On December 22, 2009, the U.S. Department of the
Treasury received repayments on its Troubled Asset Relief
Program (TARP) investments in Wells Fargo and Citigroup
in the sum of $45 billion, bringing the total amount of
repaid TARP funds to $164 billion. Wells Fargo repaid $25
billion under the Capital Purchase Program (CPP) and
Citigroup repaid $20 billion under the Targeted
Investment Program (TIP), both of which will wind down at
the end of this year. Treasury now estimates that total
bank repayments should exceed $175 billion by the end of
2010, cutting total taxpayer exposure to the banks by
three-quarters.
In addition, effective today, Treasury, the Federal
Reserve, the Federal Deposit Insurance Corporation and
Citigroup terminated the agreement under which the U.S.
government agreed to share losses on a pool of originally
$300 billion of Citigroup assets. This arrangement was
entered into in January of this year under
Treasury’s Asset Guarantee Program (AGP) and was
originally expected to last for 10 years. The U.S.
government parties did not pay any losses under the
agreement, and will keep $5.2 billion of $7.0 billion in
trust preferred securities as well as warrants for common
shares that were issued by Citigroup as consideration for
such guarantee. With this termination, the AGP is being
terminated at a profit to the taxpayer.
Treasury currently estimates that TARP programs aimed
at stabilizing the banking system will earn a profit
thanks to dividends, interest, early repayments, and the
sale of warrants. Total bank investments of $245 billion
in FY2009 that were initially projected to cost $76
billion are now projected to bring a profit. Taxpayers
have already received over $16 billion in profits from
all TARP programs and that profit could be considerably
higher as Treasury sells additional warrants in the weeks
ahead.
Source: http://www.financialstability.gov/latest/pr_12232009b.html
