Latest news with #CET1
Globe and Mail
02-07-2025
- Business
- Globe and Mail
Will BAC's Intended Dividend Hike Boost Investor Confidence?
After clearing the Federal Reserve's 2025 stress test, Bank of America BAC has announced plans to increase its quarterly common stock dividend 7.7% to 28 cents per share beginning third-quarter 2025. This year, all 22 banks that were tested have passed the stress test, given that the 2025 scenario used to test the banks was less severe than last year. The current scenario modelled a 10% unemployment rate, a 33% drop in home prices, a 30% decline in commercial real estate prices, an 8% contraction in GDP and a 50% equity market decline. The aggregate simulated losses across the group totaled more than $550 billion. Yet, banks remained well-capitalized with common equity tier 1 (CET1) ratios far above the 4.5% minimum. Per the results, BAC's preliminary stress capital buffer (SCB) would improve 70 bps to 2.5% and its CET1 minimum requirement would be 10%, effective Oct. 1, 2025. However, if the Fed's proposed modifications to the SCB calculation are adopted, Bank of America's SCB would be 2.7% and its CET1 minimum requirement is 10.2%, effective Jan. 1, 2026. Currently, BAC has a payout ratio of 31% and its annual dividend yield is 2.20%. After clearing the 2024 stress test, the company increased its quarterly dividend 8.3% to 26 cents per share, following a 9.1% hike in 2023, a 4.8% rise in 2022 and 17% hike in 2021. BAC also has a share repurchase plan in place. In July 2024, the company authorized a $25-billion stock repurchase program, effective Aug. 1. As of March 31, 2025, $14.4 billion worth of authorization remained available. Moreover, as of March 31, 2025, Bank of America had total debt worth $721.9 billion and cash and cash equivalents of $273.6 billion. Given a decent liquidity position and strong balance sheet, BAC is expected to continue to reward shareholders with efficient capital deployments. Capital Deployment Plans of BAC's Peers Like BAC, JPMorgan JPM has announced that it intends to increase its quarterly common stock dividend 7.1% to $1.50 per share for the third quarter of 2025. Also, JPM's board of directors authorized a share repurchase program worth $50 billion, effective July 1, 2025. After clearing last year's stress test, JPMorgan had authorized a repurchase program of $30 billion. As of March 31, 2025, $11.7 billion in authorization remained available. Moreover, in March 2025, the Wall Street giant raised its quarterly dividend 12%, following a 9% hike in September 2024. Morgan Stanley MS announced that it would increase its quarterly dividend from 92.5 cents per share to $1.00 in the third quarter. Also, MS' board of directors reauthorized a multi-year common equity share repurchase program of up to $20 billion, without any expiration date. Following the clearance of the 2024 stress test, Morgan Stanley hiked its dividend by 8.8%. BAC's Price Performance, Valuation & Estimates So far this year, shares of Bank of America have gained 9.6% compared with the industry 's 18% growth. YTD Price Performance From a valuation standpoint, BAC trades at a price-to-tangible book ratio of 1.82, well below the industry average of 2.85. Price-to-Tangible Book Ratio The Zacks Consensus Estimate for BAC's 2025 and 2026 earnings indicates year-over-year growth rates of 11.9% and 16.7%, respectively. Earnings estimates have been revised marginally lower for both years over the past seven days. Expected Earnings Growth Currently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Globe and Mail
01-07-2025
- Business
- Globe and Mail
Santander Holdings USA, Inc. Announces 2025 Stress Capital Buffer
The Board of Governors of the Federal Reserve System (the 'Federal Reserve') informed Santander Holdings USA, Inc. ('SHUSA') on June 27, 2025, of SHUSA's updated stress capital buffer ('SCB') requirement, which becomes effective on October 1, 2025. SHUSA's updated SCB will be 3.4% of its common equity Tier 1 capital ('CET1'), resulting in an overall CET1 capital requirement of 7.9%. SHUSA's strong capitalization supports our planned capital actions, and the updated SCB is consistent with our long-term capital efficiency objectives. As of March 31, 2025, SHUSA maintained $5.0 billion of excess CET1 capital over the updated 7.9% capital requirement. As a Category IV firm under the Federal Reserve's tailoring rule, SHUSA was not subject to the Federal Reserve's 2025 supervisory stress test and SHUSA's results were not publicly released. SHUSA completes its own stress tests utilizing our internally developed bank holding company stress scenario as well as the scenarios provided by the Federal Reserve. In our 2025 stress testing exercise, SHUSA maintains a strong capital position under all forecasted scenarios. SHUSA's internal recessionary stress scenario includes lower interest rates, high unemployment and large shocks to used car and commercial real estate prices. Santander Holdings USA, Inc. (SHUSA) is a wholly-owned subsidiary of Madrid-based Banco Santander, S.A. (NYSE: SAN) (Santander), recognized as one of the world's most admired companies by Fortune Magazine in 2025, with approximately 175 million customers in the U.S., Europe and Latin America. As the intermediate holding company for Santander's U.S. businesses, SHUSA is the parent company of financial companies with more than 11,300 employees, 4.5 million customers, and assets of $165 billion in the fiscal year ended 2024. These include Santander Bank, N.A., Santander Consumer USA Holdings Inc., Banco Santander International, Santander Securities LLC, Santander US Capital Markets LLC and several other subsidiaries. Santander US is recognized as a top 10 auto lender as well as a top 10 multifamily bank lender and servicer, and has a growing wealth management business. For more information about Santander US, please visit
