Neither Ally nor BB&T are allowed to implement plans for capital deployment, and both are required to submit revised capital plans to the Fed, following "remediation" of deficiencies, the regulator said.
BB&T in a press release on Thursday said that the company "does not believe these objections are related to the company's capital strength, earnings power or financial condition." The company recently raised its quarterly dividend to $0.23 a share from $0.20. BB&T CEO Kelly King said in the press release that "we are pleased to have increased our dividend 15% in the first quarter. This reflects the strength of our financial position. We remain strongly committed to our shareholders and are proud to have one of the strongest dividend yields and highest payout rates in the industry."
Based on Thursday's closing price of $31.57, BB&T's shares have a dividend yield of 2.91%.
Ally Financial said in a press release last week that the Federal Reserve "has not provided details" on how it actually conducts the stress tests, and there have been reports that the Fed doesn't want to release too much details, out of fear that banks may manage themselves simply to pass the stress tests and have their capital plans approved."If someone games the system it means they are doing the right thing," according to White & Case Partner Ernie Patrikis, who is a former general counsel and chief operating officer of the Federal Reserve Bank of New York, and also a former deputy general counsel and alternate member of the Federal Open Market Committee. Patrikis believes that "the Fed should be more transparent about how it conducts the stress tests," and that "there should be no surprises," with companies like Ally Financial and BB&T being singled out in a regulatory press release. "I don't like the Fed approving dividends and share buybacks -- that is not the government's job," he adds. "If someone is above the minimum
- Bank of America (BAC). The quarterly dividend will remain 1 cent a share. The company was approved for common share buybacks of up to $5.0 billion, and for $5.5 billion in buybacks of preferred shares.
- Bank of New York Mellon (BK). A "15 percent increase" in the quarterly dividend from 13 cents, and up to $1.35 billion in share buybacks.
- Capital One Financial (COF). An increase in the quarterly dividend to 30 cents a share from 5 cents.
- Fifth Third Bancorp (FITB) of Cincinnati. A "potential increase" in the quarterly dividend from 10 cents, with approval for the potential repurchase of up to $750 million in trust preferred securities. The company also received approval for the potential conversion of $398 million in convertible preferred shares to common shares. If the conversions are completed, the company has Federal reserve approveal for common share buybacks totaling up to $984 million.
- JPMorgan Chase. An increase in the quarterly dividend to 38 cents a share from 30 cents, with buybacks totaling up to $6.0 billion.
- KeyCorp (KEY) of Cleveland. An increase in the quarterly dividend to 5.5 cents a share from 5 cents, and up to $426 million in share buybacks.
- Morgan Stanley (MS). The company didn't announce any increased capital return to investors, but did say that its capital plan included the "cash acquisition of the remaining 35% interest in Morgan Stanley Smith Barney," from Citigroup.
- PNC Financial Services Group (PNC) of Pittsburgh. The company said its board of directors would "consider an increase" in the dividend from 40 cents a share, at the next board meeting on April 4.
- Regions Financial (RF) of Birmingham, Ala. An increase in the quarterly dividend to 3 cents a share from 1 cents, with buybacks totaling up to $350 million. The company's plan also allows it to repurchase up to $500 million in trust preferred securities.
- State Street (STT) of Boston. An increase in the quarterly dividend to 26 cents a share from 24 cents, and up to $2.1 billion in share buybacks.
- SunTrust (STI) of Atlanta. An increase in the quarterly dividend to 10 cents a share from 5 cents, with buybacks totaling up to $200 million.
- U.S. Bancorp (USB) of Mineapolis. An increase in the quarterly dividend to 23 cents a share from 19.5 cents, and up to $2.25 in share buybacks.
- Wells Fargo (WFC). An increase in the quarterly dividend to 30 cents a share from 25 cents, and approval for "a proposed increase in common stock repurchase activity for 2013 compared with 2012," when the company's share repurchases totaled $4.0 billion.