JPMorgan Chase expects to start raising its dividend early next year, CEO Jamie Dimon will tell investors this afternoon.
Dimon (right) is scheduled to appear this afternoon at the Barclays Global Financial Services conference in New York. “We intend to restore the dividend,” presentation materials posted on JPMorgan’s (JPM) web site say, “hopefully early 2011.”
The comments are in line with the remarks Dimon has made over the past year, as investors have asked when the bank expects to raise its quarterly payout. JPMorgan slashed its dividend to a nickel a share from 38 cents during the financial crisis, and has been on hold since then as regulators prod banks to raise more capital.
Dimon has reminded Wall Street at every turn of JPMorgan’s “fortress balance sheet,” and has been promising a dividend decision once the regulatory outlook clears up. This week’s release of new capital guidelines by banking mandarins in Basel, Switzerland, should help on that front, though JPMorgan’s presentation indicates that any decision on the dividend is “subject to final analysis of Basel III in November and regulatory capital adequacy,” as well as pending tax law changes.
Wall Street analysts have been handicapping which banks would be the first to resume buybacks and raise their dividends following the adoption of the new capital rules, with some analysts arguing higher dividends could send the stocks higher.
Until then, the bank is likely to continue buying back stock, which it began doing in the second quarter – though Dimon will tell investors repurchases “will be higher when the stock price is lower,” and vice versa. It would be nice to see someone stick to their guns on that one one of these days.