Big US banks' buybacks and dividends may not reflect financial health
The money comes from the preferred shares the banks are selling at a relatively high dividend
Add BT as a preferred source
DeeperDive is a beta AI feature. Refer to full articles for the facts.
New York
BIG US banks, including JPMorgan Chase & Co and Citigroup Inc, are expected to win Federal Reserve backing later on Wednesday to buy back more shares and increase their dividends in the coming year, but the approvals may be as much about the institutions' financial engineering as any improvement in their health.
Much of the money for buybacks and higher dividends is coming from the banks issuing securities known as preferred shares. These shares are a type of equity that pays regular, relatively high dividends. To investors, they look a lot like bonds that pay interest. But for regulators, preferred shares serve as a cushion against any future losses, in part because they never have to be repaid.
Share with us your feedback on BT's products and services
TRENDING NOW
Japan stocks look set for new highs in 2025 on earnings, reform
Beijing’s calculated silence on the Iran war
China pips the US if Asean is forced to choose, but analysts warn against reading it like a sports result
Richard Eu on how core values, customers keep Singapore’s TCM chain Eu Yan Sang relevant
