U.S. bank stocks rose after the Federal Reserve’s annual health checks showed lenders could weather an economic slump, easing investor fears after Silicon Valley Bank and two other lenders failed this year. | Reuters
Most big bank stocks gained. The S&P 500 Banks index finished up 2.6 percent, notching its biggest daily percentage gain since June 2, when it rose 3 percent.
Citigroup shares were flat, trailing peers as the bank is expected to bolster capital, which could reduce profits and dividends. Shares of Charles Schwab, top performer on the test, rose 2.4 percent. It found the lenders would suffer a combined $541 billion in losses under the severe downturn scenario but would still have over twice the capital required to absorb loan losses.The test dictates how much capital banks must hold and how much cash they can give to investors. Lenders are expected to release capital plans after trading ends on Friday.
Other analysts warned investors not to expect a payout bonanza, noting the Fed is due to roll out stiff new capital rules.
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