MW 20 banks expected to increase their dividends the most following the Fed's stress tests
By Philip van Doorn and Steve Gelsi
Many of these banks have also boosted earnings per share through large stock buybacks over the past year
Wells Fargo & Co., Goldman Sachs Group Inc. and Bank of New York Mellon Corp. top the list of 20 banks expected to boost their dividends in the coming quarter as capital deployments by the largest U.S. banks come into focus in the days ahead.
The Federal Reserve will announce results of its annual stress tests for large U.S. banks on Friday.
These are simulations of profits or losses under difficult economic scenarios, designed to make sure the banks have enough capital to navigate hypothetical recessions.
After the Fed does its work, banks will be freed up to announce dividend increases and plans to buy back stock. Both moves can help to lift share prices.
Wall Street analysts have already baked expectations of these factors into their dividend projections, which MarketWatch ranked.
Among the largest 50 U.S. banks by total assets, Wells Fargo $(WFC)$ leads the top 20 list with an 11.3% projected dividend increase in the third quarter, based on consensus estimates among analysts polled by FactSet. Goldman Sachs Group $(GS)$ ranks second with an expected 8.5% boost, followed by Bank of New York Mellon Corp. $(BK)$ with an expected 7.9% dividend increase.
Bank Ticker City Expected dividend increase Estimated third-quarter dividend Current quarterly dividend Current dividend yield Wells Fargo & Co. WFC San Francisco 11.3% $0.45 $0.40 2.02% Goldman Sachs Group Inc. GS New York 8.5% $3.26 $3.00 1.79% Bank of New York Mellon Corp. BK New York 7.9% $0.51 $0.47 2.09% $Bank of America Corp(BAC-N)$. BAC Charlotte, N.C. 7.7% $0.28 $0.26 2.22% Raymond James Financial Inc. RJF St. Petersburg, Fla. 7.0% $0.54 $0.50 1.32% Morgan Stanley MS New York 6.8% $0.99 $0.93 2.69% Huntington Bancshares Inc. HBAN Columbus, Ohio 6.2% $0.16 $0.16 3.81% State Street Corp. STT Boston 5.7% $0.80 $0.76 2.91% Fifth Third Bancorp FITB Cincinnati 4.4% $0.39 $0.37 3.64% Citigroup Inc. C New York 4.3% $0.58 $0.56 2.71% Regions Financial Corp. RF Birmingham, Ala. 4.0% $0.26 $0.25 4.37% Bank OZK OZK Little Rock, Ark. 4.0% $0.45 $0.43 3.70% PNC Financial Services Group Inc. PNC Pittsburgh 3.9% $1.66 $1.60 3.51% Northern Trust Corp. NTRS Chicago 3.8% $0.78 $0.75 2.42% SouthState Corp. SSB Winter Haven, Fla. 3.5% $0.56 $0.54 2.43% Citizens Financial Group Inc. CFG Providence, R.I. 3.3% $0.43 $0.42 3.90% JPMorgan Chase & Co. JPM New York 3.0% $1.44 $1.40 1.97% U.S. Bancorp USB Minneapolis 2.9% $0.51 $0.50 4.46% F.N.B. Corp. FNB Pittsburgh 2.8% $0.12 $0.12 3.36% KeyCorp KEY Cleveland 2.6% $0.21 $0.21 4.89% Source: FactSet
Other dynamics are coming into play, especially on the regulatory front, that may shape dividend payments in the future.
A move by the U.S. Federal Reserve this week to ease its leverage rules may also free up capital down the road when the regulations go into effect after a public hearing process. The change is also expected to improve long-term demand for U.S. Treasury securities.
KBW analysts said Thursday that this proposed reduction could benefit the prime brokerage businesses of Goldman Sachs and Morgan Stanley $(MS)$, which have been "modestly constrained by the supplement leverage ratio rules."
And despite economic jitters and stock-market volatility around tariffs, the deal environment for investment banking is expected to improve in the second half of this year, according to analysts at Jefferies Financial Group Inc. $(JEF)$.
"While nothing is certain, the global economy continues to show remarkable resilience in the face of incredibly significant crosscurrents," Jefferies Chief Executive Richard Handler and President Brian Friedman said in a prepared statement. "We are increasingly optimistic about the second half of 2025."
A recent 10-year lookback at corporate buybacks and share-count reductions for the S&P 500 SPX showed that Bank of New York Mellon was tied with Apple Inc. $(AAPL)$ with a 35% reduction in share count. A share-count reduction of that magnitude increases a company's earnings per share by 54%, all other things being equal. The math is explained in that article.
