JPMorgan Chase (NYSE:JPM) on Tuesday lifted its quarterly dividend by 16%, to 30 cents a share, and authorized a new $15 billion stock repurchase program.
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The New York-based bank lifted its dividend by a nickel, payable on April 30 to shareholders of record on April 5. Its shares spiked more than 7% to $43.40 on the news, helping to propel the broader stock market higher.
JPMorgan CEO Jamie Dimon said the bank expects to generate “significant capital and deploy that capital” to benefit shareholders.
JPMorgan’s board authorized a new equity buyback program of $15 billion, which replaces an earlier $15 billion program that had about $6.05 billion remaining.
The bank is authorized to buy back up to $12 billion in 2012 and another $3 billion through the end of the first quarter of 2013. It expects to buy back at least the same amount of shares it issues for employee stock-based incentive awards.
Dimon said the company intends to repurchase equity only when it is generating more capital than it needs to fund organic growth and when it thinks the investment will provide “excellent value” to existing shareholders.
The announcement comes as regulators ready to publicly release stress test results for the nation's largest banks on Tuesday at 4:30 PM ET. The Fed was initially supposed to release those results on Thursday.
The increased dividend and stock buyback is reportedly a reflection of Dimon getting wind that JPMorgan passed the Fed's stress tests.