Major U.S. Banks Collectively Raise Dividends and Launch Buybacks After Fed Stress Tests
Miles Bennett
Following the Fed's annual stress-test results, six major U.S. banks announced dividend hikes and large-scale buybacks on June 25 — JPMorgan alone approved a $50 billion repurchase plan. The collective move signals a rare dual window of looser regulation and peak-level profits opening at the same time.
How much did each bank raise?
JPMorgan lifted its quarterly dividend from $1.50 to $1.65 — roughly 10% — and approved a $50 billion new buyback program effective July 1.
Goldman Sachs raised its dividend from $4.50 to $5.00 (≈11%); Morgan Stanley went from $1.00 to $1.15 (≈15%) and reauthorized a $20 billion multi-year buyback.
Wells Fargo increased from $0.45 to $0.50 (≈11%); Citigroup from $0.60 to $0.67 (≈12%).
Bank of America has not yet announced a new dividend, saying it will decide after its July board meeting; its existing buyback authorization still had nearly $23 billion unused as of end-March.
Why could they all move at once this year?
The direct trigger: in February the Fed voted to freeze current stress-capital-buffer requirements through 2027 while overhauling the annual test framework in a more bank-friendly direction.
This means → this year's test results do not reset capital requirements, so banks can announce payout plans early instead of waiting for a regulatory window.
In plain terms = banks used to need their "exam scores" before deciding how much to pay out. This year the regulator said "scores are frozen — they don't count," so the money flowed faster.
Can earnings sustain payouts at this pace?
According to Bloomberg, the six largest banks returned over $140 billion in dividends and buybacks last year, topping the previous record set in 2019.
The foundation: driven by record trading revenue, the six banks posted their highest combined profit since 2021.
This reflects a deeper point — this round of outsized capital return is not just a regulatory loosening story. Earnings themselves are at a high, and both conditions had to hold for payouts at this scale.
What should investors watch next?
Bank of America CEO Brian Moynihan stated: "Today's results demonstrate that Bank of America has robust capital strength and will continue to invest in the company while supporting clients and a growing economy."
This means → whether banks can maintain this payout pace in the second half hinges on whether earnings continue to support current capital-surplus expectations.
In plain terms = the regulatory window is open, but how long it stays open ultimately comes down to profits.
Content is for reference only, not financial advice.