The big banks are getting a big boost going into Thursday trading.
The Federal Reserved gave across the board approvals for the financial companies’ capital plans, most of which included share buybacks and dividend increases.
The approvals are a signal of strength for the banks, as the Fed no longer thinks holding more capital in reserve to help survive a potential crisis is necessary. Instead of reserving their money, the banks are able to share it with their shareholders.
Most of the big financial companies rose in after-market trading Wednesday after the results were announced. When markets opened for trading Thursday morning, the financials continued their upward march with most gaining a per cent or more.
Barclays analysts said that the bank it covers are set to “return over $US130bn of capital back to shareholders over the next 4 quarters in the form of dividends and share repurchases up 38% from the prior 4 quarters.”
Goldman Sachs, which passed the stress test itself, released a note tallying up all the buybacks and dividend increases in the sector. Those shareholder wealth moves, along with the share price increases, are listed below for some of the biggest names in the sector.
- Bank of America (BAC) Stock move: +3.0% Dividend: 24% Buybacks: 55% Total year/year increase: 30%
- JPMorgan (JPM) Stock move: +2.75% Dividend: 31% Buybacks: 70% Total year/year increase: 27%
- Citigroup (C) Stock move: +3.28% Dividend: 23% Buybacks: 102% Total year/year increase: 56%
- Key Corp (KEY) Stock move: +3.84% Dividend: 29% Buybacks: 50% Total year/year increase: 16%
- Wells Fargo (WFC) Stock move: +4.12% Dividend: 37% Buybacks: 53% Total year/year increase: 13%
- Capital One (COF) Stock move: -1.02% Dividend: 19% Buybacks: 45% Total year/year increase: -19%
- BB&T (BBT) Stock move: +2.68% Dividend: 41% Buybacks: 71% Total year/year increase: 45%
Above data collected by Goldman Sachs
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