Count on a dividend increase from Shawmut National Corp. in the next several months.

"Our expectation is we will raise the dividend," said Gunnar Overstrom, president of Shawmut, New England's third-largest banking company.

"The only question is whether it's later this year or in the early part of the following year."

Analysts are not surprised that Shawmut and many of its regional cohorts will begin lifting their payouts to shareholders. Most cut or eliminated their dividends several years ago as they struggled with real estate induced capital shortages.

Now, said Thomas Theurkauf, who follows Shawmut for Keefe, Bruyette & Woods, the company is likely to return to its historical payout ratio of 35% to 40% of earnings.

The bank's current annual dividend of 40 cents a share comes out to just about half that percentage. Given the fact that the New England economy remains sluggish, Shawmut will work to return some capital to shareholders.

"There's room for a pretty hefty payout ratio because there is little balance-sheet growth," Mr. Theurkauf said.

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