Wells Fargo & Co. climbed in late trading Tuesday after announcing plans to repurchase as much as $30 billion of its shares and boosting its dividend.

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Shares of the San Francisco-based lender advanced 3.2 percent to $46.97 in extended trading at 5:29 p.m. in New York. The stock had already gained 13 percent this year, making it one of the best performers among the biggest US banks.

The new buyback program will consider “current market conditions, potential changes to regulatory capital requirements, and other risk factors,” Wells Fargo said in a statement, which didn’t provide a timeline for the repurchases. The firm increased its quarterly dividend by 17 percent to 35 cents a share.

While Wells Fargo bought back $8 billion of its stock during the first half of the year, the firm previously said it would look to be prudent with its excess capital as regulators weigh proposed changes to capital rules for the biggest US banks. The Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are expected to unveil those plans Thursday.

“While we expect to repurchase more common stock this year, we believe continuing to maintain significant excess capital is prudent until there is more specificity on the new bank capital requirements,” Chief Executive Officer Charlie Scharf said earlier this month.

Wells Fargo and all of its top rivals passed the Fed’s annual stress test last month, typically the key hurdle banks must clear to return capital to their investors. But this year’s results didn’t trigger immediate buyback announcements because many banks wanted to wait until the Fed provided more clarity on the new rules.

More recently, however, the Fed said it will give banks ample time to comment on the proposals and that the new requirements might not take effect for several years.

“Our first priority remains investing in our risk and control infrastructure, but we are also investing in providing updated capabilities to our customers and supporting our employees and communities,” Scharf said Tuesday. “Even with these significant investments, our capital levels are strong and we expect them to remain so, allowing us to return excess capital to our shareholders.

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First Published:Jul 26, 2023 1:16 PM IST