JPMorgan Chase & Co
The decision to cut the quarterly dividend to 5 cents per share from 38 cents will save $5 billion a year.
Our action today is being done as a strong precautionary measure to help ensure that our fortress balance sheet remains intact even if conditions worsen significantly, said Chief Executive Jamie Dimon.
JPMorgan also said it is turning a profit this quarter, and that its outlook for the quarter is roughly in line with analyst expectations.
Analysts, on average, expected a profit of 35 cents per share on revenue of $21.96 billion, according to Reuters Estimates.
JPMorgan received $25 billion in capital from the government's Troubled Asset Relief Program (TARP). Dimon said the dividend cut is not directly related to TARP. Our reason for accepting TARP capital still holds -- namely, to help stabilize the banking system and economy.
The bank said it hopes to return to a more normalized dividend as soon as feasible once the environment stabilizes.
Bank of America Corp
Shares of JPMorgan fell 30 cents to $19.21 in after-hours trading following the dividend cut, which was announced after markets closed. They fell 39 cents to $19.51 in regular trading.
(Reporting by Jonathan Stempel; editing by Jeffrey Benkoe)