San Francisco-based Wells Fargo today said it would repay its $25 billion in bailout money, making it the last major bank to reach a deal to wipe the slate clean with the U.S. government.
The Wells Fargo announcement came on the same day that Citigroup said it would repay it’s $20 billion it received under the government’s Troubled Asset Relief Program, or TARP. Bank of America returned $45 billion in TARP money last week.
JPMorgan Chase, Goldman Sachs and Morgan Stanley repaid the government in June.
So far, about $161 billion in bailout money has been repaid out of the $245 billion in capital that was dispersed to about 700 institutions under TARP. The U.S. Treasury is projecting that it will earn a profit of $19 billion from investments in the TARP-assisted institutions, stemming primarily from dividends, interest, early repayments and the sale of warrants.
“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. Its success also generated financial returns for taxpayers, including $1.4 billion in dividends paid to the U.S. Treasury by Wells Fargo,” said Wells Fargo President and CEO John Stumpf.
Wells Fargo said it would repay the TARP money after completion of a $10.4 billion common stock offering. The bank also said it would raise $1.35 billion by issuing common stock to certain employees instead of cash as part of their 2009 compensation. It also plans to pump up equity by selling $1.5 billion worth of assets, pending Federal Reserve approval.
