JPMorgan (JPM) Slashes Dividend, Expects To Be Profitable In Q1
While likely not surprising, the big news tonight is that JPMorgan Chase (NYSE: JPM), which some have considered the best capitalized large U.S. bank, cut its quarterly common stock dividend from $0.38 to $0.05 per share. JPMorgan anticipates maintaining this level for the time being.
JPMorgan said the move will free up an additional $5 billion in common equity per year.
Providing an indication of how the quarter is shaping up, JPMorgan said "first-quarter 2009 financial performance quarter-to-date is solidly profitable even after significant additions to reserves, and the outlook for the quarter is roughly in line with analyst expectations."
CEO Jamie Dimon said, "Our action today is being done as a strong precautionary measure to help ensure that our fortress balance sheet remains intact."
Dimon also said, "Today’s capital action is not directly related to TARP. Our reason for accepting TARP capital still holds -- namely to help stabilize the banking system and economy. The decision to retain additional common equity does, however, help position our company to repay TARP as soon as is prudent -- and still maintain a strong capital position. Our repayment of TARP will ultimately be worked out in consultation with the U.S. Treasury and other regulators, and in consideration of the best interests of the banking system overall."
JP Morgan said it hopes to return to a more normalized dividend payout ratio as soon as feasible after the environment has stabilized.
JPMorgan said the move will free up an additional $5 billion in common equity per year.
Providing an indication of how the quarter is shaping up, JPMorgan said "first-quarter 2009 financial performance quarter-to-date is solidly profitable even after significant additions to reserves, and the outlook for the quarter is roughly in line with analyst expectations."
CEO Jamie Dimon said, "Our action today is being done as a strong precautionary measure to help ensure that our fortress balance sheet remains intact."
Dimon also said, "Today’s capital action is not directly related to TARP. Our reason for accepting TARP capital still holds -- namely to help stabilize the banking system and economy. The decision to retain additional common equity does, however, help position our company to repay TARP as soon as is prudent -- and still maintain a strong capital position. Our repayment of TARP will ultimately be worked out in consultation with the U.S. Treasury and other regulators, and in consideration of the best interests of the banking system overall."
JP Morgan said it hopes to return to a more normalized dividend payout ratio as soon as feasible after the environment has stabilized.
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