Bank of America increases dividend by 9% after US Fed stress test

BANK of America (BofA) said on Wednesday (Jul 5) it planned to increase its quarterly common stock dividend to 24 US cents per share from 22 US cents per share beginning in the third quarter of 2023. BofA, unlike other major US banks, had held back a decision on the dividend last week. Rivals JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley hiked their third-quarter dividends on Friday after sailing through the Federal Reserve’s stress test.

BofA had cited a dialogue with the Fed to understand differing results between the central bank’s stress test and the companies’ own under the Dodd-Frank Act.

BofA, the second-biggest US bank, said on Wednesday the talks are ongoing.

The Fed’s annual test showed major lenders, including BofA, have enough capital to weather a severe economic slump, paving the way for them to buy back shares and issue dividends.

Last year, BofA raised its dividend to 22 US cents a share, the highest level since the 32 US cents paid in 2008 and up from 21 US cents in 2021. REUTERS