By Bob Blandeburgo
The U.S. government is starting to see profits from the $750 billion
Troubled Asset Relief Program (TARP), started last year to thwart the
financial crisis. However, the two largest recipients of TARP money –
Citigroup Inc. (NYSE:
C) and Bank of America Corp. (NYSE:
BAC)
– have yet to pay back their loans and the government is still exposed
to possible losses from those two heavyweights, as well as from smaller
U.S. banks.
The government netted roughly $4 billion – the equivalent of a 15%
annual return – from eight of the biggest banks that have fully repaid
their obligations to the government, according to calculations by The New York Times.
Those financial institutions consist of:
- Goldman Sachs Group Inc. (NYSE: GS) – $1.4 billion in profit.
- Morgan Stanley (NYSE: MS) – $1.3 billion in profit.
- American Express Co. (NYSE: AXP) – $414 million in profit.
- Northern Trust Corp. (NYSE: NTRS), The Bank of New York Mellon Corp. (NYSE: BK), State Street Corp. (NYSE: STT), U.S. Bancorp (NYSE: USB) and BB&T Corp. (NYSE: BBT) – $100 million to $334 million in profit.
- Fourteen smaller banks that have repaid their debt – $35 million in profit.
JPMorgan Chase & Co. (NYSE: JPM) and Capital One Financial Corp. (NYSE: COF)
could yield an additional profit of more than $3.1 billion in the
coming month, but the final number is dependent on how much they will
pay to buy back their warrants, The Times said.
Additionally, the U.S. Federal Reserve earned $16.4 billion through
the first six months of the year, thanks to a range of rescue programs
– including loans to investment banks and purchases of mortgage-backed
securities – while the Federal Deposit Insurance Corp.
