BB&T Wants to be First Bank to Raise Dividends

Bank investors will likely get a dividend boost in 2011, and BB&T (BBT) wants to be one of the first banks to do so.

"We hope to be in the early group with a dividend increase," said CEO Kelly King on Wednesday, speaking at the Goldman Sachs U.S. Financial Services Conference, according to Reuters.

In May 2009, BB&T cut its quarterly dividend to 15 cents per share from 47 cents as a result of the financial crisis that hammered both the banking industry and the country in the fall of 2008. Prior to that, BB&T had raised its dividend for 37 straight years.

BB&T won't be alone. Bank of New York Mellon (BK) CEO Robert Kelly also said he expects to pay a higher dividend next year. Kelly spoke at the same conference. In April 2009, Bank of New York Mellon cut its dividend to 9 cents from 24 cents.

Bank of America (BAC) CEO Brian Moynihan on Tuesday told investors at the conference that the bank wants to increase its dividend "as soon as we can." According to Dow Jones Newswires, he also said that the the dividend rate will be closer to 30% of earnings. B of A slashed its quarterly dividend to a penny from 32 cents per share in the first quarter of 2009.

The 19 biggest U.S. banks are currently undergoing a second round of stress tests by the Federal Reserve to determine if they will be able to withstand another financial crisis. The banks have to submit financial plans to the Fed by mid-January; banks that pass the tests will then be able to increase dividend payments.

The Fed subjected the same banks to a first round of stress tests in 2009.