Goldman says options show top US bank dividends may fall 30%

Options are pricing in odds that the seven top US banks will cut their dividends by an average of 30 per cent, according to an analysis by Goldman Sachs.[NEW YORK] Options are pricing in odds that the seven top US banks will cut their dividends by an average of 30 per cent, according to an analysis by Goldman Sachs.

Analysts led by Richard Ramsden wrote that the options market had been pricing in a 10 per cent increase in bank dividends before the Covid-19 pandemic hit. They say options are now implying Wells Fargo and Citigroup will have the two largest dividend cuts in 2021, at 65 per cent and 44 per cent, respectively. Goldman said options showed Morgan Stanley may cut its dividend by 29 per cent, the smallest in the top seven.

Investors and analysts have been growing increasingly concerned in recent weeks about bank dividend cuts. Earlier this month, Federal Reserve governor Randal Quarles said the Fed could curtail Wall Street banks' ability to pay dividends by cranking up the amount of capital they need to maintain due to the Covid-19 crisis.

And Morgan Stanley saw Goldman's dividend as most at risk in a bear case, while Atlantic Equities downgraded Wells Fargo due to the looming specter of a lower dividend.

Singapore Latest News, Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

China plans to extend curbs on international flights until June 30: US embassyBEIJING (REUTERS) - Chinese civil aviation authorities plan to extend until June 30 their curbs on international flights imposed to restrain the spread of the coronavirus, the US embassy in Beijing said in a travel advisory on Friday (May 29).. Read more at straitstimes.com.
Source: The Straits Times - 🏆 8. / 63 Read more »

US consumer spending falls by 13.6% in April, a new lowUS CONSUMER spending suffered another month of record decline in April as the Covid-19 pandemic undercut demand, buttressing expectations that the economy could contract in the second quarter at its steepest pace since the Great Depression. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »

US taxpayers' virus relief went to firms that avoided US taxLast month Zagg Inc, a Utah-based company that makes mobile device accessories, received more than US$9.4 million in cash from a US government ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Coronavirus sinks US consumer spending; savings hit record highU.S. consumers cut spending by the most on record for the second straight month in April while boosting savings to an all-time high, and the ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Hong Kong warns removing US special status is a 'double-edged sword'
Source: TODAYonline - 🏆 1. / 99 Read more »

US Asians, harassed over coronavirus, push back on streets, social mediaNEW YORK (REUTERS) - A spike in harassment of Asian-Americans since the coronavirus pandemic began has led community activists in the United States to fight back - forming street patrols, rallying on social media, and supporting each other online.. Read more at straitstimes.com.
Source: The Straits Times - 🏆 8. / 63 Read more »