Morgan Stanley said it would double its dividend and increase the size of its share buyback program to $12 billion after the US Federal Reserve eased restrictions on shareholder payouts by major banks last week.
The bank will increase its quarterly dividend in common stock from 35 cents to 70 cents per share and will repurchase up to $2 billion more of its shares over the next 12 months, after previously committing to a buyback program of up to $10 billion.
“The board of directors has approved a 100 percent increase in our dividend and an increase in our share repurchase program to $12 billion,” said CEO James Morgan, adding that the bank “had built up significant excess capital in recent years and now has a of the largest capital buffers in the sector”.
Shares of Morgan Stanley gained 3 percent in after-hours trading in New York.
Morgan Stanley is the first of several major US banks to indicate how much money they plan to return to shareholders after Thursday’s release of the results of the Fed’s “stress tests”. The central bank concluded that the 23 banks involved in the exercise could incur nearly $500 billion in combined losses and still be able to comfortably meet capital requirements.
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