American Express (AXP), Bank of America (BAC), the Bank of New York (BK), Capital One (COF), Citigroup (C), Fifth Third Bank Corp (FITB), KeyCorp (KEY), Morgan Stanley (MS), PNC Financial Services Group (PNC), Regions Financial Corp. (RF), State Street Corp. (STT), Sun Trust Banks (STI), US Bancorp (USB) and Wells Fargo (WFC) will surely be happy to be able to announce dividend payouts and share buybacks to their shareholders as soon as possible. Many of them already have.
Ally Financial’s original plan was rejected last week, and so it is not entirely surprising that this was also the case with their revised plan. According to the Fed, the bank’s capital ratios would not meet requirements in a worst-case-scenario, nor was its capital planning process found to be sufficient.
BB&T's (BBT) rejection by the fed was much more of a surprise. Though the bank’s capital met the Fed’s threshold requirements, their dividend payout and stock buyback plans were sent back based on problems with the capital planning process. The Fed has not explained this decision, but the bank itself has said only that it would have to reconsider “unfunded lending commitments” in order to meet with regulatory requirements.
J.P. Morgan Chase (JPM) and Goldman Sachs (GS) passed, sort of, but must retool their share distribution plans by the end of the third quarter. In the meantime, their plans were given “conditional approval”, according to a senior Fed official. Failure to resubmit the plans, however, could result in them ultimately being rejected.
In afterhours trading, J.P. Morgan’s shares dipped 1.92 percent to $50.02, while Goldman’s were down 1.77 percent to 151.30. BB&T lost just over 3 percent, to $30.77.
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