Banks Expected to Dole Out Dividends Again

Rising profits should lead to 'milestone' soon: Analysts
By Kevin Spak,  Newser Staff
Posted Jan 14, 2011 2:22 PM CST
In this file photo taken April 13, 2010, the door of a branch of Chase in New York, is shown.   (AP Photo/Richard Drew, file)

(Newser) – America’s top banks are expected to report yet another quarter of profits, putting them in prime position to start paying dividends again, analysts tell the New York Times. JPMorgan got things rolling today by reporting a 47% increase in profits, notes the Wall Street Journal. It will be followed by Bank of America, Citigroup, Goldman Sachs, and Wells Fargo next week. Analysts expect their combined 2010 profits to come in at around $70 billion, up from $12.5 billion in 2009.

This week, the Fed began another round of “stress tests” on the banks. If the results are good, regulators will give banks the OK to reinstate dividends, putting money back in the pockets of investors, pension funds, and retirees. “It’s a significant milestone,” said one analyst. “The return of dividends signals the banks are back, and the Federal Reserve wants to inspire confidence in the marketplace so that banks lend more.”

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