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FBN’s Liz MacDonald on the Federal Reserve releasing results from banks’ capital distribution plans.
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Watch the Federal Reserve.
Just releasing banks' capital distribution plan results was McDonald has the very latest on this -- really affects the strategy the big banks doesn't.
Yet his -- is dividend -- -- about -- stock buybacks sixteen banks won approval to got rejected ally financial and BBT got rejected.
JPMorgan Chase and Goldman Sachs have to send back to the drawing board.
Their capital plans they're still allowed to do dividends and stock buybacks.
But they have to resubmit their capital plans by the third quarter of 2013.
So right now you're looking at these banks have been approved for dividends and buybacks worth noting his son trusses in here.
As being approved they have failed the bank stress tests last year also fifth.
The third got their dividend hike rejected last year they have been approved this year.
Think this thing with ally financial -- -- so all of that treasury.
Department F fourteen point six billion dollars.
Other breaking news here the Federal Reserve senior officials -- the London will trading loss at JPMorgan Chase did not affect its assessment of JPMorgan Chase's capital plan.
Well we're gonna give -- more after the break David there's a lot of breaking news no actually you can bet you're gonna see dividend hikes in stock buyback plans.
Rolling a gonna probably -- press releases well rolling out going forward.
We're not gonna take a break -- back because this is important news I'm just curious as to how this might affect.
Goldman Sachs and JPMorgan's plans were they planning to give more of a dividend or or buyback worst possible that thwart their plans at all -- -- -- just -- ally -- BB NT.
But JPMorgan Chase had fifteen billion dollars in stock buybacks -- thinking on Wall Street is they're gonna have to -- half.
Any plans stock buyback that they were dealing let me give you more news to Morgan Stanley just barely squeaked by -- their capital plan approval by the -- served.
They were right down there with Goldman Sachs and JPMorgan Chase.
What the veterans service objected to with the what they're calling it capital planning -- -- process they didn't like the way that the banks were going about.
Doing their plans so -- the big deal is I would say to you is ally financial and BB&T getting rejected.
BB&T did pass a stress tests last year its capital does looks solid but that better reserve and so worried about let's spend balance sheet.
You know BBT -- -- acquisition -- bought Crump insurance for example and another bank.
So there at the Federal Reserve is being very close of investing not saying what they did not like in the -- plans.
Deviancy -- but you know the fact that you see this smaller regionals getting approved as an indication.
That basically you know the banking sector is healing what's really interesting to I gotta tell -- David is the fact that American Express to breaking news here is.
American Express resubmitted.
Their capital plan before the announcement today.
What apple was a third survey -- reserve initially rejected the American Express is dividend hike.
They went back and cut it and so they did get approvals and that's interesting -- your product gonna -- -- dividend hike coming out of our American Express moment.
Are okay we already saw was at deviancy your -- that we just saw the after hours trade they are trading down.
Presumably as a result of this news after hours I'm just wondering what the betting is on JPMorgan and chase in fact there we got -- -- BB NT.
We stock closed at 31 dollars 73 cents is now down to thirty there is JPMorgan closed at 51 flat.
And it is now trading just to tick below so it's not really affecting the value that much that Britain what that says to me is it's not gonna effect their their strategy going forward.
Yeah -- -- -- shut in -- David here's what's -- about JPMorgan Chase and Goldman Sachs the Federal Reserve is very clear on the phone call the question was put to them.
OK so these guys have to go back to the drawing board and they basically have to have some reason it back to the Federal Reserve.
If they want to do it dividend or stock buyback for those two banks they can still go ahead and do dividend increases -- stock buybacks.
They have the reason that the plans though that the third quarter when he thirteen.
If the Federal Reserve doesn't like what they see they can still at that point in time in six -- signed.
Reject Goldman Sachs dividend -- or stock buyback or reject JPMorgan's that.
And my next hour break in but we just got breaking news here that Capital One that is increasing its dividend by about thirty cents a -- -- so Capital One immediately.
Jumping on the bandwagon -- -- like hey look we're -- we're gonna increase our dividend.
That's that's -- that's and you know it's not affecting stock after hours that much but it certainly doesn't hurt -- -- it.
Doesn't -- these stocks Capital One has been approved by the Federal Reserve the Capital One seems to -- first out of the box the bum bank that was first out of the box and David.
With Citigroup right up to Citigroup basically the but gave that really solid performance -- less stress test results last week.
Citigroup said it and it repurchased one point two billion dollars in -- but you know what's interesting here David.
Is that what you do the math it's only 125 million shares through Citigroup that's a drop in the bucket the other three billion shares outstanding.
A 25 million hardly affects the float of that of the banks like while -- This agony -- -- -- just got another -- break it is American Express is us right now 15%.
Buy back of their shares is that right produce L we have heard it doesn't mean percent by the actor -- -- -- huge.
Huge purchased by American Express.
After they got -- go -- by the Fed.
That's exactly right dividend this is a name of the game this is what the banks want to do they want to buy back stock because they issue a lot of stock.
During the financial crisis when they were under duress and so what they're facing with is basically.
Not just shareholder dilution and angry shareholders but EPS solutions of buying back that's got will improve the earnings per share performance -- American Express.
And for Citigroup and a marginal basis.
This could really Chalabi we talked about whether financials had any more room to grow this shows where they do have room to grow particularly their buyback their shares they dilute that pool of stock out there this -- -- this -- values go up.
Even more at least that's what they're better in this value right -- Freddie Mac-Gray stuff thank you for the breaking news or appreciate it.
