– This is the script of CNBC's news report for China's CCTV on June 29, Thursday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Several big banks announced significant increases in their plans to return capital to shareholders after passing the Federal Reserve's annual stress test.
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.
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.
Besides, Bank of America, Morgan Stanley, Goldman Sachs and Wells Fargo are all planning to conduct stocks buyback and increasing divident to some degree.
[KINGSLEY JONES, Jevons Global / Founder and CIO] "It has been a long way. It has been at least 10 years and it seems like most of the fines are paid. There is a huge amount of legal fines there, you remember. The balance sheets are cleaned up, the US economy is firming. We are considerably... I think what that means is we are going to see more lending. These banks are now in a really good shape. As we saw in the city great buy-back, now is a good time to be investing."
Afer the Fed's announcement, Financial shares jumped in extended trading. Most of the financial giants contributed the gains during Wednesday's trading session, helping the S&P500 index closing up by 0.88%, which is its best one-day performance in about 2 months.
Meanwhile, the Financials Select SPDR ETF (XLF) climbed recently. The historical trend shows that the ETF between 2011 and 2016 has tended to reach its lowest point for the year around the second round of the stress tests.
Encouraging stress test outcomes and higher payouts to shareholders could help the bank sector further.
CNBC's Qian Chen, reporting from Singapore.