JPMorgan Chase said Monday that increasingly stringent capital requirements forced it to keep its dividend unchanged while rival banks announced bumps to their quarterly payouts.
Bank of America said that it was raising its quarterly dividend by 5% to 22 cents per share. Morgan Stanley said it was raising the payout 11% to 77.5 cents per share. Wells Fargo boosted its dividend 20% to 30 cents a share.
Goldman Sachs appeared to have one of the larger dividend increases, a 25% bump to $2.50 per share. Last week, analysts had highlight Goldman’s results, saying that it was a surprise winner of the Federal Reserve’s annual stress tests and that it would have more capital flexibility as a result.
While all 34 banks involved in the regulatory exercise passed last week, analysts focused on the biggest American banks including JPMorgan, saying that an unexpected rise in stress capital buffers would mean they might have to keep dividends flat and scale back or even eliminate share buybacks.
JPMorgan confirmed some of those fears on Monday, saying that “higher future capital requirements” are the reason it intends to keep its quarterly dividend frozen at $1 per share.
“The Federal Reserve’s 2022 CCAR stress test once again shows that banks are able to be a source of strength for the broader economy while withstanding extreme market shocks,” JPMorgan CEO Jamie Dimon said in the release. “We will continue to use our capital to invest in and grow our market-leading businesses, pay a sustainable dividend, and we will retain capital to fully satisfy our future regulatory requirements.”
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