JPMorgan, led by CEO Jamie Dimon, quintupled its dividend to 25 cents earlier this year and received the go-ahead to repurchase $8 billion of shares in 2011 out of a total $15 billion approved by the Fed.
"It's hard to tell what we're supposed to do and how we're supposed to do it," Dimon, 55, told analysts during an Oct. 13 conference call. "We'll be figuring it out, having conversations with regulators." Joe Evangelisti, a JPMorgan spokesman, declined to comment on the new test criteria.
'Great Story'
Wells Fargo CEO John Stumpf boosted the quarterly payout at the San Francisco-based bank from 5 cents to 12 cents earlier this year, and the company announced it would repurchase 200 million shares. Chief Financial Officer Timothy J. Sloan told investors Nov. 3 that he was "optimistic" the Fed would let the firm boost the payout and repurchase more shares next year.
"We look forward to the process, we've got a great story to tell," Sloan said. Ancel Martinez, a Wells Fargo spokesman, declined to comment on yesterday's announcement.
The Federal Reserve expanded its capital test to companies with at least $50 billion in assets, adding 12 banks to its list for 2012. The stress tests, officially called the Comprehensive Capital Analysis and Review, or CCAR, have become a centerpiece of the central bank's oversight of the largest financial firms.
The Fed rejected MetLife Inc.'s request to raise its dividend earlier this year, telling the New York-based insurer it had to wait until its portfolio was tested against a "revised adverse macroeconomic scenario" being developed for the 2012 tests, the company said in an Oct. 25 statement. The biggest U.S. life insurer may speed plans to shed its bank subsidiary, which subjects it to Fed oversight.
"At the end of the day, a stress test is to demonstrate to investors and the marketplace that the banks are strong and can withstand problems in their portfolios," said Fred Cannon, a bank analyst with KBW Inc. in New York. "It's all about credibility."