Morgan Stanley said it would double its dividend and boost the size of its share buyback programme to up to $12bn after the US Federal Reserve last week loosened restrictions on shareholder payouts by large banks.
The bank is raising its quarterly common stock dividend to 70 cents per share from 35 cents and will buy back up to $2bn more of its own shares over the next 12 months, having previously committed to a repurchase programme of up to $10bn.
“The board of directors has approved a 100 per cent increase in our dividend and an increase of our share repurchase program to $12bn,” said chief executive James Morgan, adding that the bank had “accumulated significant excess capital over the past several years and now has one of the largest capital buffers in the industry”.
Shares in Morgan Stanley gained 3 per cent in after-hours trading in New York.
Morgan Stanley is the first of a number of big US banks set to outline how much money they plan to return to shareholders following publication on Thursday of the results of the Fed’s “stress tests”. The central bank concluded that the 23 banks included in the exercise could suffer almost $500bn in combined losses and still comfortably meet capital requirements.
This is a developing story. More to follow.