LONDON (ShareCast) - JP Morgan jumped the gun last night and announced that it had passed the Federal Reserve’s bank stress tests with flying colorus. The blue chip bank couldn’t wait to up its payout, raising its dividend by five cents to 30 cents per share and announcing a 15m-dollar share buyback.

Thus the Fed was prompted to release the results of all the stress tests that it had conducted on 19 US financial institutions two days earlier than planned.

The monetary authority explained that these exams contemplated a worst-case scenario that would include a 13% unemployment rate, a 50% stock market crash and an additional 21% decrease in housing prices. In this supposed case, banks would lose $534bn and their tier one capital ratio would fall from the current 10.1% to 6.1% in the fourth quarter of 2013. Plans to issue dividends and buy back or issue stock were all taken into account.

Under these conditions, the Fed concluded that 15 of the 19 financial institutions would be able to maintain capital levels above the minimum requirement. This group of companies has raised its tier one levels to $759bn as of the end of 2011, from the $420mn on the books in the first quarter of 2009.

The 15 banks that passed the worst-case scenario in the stress tests are: American Express, Bank of America, Bank of New York, BB&T, Capital One Financial, Fifth Third Bancorp., Goldman Sachs, JP Morgan, Keycorp, Morgan Stanley, PNC Financial, Regions Financial, State Street, US Bancorp and Wells Fargo.

The four financial institutions that failed are Ally Financial, Citigroup, MetLife and SunTrust Banks.

CPO

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE