JPMORGAN UNLEASHED: Bank commits to largest buyback since crisis

Key Points
  • JPMorgan Chase announced share buybacks of up to $19.4 billion.
  • The program the financial giant has authorized is its largest since the 2008 financial crisis.
  • The news followed the Federal Reserve's decision to approve capital return plans for 34 banks.
A pedestrian walks past the JPMorgan Chase headquarters building in New York.
Scott Mlyn | CNBC

JPMorgan Chase announced Wednesday its biggest share buyback since the 2008 financial crisis.

The financial giant said it has authorized share buybacks of up to $19.4 billion between July 1 and June 30 next year. That's more than the other banks announcing buybacks on Wednesday.

The $19.4 billion buyback plan surpasses a $12.81 billion repurchase program announced in 2012, according to Richard Peterson, principal analyst at S&P Global Market Intelligence. Since the subprime mortgage crisis, big banks like JPMorgan have had to seek formal approval from the Federal Reserve for buybacks and dividend payouts.

Shares climbed more than 2 percent in extended trade. The stock is the eighth-largest in the S&P 500 by market capitalization and a member of the Dow Jones industrial average.

Fed clears capital plans for all 34 banks

JPMorgan also said it would raise its quarterly dividend by 6 cents to 56 cents a share, effective the third quarter of 2017.

"Given the financial strength of the company and the significant capital and liquidity advancements we have made over the last several years, we are pleased to further increase capital returns to our shareholders while continuing to invest in our businesses for long-term profitability," Jamie Dimon, Chairman and CEO of JPMorgan Chase said in a release.

Citigroup also announced a $15.6 billion buyback, its biggest ever, according to S&P Global Market Intelligence.

The capital return plan announcements followed the Federal Reserve's approval of shareholder payout plans from 34 major banks. All firms reviewed passed the second part of the Fed's annual stress test since it was implemented after the financial crisis.

"The positive implication is the Fed's looking at capital growth, not just earnings," said Jeffery Harte, principal at Sandler O'Neill. He said Wednesday's announcements would likely lead to more share buybacks.