JP Morgan Slashes Dividend Payment To Conserve Capital

JP Morgan Chase [[JPM]] announced today that they are slashing their quarterly dividend payment from $.38 per share to $.05 per share. The dividend will be payable on April 30, 2009 to shareholders of record as of April 6, 2009.

 

The reduction in the dividend payments reduces the current yield to 1.0% – down from 7.6%. The dividend cut represented an 87% decline and is expected to save the company $5 billion.

 

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 Jamie Dimon, Chief Executive Officer.

 

The dividend cut, while drastic, did not come as a complete surprise either. The company’s shares have fallen 38% since the beginning of the year. In after hours trading, the stock was up 3%. 

 

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