TARP repayment posts
FeedPosted Jun 9th 2009 10:10AM by Mark Fightmaster (RSS feed)
Filed under: Economic data, Federal Reserve, Financial Crisis
The Congressional Oversight Panel announced in a report this morning that it feels
more bank stress tests are needed, especially if unemployment rates continue to rise. The group believes that the stress tests should be repeated periodically as long as banks continue to hold toxic assets.
The panel used a risk-modeling approach that is described as "reasonable and conservative," but added that it is impossible for an outside party to mirror the loss projections that form the core of the stress tests. The group noted that the "more adverse scenario" assumption for the U.S. unemployment rate in the tests has nearly been met in 2009. The yearly average for the unemployment rate stands at 8.5%, which isn't far from the 8.9% assumed in the first round of stress tests. The group recommended that the "Treasury publicly track the status of its stress test macro-economic assumptions (unemployment, GDP, and housing prices) and repeat the stress test if the adverse scenario assumptions have been exceeded."
Continue reading More bank stress tests needed?
Posted Jun 8th 2009 10:10AM by Mark Fightmaster (RSS feed)
Filed under: JPMorgan Chase (JPM), American Express (AXP), BB and T (BBT), Goldman Sachs Group (GS), Morgan Stanley (MS), U.S. Bancorp (USB), Financial Crisis
This morning, the U.S. Federal Reserve is expected announce that some banks will be allowed to
repay the money lent to them under the Troubled Asset Relief Program (TARP). Some of the banks expected to receive approval are
Goldman Sachs (NYSE:
GS),
JPMorgan Chase (NYSE:
JPM),
American Express (NYSE:
AXP),
Morgan Stanley (NYSE:
MS),
State Street (NYSE:
STT) and
U.S. Bancorp (NYSE:
USB). All of these banks have expressed interest in repaying the government.
What is interesting is that there will be yet another Czar joining the White House, a "Repayment Czar," (what is the deal with the media's fascination with Russian royalty?) or as the administration will call the position, the "
Special Master for Compensation."
Continue reading Fed to okay TARP repayment for some banks, appoint a Pay Czar
Posted May 21st 2009 9:45AM by Mark Fightmaster (RSS feed)
Filed under: Financial Crisis
Cincinnati-based Fifth Third Bancorp (NASDAQ: FITB) announced Wednesday that it plans to sell stock in order to raise capital. FITB plans to sell $750 million of common stock in order to meet its commitment to push its capital beyond the $1.1 billion it needs according to the recent stress tests.
The bank will perform two transactions to help provide the common equity. FITB plans to sell up to an aggregate of $750 million of its common shares occasionally with an "at the market" offering through Morgan Stanley and Merrill Lynch. The firm expects to use a part of the proceeds of shares issued under the offering to fund the cash portion of its offer to exchange cash and common shares for Series G convertible preferred depositary shares.
Continue reading Fifth Third to raise capital by selling stock
Posted May 11th 2009 8:30AM by Mark Fightmaster (RSS feed)
Filed under: BB and T (BBT)
Earlier this morning,
BB&T (NYSE:
BBT) announced that it will
cut the size of its dividend as part of its plan to repay all stock and warrants that were invested in the company through TARP. BBT said that a 15-cent dividend will be paid on common stock in the third quarter -- 68% lower than the company's current 47-cent dividend.
BBT
declare: "In addition to our current earnings, while superior to our peers, are not likely to justify our 47-cent dividend in the near term." The company said that the board decided to make the dividend cut thanks to "the risk and uncertainty associated with being a TARP participant." This reduced dividend will be paid on August 3 to shareholders of record as of July 10.
Continue reading BB&T reveals plans to repay TARP funds
According to the Wall Street Journal, Bank of America (NYSE: BAC) is offering to repay part of the government bailout money it received last year, and the U.S. isn't ignoring the offer. 
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