Jim Cramer: Focus on Bank Earnings After Wells Fargo Dividend Cut
Wells Fargo announced it will cut its dividend, breaking rank with all of Wall Street’s other big banks, following the Federal Reserve’s move to set new restrictions on dividend payouts to shareholders.
The fourth-biggest U.S. bank by assets announced it plans to cut its dividend from the 51 cents it paid in each of the four most recent quarters. The bank said it would announce its payout when it reports second-quarter earnings on July 14.
This is the first time since the financial crisis that a major U.S. bank has slashed its quarterly reward to shareholders, though it also comes as the Fed backstops banks and other lenders with almost free money to keep cash flowing through the economy amid the coronavirus pandemic and ensuing economic collapse.
“There remains great uncertainty in the path of the economic recovery and though it’s difficult to accurately predict the ultimate impact on our credit portfolio, our economic assumptions have changed significantly since last quarter,” said Wells Fargo CEO Charlie Scharf.
Jim Cramer said, "We have to see what exactly the banks report."