Chase JPMorgan (NYSE: JPM) announce that they have agreed a $ 30 billion allotment repurchase program for 2021.
The news came within hours of the Federal Reserve releasing a second round of bank pressure test results and reporting that it would allow major U.S. banks to make stock purchases limited by income. into 2020.
It’s no secret that JPMorgan CEO Jamie Dimon has been dying to repurchase shares after the bank earned strong earnings in the second and third quarters among coronavirus pandemics.
However, the Fed banned stock repurchases and suspended shares in the third and fourth quarters of this year. With the green light, JPMorgan wasted no time.
Image source: JPMorgan Chase
“Our highest and best use of capital continues to support our clients and drive inclusive economic recovery,” Dimon said in a statement.
He said, “We will continue to maintain a strong balance sheet that allows us to use capital safely by investing and growing our businesses, supporting consumers and businesses, paying stable allowance, and return of additional capital remaining to shareholders. “
In the same announcement regarding the repurchase plan, JPMorgan announced that they would maintain the regular quarterly share of $ 0.90 per common share.
If JPMorgan goes ahead and buys back the $ 30 billion worth of shares in 2021, it will equate to more repurchases of shares with the bank than in 2019, when JPMorgan merged repurchased more than $ 24 billion of stock.
In the Fed’s weight test exercise, JPMorgan would be able to maintain strong capital ratios even in some very tough situations where unemployment gets as high as 11% or 12.5%.