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JPMorgan Chase (JPM.N) could pay an annual dividend of 75 cents to a dollar once the Federal Reserve completes stress tests of the largest U.S. banks and gives its approval, Chief Executive Officer Jamie Dimon said on Tuesday.
The bank could raise its dividend as soon as the second quarter 2011 if the Fed approves, Dimon said in an interview with cable news channel CNBC after his keynote address at the JPMorgan Chase Healthcare Conference.
Dimon's comments come as the 19 largest U.S. banks -- including JPMorgan and rivals Bank of America Corp (BAC.N) and Citigroup Inc (C.N) -- are undergoing a second series of stress tests by the Fed since the 2008 financial crisis.
The Fed is gauging whether banks have enough capital to weather another economic shock, and are similar in structure to the first stress test in 2009.
If a bank passes, investors are expecting dividends to increase shortly thereafter.
"We will be adequately capitalized even in a stressed situation, so when they finish these tests we're hopeful we'll be allowed to go back to paying normal dividends," Dimon told an audience of investors at a bank-sponsored healthcare conference.
JPMorgan currently pays an annual dividend of 20 cents, with a dividend yield of 0.4 percent.
A dividend of 75 cents to a dollar would generate a 1.7 percent to 2.2 percent yield.
The bank paid a 38 cents per share quarterly dividend in 2008 and the first quarter of 2009.
While banks are unlikely to return to large dividend payouts made before the financial crisis as profits soared, bank CEOs now are typically targeting a dividend payout equal to 30 percent of earnings.
The bank could raise its dividend as soon as the second quarter 2011 if the Fed approves, Dimon said in an interview with cable news channel CNBC after his keynote address at the JPMorgan Chase Healthcare Conference.
Dimon's comments come as the 19 largest U.S. banks -- including JPMorgan and rivals Bank of America Corp (BAC.N) and Citigroup Inc (C.N) -- are undergoing a second series of stress tests by the Fed since the 2008 financial crisis.
The Fed is gauging whether banks have enough capital to weather another economic shock, and are similar in structure to the first stress test in 2009.
If a bank passes, investors are expecting dividends to increase shortly thereafter.
"We will be adequately capitalized even in a stressed situation, so when they finish these tests we're hopeful we'll be allowed to go back to paying normal dividends," Dimon told an audience of investors at a bank-sponsored healthcare conference.
JPMorgan currently pays an annual dividend of 20 cents, with a dividend yield of 0.4 percent.
A dividend of 75 cents to a dollar would generate a 1.7 percent to 2.2 percent yield.
The bank paid a 38 cents per share quarterly dividend in 2008 and the first quarter of 2009.
While banks are unlikely to return to large dividend payouts made before the financial crisis as profits soared, bank CEOs now are typically targeting a dividend payout equal to 30 percent of earnings.
