One of the reasons we invested in JP Morgan Chase (JPM) and Morgan Stanley (MS) is our belief that they are over capitalized. Their excess capital will eventually be returned to shareholders through buybacks and dividend increases as they continue to pass the Federal Reserve’s Comprehensive Capital and Analysis and Review (CCAR).
Goldman Sachs via Barrons believes that over the next two years we will see the big banks grow their dividends faster than any other group.
These banks will grow their dividends faster than any other sector over the next two years, concludes a recent Goldman Sachs report—once they’re given the green light after the Federal Reserve’s annual Comprehensive Capital and Analysis and Review (CCAR), due shortly.
Richard Ramsden, who heads Goldman’s financials group in global investment research, says: “Banks can grow their dividends by roughly 20% to 25% per year over the next few years, given that both payout ratios and earnings will be growing for the banking system.”