WASHINGTON ( TheStreet) -- The Federal Reserve is expected to approve dividend hikes for big banks like Wells Fargo (WFC - Get Report) and JPMorgan Chase (JPM - Get Report) within the next couple of weeks.
The 19 largest U.S. banks were required to provide the Fed with detailed capital plans in January, and then incorporate a "stress test" of how banks would perform under various economic scenarios. The Fed would then approve the banks' plans, or advise them on changes, after which time the firms would be allowed to announce higher dividends.
Several big banks, including Wells, JPMorgan, U.S. Bancorp (USB), State Street (STT) and Bank of New York Mellon (BK) have been itching to raise their dividends for months and are widely expected to be among the first to announce those plans.
Other banks that are still restructuring, like Bank of America (BAC - Get Report) and Citigroup (C - Get Report), and other regional banks that are working through troubled loan books, will probably have to wait longer to announce dividend raises.In an interview with the Wall Street Journal, Wells CEO John Stumpf said he expects to receive guidance from the Fed by March 21, but isn't sure how soon after that he will be able to tell the public about the results. The other big banks whose dividend futures are tied to the stress tests are MetLife (MET - Get Report), American Express (AXP), Regions Financial (RF), SunTrust (STI), BB&T (BBT), Fifth Third (FITB), Capital One (COF), Goldman Sachs (GS), Morgan Stanley (MS), PNC (PNC) and KeyCorp (KEY). (The 19th bank, Ally Financial, is not publicly traded.) TheStreet
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