Banks to U.S.: Take our $55 billion, please

Five of the nation's largest banks, including Goldman Sachs and JPMorgan Chase, repay billions of TARP dollars.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Bailout tracker
Follow the money: Bailout tracker
The government is engaged in a far-reaching - and expensive - effort to rescue the economy. Here's how you can keep tabs on the bailouts. More
When will the government come up with a plan to reform health care?
  • By the end of the year
  • By the end of Obama's term
  • It won't happen

NEW YORK (Reuters) -- Five of the largest U.S. banks, including Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley, repaid billions of dollars in taxpayer bailout funds Wednesday, getting out from under the government's thumb.

Banks have been anxious to return the funds, taken under the $700 billion Troubled Asset Relief Program to escape the strings attached, including restrictions on executive compensation.

JPMorgan (JPM, Fortune 500) said it repaid $25 billion, Goldman (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) $10 billion each, U.S. Bancorp (USB, Fortune 500) $6.6 billion, and BB&T Corp. (BBT, Fortune 500) $3.1 billion.

In connection with announcing the repayment, Goldman also said it paid a dividend of $425 million, which will reduce second-quarter profit by about 77 cents per share.

JPMorgan, U.S. Bancorp and BB&T also intend to buy back warrants for their common stock from the U.S. Treasury, which they awarded when they took the bailout money.

The warrants give the Treasury the right for up to 10 years to buy common stock in the banks at a set price. Banks can buy back the warrants at "fair market value," the Treasury said.

BB&T is negotiating a buyback, a spokesman said. The other banks did not comment on the status of buybacks or potential terms.

Banks line up

Other big banks are also lining up to return bailout funds. American Express Co. (AXP, Fortune 500), which took $3.4 billion, was expected to follow suit.

Other big banks that won permission from the government to repay TARP funds are Bank of New York Mellon Corp (BK, Fortune 500)., Capital One Financial Corp. (COF, Fortune 500), Northern Trust Corp. (NTRS, Fortune 500) and State Street Corp. (STT, Fortune 500)

As a condition of being allowed to repay, banks had to show they could raise money from the private sector by selling stock and issuing debt without the help of government guarantees.

The Federal Reserve also had to agree that their capital levels were adequate to allow them to continue lending.

At least 22 smaller banks have been allowed to repay some or all of their TARP money, although most must still negotiate terms to buy back or extinguish their associated warrants.

Bank shares were mostly lower Wednesday, with the KBW Banks Index down 1.3% in afternoon trading. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Cool cars from the LA Auto Show There are some of the standout vehicles on display this year at the Los Angeles Auto Show. More
American Dream homes: Prices in 10 cities How much does the American Dream home cost? From $2 million in Los Altos, Calif., to $65,000 in Cleveland, here's what you'll pay for a 4-bedroom, 2-bath house, according to Coldwell Banker's annual survey. More
FBI's 10 most wanted cyber criminals The FBI is raising the stakes in its hunt for hackers and cyber fraudsters. Meet the suspected cybercriminals the agency wants most. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.