Yahoo
24-06-2025
- Business
- Yahoo
U.S. Bancorp Shows Resilience as a Consistent Dividend Payer
U.S. Bancorp (NYSE:USB) is one of the Best Dividend Leaders to Buy Now. While many bank stocks are recognized for paying dividends, only a select few are known for consistently maintaining those payments over time. U.S. Bancorp (NYSE:USB) has been rewarding shareholders with growing dividends for the past 14 years. Currently, it pays a quarterly dividend of $0.50 per share, and its dividend yield of 4.54% also catches investors' attention. An experienced banker on the trading floor, monitoring financial markets in real time. U.S. Bancorp (NYSE:USB) is one of the few major banks to stay profitable during the 2008-09 financial crisis, thanks to its strong risk management. Unlike many peers, it doesn't rely heavily on investment banking, which tends to be more volatile, making its earnings and revenue more stable and predictable. In its latest earnings report, U.S. Bancorp (NYSE:USB) saw its Common Equity Tier 1 (CET1) capital ratio rise to 10.8%, up from 10.6% at the end of 2024. Additionally, average total loans increased 2.1% year-over-year and 0.9% quarter-over-quarter. U.S. Bancorp (NYSE:USB) is the parent company of U.S. Bank National Association. As of March 31, the company holds about $676 billion in assets. Based in Minneapolis, it serves millions of customers at local, national, and global levels through a diverse range of services, including consumer, business, commercial, and institutional banking, as well as payments and wealth management. While we acknowledge the potential of USB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure. None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-06-2025
- Business
- Yahoo
Citi Retains a Neutral Rating on UBS Group (UBS) Amid Capital Considerations
UBS Group AG (NYSE:UBS) is one of the best Goldman Sachs bank stocks. On June 9, UBS maintained a Neutral rating on UBS, with a price target of CHF26.90. Analysts talked about the Swiss Federal Council's newly announced proposals, introduced following the Credit Suisse fallout and a comprehensive review of Switzerland's 'too big to fail' regulatory framework. The proposals introduce an incremental CET1 capital requirement of $26 billion, landing at the upper end of market expectations. However, the outlined transition period of six to eight years post-implementation provides UBS with a meaningful runway to meet the requirement properly. Citi analysts noted that the extended transition timeline alleviates near-term uncertainty. In their view, UBS is well-positioned to address the incremental capital requirements without disrupting its capital return strategy, including dividends and share buybacks. A close-up picture of financial documents and computers in a modern office setting. However, analysts cautioned that the proposals remain subject to consultation and legislative review, introducing potential for revisions. They also highlighted concerns around UBS's relative earnings momentum, which continues to trail peers due to sustained weakness in net interest income. UBS Group AG (NYSE:UBS) is a global financial services firm offering a wide range of solutions for individuals, businesses, and institutions, including wealth management, personal and corporate banking, asset management, and investment banking. While we acknowledge the potential of UBS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure. None. Sign in to access your portfolio
Yahoo
07-06-2025
- Business
- Yahoo
UBS bank challenges proposed capital requirement increases
UBS banking group has mostly accepted regulatory proposals issued by the Swiss government but on Friday argued against an increase in capital requirements. The measures from the Federal Council "would result in capital requirements that are neither proportionate nor internationally aligned," the bank said. The new proposals would require UBS to fully deduct investments in foreign subsidiaries, deferred tax assets on temporary differences, and capitalized software from its CET1 capital, alongside increased prudential valuation adjustments. UBS noted that the changes would force the company to hold an estimated additional $24 billion in CET1 capital, primarily due to a $23 billion deduction of its foreign subsidiaries' investments. At the group level, the CET1 capital ratio would rise to 19%, but regulatory measures misaligned with global standards could reduce it to around 17%, underrepresenting UBS's financial strength. The capital requirement increase would come on top of $18 billion already needed following UBS's acquisition of Credit Suisse-bringing the total additional CET1 capital required to $42 billion. Despite these proposed regulations, UBS Group AG maintains its target of a 15% underlying return on CET1 capital and a cost/income ratio below 70% by the end of 2026. UBS reaffirms its 2025 capital return plans, including a 10% dividend increase and share repurchases of up to $3 billion, contingent on maintaining its CET1 capital ratio target of 14%. Future capital return goals for 2026 will be disclosed with its fourth-quarter and full-year financial results for 2025. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
