About time:

“J.P. Morgan Chase & Co. slashed its quarterly dividend late Monday to save $5 billion a year and said that its first-quarter has been “solidly profitable” so far.

Shares of the giant bank climbed 4.7% to $20.42 during after-hours trading. The stock closed down 2% at $19.51 during regular trading.

The quarterly dividend will be 5 cents a share in future, down from 38 cents. That will help J.P. Morgan (JPM) retain $5 billion in common equity a year, bolstering its financial strength in case the recession is longer and deeper than expected.

“Extraordinary times require extraordinary measures,” said Jamie Dimon, chief executive of J.P. Morgan, in a statement. “Our action today is being done as a strong precautionary measure to help ensure that our fortress balance sheet remains intact — even if conditions worsen significantly.”

What the hell took so long?

The entire sector should have ceased dividends the instant they started receiving taxpayer dollars . . .


J.P. Morgan cuts dividend to save $5 billion a year
Alistair Barr
MarketWatch 7:12 p.m. EST Feb. 23, 2009


JPMorgan Slashes Dividend 87% in `Precautionary’ Step to Preserve Capital
Elizabeth Hester
Bloomberg, Feb. 23 2009


Category: Corporate Management, Credit, Dividends, Valuation

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9 Responses to “JPM Slashes Dividend 87%”

  1. jsgarber says:

    Talk about putting a band-aid on a gunshot wound.

  2. Greenewabe says:

    Or even much before that.

  3. maybe they’re looking to repay the TARP funds ASAFP?

  4. d4winds says:

    “The entire sector should have ceased dividends the instant they started receiving taxpayer dollars . . ”


  5. The Woodsman says:

    Being a big history buff, I was looking into banking problems of the past here in the USA. Andrew Jackson had some problems with banks during his first term in office. Here’s the link. We are living in history so take note!


  6. zongren says:

    So these banks are now being “stress tested”. They are public companies which publish audited statements and comply with SEC rules. There are many different bank regulators with thousands of employees. The taxpayers have dished out over a trillion dollars to these insolvent companies over the past 6 months and just now we are going to send out a few dolts to determine if they really need the money and how much. WTF.

  7. Steve Barry says:

    Dimon says they’ll pass the stress test “with flying colors”…if he’s right, he may be the first wall street, bank or insurance CEO that hasn’t been blowing smoke up our ass. Look at AIG…Merrill, Bear….all said they were “well capitalized”. Auto CEOs seem to be most truthful.

  8. wally says:

    These banks are now all strong and well capitalized; several government agencies have said so (in an unsigned press release). We can now expect return of TARP funds, a retreat by the Fed from support positions and a phase-out of stimulus spending.


  9. dead hobo says:

    The Fed is waking up.

    Dividends paid by TARP recipients are now officially frowned upon and constitute evidence of mismanagement, according to a memo from the Fed to banks.

    The Fed is implementing a “Lend or Die” program.

    Bravo. A few more good ideas like this one and I might have to take back some of the nasty things I may have written about them. Not just yet, though.