Payback time for Goldman Sachs?

CEO Lloyd Blankfein says Goldman wants to repay taxpayers, but it's not clear how soon it can do so.

Goldman shares are off their low but remain far below their year-ago high.

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NEW YORK (Fortune) -- For Goldman Sachs, making money is usually easy. Giving it back, on the other hand, is turning into quite a challenge.

Next month, the New York-based investment firm is expected to post the results of its first full quarter since it formally became a bank holding company last fall. Goldman took that move to quell worries it would run short of cash in the market swoon.

Analysts expect Goldman (GS, Fortune 500) to bounce back from the fourth quarter, when it posted its first-ever loss as a public company, and report a $1.24-a-share profit. The company says weaker competition has helped.

"In today's market, we are finding that trading vanilla products and performing basic functions like market-making are significantly more profitable than they have been in the recent past," finance chief David Viniar said at an investment conference last month.

But the talk about Goldman lately focuses much less on how much money it's making than on how soon it might be able to pay taxpayers back for the support they have provided since last fall's market seizures.

In the weeks after Lehman's bankruptcy filing last September, Goldman got $10 billion from Treasury under the Troubled Asset Relief Program. It also received billions of dollars of payments in the federal bailout of AIG (AIG, Fortune 500), as a major trading partner of the troubled insurer.

Since then, bailout rage has exploded, fed by the continued unraveling of the economy, outlandish Wall Street bonuses and the rising tab of government rescue packages.

The latest uproar centers on rumors that the strong performance of some big banks in the first two months of the year was based in no small part on the profits the banks made as AIG rushed to unwind bad mortgage bets.

As a result, investors who would like to return to the days when Goldman was simply the savviest financial player -- not an unlikely dependent of the U.S. government -- have been wondering aloud when the firm might be able to get out from under the obligations that come with TARP money.

"It is never too early to start thinking about it, for sure," Viniar said last month. "At some point over the course of the year would we like to pay back the TARP."

In recent weeks the AIG bonus rage seems to have accelerated that timetable, at least in the investing public's mind. According to news reports last week, CEO Lloyd Blankfein is said to be pushing for the firm to pay the funds back after federal regulators finish the so-called stress tests they have been promising for the biggest financial firms sometime next month.

But as eager as Goldman might be to shed TARP-based restrictions on its executive pay and the related scrutiny, it may be stuck with them for a bit.

Brad Hintz, an analyst at BernsteinResearch in New York, said in a report last week he believes investors eager to see Goldman get out from under its government obligations may have some waiting to do.

In a note to clients last week, Hintz wrote that he think the government will prohibit banks from repaying TARP until Congress introduces new regulation for the financial services industry.

"More likely, banks will not be permitted to repay TARP until Treasury has established a plan for an orderly TARP exit strategy for the industry as a whole, so as not to 'rock the boat,'" Hintz added.

A spokesman for Goldman said in an email Tuesday that "we always intended to pay the money back sooner rather than later, but would not do anything without the approval of our regulators."

Goldman's rival Morgan Stanley (MS, Fortune 500), meanwhile, is in no rush to repay its TARP funds, according to a Bloomberg report.

"As much as we'd like to give the money back and just focus on not having government involvement, being totally a public entity, we think and I think that it's the wrong time to do it now," CEO John Mack said on an internal conference call, Bloomberg reported.

Meanwhile, TARP isn't the only form of taxpayer support going to Goldman and Morgan. Goldman has issued more than $25 billion in FDIC-insured debt since last fall, according to a note last week from FBR Capital Markets.

The Federal Deposit Insurance Corp. last week extended that program by four months, meaning that firms can issue three-year bonds with federal backing through Oct. 31, 2009.

Goldman sold one longer-dated bond issue earlier this year without the FDIC guarantee, though it had to pay much more to do so. The high cost of selling uninsured bonds, together with the declining public support for Wall Street aid, could make it tougher for the firm to raise enough money to pay back the TARP.

And that might not be a bad thing.

"While it seems that the market wants Goldman to repay TARP early, it remains evident to us that TARP preferred stock provides cheap capital during a time when bank capital levels are under increased scrutiny," wrote FBR analyst Steve Stelmach in a note last week.