You might be curious to see how these banks' diluted share counts changed over the past year. Leaving the list of banks in the same order, here are changes in their average quarterly diluted share counts through the first quarter from the year-earlier quarter:
Bank Ticker Change in first-quarter average diluted share counts from year-earlier quarter
Wells Fargo & Co. WFC -7.7%
Goldman Sachs Group Inc. GS -4.4%
Bank of New York Mellon Corp. BK -4.6%
Bank of America Corp. BAC -3.2%
Raymond James Financial Inc. RJF -2.2%
Morgan Stanley MS -1.0%
Huntington Bancshares Inc. HBAN 0.6%
State Street Corp. STT -4.3%
Fifth Third Bancorp FITB -2.1%
Citigroup Inc. C -1.2%
Regions Financial Corp. RF -1.4%
Bank OZK OZK 0.3%
PNC Financial Services Group Inc. PNC -0.5%
Northern Trust Corp. NTRS -4.4%
SouthState Corp. SSB 32.8%
Citizens Financial Group Inc. CFG -4.7%
JPMorgan Chase & Co. JPM -3.0%
U.S. Bancorp USB 0.1%
F.N.B. Corp. FNB 0.1%
KeyCorp KEY 18.0%
Source: FactSet
Wells Fargo tops the first list for expected dividend increases, and it also has lowered its share count the most over the past year.
MW 20 banks expected to increase their dividends the most following the Fed's stress tests
By Philip van Doorn and Steve Gelsi
Many of these banks have also boosted earnings per share through large stock buybacks over the past year
Wells Fargo & Co., Goldman Sachs Group Inc. and Bank of New York Mellon Corp. top the list of 20 banks expected to boost their dividends in the coming quarter as capital deployments by the largest U.S. banks come into focus in the days ahead.
The Federal Reserve will announce results of its annual stress tests for large U.S. banks on Friday.
These are simulations of profits or losses under difficult economic scenarios, designed to make sure the banks have enough capital to navigate hypothetical recessions.
After the Fed does its work, banks will be freed up to announce dividend increases and plans to buy back stock. Both moves can help to lift share prices.
Wall Street analysts have already baked expectations of these factors into their dividend projections, which MarketWatch ranked.
Among the largest 50 U.S. banks by total assets, Wells Fargo (WFC) leads the top 20 list with an 11.3% projected dividend increase in the third quarter, based on consensus estimates among analysts polled by FactSet. Goldman Sachs Group (GS) ranks second with an expected 8.5% boost, followed by Bank of New York Mellon Corp. (BK) with an expected 7.9% dividend increase.
Bank Ticker City Expected dividend increase Estimated third-quarter dividend Current quarterly dividend Current dividend yield
Wells Fargo & Co. WFC San Francisco 11.3% $0.45 $0.40 2.02%
Goldman Sachs Group Inc. GS New York 8.5% $3.26 $3.00 1.79%
Bank of New York Mellon Corp. BK New York 7.9% $0.51 $0.47 2.09%
Bank of America Corp. BAC Charlotte, N.C. 7.7% $0.28 $0.26 2.22%
Raymond James Financial Inc. RJF St. Petersburg, Fla. 7.0% $0.54 $0.50 1.32%
Morgan Stanley MS New York 6.8% $0.99 $0.93 2.69%
Huntington Bancshares Inc. HBAN Columbus, Ohio 6.2% $0.16 $0.16 3.81%
State Street Corp. STT Boston 5.7% $0.80 $0.76 2.91%
Fifth Third Bancorp FITB Cincinnati 4.4% $0.39 $0.37 3.64%
Citigroup Inc. C New York 4.3% $0.58 $0.56 2.71%
Regions Financial Corp. RF Birmingham, Ala. 4.0% $0.26 $0.25 4.37%
Bank OZK OZK Little Rock, Ark. 4.0% $0.45 $0.43 3.70%
PNC Financial Services Group Inc. PNC Pittsburgh 3.9% $1.66 $1.60 3.51%
Northern Trust Corp. NTRS Chicago 3.8% $0.78 $0.75 2.42%
SouthState Corp. SSB Winter Haven, Fla. 3.5% $0.56 $0.54 2.43%
Citizens Financial Group Inc. CFG Providence, R.I. 3.3% $0.43 $0.42 3.90%
JPMorgan Chase & Co. JPM New York 3.0% $1.44 $1.40 1.97%
U.S. Bancorp USB Minneapolis 2.9% $0.51 $0.50 4.46%
F.N.B. Corp. FNB Pittsburgh 2.8% $0.12 $0.12 3.36%
KeyCorp KEY Cleveland 2.6% $0.21 $0.21 4.89%
Source: FactSet
Other dynamics are coming into play, especially on the regulatory front, that may shape dividend payments in the future.
A move by the U.S. Federal Reserve this week to ease its leverage rules may also free up capital down the road when the regulations go into effect after a public hearing process. The change is also expected to improve long-term demand for U.S. Treasury securities.
KBW analysts said Thursday that this proposed reduction could benefit the prime brokerage businesses of Goldman Sachs and Morgan Stanley (MS), which have been "modestly constrained by the supplement leverage ratio rules."
And despite economic jitters and stock-market volatility around tariffs, the deal environment for investment banking is expected to improve in the second half of this year, according to analysts at Jefferies Financial Group Inc. (JEF).
