Wells to pay back TARP ‘shortly’
No big bank wants to be the last one in the TARP pit.
On Tuesday, as Bank of America Corp. was reported to be working on a plan to repay part of its federal capital injection under the Troubled Asset Relief Program, Wells Fargo & Co. Chief Executive John Stumpf was on TV promising that Wells would be returning its TARP money soon.
“We will pay it back shortly,” Stumpf said in an interview with Bloomberg TV, referring to $25 billion in capital received last fall under TARP.
He didn’t give a date, saying repayment had to be worked out with the Federal Reserve. But “of all the issues I’m dealing with, this one doesn’t keep me up at night,” he said.
Many of San Francisco-based Wells Fargo’s peers, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and US Bancorp, already have repaid their TARP funds, freeing them of the executive-pay limits imposed on TARP recipients by the Treasury.
On Tuesday, the Wall Street Journal reported that Bank of America wanted to repay $20 billion of the $45 billion in aid it received. BofA and Wells Fargo in May were ordered by regulators to raise capital after they came up short in the government’s “stress test” of big banks’ books.
Stumpf told Bloomberg on Tuesday that Wells was earning enough money to repay its TARP capital without selling more shares to investors.
Wells’ shares traded Tuesday as low as $25.81 with about 15 minutes to go in the session, then bounced up after Stumpf made his comments. The stock closed at $26.21, down $1.31, or 4.8%.
--
