Stress tests will boost bank payouts to shareholders

The six largest banks may retun almost $41 billion to investors over the next year, which is the most since 2007, due to firms having amassed enough capital to withstand another economic shock, Bloomberg reports.

Banking giants including Citigroup (C) and Bank of America (BAC) are expected to buy back $26.4 billion in shares, according to the average estimate of Wall Street analysts.

“You’ve gone from a few years ago, when the industry as a whole didn’t have enough capital, to the point where in the not- too-distant future, it’s going to have too much,” Jason Goldberg, a New York-based banking analyst at Barclays Plc, said in a telephone interview. The Fed’s endorsement is “a Good Housekeeping seal of approval.”

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