi-year $20bn common equity share repurchase programme.
Wells Fargo said it has completed the Federal Reserve’s 2026 supervisory stress test process.
The bank also said it expects to lift its third-quarter 2026 common stock dividend by 11% to $0.50 a share from $0.45, subject to approval by the company’s Board of Directors at its regularly scheduled meeting in July.
