JPMorgan can buy back $950 mln more in stock
REUTERS – JPMorgan Chase Co (JPM.N) said it has the authority to repurchase more of its shares after spending less money than regulators had allowed on dividends.
The second largest U.S. bank can buy back $950 million in stock and warrants as part of an adjustment to a capital plan approved by the Federal Reserve Board earlier this year, Chief Executive Officer Jamie Dimon said at a Goldman Sachs investor conference in New York on Wednesday.
The bank is allowed to buy back stock right away but “will decide what to do over time,” Dimon said.
JPMorgan has repurchased about $8 billion in stock in 2011, the limit outlined by the Fed as part of a stress test completed in March.
Banks have been eager to buy back their own shares at depressed prices, but also face regulatory pressure to conserve capital as a cushion against future losses.
U.S. banks will undergo another round of Fed stress tests starting in January to determine whether they can increase dividends or buy back more shares. Dimon said he expects the results for his bank will be “fine.”
Banks also face impending international capital rules that could require large “systematically important” banks to attain a Tier 1 common equity ratio — a measure of capital compared to assets weighted by risk — of 9.5 percent by the end of 2018.
JPMorgan could achieve 9.5 percent ahead of schedule, by the end of 2012, if its board decides to do so, Dimon said. He noted there may be a “race to the top” among banks to reach that mark.
Dimon also provided an update on the bank’s fourth-quarter and 2012 outlook.
Total investment banking revenue in the fourth quarter could be down from the third quarter, excluding an accounting adjustment, if December is a weak month, Dimon said. In the third quarter, JPMorgan posted investment banking net income of $1.6 billion on revenue of $6.4 billion.
In a presentation on Tuesday, Bank of America CEO Brian Moynihan said the bank’s global banking and markets unit had seen better sales and trading results in the fourth quarter, compared to a “very weak” third quarter.
In consumer banking, JPMorgan expects low interest rates to reduce 2012 net income by about $400 million, Dimon said. The bank expects to add 175 branches next year, down from a previous estimate of about 300, as new regulations crimp debit card and other fees made by banks. (Reporting by Rick Rothacker in Charlotte, North Carolina; Additional reporting by David Henry in New York ; editing by Carol Bishopric)
Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/jrCuymI6dgs/jpmorgan-dimon-idINDEE7B60MF20111207
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