Big US banks halt stock buybacks, citing customer needs during coronavirus

Business

NEW YORK: The biggest U.S. banks will stop buying back their own shares, and will instead use that capital to lend to individuals and businesses affected by the coronavirus, an industry trade group said on Sunday.

The Financial Services Forum said its eight members – JPMorgan Chase & Co , Bank of America Corp , Citigroup Inc , Wells Fargo & Co , Goldman Sachs Group Inc , Morgan Stanley , Bank of New York Mellon Corp and State Street Corp – would each halt share repurchases through June 30.

“The COVID-19 pandemic is an unprecedented challenge for the world and the global economy and the largest U.S. banks have an unquestioned ability and commitment to supporting our customers, clients and the nation,” the group said in a statement, referring to a severe and sometimes fatal respiratory infection that stems from the coronavirus.

The decision follows pressure from some U.S. lawmakers, who last week urged big banks to stop using funds to repurchase shares and instead support the economy.

It also comes within hours of the U.S. Federal Reserve slashing interest rates further and Wall Street’s home city, New York, detailing plans to close schools and senior centers, and toughen enforcement of restrictions on bars and restaurants.

The banks said their decision was consistent with actions by the Fed, the White House and Congress.

JPMorgan, the largest U.S. bank, said in a separate statement that it will use the extra funds to support lending to individuals, business owners and governments, and add liquidity in capital markets, “even if circumstances get dramatically worse.”

(Reporting by Elizabeth Dilts; Writing by Lauren Tara LaCapra; Editing by Daniel Wallis)