JP Morgan slashes its dividend
Outside the JP Morgan Chase building in New York City
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Renita Jablonski: Banking worries remain at the center of the market malaise. And here's something that doesn't with the whole confidence thing -- JP Morgan Chase, the nation's second-largest bank, slashed its dividend. The move came as quite a surprise because JP Morgan is one of the healthiest banks. Marketplace's Dan Grech reports.
Dan Grech: Back in January, JP Morgan said it was comfortable with its 38 cent a share payout. But then things went downhill. Bank stocks have been hammered, and competitors Bank of America and Citigroup both slashed their dividends to a penny. Now, JP Morgan's payment is down to a lowly nickel.
JP Morgan's CEO Jamie Dimon called the move a precaution. The bank hasn't posted a quarterly loss during this financial crisis. By slashing its dividends, JP Morgan will save $5 billion a year.
CEO Dimon says the money will be a buffer against economic calamity. And it will allow JP Morgan to pay off its $25 billion dollar bailout loan faster.
Experts say JP Morgan has just written a script that other banks can follow. Wells Fargo, the fourth biggest bank, is now expected to cut its dividends as well.
I'm Dan Grech for Marketplace.