Citigroup and Wells Fargo reimburse the State
The crisis seems well for U.S. banks Wells Fargo and Citigroup. The two institutions announced that they had repaid as expected aid from the government under the program of emergency aid to financial sector (TARP). Thus, Wells Fargo has repaid 25 billion worth of preference shares it had ceded to the federal state. A sum to which are added 131.9 million dollars in dividends. "This brings the total dividends paid to the Treasury to 1.441 billion from the issuance of preference shares in October 2008, the company said.
To repay the government, Wells Fargo has drawn in its excess liquidity and raised 12.25 billion dollars in a capital increase last December 18.According to the bank, the repayment will remove $ 1.25 billion in annual dividends of preference shares and will have "a slightly positive effect on earnings per share in 2010. The U.S. Treasury still holds warrants for about 110 million Wells Fargo shares at an exercise price of 34.01 dollars per share.
Even new side of Citigroup. The bank said it had repaid 20 billion dollars in aid. The Treasury still holds warrants for common shares issued under the rescue plan, and that 7.7 billion shares, it intends to sell in 2010. In addition, Citigroup said to have ended an agreement to share losses dating back to January and signed with the Treasury, the Federal Reserve and the federal agency guarantees bank deposits (FDIC). The agreement was nearly 300 billion dollars in assets from Citigroup.However, the Government still holds 5.3 billion worth of preferred securities, obtained under this program to share losses.
For the benefit of taxpayers
For now, the Treasury received a total of 164 billion dollars in aid repayments by banks. He said that amount could exceed 175 billion dollars by the end of 2010. The state would have incurred any loss in connection with this plan.Better yet according to the Treasury, "the taxpayers have already received over 16 billion dollars in profit program of emergency assistance and this amount could increase significantly, the Treasury selling warrants further in the coming weeks."
To recall, the U.S. government paid 245 billion dollars over fiscal year 2009 (October 2008-September 2009).
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