Bank Holding Company Capital Ratios and Shareholder Payouts
6 Pages Posted: 3 Jul 2007
Date Written: September 1998
Last year's sharp drop in the capital ratios of bank holding companies could cast doubt on the companies' future capital strength, especially if credit quality eroded significantly or if profitability weakened. However, an analysis linking the drop in ratios to bank efforts to increase shareholder payouts in a period of strong profitability suggests that these concerns are premature.
Keywords: repurchases, bank capital
JEL Classification: G21, G32
Suggested Citation: Suggested Citation