(Updates with details on Morgan Stanley, U.S. Bancorp and Capital One)
DOW JONES NEWSWIRES
Morgan Stanley (MS), U.S. Bancorp (USB), Capital One Financial
Corp. (COF) and BB&T Corp. (BBT) announced they have been
cleared to repurchase preferred shares and warrants the government
received last fall through its capital-purchase program.
The Treasury Department announced earlier Tuesday that 10 of the
nation's largest banks have met the necessary requirements to repay
funds they received from the government's financial-rescue fund,
making way for $68 billion to possibly be returned to Treasury.
The names weren't disclosed, but The Wall Street Journal
reported they include American Express Co. (AXP), Bank of New York
Mellon Corp. (BK), Goldman Sachs Group Inc. (GS) and JPMorgan Chase
& Co. (JPM).
"This is an important achievement for BB&T," said BB&T
Chief Executive Kelly S. King. "Repaying the government's
investment will give us greater flexibility to benefit
significantly from future opportunities that will be available as
we emerge from this recession. In addition, we will become even
more focused on the business of serving our clients, rather than
dealing with government distractions."
Many financial firms have been chomping at the bit to get out
from under the increased federal involvement which came with being
part of the Troubled Asset Relief Program. They included dividend
and compensation restrictions.
BB&T will pay $3.13 billion, which includes accrued and
unpaid dividends. The company will record a nearly $48 million
charge in the second quarter to account for the difference between
the amortized cost of the preferred stock and the repurchase
price.
U.S. Bancorp expects a nearly 15-cent combined charge from the
repurchasing the $6.6 billion in securities and the one-time fee
assessment enacted last month by the Federal Deposit Insurance
Corp.
Morgan Stanley received a $10 billion investment. In a short
statement, the company said repaying the money "reflects both
Morgan Stanley's strong capital position as well as the important
systemic role the TARP program played in helping stabilize the U.S.
banking system since the height of the financial crisis."
Capital One said it expects to repurchase the $3.55 billion
investment "in the coming weeks."
Bank of New York has raised $2.9 billion through the recent sale
of stock and debt. It received $3 billion.
Shares of BB&T and Capital One rose in recent trading while
Morgan Stanley and U.S. Bancorp were down less than 1%.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com
