Latest news with #StressCapitalBuffer
Globe and Mail
07-07-2025
- Business
- Globe and Mail
Does Capital One's Lower SCB Reflect Robust Capital Discipline?
Last week, Capital One COF announced that its preliminary Stress Capital Buffer (SCB) has been set at 4.5% by the Federal Reserve. This will be effective from Oct. 1, 2025, through Sept. 30, 2026. The requirement, determined through the 2025 Comprehensive Capital Analysis and Review (CCAR), is lower than the previously disclosed SCB of 5.5% in effect through Sept. 30, 2025. This preliminary SCB is pending final confirmation by the Fed, which is expected to be announced by Aug. 31, 2025. The development strengthens Capital One's financial position by increasing its capital flexibility. With less capital constrained by regulatory buffers, the company can allocate resources more efficiently toward strategic priorities, such as growth initiatives like acquisitions, product innovation and potential shareholder returns, including dividends and share repurchases. This optimized capital deployment supports higher returns on equity and bolsters long-term profitability. In April 2025, the Fed issued a notice of proposed rulemaking to revise how the SCB is calculated. Under the proposal, SCB requirements would be based on the average of stress test results over two consecutive years, rather than a single year. As a testament to its financial strength, in May, Capital One acquired Discover Financial in an all-stock deal valued at $35.3 billion, reshaping the credit card industry landscape, creating a behemoth and unlocking substantial value for shareholders. The company is now well-placed to capture a bigger share of spending on cards. Also, since July 2021, Capital One has maintained its quarterly dividend of 60 cents per share, with a payout ratio currently at 16% of earnings. Further, it has a share repurchase program in place. As of March 31, 2025, nearly $3.88 billion worth of repurchase authorization remained. How Capital One's Peers Fared in Terms of SCB A total of 22 financial institutions, including Capital One, were under this year's CCAR. Similar to COF, JPMorgan JPM noted that under the current SCB framework, the Fed has set its preliminary SCB requirement at 2.5%. This is lower than JPMorgan's previous SCB of 3.3%. Post-clearing the 2025 stress test, the company announced enhanced capital plans. JPMorgan intends to hike its quarterly dividend by 7.1% to $1.50 per share and authorized a share repurchase program worth $50 billion, which became effective as of July 1. Further, under CCAR, this year, Goldman 's GS SCB set by the central bank is lower than the previous year. The company's SCB will be 3.4% from Oct. 1, 2025, through Sept. 30, 2026. At present, Goldman's SCB is 6.1%. Like JPM, Goldman cleared this year's stress test and announced a raise in its quarterly dividend. The company plans to increase its dividend by 33.3% to $4 per share. Capital One's Price Performance and Zacks Rank This year, shares of Capital One have gained 23.8%, outperforming the industry 's rally of 21.9%. COF currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> 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 The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Capital One Financial Corporation (COF): Free Stock Analysis Report
Globe and Mail
01-07-2025
- Business
- Globe and Mail
American Express Announces 2025 Preliminary Stress Capital Buffer Requirement
American Express Company (NYSE: AXP) today announced that the Federal Reserve set the company's preliminary Stress Capital Buffer ('SCB') requirement at 2.5 percent, effective October 1, 2025 through September 30, 2026, based on the results of the 2025 Comprehensive Capital Analysis and Review process. This is the minimum SCB requirement under the applicable regulations and is consistent with American Express' previously disclosed SCB in effect through September 30, 2025. 'The results of this year's stress test once again reaffirmed our strong capital position and the earnings power of our resilient business model,' said Christophe Le Caillec, Chief Financial Officer. 'We remain focused on executing our disciplined capital allocation strategy, prioritizing investments in our business to drive sustainable long-term growth, while maintaining a strong balance sheet and returning excess capital to our shareholders.' As previously disclosed, American Express increased its quarterly dividend on common shares by 17 percent to $0.82 per share beginning with the first quarter 2025 dividend declaration, and returned $5.4 billion of capital to shareholders via share repurchases during the 12 months ended March 31, 2025. The SCB requirement is subject to final confirmation by the Federal Reserve, which is expected by August 31, 2025. ABOUT AMERICAN EXPRESS American Express (NYSE: AXP) is a global, premium payments and lifestyle brand powered by technology. Our colleagues around the world back our customers with differentiated products, services and experiences that enrich lives and build business success. Founded in 1850 and headquartered in New York, American Express' brand is built on trust, security, and service, and a rich history of delivering innovation and Membership value for our customers. With a hundred million merchant locations on our global network in around 200 countries and territories, we seek to provide the world's best customer experience every day to a broad range of consumers, small and medium-sized businesses, and large corporations. For more information about American Express, visit and CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements, which are subject to risks and uncertainties, contain words such as 'expect,' 'intend,' 'plan,' 'aim,' 'will,' 'may,' 'should,' 'could,' 'would,' 'continue' and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Actual results may differ from those set forth in the forward-looking statements due to a variety of factors, including those described in American Express' Annual Report on Form 10-K for the year ended December 31, 2024 and its other reports filed with the SEC. The company undertakes no obligation to update or revise any forward-looking statements.
Yahoo
01-07-2025
- Business
- Yahoo
American Express Announces 2025 Preliminary Stress Capital Buffer Requirement
NEW YORK, July 01, 2025--(BUSINESS WIRE)--American Express Company (NYSE: AXP) today announced that the Federal Reserve set the company's preliminary Stress Capital Buffer ("SCB") requirement at 2.5 percent, effective October 1, 2025 through September 30, 2026, based on the results of the 2025 Comprehensive Capital Analysis and Review process. This is the minimum SCB requirement under the applicable regulations and is consistent with American Express' previously disclosed SCB in effect through September 30, 2025. "The results of this year's stress test once again reaffirmed our strong capital position and the earnings power of our resilient business model," said Christophe Le Caillec, Chief Financial Officer. "We remain focused on executing our disciplined capital allocation strategy, prioritizing investments in our business to drive sustainable long-term growth, while maintaining a strong balance sheet and returning excess capital to our shareholders." As previously disclosed, American Express increased its quarterly dividend on common shares by 17 percent to $0.82 per share beginning with the first quarter 2025 dividend declaration, and returned $5.4 billion of capital to shareholders via share repurchases during the 12 months ended March 31, 2025. The SCB requirement is subject to final confirmation by the Federal Reserve, which is expected by August 31, 2025. ABOUT AMERICAN EXPRESS American Express (NYSE: AXP) is a global, premium payments and lifestyle brand powered by technology. Our colleagues around the world back our customers with differentiated products, services and experiences that enrich lives and build business success. Founded in 1850 and headquartered in New York, American Express' brand is built on trust, security, and service, and a rich history of delivering innovation and Membership value for our customers. With a hundred million merchant locations on our global network in around 200 countries and territories, we seek to provide the world's best customer experience every day to a broad range of consumers, small and medium-sized businesses, and large corporations. For more information about American Express, visit and CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements, which are subject to risks and uncertainties, contain words such as "expect," "intend," "plan," "aim," "will," "may," "should," "could," "would," "continue" and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Actual results may differ from those set forth in the forward-looking statements due to a variety of factors, including those described in American Express' Annual Report on Form 10-K for the year ended December 31, 2024 and its other reports filed with the SEC. The company undertakes no obligation to update or revise any forward-looking statements. Source: American Express Company Location: Global View source version on Contacts Media:Amanda Miller, +1.408.219.0563Deniz Yigin, +1.332.999.0836 Investors/Analysts:Kartik Ramachandran, +1.212.640.5574Amanda Blumstein, +1.212.640.5574 Sign in to access your portfolio