"While nothing is certain, the global economy continues to show remarkable resilience in the face of incredibly significant crosscurrents," Jefferies Chief Executive Richard Handler and President Brian Friedman said in a prepared statement. "We are increasingly optimistic about the second half of 2025."
A recent 10-year lookback at corporate buybacks and share-count reductions for the S&P 500 SPX showed that Bank of New York Mellon was tied with Apple Inc. (AAPL) with a 35% reduction in share count. A share-count reduction of that magnitude increases a company's earnings per share by 54%, all other things being equal. The math is explained in that article.
You might be curious to see how these banks' diluted share counts changed over the past year. Leaving the list of banks in the same order, here are changes in their average quarterly diluted share counts through the first quarter from the year-earlier quarter:
Bank Ticker Change in first-quarter average diluted share counts from year-earlier quarter
Wells Fargo & Co. WFC -7.7%
Goldman Sachs Group Inc. GS -4.4%
Bank of New York Mellon Corp. BK -4.6%
Bank of America Corp. BAC -3.2%
Raymond James Financial Inc. RJF -2.2%
Morgan Stanley MS -1.0%
Huntington Bancshares Inc. HBAN 0.6%
State Street Corp. STT -4.3%
Fifth Third Bancorp FITB -2.1%
Citigroup Inc. C -1.2%
Regions Financial Corp. RF -1.4%
Bank OZK OZK 0.3%
PNC Financial Services Group Inc. PNC -0.5%
Northern Trust Corp. NTRS -4.4%
SouthState Corp. SSB 32.8%
Citizens Financial Group Inc. CFG -4.7%
JPMorgan Chase & Co. JPM -3.0%
U.S. Bancorp USB 0.1%
F.N.B. Corp. FNB 0.1%
KeyCorp KEY 18.0%
Source: FactSet
Wells Fargo tops the first list for expected dividend increases, and it also has lowered its share count the most over the past year.
(MORE TO FOLLOW) Dow Jones Newswires
June 26, 2025 09:42 ET (13:42 GMT)
MW 20 banks expected to increase their dividends -2-
Two of the banks showed large increases in share counts. SouthState Corp. $(SSB)$ of Winter Haven, Fla., issued shares in January when it acquired Independent Bank Group of McKinney, Texas.
KeyCorp $(KEY.AU)$ of Cleveland issued $2 billion in common stock to Bank of Nova Scotia $(BNS)$ in December. That deal left Bank of Nova Scotia with a 14.9% stake in KeyCorp's common stock.
Here's one more table with the same 20 banks in the same order, this time summarizing analysts' sentiment:
Bank Ticker Share buy ratings Share neutral ratings Share sell ratings March 25 price Consensus price target Implied 12-month upside potential
Wells Fargo & Co. WFC 70% 30% 0% $79.07 $81.37 3%
Goldman Sachs Group Inc. GS 46% 54% 0% $669.87 $592.20 -12%
Bank of New York Mellon Corp. BK 65% 35% 0% $90.00 $95.00 6%
Bank of America Corp. BAC 85% 15% 0% $46.85 $50.11 7%
Raymond James Financial Inc. RJF 31% 69% 0% $151.73 $154.75 2%
Morgan Stanley MS 27% 73% 0% $137.72 $125.55 -9%
Huntington Bancshares Inc. HBAN 75% 21% 4% $16.28 $17.95 10%
State Street Corp. STT 56% 38% 6% $104.35 $105.79 1%
Fifth Third Bancorp FITB 65% 35% 0% $40.68 $44.57 10%
Citigroup Inc. C 75% 25% 0% $82.63 $86.33 4%
Regions Financial Corp. RF 42% 54% 4% $22.89 $24.16 6%
Bank OZK OZK 22% 67% 11% $46.53 $50.63 9%
PNC Financial Services Group Inc. PNC 64% 28% 8% $182.51 $199.10 9%
Northern Trust Corp. NTRS 12% 64% 24% $123.80 $106.96 -14%
SouthState Corp. SSB 83% 17% 0% $88.83 $112.25 26%
Citizens Financial Group Inc. CFG 61% 39% 0% $43.12 $47.60 10%
JPMorgan Chase & Co. JPM 56% 40% 4% $284.06 $277.09 -2%
U.S. Bancorp USB 58% 38% 4% $44.82 $50.04 12%
F.N.B. Corp. FNB 100% 0% 0% $14.27 $16.30 14%
KeyCorp KEY 52% 48% 0% $16.77 $17.90 7%
Source: FactSet
Despite having 70% buy or equivalent ratings, the consensus price target for Wells Fargo is only 3% higher than the stock's closing price on Tuesday. But these are 12-month price targets. Analysts can favor a stock even if they don't expect it to go up over the next year, which might be a short period for a committed investor. And next week's capital-deployment announcements could lead to upward revisions for EPS estimates and price targets.
Click on the tickers for more about each bank.
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