Wednesday June 17, 05:46 PM
JPMorgan Chase repays US 25 billion dollars
NEW YORK (AFP) - Banking giant JPMorgan Chase said Wednesday it repaid the government for its 25-billion-dollar capital injection, the largest of some 68 billion dollars in expected repayments.
The repayment came after the Federal Reserve and Treasury agreed to allow some banks to begin reimbursing the government for capital injections begun last year in an effort to stabilize a shaky financial system.
JPMorgan Chase said that it had now repaid the government in full for the investment under the Troubled Asset Relief Program (TARP), and had paid a total of 795 million dollars in dividends on the preferred stock.
The banking group said it was notifying the US Treasury of its intent to repurchase the 10-year warrant issued to the Treasury in connection with the preferred investment, which gave the government an option to buy common shares.
Separately, BB&T Corporation said it had repurchased the Treasury's preferred shares, repaying 3.1 billion dollars. The North Carolina bank also paid a final dividend to make the total dividend payments 92.7 million dollars.
"This was, in fact, an excellent investment for the American taxpayer," said BB&T chief executive Kelly King.
"Our strong capital position allowed us to pay back TARP in a very short amount of time. But what's important today is that we've repaid the government, and now we have a singular focus on the business of serving our clients."
The decision to allow 10 major banks to repay the government capital offered more evidence the fragile financial system is becoming able to stand on its own, analysts said.
But with some major banks still required to hold tens of billions in Treasury capital, the sector is not out of the woods, according to some analysts.
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