Plans from Wells Fargo & Co and Citigroup to repay taxpayer funds will put the U.S. government on track to reduce its bailout investments in banks by more than 75 percent, while earning a healthy profit for the U.S., Treasury Secretary Timothy Geithner said on Monday.
"With the recent announcements on repayments, we are now on track to reduce TARP bank investments by more than 75 percent, while earning a healthy profit on that commitment," Geithner said in a statement after Wells Fargo announced it will repay the $25 billion it received from the government under the Troubled Asset Relief Program after it sells $10.4 billion of common shares.
A Treasury spokesman said separately that the Treasury was "pleased that Wells Fargo was moving ahead with plans to repay taxpayers back," adding that the department has repeatedly stated that it never intended to be a long-term shareholder in private companies. He added that replacement of taxpayer funds with private capital increases confidence in the financial system.
"Today's announcements mean that more than $185 billion of the $245 that TARP invested in banks is now slated to be returned to taxpayers -- with $90 billion scheduled to come back just in this month alone," the spokesman said in a statement. "While much work lies ahead to improve lending and spur job creation, the news from Wells Fargo moves us closer to winding down the government's unprecedented involvement in the banks."
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