JPMorgan (JPM), Wells Fargo (WFC), Goldman Sachs (GS) Lead $22 Billion in Payouts, Buybacks

JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and Goldman Sachs (NYSE:GS) will give bank investors a boost of about $22 billion on an annual basis after given the go ahead by the Federal Reserve to buy back shares and boost dividends.

Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) were among six lenders that disclosed more than $16.2 billion in share buybacks and $5.4 billion of annualized dividend increases Friday, according to data compiled by Bloomberg. The banks made their announcements after learning they passed a Federal Reserve review of their financial health.

“This is a real signal by the Federal Reserve to tell the world that the U.S. banking system is back,” said Gerard Cassidy, an analyst at RBC Capital Markets. “We are going to see, in our view, over the next three years, a dramatic increase in the dividends.”

Regulators are allowing banks to begin restoring dividends that were cut in early 2009 during the financial crisis, when investors and analysts were speculating some banks might need to be nationalized. Losses tied to home mortgages, commercial real estate and business lending drained capital, leading to more than 300 failures.




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