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Wells Fargo to repay $25 billion in TARP funds
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Dec 15, 2009 01:38pm |
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| Category | News |
| News Date | Tuesday, December 15, 2009 07:00:00 PM UTC0:0 |
| Description | By Christina Rexrode | The Charlotte Observer
Wells Fargo, eager to avoid being the biggest bank still holding bailout money, announced Monday evening that it plans to pay back its $25 billion in government loans.
The San Francisco bank, which bought Charlotte's Wachovia Corp. last year, made the announcement about 12 hours after Citigroup announced its own plan for repaying money from the Troubled Asset Relief Program, or TARP. Bank of America paid back its government loan late last week, and many peer banks paid their bills this summer.
Wells said it would repay its TARP loan after raising $10.4 billion from the markets. It expects to raise another $1.5 billion by selling certain assets next year, with approval from the Federal Reserve. It will raise another $1.35 billion by issuing stock to employee retirement plans and giving stock awards instead of cash to "certain Wells Fargo team members."
Dick Kovacevich, Wells' chairman and former chief executive officer, was one of the industry's most outspoken critics of TARP since it was introduced in October 2008. But Monday evening, Wells CEO John Stumpf spoke favorably of the program, issuing a statement saying that "TARP stabilized our country's financial system when confidence in financial markets around the world was being tested unlike any other period in our history."
Wells said it expects repaying TARP to add to earnings in 2010, since the bank will be free from the expensive interest payments to the government. However, the repayment will hurt fourth-quarter financial results, reducing income available to common shareholders by $2 billion for the period. |
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