Fed set to say whether approves bank plans to return money to investors


The Federal Reserve is due to say today whether it approves banks' plans to pay dividends and/or repurchase stock. The process is spread out over a week so that banks can alter their programs if they don't receive Fed authorization.

Last year, the Fed told JPMorgan (JPM) and Goldman Sachs (GS) to change their capital-allocation plans.

The Fed's decision will come a week after it said that 29 out of 30 banks had passed its stress tests.

Relevant tickers include C, MS, BAC, BK, AXP, COF, C, FITB, PNC, RF, STT, STI, USB, WFC, ZION.

ETFs of interest: KBE, KBWB, KRE, KCE, KBWC, XLF, IYF, PFI, VFH, RYF, RWW, FAS, UYG, FAZ, SKF, SEF, IAI, FXO, PSCF, KBWD, KBWB, IYG, FINU, FINZ.

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Comments (15)
  • Donjean4
    , contributor
    Comments (8) | Send Message
     
    I like the way BAC passed, because they barely did. But that is good enough and they have time to improve which is what they are doing. I infact they were number 29 out of 30 banks but number 30 did not pass.
    26 Mar 2014, 04:55 AM Reply Like
  • 808Amigo
    , contributor
    Comments (455) | Send Message
     
    Yeah, everyone seems to assume passing by large margin is best but the opposite (passing as narrowly as possible) could be the better managed result. After all, the result of the test is absolutely no surprise to banks' officers so why deploy excess reserves non-productively?
    26 Mar 2014, 07:57 AM Reply Like
  • thenoffya
    , contributor
    Comments (164) | Send Message
     
    "Yeah, everyone seems to assume passing by large margin is best but the opposite (passing as narrowly as possible) could be the better managed result. "

     

    Sure, barely surviving and needing a bunch of government handouts is "better managed". Yeah, they don't need them now, but the whole point of the stress tests is to make sure they NEVER need them again. I think being further from the dividing line between surviving and not surviving means better management. Having the ability to make money and still "deploying (sic) reserves non-productively" means, to me, that you are a better managed bank.
    26 Mar 2014, 08:40 AM Reply Like
  • AJG2
    , contributor
    Comments (32) | Send Message
     
    Sorry, but your not thinking about how to manage money. You just don't understand the idea of asset management. You don't keep money in reserve when you don't need to!
    26 Mar 2014, 11:57 AM Reply Like
  • thenoffya
    , contributor
    Comments (164) | Send Message
     
    "You don't keep money in reserve when you don't need to! "

     

    Exactly! Then when you NEED it, you don't have it, and you fail. Congrats! You are now a failure!

     

    This isn't about asset management, it's about not failing as a bank. Escaping by the skin of your teeth in good times only means bad management or straight stupidity. Escaping by the skin of your teeth in bad times only means you were lucky the situation didn't get worse.
    26 Mar 2014, 12:58 PM Reply Like
  • AJG2
    , contributor
    Comments (32) | Send Message
     
    You have a weird view of what is success or failure.
    They are making a lot of money. Very successful. They are not failing in any facet! Your not being very realistic! Why the sour attitude, it's not necessary in this case. BAC will be making ton's on money going forward for all concerned, but I guess just not YOU!
    Think about what your saying! This is all about managing money in the most profitable way! "LOL"
    27 Mar 2014, 12:32 PM Reply Like
  • 808Amigo
    , contributor
    Comments (455) | Send Message
     
    Granted the word "deploying" has a military connotation, but grammatically is correct so why the "(sic)"?
    27 Mar 2014, 10:26 PM Reply Like
  • june1234
    , contributor
    Comments (3865) | Send Message
     
    Wonder is they'll pass? lol
    26 Mar 2014, 06:25 AM Reply Like
  • GregT
    , contributor
    Comments (690) | Send Message
     
    One of the big capital return questions is about solidly passing through the 30% payout ratio limit on dividends that the Fed had imposed during the financial crisis? Last year Wells Fargo pushed slightly over the 30% amount. Will they be able to go to 35% this time around? That could bring their dividend to 1.40 annually for a 16% increase. And the yield would jump to almost 2.9%.
    26 Mar 2014, 07:18 AM Reply Like
  • Phr3d
    , contributor
    Comments (371) | Send Message
     
    Buybacks are still the BI-ig question, with exec stating that they are serious about them. We all know that they can do both, but the nursemaid is unlikely to agree -
    it will be an Intrestin' day.
    26 Mar 2014, 10:21 AM Reply Like
  • Phr3d
    , contributor
    Comments (371) | Send Message
     
    True to their word as always - looks like 300M shares retired after compensation, Thank You John and Team!
    high side of 'riding the line', RE div increase, but wholly agree with their decision to coat-tail a bit longer, no real need to threaten.
    Giving a dime of the 'buck-fitty' to buyback is wise and was telegraphed Q4.
    IMHO, of course..
    26 Mar 2014, 07:37 PM Reply Like
  • keallen
    , contributor
    Comments (428) | Send Message
     
    Somebody please tell me how the Fed has authority to tell private institutions whether they can have a buyback or increase dividends. Am I missing something?
    26 Mar 2014, 10:56 AM Reply Like
  • mphill47
    , contributor
    Comments (588) | Send Message
     
    Welcome to Socialistic Capitalism.
    26 Mar 2014, 11:43 AM Reply Like
  • 11146471
    , contributor
    Comments (1339) | Send Message
     
    Because they pay when the are going broke maybe?
    26 Mar 2014, 02:44 PM Reply Like
  • ThreeWest
    , contributor
    Comments (2) | Send Message
     
    This is all about taking action that will drive the price up and generate better ratios. The top management of every bank has piled up huge amounts of compensation payable through stock purchases. Buy-backs will increase near term stock price and produce better earnings per share. Increased dividends will also drive up stock price. Part of the end game is also having highly valued stock for acquisitions. PE ratio of 10 and ROE of 14 is hindering acquisition activity and the larger community banks are gaining considerable market share. When the larger regionals have more valuable currency (stock) then we can expect the next wave of mergers to begin.
    26 Mar 2014, 12:45 PM Reply Like
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