As Markit notes, the Fed was reluctant to approve payout ratios in excess of 30%, but a few banks got permission to exceed that level, including U.S. Bancorp, Wells Fargo (NYSE: WFC), Northern Trust (NasdaqGS: NTRS) and M&T Bancorp (NYSE: MTB). J.P. Morgan Chase’s expected payout ratio is 27%, though it would have been higher if not for a reduced share count via an existing buyback plan.
Banks with 30% payout ratios or higher combine for over 20% of the Financial Select Sector SPDR’s (NYSEArca: XLF), indicating that although XLF and rival ETFs usually feature Citi among their top-10 holdings, the overall dividend outlook is improving for these funds. [Rotating Through Strong Sector ETFs]
iShares U.S. Regional Banks ETF
