SOURCE: The Bedford Report

The Bedford Report

January 13, 2011 16:15 ET

Big Banks Could Soon Pay Big Dividends

The Bedford Report Provides Analyst Research on Bank of America & KeyCorp

NEW YORK, NY--(Marketwire - January 13, 2011) - Dividend paying companies are attracting a lot of attention right now. Investors usually count on dividend paying stocks during hectic times in the market believing in the company's security and real earnings power. Additionally, when interest rates get as low as they currently are, the return on dividends can far exceed that of bonds. Before the financial crisis, major banks were reliable source of dividends, but by mid-2009 most banks had substantially reduced, or altogether cut, their dividend payments. Hopes are that a few stronger banks could resume healthy dividend payments by March. The question is: which banks are strong enough? The Bedford Report examines the outlook for companies in the Major Banking Industry and provides research reports on Bank of America Corporation (NYSE: BAC) and KeyCorp (NYSE: KEY). Access to the full company reports can be found at:

A report from The Wall Street Journal yesterday claimed that several major banks will submit their capital plans to the Federal Reserve this week, part of a stress test to figure out which banks are healthy enough to resume dividends or buy back their own stock. In November Federal Reserve issued guidelines that banks could issue dividends if they could meet capital requirements and have made their required payments under the Troubled Asset Relief Program.

Banks will also have to adhere to a new set of capital standards known as Basel III, if they hope to increase dividends. According to the Basel Committee on Banking Supervision, Basel III will set a tougher standard for the quality of capital as well as the assessment of risks on a bank's balance sheet. According to the proposals under Basel III, only if a bank operating in a steady economic environment maintains a Tier 1 capital ratio of 12% would it be allowed to pay or increase common dividends.

The Bedford Report releases regular market updates on the Major Banking Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Bank of America recently announced that its board approved a quarterly dividend of one cent per common share -- unchanged from the seven previous quarters. Before the financial meltdown, BofA paid a quarterly dividend of 32 cents a share.

Last month BofA's CEO Brian Moynihan said that BofA has "reached the amount of capital" needed to run the company. Moynihan added that he expects to institute a normalized shareholder payout ratio of 30% of earnings, which is well below previous levels.

The Bedford Report provides Analyst Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. The Bedford Report has not been compensated by any of the above-mentioned publicly traded companies. The Bedford Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at

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