Aug 21 (Reuters) - Fifth Third Bancorp said the Federal Reserve did not object to its proposed capital actions through March 2013, including buying back shares and a potential dividend increase.
The bank had submitted a revised capital plan in June that included potential share repurchases of up to $600 million through the first quarter of 2013 and a potential increase in the bank’s quarterly dividend to 10 cents per share, Fifth Third said in a statement.
The Fed had, in March, objected to Fifth Third’s bid to raise its quarterly dividend and spend more for share buybacks than it receives from a potential asset sale.
The Fed’s non-objection applies to capital actions proposed to be taken through March 31, 2013, after which the bank will have to submit a subsequent capital plan.
Cincinnati, Ohio-based Fifth Third’s board is expected to consider the possibility of a dividend increase at its meeting in September, the company said. The bank’s current quarterly dividend is 8 cents per share.
The bank also said its board has authorized a new share repurchase program of up to 100 million shares, replacing the existing 2007 program under which 14 million shares remained.
The company has about 919 million shares outstanding according to Thomson Reuters data.
Fifth Third shares were up about 4 percent in extended trade. They had closed at $14.39 on Tuesday on the Nasdaq.