Dividends and buybacks will go up after the Federal Reserve's stress tests on Wall Street banks are completed next week, with Bank of America Merrill Lynch and Citi likely to double their dividends, experts said Thursday.
In the central bank's first portion of the stress test released Thursday, 33 banks met or exceeded regulators' required capital cushions they'd need to offset losses.
"The payout ratio is going up," Second Curve Capital CEO Tom Brown said in an interview with CNBC's "Closing Bell."
Last year, banks paid out about 68 percent of their earnings in the form of dividends and stock buybacks. Now it is expected to be about 75 percent or more.
"It wouldn't surprise me over the next three years that the industry gets pretty close to 100 percent in terms of dividends and buybacks," he said.