Wells Fargo plans to raise dividend by 12.5% after stress test results

Wells Fargo (NYSE:WFC) plans to boost its quarterly dividend by 12.5% to $0.45 per share from its current level of $0.40, the company said on Tuesday.

The planned increase comes after the bank’s 2025 Federal Reserve stress test results improved from last year.

Wells Fargo’s (NYSE:WFC) stress capital buffer (“SCB”) was lowered to the minimum of 2.5% from 3.8% in 2024. In addition, the Federal Reserve Board (“FRB”) revised the company’s 2024 SCB to 3.7% from 3.8% due to the correction of modest errors in the FRB’s loss projections.

The SCB represents a percentage amount of incremental capital the company must hold above its minimum regulatory capital requirements. The FRB will publish the final SCB by Aug. 31, 2025.

The FRB, though, has a pending notice of proposed rule making that, if finalized as proposed, would result in Wells Fargo’s (WFC) SCB being 2.6%.

In addition to the pending dividend increase, the company has the capacity to continue buying back stock, which will be routinely assessed as part of Wells Fargo’s (WFC) internal capital adequacy framework.

Wells Fargo (WFC) stock edged up 0.2% in Tuesday after-hours trading.