This is how much the largest 20 U.S. banks raised dividends after stress tests

By Philip van Doorn

Banks increasing payouts the most included Wells Fargo and Bank of New York Mellon.

With another round of Federal Reserve stress tests in the books, many large U.S. banks have already announced dividend increases. Analysts at Jefferies compiled the data in a report sent to clients early Monday.

Among the largest 20 banks by total assets, 12 have announced increases to their quarterly dividends since the Fed completed its stress tests last week.

Coverage of stress tests by Steve Gelsi:

Analysts praise banks and puzzle over Fed after stress testsFed stress tests fall short, finance professor says

There are differences of opinion over how effectively the Fed can test the large banks' ability to withstand severe economic stress, but investors can take comfort that regulators have approved the dividend-payout increases and any stock-buyback authorizations the banks have announced. No investor wants to see a dividend cut, and corporate executives don't want to cut the payouts either. If a bank needs to preserve capital during an unanticipated spike in loan losses, the first lever it will pull will be to stop repurchasing shares.

Here are dividend yields for the largest 20 banks, sorted by their total assets as of March 31. The yields are based on the most recent available information compiled by Jefferies, with more data supplied by FactSet. Please read the clarifying notes below the table.

   Bank                                     Ticker   Total assets ($bil)  June 28 price  New quarterly dividend  First-quarter dividend  Dividend yield based on most recent payout information 
   JPMorgan Chase & Co.                      JPM                  $4,091        $202.26                  $1.250                  $1.150                                                   2.47% 
   Bank of America Corp.                     BAC                  $3,274         $39.77                  $0.260                  $0.240                                                   2.62% 
   Citigroup Inc.                             C                   $2,433         $63.46                  $0.560                  $0.530                                                   3.53% 
   Wells Fargo & Co.                         WFC                  $1,959         $59.39                  $0.400                  $0.350                                                   2.69% 
   Goldman Sachs Group Inc.                   GS                  $1,698        $452.32                  $3.000                  $2.750                                                   2.65% 
   Morgan Stanley                             MS                  $1,229         $97.19                  $0.925                  $0.850                                                   3.81% 
   U.S. Bancorp                              USB                    $684         $39.70                  $0.500                  $0.490                                                   5.04% 
   PNC Financial Services Group Inc.         PNC                    $566        $155.48                  $1.600                  $1.550                                                   4.12% 
   Truist Financial Corp.                    TFC                    $535         $38.85                  $0.520                  $0.520                                                   5.35% 
   Capital One Financial Corp.               COF                    $482        $138.45                  $0.600                  $0.600                                                   1.73% 
   Charles Schwab Corp.                      SCHW                   $469         $73.69                  $0.250                  $0.250                                                   1.36% 
   Bank of New York Mellon Corp.              BK                    $435         $59.89                  $0.470                  $0.420                                                   3.14% 
   State Street Corp.                        STT                    $338         $74.00                  $0.760                  $0.690                                                   4.11% 
   American Express Co.                      AXP                    $269        $231.55                  $0.700                  $0.700                                                   1.21% 
   Citizens Financial Group Inc.             CFG                    $220         $36.03                  $0.420                  $0.420                                                   4.66% 
   First Citizens Bancshares Inc. Class A   FCNCA                   $218      $1,683.61                  $1.640                  $1.640                                                   0.39% 
   M&T Bank Corp.                            MTB                    $215        $151.36                  $1.350                  $1.300                                                   3.57% 
   Fifth Third Bancorp                       FITB                   $215         $36.49                  $0.370                  $0.350                                                   4.06% 
   Huntington Bancshares Inc.                HBAN                   $194         $13.18                  $0.155                  $0.155                                                   4.70% 
   Ally Financial Inc.                       ALLY                   $193         $39.67                  $0.300                  $0.300                                                   3.02% 
                                                                                                                                                                    Sources: Jefferies, FactSet 

Click the tickers for more about each bank, including news coverage, stock charts, estimates and financials.

Click here for Tomi Kilgore's guide to the wealth of information available for free on the MarketWatch quote page.

The "new quarterly dividend" column includes the most recent available information. Among the eight banks on the list whose dividend yields are unchanged from those based on first-quarter payouts, only Truist, headquartered in Charlotte, N.C., announced that its dividend payout would be unchanged. The other seven have made no dividend announcements yet.

More about the data:

Wells Fargo raised its quarterly dividend by 14% - the biggest increase on the list. BNY Mellon followed with a 12% increase, while its rival trust bank State Street of Boston raised its payout by 10%.Truist has the highest dividend yield on the list, at 5.35%. The company's share price was up 5% for 2024 through Friday, excluding dividends.U.S. Bancorp of Minneapolis has the second-highest dividend yield on the list, at 5.04%. Its share price was down 8% for 2024 through Frida. Among the largest 20 U.S. banks, the only other with a year-to-date price decline was State Street, down 4%.

So far this year, the S&P 500 bank-industry group of stocks has returned 16.9% with dividends reinvested, weighted by market capitalization, according to FactSet. The S&P 500 ETF Trust SPY has returned 15.2%.

Don't miss: This bank stock's unique combination makes it a bargain

-Philip van Doorn

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07-01-24 0845ET

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