- As the annual Federal Reserve stress tests for banks get underway this week, the 25 largest lenders may be poised to announce $30B more in dividends and buybacks than last year, Bloomberg reports, citing its analysis of analysts' estimates. That's about a 25% increase.
- This year’s average payout ratio is seen rising to about 96% for the 25 largest banks from 89% in 2017, the analysts estimated.
- JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C) are likely to distribute more than 100% of their profits in the next four quarters, while Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS)--with earnings linked to capital markets--may not fare as well under the tougher macroeconomic scenario in this year’s test.
- Wells Fargo (NYSE:WFC) could fail the part of this year’s tests that assess risk controls, RBC analysts said in a June 4 note.
- Six foreign banks that are now required to participate may fail because they may still be unfamiliar with the Fed's data requirements.
- Previously: Stress tests look tougher than expected (Feb. 2)
- Now read: Bank Of America: Into The Home Straight?
Original article