SAN FRANCISCO (MarketWatch) -- U.S. banks may start paying dividends again, or increase payouts, after new rules from the Basel Committee on Banking Supervision provided more certainty about capital levels in the industry, analysts said Monday.

"The industry is getting poised to unveil more aggressive capital-management strategies as early as January 2011 as capital requirements are codified and uncertainty surrounding the economy diminishes," Todd Hagerman, a bank analyst at Collins Stewart, wrote to investors.

The minimum common-equity level requirement was lifted to 4.5% from 2%, and banks also must have a capital-conservation buffer of 2.5%, for a total of 7%. In addition, banks will be required to have a Tier 1 capital ratio of 6%, up from the current 4% level. Lenders get about 8 years to comply. See coverage on the new rules.

"The announcement of the Basel III requirements is a big step in providing management teams of stronger banks the necessary clarity to begin allocating capital toward dividend increases, stock buybacks and acquisition opportunities," Gerard Cassidy and fellow bank analysts at RBC Capital wrote in a note Monday.

J.P. Morgan Chase & Co. JPM, +0.96% climbed 3.4% to close at $41.12, while Bank of America Corp. BAC, +1.34% gained 3% to close at $13.95. Wells Fargo & Co. WFC, +1.07% rose more than 2%, as did Citigroup Inc. C, +1.62% .

Since the global financial crisis hit in 2008, U.S. banks have raised lots of new capital -- sometimes turning to the government for help. Now many companies in the sector may be overcapitalized, Cassidy said Monday.

Indeed, Hagerman from Collins Stewart said that the 7% common-equity requirement proposed by the Basel Committee generally compares to the current median 8.79% Tier 1 common ratio at the largest U.S. banks. Still, Basel's definition of equity capital is more restrictive than the U.S. guidelines, he noted.

"Before making any adjustments we would appear to be already over that 7% Basel requirement," said Howard Atkins, chief financial officer of Wells Fargo, during a presentation to analysts and investors Monday.

Wells Fargo would like to restore its dividend and buy back shares when the time is right, but the bank still has to get permission from regulators before going ahead with such actions, he added.

Citigroup Chief Financial Officer John Gerspach said the Basel agreement "answers important questions and begins to create needed certainty," according to a memo he sent to employees of the bank on Monday.

"In recent quarters, many management teams have said they are hesitant to allocate this capital until there is more clarity regarding future capital requirements," RBC's Cassidy wrote. "While there are still many uncertainties regarding the economy, management teams have much more clarity with Basel III capital rules now known, which is crucial for banks looking to make capital-allocation decisions."

Cassidy expects dividend increases will begin in 2011. Payout ratios are currently "minimal" compared with historical levels, but those ratios should rise to 30% to 35% over the next three years, the analyst predicted.

"Bank regulators are reluctant to allow the banks to increase their dividends too quickly, which leads us to believe only a few banks are likely to increase their dividends in 2010," Cassidy said. "As the economy expands into 2011 and credit continues to improve, combined with increased profitability and capital levels, the regulators will be more willing to allow banks to increase their dividends."

Mergers and acquisitions may also pick up in early 2011, he added. "Greater clarity on capital ratios is one of two important catalysts that will 'kick off' the wave, in our opinion, with the other being credit quality."