JPMorgan's $50 Billion Buyback and Dividend Hike After the Fed Stress Test

JPMorgan Chase on Wednesday announced a new $50 billion stock buyback program and raised its quarterly dividend after the Federal Reserve’s annual stress test confirmed the industry remained well capitalized under the test.

The largest US bank by assets said it would raise its quarterly dividend by 10% to $1.65 per share, subject to board approval, and authorize the buyback plan effective July 1.

JPMorgan CEO Jamie Dimon said in a statement: “The board’s proposed dividend increase is built on our continued investment in the business and strong financial performance. As always, we are prepared for a range of scenarios, including the hypothetical 2026 regulatory ‘severely adverse’ scenario.”

Similarly, Goldman Sachs also raised its quarterly payout, saying its dividend would increase 11% to $5 per share and citing strong earnings and capital levels.

Wells Fargo said it expects to raise its dividend 11% to $0.50 per share, while Morgan Stanley lifted its payout 15% to $1.15 per share and reauthorized a $20 billion multi-year common stock repurchase program.

Bank of America CEO Brian Moynihan said in a statement that the bank will announce its dividend plan next month.

The announcements followed the Fed’s release of its annual stress test results. The test showed that 32 large banks remained above minimum capital requirements under the hypothetical scenario, which included more than $708 billion in projected losses across the industry.

However, unlike in prior years, the test results will not affect banks’ capital requirements. The Fed had previously said it would keep stress capital buffers unchanged through 2027 and plans to revise its testing methodology, meaning banks entered Wednesday’s test with a clear view of their capital requirements.

Although analysts expected the test to have limited near-term impact, banks still moved ahead with dividend increases amid regulatory uncertainty. As a sign of confidence, markets reacted positively to the move.

In a research note ahead of the results, KBW described this year’s stress test as a “rubber stamp.” It said investors were more focused on the Basel III Endgame proposal expected later this year than on the Fed’s annual routine test.

This report is developing. Please check back for updates.