WASHINGTON (AP) — The Federal Reserve is telling some major banks whether they are healthy enough to boost stock dividends.
Banks can increase dividends if they pass “stress tests” showing that they can weather another recession.
The Fed said Friday it has completed those tests and concludes that “some firms” are expected to increase or resume dividend payments, buy back shares or repay government capital. The Fed isn’t revealing either the names or number of banks that expect to do so.
All of the 19 largest banks overseen by the Fed were subject to the examinations. Those banks include Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co.
During the financial crisis banks slashed dividends to build capital cushions. Regulators barred banks from boosting dividends without obtaining approval. Fed approval signals banks are in better financial shape.
