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June 2 (Bloomberg) -- Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., said the bank is buying back stock at a faster pace than originally announced.
JPMorgan, the most profitable U.S. bank, has already purchased almost $3 billion of its own shares this year, Dimon told investors at a conference hosted by Sanford C. Bernstein & Co. in New York today.
“We told the world we were going to buy back $3 billion at a minimum” this year, Dimon said. “Obviously we’re buying back at a much faster pace than that.”
JPMorgan was among the first of the major U.S. banks allowed by the Federal Reserve to raise its quarterly dividend in March. The bank increased its payout to 25 cents a share from 5 cents and authorized up to $15 billion in buybacks, with as much as $8 billion eligible for repurchase this year.
Dimon said the New York-based bank’s buyback depends on whether there are better opportunities to invest elsewhere as well as limits on capital plans set by federal regulators.
The Fed told banks in November to consider conservative dividend payouts that would still allow for a significant build- up of capital. The central bank said in March that firms are “generally expected” to keep dividends no higher than 30 percent of earnings.
“We have a lot of excess capital," Dimon said. "We can’t use all that excess capital. Therefore buying back stock becomes attractive for us.”
Dimon said the bank’s limit on buybacks this year is $8 billion. “We apply again to regulators next year” to release more capital, he said.
The Fed capital tests measured how banks would absorb stresses from a typical recession, such as a decline in the value of riskier assets and a higher unemployment rate that would pressure borrowers.
--Editors: Steve Dickson, Rick Green
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