A check of payout ratios allowed by CCAR process


Count Credit Suisse's Moshe Orenbuch as surprised about the Fed's denial of Citigroup's (C -0.5%) capital return plan. Maybe Citi is just too tough for regulators to get their arms around as it is the most complicated of all the bank holding companies.

Included in the Credit Suisse report is this handy chart of dividends, buybacks, and payout ratios for all of the CCAR banks for 2013 and 2014. Things are loosening up - the median payout ratio (includes dividends and buybacks) this year of 71% compares to 59% in 2013. The dividend payout ratio rises to 26% from 23%.

It helps to be smaller - among the TBTFs, Citi's payout ratio is just 8%, BofA (BAC) 37%, JPMorgan (JPM) 56%, Morgan Stanley (MS) 41%. Wells Fargo is above the median though, being allowed a payout of 79%.

The regionals (KRE), trust banks, and credit card companies - for the most part - were all allowed payout ratios above the median.

The strongest capital returns vs. CS's expectations are those for BNY Mellon (BK), Capital One (COF), KeyCorp (KEY), Huntington Bancshares (HBAN), PNC Financial, and Wells Fargo.

ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, AIRR

From other sites
Comments (4)
  • sethmcs
    , contributor
    Comments (3550) | Send Message
     
    Government picking winners and losers again.
    28 Mar 2014, 11:59 AM Reply Like
  • Hello Again 83
    , contributor
    Comments (683) | Send Message
     
    Business does better when government stays out of the way. If a business is going to fail let it fail. If it is going to succeed let is succeed. Stay out of the way and let nature takes its course.
    28 Mar 2014, 12:13 PM Reply Like
  • herschfields
    , contributor
    Comments (126) | Send Message
     
    The evolutionary attitude of "let happens, what happens" is really great when we try and explain the genetic process, but this is not applicable nor acceptable in the financial processes which has made America's economic structure the greatest in the world.
    28 Mar 2014, 12:35 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11177) | Send Message
     
    Citi will just build capital until they are allowed to payout $3 per share in 2019 (my estimate).

     

    Going to be a nice retirement income!

     

    Patience is needed.
    29 Mar 2014, 10:25 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs