Several big banks announced significant increases in their plans to return capital to shareholders after passing the Federal Reserve's annual stress test. Financial shares jumped in extended trading.
Citigroup was the highlight after hours, doubling its quarterly dividend to 32 cents per common share and announcing a common stock repurchase program of up to $15.6 billion. That would be the biggest ever buyback for Citi, surpassing a $15 billion buyback announced in 2005 before the financial crisis, according to Richard Peterson of S&P Global Market Intelligence.
The shares jumped more than 2 percent in after-hours trading.
The Fed approved Wednesday the capital return plans of all 34 banks, the first time the whole industry passed in the seven-year history of the tests. The Financials Select SPDR ETF (XLF) climbed more than 1 percent in after-hours trade, after closing 1.58 percent higher Wednesday in its third straight day of gains.
"For some time, we have retained a significant amount of capital in excess of what is needed to prudently operate and invest in the firm. Now we can begin delivering on two of our most important priorities —returning a higher level of that capital to our shareholders and improving Citi's overall returns," Citi CEO Michael Corbat said in a release.
JPMorgan Chase said it would raise its quarterly dividend by 6 cents to 56 cents a share, effective the third quarter of 2017. The financial giant also said it has authorized share buybacks of up to $19.4 billion between July 1 and June 30 next year. That repurchase program was the largest in its publicly recorded history.
JPMorgan shares climbed more than 2 percent in extended trade.