Banks Likely to Raise Dividends after Passing Next Year's "Stress Tests"
November 20, 2012 08:20 ET
Banks Likely to Raise Dividends after Passing Next Year's "Stress Tests"
Five Star Equities Provides Stock Research on Regions Financial and SunTrust Banks
NEW YORK, NY--(Marketwire - Nov 20, 2012) - Despite the global economy experiencing a major slowdown financial stocks have shown investors some pretty admirable gains. The Financial Select Sector SPDR ETF (XLF) has gained 17.5 percent year-to-date, nearly 6 times the Dow Jones Industrial Average gain of 3 percent over the same period. Five Star Equities examines the outlook for companies in the Regional Banking Industry and provides equity research on Regions Financial Corporation (
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Last week the Federal Reserve announced guidelines for the latest round of "stress tests," which they expect to release results for by late by 2013. The latest tests will focus on how the nation's 19 largest banks would handle major recessions in Europe, China and Japan. The passing of the "stress tests" are considered key as it enables large banks to increase dividends and share buybacks.
"For the majority of banks, we view the scenarios laid out for [the capital analysis and review for] 2013 as modestly more optimistic as the one used in 2012," Barclays analyst Jason Goldberg said. There will be a number of banks that "will return the majority of their 2013 net income to shareholders in dividends and buyback next year," he said.
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Regions Financial, with $122 billion in assets, is a member of the S&P 500 Index and is one of the nation's largest full-service providers of consumer and commercial banking, wealth management, mortgage, and insurance products and services. The company currently offers investors an annual dividend of $0.04 per share.
SunTrust Banks, headquartered in Atlanta, is one of the nation's largest banking organizations. As of September 30, 2012, SunTrust had total assets of $173.2 billion and total deposits of $127.2 billion. The company currently offers investors an annual dividend of $0.20 per share.
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