Dividends and US bank shares jump as Federal Reserve gives capital plans the green light

In every industry group the actions of the government can and does have an effect on the industry. In the banking world the federal reserve and capital requirements are the most important aspects to profitability. The greater the capital the more the bank can lend and be more profitable.

In late June, the federal reserve approved the capital plans of the big banks, giving them a clean bill of health.

In an article from Reuters, Jefferies analyst Ken Usdin estimated the average bank would be returning about 10.5% of its market capitalization in dividends and buybacks from the third quarter of 2019 to the second quarter of 2020.

Linking to dividend paying stocks, for many of these stocks the government and business are in partnership and work together. Good news by the government means good news for investors.

There are more questions than answers, till the next time – to raising questions

 

 

 

 

 

 

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