2023-07-03 12:19:38 ET
Bank stocks changed hands firmly in the green in Monday afternoon trading as a number of large lenders lifted their dividends after sailing past the Federal Reserve's stress test.
Popular bank-stock gauges rose markedly, including: Invesco KBW Regional Banking ETF ( NASDAQ: KBWR ) +1.6% , SPDR Regional Banking ETF ( NYSEARCA: KRE ) +2.2% , SPDR S&P Bank ETF ( NYSEARCA: KBE ) +2.1% , Invesco KBW Bank ETF ( NASDAQ: KBWB ) +2.2% .
The gains outpaced the broader stock market, with the S&P 500 up a mere 0.03% at the time of writing.
Goldman Sachs ( NYSE: GS ), JPMorgan Chase ( NYSE: JPM ), Wells Fargo ( NYSE: WFC ) Morgan Stanley ( NYSE: MS ) and Citigroup ( NYSE: C ) are among the big banks that are planning higher shareholder payouts, as last week's stress tests revealed that the megabanks will come under lighter capital requirements.
Recall that all 23 banks met minimum capital requirements under a hypothetical recession in the Fed's 2023 bank stress tests and would be able to lend in a severe recession. Overall, the test projected total losses of $541B for the group of banks.
Looking at individual names, ( C ) +2.4% , ( JPM ) +1.3% , WFC ( WFC ) +2.1% , ( GS ) +2% , and MS ( MS ) +2.3% all advanced. Bank of America ( NYSE: BAC ), which has yet to announce its capital plans, saw its shares perked up 2.2% as it has begun a dialogue with the central bank to understand how the lender was evaluated for this year's stress test.
Other banks tested by the Fed that were on the rise: BNY Mellon ( NYSE: BK ) +1.7% , State Street ( NYSE: STT ) +2.3% , Charles Schwab ( NYSE: SCHW ) +2.1% , Citizens Financial Group ( NYSE: CFG ) +2.7% , Capital One Financial ( NYSE: COF ) +1.8% , U.S. Bancorp ( NYSE: USB ) +1.9% and Truist Financial ( NYSE: TFC ) +3.6% .
More on bank stocks:
- Morgan Stanley: The Better Financial Dividend Stock
- Bank Of America: $109B Of Paper Losses Spell Earnings Trouble
- Citigroup: Optimizing Its Profit Curve To Achieve 60% Efficiency
- JPMorgan Chase: A Good Bank For Your Buck
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Bank stocks climb as giants boost dividends after passing stress test