CINCINNATI (AP) -- Regional bank Fifth Third Bancorp on Tuesday raised its dividend by a penny, to 11 cents, and said it may buy back up to 100 million of its own shares.
The Federal Reserve approved the proposed dividend increase as part of its 2012 stress tests of Fifth Third and other banks. The Fed also signed off on other plans including the company's proposed stock buybacks.
Earlier this month Fifth Third passed another round of stress testing, receiving approval to increase its dividend further and repurchase up to $984 million of its shares.
In June the board of directors will consider increasing its dividend to 12 cents.
The Fed checks on the country's biggest banks once a year, testing how they would fare in an economic downturn.
The Cincinnati company's dividend is payable April 18 to shareholders of record on March 29.
The new buyback program replaces the one from 2012, which had about 54 million shares remaining. Buybacks can increase the value of shares by reducing supply, and they also increase a company's profit on a per-share basis.
Fifth Third Bancorp had nearly 926 million shares on the market during the fourth quarter.
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