Wells Fargo to repay US bail-out
Wells Fargo to repay US bail-out
US bank Well Fargo has said it will pay back the $25bn (£15bn) emergency funding it received under the Troubled Asset Relief Program (Tarp).
The announcement, hot on the heels of a similar one by Citigroup, makes Wells Fargo the last leading institution to repay Tarp funding.
The move marks a key step towards recovery for the US financial system.
Like Citigroup, Wells Fargo plans to part-fund the repayment by raising money in the form of new shares.
It plans to raise $10.4bn by selling new shares and another $1.5bn by selling assets.
Greater freedom
Both banks got out of the government support system on the same day that President Barack Obama called bank chiefs to a summit, which was designed to address public concern over the banks behaviour.
The president had referred to bankers as “fat cats” in a national television appearance. He said he wanted to make sure they were lending to individuals and small businesses.
By cutting loose from government support the banks also free themselves from constraints on how they reward their key employees.
Wells Fargo president John Stumpf said: “Tarp stabilised our country’s financial system when confidence in financial markets around the world was being tested unlike any other period in our history.
“Now we’re ready to fully repay Tarp in a way that serves the interests of the US taxpayer, as well as our customers, team members and investors.”
[BBC News]
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