Morgan Stanley doubled its quarterly dividend and announced as much as US$12 billion in stock buybacks, the first of the biggest U.S. banks to respond to their success in clearing this year’s stress tests.

“Morgan Stanley has accumulated significant excess capital over the past several years and now has one of the largest capital buffers in the industry,” Chief Executive Officer James Gorman said Monday in a statement.

The biggest U.S. banks began announcing their plans for distributing capital Monday after getting the green light from the Federal Reserve to resume dividend and buyback increases. All lenders passed the central bank’s stress tests last week, which freed them from remaining pandemic-era restrictions on payouts.

The stress tests used to trigger anxiety across Wall Street, but the banks’ solid showing underscores how comfortable the industry has grown with the exercises. This year, with banks sitting on a massive stockpile of excess cash, the exams were primarily an indicator of how much of that money can be doled out to shareholders.

Goldman Sachs Group Inc. said it was boosting its quarterly payout 60 per cent to US$2 a share, effective Oct. 1, according to a statement. And JPMorgan Chase & Co. said it was raising its dividend to US$1 from 90 cents, and said it continues to be authorized to repurchase shares under a plan previously approved by the board.

“The Federal Reserve’s hypothetical CCAR stress test once again showed that banks continue to have strong capital levels and could withstand an extreme outcome while continuing to support the broader economy,” JPMorgan CEO Jamie Dimon said in the statement.

Bank of America Corp. said it would increase its dividend 17 per cent to 21 cents, subject to board approval, according to a statement from the Charlotte, North Carolina-based bank.

Citigroup Inc. was an outlier among the nation’s biggest banks, holding its dividend steady at 51 cents a share -- where it’s been for almost two years. The bank will also be “continuing with out planned capital actions” regarding share repurchases, CEO Jane Fraser said in a statement.

Wells Fargo & Co. plans stock buybacks of as much as US$18 billion and said it will double its dividend to 20 cents a share. The payout was slashed last year from 51 cents to 10 cents as the San Francisco-based bank continued to work its was through a series of scandals and regulatory penalties.

Congressional Critics

Payouts are expected to surge this year, which is welcome news for investors but could put big banks on defense again in Washington. Critics including U.S. Senator Elizabeth Warren of Massachusetts have condemned buybacks and dividends for enriching executives, and called for lenders to use excess capital to do more for employees.

While Monday marked the first day that the Fed said firms could release their capital plans, companies may choose to disclose their intentions, or provide additional details, at a later date. Firms don’t need the Fed to sign off on their capital plans, as long as each lender stays above its established capital minimum. If a bank falls below its required stress capital buffer at any point in the year following the stress tests, the Fed can hit it with sanctions, including restrictions on capital distributions and bonus payments.