2023-06-29 17:39:00
NEW YORK (dpa-AFX) – The results of the US Federal Reserve’s annual bank stress test gave most US bank stocks a boost on Thursday. This also supported the standard value indices Dow Jones Industrial and S&P 500 on the New York stock exchanges.
According to the Fed, the 23 largest financial institutions in the USA have crisis-proof capital resources. They all passed the test resulting from the 2008 financial crisis. He should ensure that banks are prepared for emergencies and do not have to be rescued once more with tax money. To do this, the Fed examines whether the capital reserves are sufficient to withstand extreme loads such as a rapid increase in unemployment or a rapid collapse in real estate prices.
For many of the big banks, the annual audit is crucial to being able to distribute money to investors in the form of dividends or share buybacks. From Friday they are allowed to publish their capital plans.
In the Dow, Goldman Sachs and JPMorgan took the top spots on Thursday, each with price gains of more than three percent. Bank shares were also in demand outside of the leading index: Wells Fargo, Bank of America and Morgan Stanley rose by two to four percent. Citigroup’s stocks only managed a plus of 0.6 percent.
The largest banks in the US have once once more demonstrated their resilience in the stress test, write the analysts at the Canadian bank RBC. This clears the way for distributions of funds to shareholders. After the crisis in parts of the industry, however, the banks tended towards a more conservative capital and balance sheet policy, which means that only limited share buybacks can be expected in the second half of the year.
According to the UBS experts, there are also differences in the stress test results of the individual banks. For example, Bank of America, JPMorgan, Wells Fargo and M&T Bank did better than Citizens Financial Group and Citigroup, writes the analyst team at the major Swiss bank. While M&T was up 2.2 percent, Citizens was up just 0.7 percent.
The experts at the analysis company Evercore ISI certify, among others, JPMorgan, Goldman Sachs and Bank of America and thus three industry giants surprisingly good test results. Most other houses would have done well, with only a few disappointing like Citizens Financial Group and Truist Financial Corp. The Truist titles gained 0.6 percent./gl/he
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