Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

JPMorgan Chase to Launch $30 Billion Share Repurchase Program in 2021

By Bram Berkowitz - Dec 18, 2020 at 6:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Within hours of the Federal Reserve lifting the ban on stock buybacks, JPMorgan announced that it intends to launch a $30 billion share repurchase program.

JPMorgan Chase ( JPM -1.81% ) announced that it has approved a $30 billion share repurchase program for 2021.

The news came within hours of the Federal Reserve releasing its second round of bank stress-testing results and declaring that it would allow large U.S. banks to conduct stock buybacks limited by their income in 2020.

It's no secret that JPMorgan CEO Jamie Dimon has been dying to resume share repurchases after the bank turned in strong second- and third-quarter earnings amid the coronavirus pandemic.

However, the Fed banned stock repurchases and capped dividends in the third and fourth quarters of this year. With the green light, JPMorgan didn't waste any time.

A Chase bank branch.

Image source: JPMorgan Chase

"Our highest and best use of capital continues to be supporting our clients and driving an inclusive economic recovery," Dimon said in a statement.

He added, "We will continue to maintain a fortress balance sheet that allows us to safely deploy capital by investing in and growing our businesses, supporting consumers and businesses, paying a sustainable dividend, and returning any remaining excess capital to shareholders."

In the same announcement regarding the repurchase plan, JPMorgan announced that it would maintain its regular quarterly dividend of $0.90 per common share.

If JPMorgan does go ahead and buy back all $30 billion worth of shares in 2021, it will equate to more aggregate share repurchases by the bank than in 2019, when JPMorgan collectively repurchased more than $24 billion of stock.

In the Fed's stress-testing exercise, JPMorgan would be able to maintain strong capital ratios even in some pretty harsh scenarios where unemployment gets as high as 11% or 12.5%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
$158.29 (-1.81%) $-2.92

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.