The financials ETF XLF surged to its highest since October 2008 today ahead of the second part of the terribly dire stress test results:
- FED APPROVES 14 OF 18 BANKS' CAPITAL PLANS WITHOUT CONDITIONS
But...
- GOLDMAN, JPMORGAN PLANS GRANTED 'CONDITIONAL' APPROVAL BY FED
- GOLDMAN, JPMORGAN MUST RESUBMIT CAPITAL PLANS BY END Q3: FED
- GOLDMAN, JPMORGAN FACE REJECTION IF WEAKNESSES NOT FIXED: FED
- BB&T CAPITAL PLAN REJECTED AS FED CITES `QUALITATIVE' CONCERNS
- ALLY CAPITAL PLAN REJECTED AS FED SEES FIRM BELOW MIN TARGETS
Visually:
[9]
The part that most are paying attention to:
The Federal Reserve did not object to the capital plans of The Goldman Sachs Group, Inc. and JPMorgan Chase & Co., which are both listed in the “Conditional non-objection to capital plan” column. However, each of these BHCs exhibited weaknesses in its capital plan or capital planning process that were significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests for that firm or the overall reliability of the firm’s capital planning process. As a condition of the Federal Reserve’s non-objection to their capital plans, each of these BHCs is required to remediate immediately the weaknesses identified in its capital plan and capital planning process and to resubmit a capital plan to the Federal Reserve by the end of the third quarter of 2013. Failure to remediate these weaknesses adequately by the time of resubmission would be grounds for objecting to the capital plans and planned capital distributions.
The immediate result is stocks down:
[10]
Of course, the irony is that all that matters is what approval Goldman and JPM have given to the Fed. But for the purpose of theatrics let's play along. And don't forget - BTFD.
Dividends & Buybacks:
JPMorgan - Conditional REMEMBER!!
$6 Billion Equity Repurchase
$0.38 Quarterly Per Share Common Stock Dividend Effective Second Quarter
Between April 1 2013 and March 31 2014
BofA - Unconditional
*BOFA TO BUY BACK UP TO $5B SHARES, REDEEM $5.5B PREFERREDS
No Dividend Boost
Citi - Unconditional
*CITIGROUP PLANS TO BUY BACK UP TO $1.2B SHRS :C US
*CITIGROUP PLANS TO MAINTAIN 1C/SHR QTR DIV :C US
Goldman Sachs - Conditional
Nothing yet...
Full report below: