State Street may ask Fed for more aggressive capital-return plan

Tue Dec 4, 2012 10:11am EST

Dec 4 (Reuters) - State Street Corp next month may ask the Federal Reserve to approve a more aggressive plan for returning capital to shareholders, such as a larger dividend, the bank's chairman said on Tuesday.

"We're thinking of perhaps a more aggressive ask," State Street Chairman and Chief Executive Jay Hooley said during a presentation at the Goldman Sachs Financial Services conference.

On the table for discussion is a larger dividend, Hooley said. Returning capital to shareholders has been a priority for the bank.

"We're looking at ... what is an appropriate level of stock buyback and share dividend," he said.

In the first 10 months of this year State Street repurchased nearly 27 million of its shares at a cost of $1.2 billion. That left $649 million remaining under a stock repurchase plan announced in March.

The Boston-based custody bank currently pays a quarterly dividend of 24 cents per share, which translates to an annual yield of about 2.15 percent at Tuesday's share price of $44.66.

State Street's deadline for submitting its capital plan to the Fed is Jan. 7. Hooley said the bank's capital position supports the continued return of capital to shareholders.

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