Open

Coming up

Don't miss

Replay


LATEST SHOWS

ENCORE!

Haute Couture: the hand-stitched clothing made in Paris that sells for the price of small yachts

Read more

IN THE PAPERS

'Caution, another Cast Lead lies ahead'

Read more

BUSINESS DAILY

Rising into the ranks of Haute Couture

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive (part 2)

Read more

MEDIAWATCH

A thin line between fact-checking and propaganda in Gaza social media coverage

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FOCUS

Ireland's missing babies cast light on dark history

Read more

WEB NEWS

World Cup 2014: Germany-Brazil inspires the Web

Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Are French high school students getting smarter?

    Read more

  • Disgraced Suarez leaves Liverpool for Barcelona

    Read more

  • Kurdish forces take over two oilfields in northern Iraq

    Read more

  • In Pictures: Petrol station hit by Hamas rockets

    Read more

  • Manhunt as FIFA partner flees Rio hotel to avoid arrest

    Read more

  • Video: Living in Tel Aviv, under threat of rocket attack

    Read more

  • Video: Palestinians fear full Israeli military offensive in Gaza

    Read more

  • US prepared to negotiate Gaza ceasefire, Obama says

    Read more

  • French companies will have to accept anonymous CVs

    Read more

  • Ukrainian forces close in on Donetsk

    Read more

  • Germany asks US intelligence station chief to leave country

    Read more

  • Video: Muslims in China confront obstacles to Ramadan fasting

    Read more

  • Tour de France passes WWI Chemin des Dames battlefield

    Read more

  • Senegalese man awarded French visa in gay marriage debate

    Read more

Business

Big banks repay big bucks to US Treasury

©

Text by NEWS WIRES

Latest update : 2009-06-17

JPMorgan Chase announced it has repaid $25 billion to the US Treasury, the biggest of all the expected repayments of loans made to the banks by the state. Other banks, including Morgan Stanley and BB&T Corporation, have also started repaying loans.

AFP - Major US banks Wednesday started repaying the US Treasury for capital injected into the financial system, in the latest sign of a stabilizing financial system.
  
JPMorgan Chase said it repaid the government for its 25-billion-dollar capital injection, the largest of some 68 billion dollars in expected repayments.
  
Morgan Stanley said it repaid 10 billion dollars and said the firm and its employees "appreciate the support of the US government, Congress and the administration during this challenging period."
  
The repayments came after the Federal Reserve and Treasury agreed to allow some banks to begin reimbursing a total of 68 billion dollars in capital injections begun last year in an effort to stabilize a shaky financial system.
  
JPMorgan Chase said that it had now repaid the government in full for the investment under the Troubled Asset Relief Program (TARP), and had paid a total of 795 million dollars in dividends on the preferred stock.
  
The banking group said it was notifying the US Treasury of its intent to repurchase the 10-year warrant issued to the Treasury in connection with the preferred investment, which gave the government an option to buy common shares.
  
Separately, BB&T Corporation said it had repurchased the Treasury's preferred shares, repaying 3.1 billion dollars. The North Carolina bank also paid a final dividend to make the total dividend payments 92.7 million dollars.
  
"This was, in fact, an excellent investment for the American taxpayer," said BB&T chief executive Kelly King.
  
"Our strong capital position allowed us to pay back TARP in a very short amount of time. But what's important today is that we've repaid the government, and now we have a singular focus on the business of serving our clients."
  
US Bancorp redeemed the 6.6 billion dollars of preferred stock issued to the Treasury and also indicated its intent to repurchase the 10-year warrant.
  
"Today's repayment of the TARP funds is a significant step forward," said Richard Davis, chairman, president and chief executive.
  
"The redemption allows our company to return to operating from a position of both independent strength and strategic flexibility."
  
The decision to allow 10 major banks to repay the government capital offered more evidence the fragile financial system is becoming able to stand on its own.
  
"This demonstrates that the industry has recapitalized a lot faster than people thought possible and it represents another step back to economic recovery," said a statement from the Financial Services Roundtable, an industry group.
  
"The industry was asked to raise capital and has raised over 50 billion dollars from private investors over the last few weeks."
  
But with some major banks still required to hold tens of billions in Treasury capital, the sector is not out of the woods, according to some analysts.

Date created : 2009-06-17

Comments

COMMENT(S)