Wells Fargo issued the following announcement on Dec. 24.
Today commented on the Federal Reserve’s stress test results.
In light of the impact on the global economy from the COVID-19 pandemic, the Federal Reserve required the nation’s largest banks, including Wells Fargo, to update and resubmit their capital plans in November 2020. The Federal Reserve released their stress test results today.
“Today’s stress test results continue to demonstrate Wells Fargo’s strong capital position and the benefits of our diverse franchise and sound financial risk management practices,” said CEO Charlie Scharf. “We remain committed to supporting our customers, employees, and communities during this challenging time, and we will continue to take appropriate measures to maintain strong capital and liquidity levels.”
In addition to announcing Wells Fargo’s stress test results, the Federal Reserve today announced that it has extended, until March 31, 2021, the deadline for the Federal Reserve to provide notice of whether Wells Fargo’s stress capital buffer requirement will be recalculated. In addition, the Federal Reserve is revising the capital distribution authorization requirements it announced on September 30, 2020. Specifically, as long as Wells Fargo does not increase the amount of its common stock dividends, the Federal Reserve has authorized Wells Fargo, for the first quarter of 2021, to
pay common stock dividends and make share repurchases that, in the aggregate, do not exceed an amount equal to the average of the firm’s net income for the four preceding calendar quarters;
make share repurchases that equal the amount of share issuances related to expensed employee compensation; and
redeem and make scheduled payments on additional tier 1 and tier 2 capital instruments.
“Returning capital to shareholders remains a priority for Wells Fargo,” said Scharf. “While we expect to have modest capital distribution capacity in the first quarter, we continue to have significant excess capital above regulatory requirements.”
The company will provide additional information on its capital distribution plans during its fourth quarter earnings call on January 15, 2021.
Original source can be found here.
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