Andrew Bary

Several big banks stepped up their stock repurchases in the first quarter in a sign of confidence despite growing concern about an economic slowdown this year, making it appear likely that lenders will be among the most aggressive in terms of buybacks for any major industry.

Bank of America and Citigroup, which reported results earlier Tuesday, both bought back about 1.5% of their shares outstanding in the period. Bank of America's repurchases of $4.5 billion were the most since the third quarter of 2019 and compared with $13.1 billion for all of 2024.

Citigroup repurchased $1.75 billion of stock, ahead of KBW analyst David Konrad's estimate, and not much less than the $2.5 billion it bought back all last year. The two banks' quarterly buybacks amount to as much as some big companies do in a year in percentage terms.

Both stocks finished higher as the two companies' profits beat estimates for the period. Bank of America shares gained 3.4% to $37.92 while Citi was up 1.9% to $64.41.

Most of the big banks also are paying dividends averaging about 2.5% of their stock prices, though Citi's is at around 3.5%. Total yields -- buybacks plus dividends -- could hit 7% this year for some of the big banks.

On Monday, Wells Fargo said it repurchased $3.5 billion of stock in the first quarter, or about 1.75% of its shares outstanding. It indicated it has capacity for continued repurchases, though it didn't specify levels for the rest of 2025. KBW analyst David Konrad sees $14.7 billion for the full year, consistent with the first-quarter total.

Wells Fargo has had among the more active buybacks among big banks, repurchasing 8% of its shares over the past year.

Goldman Sachs Group bought back $4.4 billion of stock, or 2.2% of its shares outstanding, powered by a strong quarter in which it earned just over $14 a share, up 22% from the year-earlier period. The quarterly total was a record for the firm, CFO Denis Coleman told analysts on the earnings conference call Monday. The buybacks in the period were more than double Konrad's estimate.

Industry leader JPMorgan Chase also stepped up its buyback in the first quarter, repurchasing $7.1 billion, well ahead of the pace from last year, when it bought back about $19 billion over 12 months. The first-quarter total was equivalent to about 1% of the bank's shares outstanding.

Bank stocks have been hit this year with Bank of America, Goldman and Morgan Stanley down about 12%. JPMorgan has held up best, falling just 3%, as investors take comfort in its size, capital base, earnings power and management team.

Bank managements generally were noncommittal on buybacks for the rest of the year. Unknowns include the economy, bank capital rules and business opportunities. JPMorgan CEO Jamie Dimon said the bank likes to have excess capital given a turbulent environment; he put the current total at $30 billion to $60 billion.

Given the stocks' pullback, investors will be interested to see if the banks maintain their pace of buybacks in the current quarter and for the rest of 2025. The first quarter offers an encouraging indication.

Write to Andrew Bary at andrew.bary@barrons.com

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April 15, 2025 17:28 ET (21:28 GMT)

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