The coronavirus has thrown a bit of a wrench into the banking industry's plans for stock buybacks. On one hand, bank stocks have been hammered, with many now trading below book value. Similar to the ordinary trader, banks like to buy back stock when it's cheap.
But on the other hand, the virus has had such a unique and harsh impact on the economy that many banks have suspended their buyback programs to show the public they are behind them in this pandemic. The eight largest banks in the U.S. announced together on March 15 that they would be suspending stock buyback programs through the second quarter of the year in response to the virus.
The news was a big deal because share buybacks are a significant way that banks can boost profits for investors. During a buyback, companies purchase their own shares from the market, reducing the amount of outstanding shares in circulation and thus increasing the value of each remaining share.