Banks To Start Paying Dividends For First Time In 3 Years

After a 3-year hiatus, banks, plumped up by big profits thanks to a dizzying array of federal aid programs, are ready to stay paying dividends again to investors. Before they can be restored, the government will conduct a round of secret “stress tests” to evaluate the banks’ financial health. If all goes well, individual investors who had seen their dividends slashed to pennies, could start once again supping from the income stream.

Banks Poised to Pay Dividends After 3-Year Gap [NYT]

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  1. AllanG54 says:

    Good that investors will make some money but the interest rates they pay on deposits are still in the toilet. Seems like they don’t give a crap about depositors.

    • Gramin says:

      Banks don’t set the interest rate arbitrarily… you can blame the Fed for that one.

    • hymie! says:

      Don’t forget that, much like the television model, it isn’t “depositors” who are the customers of a bank.

    • Blueskylaw says:

      The banks can borrow money at 0% – 0.25% right now, why would they want to pay depositors more when they can borrow money almost for free?

  2. Blueskylaw says:

    JP Morgan bankers to share $10billion bonus pot after profits leap.
    JP Morgan’s investment bankers are to receive an average payout of $369,651 (£233,000) after the bank set aside almost $10bn to cover basic pay and bonuses.
    The figures were released after JPMorgan Chase kicked off the US banking reporting season by reporting a 47% jump in profits for the last quarter of 2010.

    Finally, JP Morgan might raise their whopping 5 cent dividend to something that might mirror the bonuses that they receive. 7 or 8 cents maybe?

  3. Nighthawke says:

    You know that won’t last for long. There’s another wave of mortgages coming up here shortly that will submarine any of their efforts to pay.

    Their 20% profit growth is almost all fee based. It’ll only be a matter of time before the fed comes down on them hard.

  4. Loias supports harsher punishments against corporations says:

    Join a credit union, the only investers they pay are its members.

  5. Simon Barsinister says:

    Am I the only one disgusted that banks have big profits while us taxpayers are giving them trillions of dollars in ‘bailouts’?

    • Applekid ┬──┬ ノ( ã‚œ-゜ノ) says:

      They need the bailouts. I mean, what would the banks in Europe think if our US bank CEOs only buy one yacht each this year?

      We’d be a laughing stock! We’d be kicked out of the country clubs! We’d be uninvited from the money fights!

  6. sir_eccles says:

    Before you complain too much, just remember where most of your pension funds are being invested.

    • danic512 says:

      What pension fund? Normal people like us had our pensions go away to make room for more profits at the top.

  7. infecto says:

    Disgusting typos. Yaaaaaaaa for bad journalism!

  8. jason in boston says:

    I would rather have the banks reinvest the dividends and use it themselves. When companies start to pay out dividends that is usually a sign that they aren’t going to be growing much more.

    • Blueskylaw says:

      If they (banks) have “excess” money laying around, I would rather it be given out in dividends.
      The banks don’t need to grow any bigger than they are right now and they sure as hell aren’t struggling financially. If they don’t pay out their massive profits to investors, then it will go back into the executive’s pockets as part of the TENS of BILLIONS of dollars in bonuses they pay themselves every year.

      • jason in boston says:

        I honestly don’t care about executive bonuses. Nor bonuses to bankers. They do a job, it is in their contract, they receive said bonus. If you have a problem with that, become a shareholder and excessive your right to be heard and vote.

        From my investment standpoint, I would rather have my money in a company that is growing than a company that is paying out dividends. Then again, I am late 20s, so that is my strategy. I can make much more with a company is that growing than the stock growth + dividend of the bank.

  9. TooManyHobbies says:

    3…2…1…
    My credit union has been paying ME dividends all along.