Should Large Banks Lean Into Share Repurchases Over Dividends? Maybe
The way that companies return capital to shareholders is through dividends and share repurchases. For banks, it boils down to looking at how much excess capital they have above their regulatory requirement to see how much they can return to shareholders.
But banks are unique. Not only do they have regulatory capital requirements, but the way those are determined is different than in any other industry.
Currently, the size of the dividend can raise a bank's regulatory requirement, which begs the question of whether or not large U.S. banks should lean more heavily into share repurchases when planning out capital returns.
Source Fool.com
