Observer » dividends

Bankers Violently Want to Reward Shareholders

Mike Taylor — Tue, 07 Dec 2010 17:11:22 -0400

Wells Fargo and Bank of America's CEOs are so eager to free themselves from their short regulatory leash and raise some gosh darn dividends already. Wells CEO John Stumpf made the sentiment abundantly clear. From The Wall Street Journal's report on today's Goldman Sachs U.S. Financial Services Conference in New York:

"It's high time that we provide a return on your investment," he said. "I am in violent agreement that it is time we get back to a quote unquote more normal basis."

BofA head Brian Moynihan said his bank would raise its dividend "as soon as we can." Bank of America pays a one-penny-a-share quarterly dividend, and Wells Fargo pays a nickel a quarter. In heady 2007, Wells' dividend was 31 cents a share.

Despite their enthusiasm, the CEOS are going to have to wait, as regulators continue to drag their feet when it comes to letting banks play freely with their capital. The Federal Reserve is putting systemically important institutions through another round of stress tests before investor payouts are made available. But shareholders should take note: the banks care about you.

mtaylor [at] observer.com | @mbrookstaylor

Morning Roundup: Business Grads, This Could Be Your Year!

Mike Taylor — Fri, 05 Nov 2010 11:59:56 -0400

More graduates of MBA programs are finding jobs this year, but fat paychecks and practical-joke-sized signing bonuses have yet to return to vogue. [BBW]
The Commodities Futures Trading Commission is not the wastrel federal institutio0n it once was, but it may still lack the resources to oversee the derivatives markets it is now charged with regulating. [NYT]
Unlike the Federal Reserve, the European Central Bank is not exceptionally enthusiastic about pouring unprecedented amounts of money into the financial system. [WSJ]
Ex-Federal Reserve chair Paul Volcker isn't convinced that the Fed's $600 billion quantitative easing plan will light a fire under the proverbial backside of our stagnant economy. [AP]
The Federal Reserve may soon chill out a little bit about big banks paying dividends to their investors. [Reuters]

mtaylor [at] observer.com | @mbrookstaylor

Bailed Out Banks Keep Welching On TARP Payments

Mike Taylor — Fri, 17 Sep 2010 20:00:54 -0400

The number of banks that for whatever reason decided they were better off not paying the government the money they owe under the Troubled Asset Relief Program rose to 115, up from 91 in May, TheStreet.com reports.

If a bank racks up six delinquent payments, the government gets to install two new directors on its board. Fifteen companies have racked up five skipped dividends, TheStreet says, citing research by SNL Financial. Non-paying recipients of government funding only owe about 1.8 percent of the $205 billion doled out to banks under the program. Says TheStreet:

As of the most recent government tabulation, the Office of Management and Budget estimates that taxpayers will lose $105 billion on all of its TARP investments, down from an initial estimate of $341 billion. Those losses will mostly be concentrated in AIG, automotive investments and a bailout program for troubled homeowners.