JP Morgan Gets the OK for Buyback; But What about Dividends?

By Avi Salzman

JPMorgan Chase (JPM) filed its 10-Q today with the SEC, and said that it had received authorization to buy back up to $3 billion in stock in the first quarter of 2013. The company had suspended buybacks after incurring its massive London Whale loss. Banks need authorization from the Fed before returning capital to shareholders.

The authorization is another sign that regulators haven’t found similar misjudgments and weak oversight at JP Morgan. JPM also said it has reached agreements “in principle” to settle two SEC investigations about mortgage securities. It’s not yet clear how much they will cost.

The stock is rising this morning, and was recently up 1.4%, less than Bank of America’s (BAC) 3.2% rise but in line with other banks like Citigroup’s (C).

The company added that it didn’t ask for authorization to increase its dividend in the first quarter. According to the 10-Q:

“In August 2012, the Firm resubmitted its capital plan to the Federal Reserve under the 2012 CCAR process. The resubmitted capital plan related to the repurchase of up to $3.0 billion of common equity in the first quarter of 2013.The Firm’s resubmission provided for the continued payment of its current quarterly common stock dividend.  On November 5, 2012, the Federal Reserve informed the Firm that it had completed its review and that it did not object to the Firm’s resubmitted capital plan.”

It’s unclear when JPM will ask to raise its 30-cent-per-quarter dividend. JPM hasn’t yet submitted its plans for the rest of 2013 to the Fed, and expects to get more info on that process by mid-November.



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