Wells Fargo and Capital One may be forced to slash dividends after Fed test, Morgan Stanley says

Wells Fargo and Capital One may be forced to cut their dividends after the Federal Reserve stress test introduced a new rule governing the quarterly payouts, according to Morgan Stanley analyst Betsy Graseck. 

The Fed released the results of its annual bank exam Thursday, revealing new restrictions on the U.S. banking industry after it found that several banks could get close to minimum capital levels in scenarios tied to the coronavirus pandemic. That included a new formula for dividend payouts that dictates that a lender's dividend cannot exceed its average net income from the previous four quarters.

Source: cnbc.com