Bank investors await U.S. stress test results for capital returns

U.S. investors expect banks and other financial institutions to announce large returns of capital to shareholders after the Federal Reserve publishes the first set of results from its annual “stress test” late Thursday. Many of the 38 financial firms undergoing the test are expected to boost dividends and share buybacks due to higher profits on the back of tax cuts and rising net interest income. Banks will be able to unveil capital return plans for the coming year next week after the Fed issues its second set of results that determine how much of a capital buffer the banks need.

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