JP Morgan Chase was the first U.S. bank to pass its stress test, allowing it to go ahead with a dividend increase and stock repurchase program. The bank is raising its quarterly dividend by $0.05 to $0.30 per share and is looking to repurchase $12 billion worth of stock this year.
The announcement was made two days before the Federal Reserve was scheduled to announce the results of stress tests for 19 banks. While the details of JP Morgan’s test are not known, it said in a statement that the Fed did not object to its plans.
CEO Jamie Dimon said, “We are pleased to be in a position to increase our dividend and to establish a new equity repurchase program. We expect to generate significant capital and deploy that capital to the benefit of our shareholders.” Dimon had previously indicated that he believed some banks would have more capital than required under new regulations as customers pay back loans and losses stemming from the financial crisis begin to ease.
JP Morgan Chase (JPM : NYSE : US$43.39), Net Change: 2.85, % Change: 7.03%, Volume: 76,026,911