Fed ruling sees US banks rush to increase dividends

US BANK investors are set to benefit from a wave of dividends and share buybacks after the Federal Reserve finally lifted its blanket ban on “increased capital distributions” by financial institutions.

American banking stocks were up across the board on Friday after the Fed concluded its review of their capital plans and gave permission for dividend hikes, share buybacks and paybacks of government aid.

Firms queued to take advantage of the decision: JP Morgan, Goldman Sachs, Wells Fargo, State Street and Bank of New York Mellon all announced share purchases or increases in their dividends.

But Citigroup has so far stayed aloof from the rush to spend its accrued capital. BoA said that it would request permission for a “modest” dividend hike in the summer.