JPMorgan Chase on Wednesday unveiled a new $50 billion share repurchase program and raised its quarterly dividend after the Federal Reserve found the industry remained well capitalized under its annual stress test.
The biggest U.S. bank by assets said it will increase its quarterly dividend 10% to $1.65 per share, subject to board approval, and authorized the buyback program effective July 1.
“The Board’s intended dividend increase is supported by our consistent investment in our business and strong financial performance,” JPMorgan CEO Jamie Dimon said in a statement. “As always, we are prepared for a wide range of scenarios, including the hypothetical 2026 supervisory severely adverse scenario.”
Goldman Sachs likewise increased its quarterly payouts, saying that its dividend will rise 11% to $5 per share, citing the firm’s strong earnings and capital position.
Wells Fargo said it expects to raise its dividend by 11% to 50 cents per share, while Morgan Stanley boosted its payout 15% to $1.15 per share, while also reauthorizing a $20 billion multi-year common equity share repurchase program.
Bank of America CEO Brian Moynihan said in a statement that the bank will make an announcement on the firm’s dividend next month.
Fed annual stress test: all 32 large banks still meet capital requirements
The announcements followed the release of the Federal Reserve’s annual stress test, which found that all 32 large banks remained above their minimum capital requirements even after a hypothetical recession generating more than $708 billion in projected losses across the industry.
Unlike in previous years, however, the results will not affect banks’ capital requirements. The Fed said earlier this year it would keep stress capital buffers unchanged through 2027 while it overhauls the testing methodology, meaning banks entered Wednesday with a clear understanding of their capital requirements.
Market view: banks still raise payouts despite regulatory uncertainty
While analysts had expected the exercise to have little immediate impact, in a sign of confidence, banks opted to proceed with payout increases despite the regulatory limbo.
In a note ahead of the results, KBW described this year’s stress test as “going through the motions,” arguing that investors are more focused on the pending Basel III Endgame proposal expected later this year than on the Fed’s annual exercise.
This report is developing; please check back for updates.
