The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

US bank capital: US banks get mixed dividend decisions

BAML told ‘no’; Citi surprises analysts; Capital requirements might yet increase

In March, US banks received the decision of the Federal Reserve on whether or not they would be able to start increasing dividends. In January the Fed had begun a second round of stress tests at the largest 19 financial institutions to look not only at capital levels but also at internal capital-planning procedures. More than 100 Fed staff reportedly worked on the decision on whether to allow the banks to pay or increase dividends should they want to or buy back stock.

Of the 19 banks, 12 will be increasing dividends. Of those that are not, two – SunTrust and Regions Financial – were unable to contemplate dividend payments since they had not paid back Tarp money. Ally Financial said its plans were still under review. Metlife said it was premature to discuss dividends as it tends to pay them later in the year. Capital One declined to comment (the Fed has said that its discussions with the financial institutions are private and that it is up to the individual banks to provide public comment). Morgan Stanley has said it is looking to buy the rest of Smith Barney before considering paying dividends.

BAML’s bad news

Bank of America Merrill Lynch, however, which had planned for an increase in dividends later in the year, faced disappointing news.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree