Shares of Wells Fargo experienced a surge on Tuesday following the bank’s announcement of a $30 billion stock buyback. Additionally, the company’s board of directors gave the green light to a previously disclosed dividend increase, raising it from 30 cents to 35 cents per share. Shareholders of record on August 4 will receive the dividend payment on September 1. In response to the bank’s strong second-quarter earnings and revenue, which surpassed expectations, Wells Fargo’s stock saw a more than 3% increase in after-hours trading on Tuesday. The impressive financial performance was driven by a substantial 29% rise in net interest income, bolstered by multiple rate hikes implemented by the Federal Reserve since the previous year. These rate increases have benefited key financial institutions, even though borrowers have faced higher interest costs.

The Federal Reserve is anticipated to further increase rates as part of its efforts to address elevated inflation. In response to concerns over major corporations prioritizing stock buybacks over increasing employee wages, Democratic lawmakers have introduced several bills to restrict such practices. Last month, the largest U.S. banks cleared the Federal Reserve’s annual stress test, enabling them to announce plans for raising their quarterly dividends. Wells Fargo CEO, Charlie Scharf, emphasized the bank’s intense capital levels and expressed the intention to continue returning excess capital to shareholders despite making significant investments.