Page 25 - ARUBA TODAY

BUSINESS Thursday 29 June 2017
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Fed approves dividend, buyback plans of all 34 biggest banks

By MARCY GORDON compared with 65 percent
AP Business Writer in the same period last
WASHINGTON (AP) — The year.
Federal Reserve has given Fed Gov. Jerome Powell
the green light to all 34 of said the Fed’s assessment
the biggest banks in the of banks’ capital plans in
U.S. to raise their dividends light of their reserves “has
and buy back shares, judg- motivated all of the largest
ing their financial founda- banks to achieve healthy
tions sturdy enough to with- capital levels, and most to
stand a major economic substantially improve their
downturn. capital planning process-
It was the first time in sev- es.”
en years of annual “stress The financial industry has
tests” that every bank as- seized on the strong show-
sessed by the Fed won ap- ing to buttress its assertion
proval for its capital plans. that regulations it sees as
All have at least $50 billion excessive should be rolled
in assets. back.
The Fed on Wednesday After the crisis that plunged
announced the results of the U.S. into the worst eco-
the second round of its an- nomic meltdown since the
nual stress tests. Those al- Commuters walk by a Wells Fargo ATM location at New York’s Penn Station. On Wednesday, June Great Depression of the
lowed to raise dividends or 28, 2017, the Federal Reserve gave the green light to all 34 of the biggest banks in the U.S. to raise 1930s, banking industry
repurchase shares include their dividends and buy back shares, judging their financial foundations sturdy enough to with- profits have been steadi-
the four biggest U.S. banks stand a major economic downturn. ly rising and banks have
— JPMorgan Chase, Bank (AP Photo/Swayne B. Hall) been lending more freely.
of America, Citigroup and The Trump administration
Wells Fargo. JPMorgan and American of hit by another financial up during the financial and Republicans in Con-
Capital One’s plan only Express. Capital One, be- crisis and severe recession. meltdown. gress have taken major
got conditional approval cause of its conditional sta- With the 34 banks holding Now the banks have a to- steps this year toward eas-
and it has six months to re- tus, opted to keep its divi- more than three-quarters tal of about $1.2 trillion in ing the financial rules that
vise it. But the bank was still dend at the current level of total assets of all U.S. fi- capital reserves as of the came in under the Dodd-
allowed to return profits to but is planning a share re- nancial companies, the fourth quarter of last year, Frank law enacted by
shareholders. purchase. results showed strength in an increase of $750 billion Democrats and President
After the results were made The second part of the an industry that has recov- over the beginning of 2009, Barack Obama in response
public, a number of banks seventh yearly check-up ered handily nearly nine in the depths of the crisis, to the crisis.
quickly jumped in with an- tested the banks to deter- years on from the 2008-09 according to the Fed. They Wednesday’s announce-
nouncements of dividend mine if their current plans crisis. Banks large and small are expected to pay out ment on the second round
boosts and share buyback for paying out capital to across the U.S. received to shareholders 100 per- of the tests followed last
plans. They included Citi- shareholders would still al- hundreds of billions in tax- cent of their net revenue week’s initial results. There,
group, Morgan Stanley, low them to keep lending payer funds to prop them over the next four quarters, q

Toshiba sues Western Digital in feud over memory unit sale

AP Business Writer it had chosen a consor- and Bain Capital Private
TOKYO (AP) — Toshiba tium led by a Japanese Equity LP as the preferred
Corp. said Wednesday it is government-backed fund bidder.q
suing its joint venture part-
ner Western Digital over
the U.S. company’s oppo-
sition to a plan to sell the
Japanese electronics and
energy giant’s memory
chip unit. Toshiba said in a
statement that it was seek-
ing a permanent injunc-
tion and 120 billion yen
($1.1 billion) in damages
for what it called interfer-
ence in the effort to sell Toshiba shareholders arrive at the venue for the annual share-
Toshiba Memory Corp. Fi- holders’ meeting in Chiba, east of Tokyo, Wednesday, June 28,
nancially strapped Toshiba 2017. The sign reads: “Toshiba Corporation. The venue for the
needs the cash from sell- annual shareholders’ meeting.”
ing its flash memory unit to (Kyodo News via AP)
survive, but Western Digi-
tal contends its Japanese because they involve the joint venture in Japan with
partner has no right to sell transfer of valuable tech- Toshiba. It has submitted
the memory chip unit with- nology. Western Digital its own bid for the mem-
out its consent. owns some SanDisk chip ory chip business, but last
Such sales can be sensitive operations including the week Toshiba announced