Fed approves capital plans of 34 national, regional banks

Jun 30, 2017, 00:28
Fed approves capital plans of 34 national, regional banks

On Wednesday, the Fed said those lenders, including household names like JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N), had passed the second, tougher part of its annual stress test.

Citigroup Inc (C.N) won a particularly notable victory, gaining permission to return almost US$19 billion to shareholders, or about 125 per cent of projected earnings over the next four quarters - a big bump from previous year, and more than analysts had expected.

European shares steadied on Thursday as banks extended a winning streak after the U.S. Federal Reserve cleared capital return plans from big banks, off-setting losses among utilities and construction stocks.

It's official: The On average, the group of firms taking part in the stress tests requested payouts that are near 100% of their expected earnings over the next year, up from 65% last year, senior Fed officials said.

As a result, most major banks, including Wells Fargo, Bank of America, SunTrust Banks, JPMorgan, American Express, and Discover Financial Services are raising their dividends.

Beth E. Mooney, Key's Chairman and Chief Executive Officer, stated, "We are pleased to share our CCAR capital plan, which is consistent with our commitment to maintain a strong capital position, while continuing to invest and deploy capital to build long term value for our shareholders".

"Banking stocks jumped after regulators in the United States gave the green light to higher dividends and buybacks, whilst the hint of a shift in tone from central bankers towards tightening is spurring hopes of higher interest rates again", ETX Capital analyst Neil Wilson said in a note.

The Federal Reserve today approved the capital plans of 34 large banks participating in the Comprehensive Capital Analysis and Review.

The Fed can reject a bank's capital plan for either reason. Morgan Stanley shares were up 0.3 percent.

As they await this week's stress test results, U.S. banks face a dilemma their European counterparts can only dream of: what to do with a pile of excess cash?

As for scandal-plagued Wells Fargo, Sandler O'Neill's principal Jeffery J. Harte said there's a "fairly high likelihood" the Fed will object to the firm's request for higher capital return.

Goldman Sachs did not give details on its plan to return capital to shareholders.

Powell, the Fed's interim regulatory czar, told Senate lawmakers last week if the country's largest banks continue to meet regulators expectations, it would be "appropriate" to remove the subjective aspect of the yearly test altogether. Our plans also include an increase in our common share repurchase authorization. The Wall Street Journal first pointed out the potential change Wednesday.

USA stock index futures were little changed on Thursday, a day after the benchmark S&P 500 index scored its biggest one-day percentage gain in about two months, as investors awaited GDP and jobs data. Analysts expect financial firms will benefit the most from the Trump administration's proposed tax reform and deregulation, as well as the Fed's plans to raise interest rates.

YOU MIGHT ALSO LIKE
  • Samsung to invest $380M in SC, creating over 900 jobs

    Samsung to invest $380M in SC, creating over 900 jobs

    The last time the company directly produced home appliance from the U.S. was in 1991 when it had closed down a TV plant. Samsung already operates a call center employing 800 people in Greenville County, about 50 miles (80 kilometers) away.
    Trump to meet with Putin amid Russian Federation  investigations

    Trump to meet with Putin amid Russian Federation investigations

    Mainstream media outlets have blasted Trump for "colluding" with Russian Federation during the 2016 election campaign. Bush. " A leak on what we've been exactly discussing, by the way, happened again on the American side ", Lavrov said.
    Saudi Arabia demands Qatar close Al Jazeera, sever ties with Iran

    Saudi Arabia demands Qatar close Al Jazeera, sever ties with Iran

    Gas also paid for Al-Jazeera, which at various times has embarrassed or angered most Middle Eastern governments. For the following 10 years, Qatar would be monitored annually for compliance based on the list of demands.
  • Burling, Team New Zealand reach match point in America's Cup

    Burling, Team New Zealand reach match point in America's Cup

    Spithill said there was a quick crew meeting after Race 8 and he was pleased that the sailors kept their composure. On Monday, we'll see if Spithill has the makings of another miracle up his sleeve.
    North Korea denies torturing American detainee Otto Warmbier

    North Korea denies torturing American detainee Otto Warmbier

    He was flown back to the U.S.in a coma, after 17 months imprisonment, but North Korea deny any knowledge of how he became ill. Some of the proof used against him was purported security footage of him removing a political banner from his hotel.
    US Deputy Attorney General Assures Congress of Special Counsel Independence

    US Deputy Attorney General Assures Congress of Special Counsel Independence

    It's hard to say how much credibility should be attached to Christopher Ruddy's remark on PBS and later on CNN. Meanwhile, House Speaker Paul Ryan urged the White House to let Mueller's investigation play out.
  • European Union  hits Google with a record-breaking $2.7 billion fine

    European Union hits Google with a record-breaking $2.7 billion fine

    Google chose to give preference to Google Shopping offerings in search engine results to gain traction with customers. Her move against Google risks attracting further criticism that she's unfairly singled out USA companies.

    Mercantile Investment Trust PLC (MRC) Declares GBX 10.50 Dividend

    Over the last 30 and 90 trading days the company share price has decreased 0.2 points and increased 154.5 points respectively. Investec reissued their buy rating on shares of Glencore PLC (LON:GLEN) in a research note published on Monday morning.

    London council evacuates residents amid fire safety concerns

    McCormack said the Hotpoint model FF175BP refrigerator-freezer had not been subject to any product recalls before the fire. Officials to evacuate London high-rise over safety concerns triggered by fatal fire in building with similar experior.
  • Free Armed Forces Day train travel for active service personnel and veterans

    Free Armed Forces Day train travel for active service personnel and veterans

    He said he was pleaded with the turnout in the city. "To everyone who serves, or has served, the rail industry salutes you". Over 300 events including parades, military displays and community fetes will take place on Saturday.
    Kiwis pedaling toward possible America's Cup upset

    Kiwis pedaling toward possible America's Cup upset

    In Race 5, Spithill crossed the starting line a split second too soon and had to drop two lengths behind Team New Zealand. That was enough for Burling to speed away around the seven-leg course for a 49-second victory.
    Military jet practicing for Ohio air show in accident

    Military jet practicing for Ohio air show in accident

    Thankfully, nobody on the ground was injured in what looks like a scary crash taking place in certainly an odd manner. A decision on whether to go forward with plans for the show in Dayton on Saturday has not been made.
popular