JPMorgan Chase & Co has reduced its common stock dividend by 87% to 5 cents a share from 38 cents.
The bank - the second-biggest in the United States - also said it has been "solidly profitable" this quarter and the outlook for the three-month period is "roughly in line" with analyst forecasts.
Shares rose 5.5% in after-hours trading on Monday.
JPMorgan said the decision will save $US5 billion of common equity a year. It hopes the lower payment will help it more quickly repay $US25 billion of capital obtained in October from a government programme.
