Analysts Compare JPMorgan, Citigroup, Other Big Banks' Capital Plans To Expectations

CLSA Americas Research pointed out a few major keys from the stress test aftermath and the big banks plans to return profits to shareholders.

The stress test has for the past six years aimed to examine large financial institutions’ ability to handle macroeconomic, crisis-level events. The results released by the Federal Reserve Wednesday pertained particularly to the banks’ liquidity and how their capital plans would affect their ability to stay flush with enough cash if market conditions swung negative unexpectedly.

How 5 Big Banks Performed

Here are key takeaways from five of the largest banks:

JPMorgan Chase & Co. (NYSE: JPM): 48 percent increase in capital return year-over-year, share buyback of $10.6 billion vs $7.7 billion estimate, no dividend change.

Citigroup Inc (NYSE: C): 51 percent increase in capital return, a total return of $10.5 billion vs $9.5 billion estimate, which entailed both buybacks an increased dividend.

Related Link: Stress Test Finale: Everything You Need To Know About Banks Returning Profits To Shareholders

Bank of America Corp (NYSE: BAC): 44 percent increase in capital return, from higher buybacks (from $5.2 billion last year to $8 billion) and a dividend that was increased, though its payout ratio still lags behind its peers.

Wells Fargo & Co (NYSE: WFC): Wells kept the details of its capital plan close to the vest after winning the Fed’s approval. While no increase to the dividend was announced Wednesday, it has bumped it up twice over the course of the past year.

Morgan Stanley (NYSE: MS): Its capital return was in-line with street expectations, but process issues were revealed. Capital returns will include a 40 percent increase in buybacks and a 33 percent increase in its dividend. It won only conditional approval of its plan from the Fed, meaning it will have to fix process problems by the end of the year.

One More Name

One big bank that won approval but has still issued no details is Goldman Sachs Group Inc (NYSE: GS), which did not need a “mulligan,” as it has two times before. A “mulligan” in this context refers to the fact that if any of the banks’ capital levels fall below what the Fed views as a minimum allowance, the Fed gives them a one-time shot at scaling back their plan to make sure they stay above the minimum — a requirement for passing the test.

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