JPMorgan slashes stock buyback plan
NEW YORK (Reuters) - JPMorgan Chase & Co's stock buyback plan that was conditionally approved by the Federal Reserve on Thursday calls for spending half as much as was allowed before the bank lost $6.2 billion in the "London Whale" derivatives trades.
The bank said in a statement that the Fed had approved its plan to buy back $6 billion of stock over the next 12 months, subject to addressing weaknesses the Fed found in the firm's capital planning process.
"JPMorgan Chase is fully committed to meeting all of the Fed's requirements," CEO Jamie Dimon said in an announcement from the company.
The bank also said it intends to raise its quarterly dividend in the second quarter to 38 cents a share from 30 cents.
The approved rate of stock purchases of $1.5 billion per quarter is half that approved last year before the loss on derivatives contracts made by trader Bruno Iksil, who became known in the markets as the "London Whale" for the size of positions he took while working in London.
On Thursday bank executives were strongly criticized over the "London Whale" loss in a report by the U.S. Senate permanent subcommittee on investigations.
Dimon had said earlier this year that the bank had proposed to regulators spending less on buybacks in order to build up capital to meet pending new requirements from regulators.
(Reporting by David Henry in New York; Editing by Phil Berlowitz)