The US Treasury has received $45 billion from Citigroup and Wells Fargo as repayment of loans which the Obama administration had given to the two American banking giants to help them recover from financial crisis.
With this, the Treasury Department has received $164 billion of the money it gave to companies under the Troubled Asset Relief Program (TARP).
Wells Fargo repaid $25 billion under the Capital Purchase Program (CPP) and Citigroup repaid $20 billion under the Targeted Investment Program (TIP), both of which will wind down at the end of this year, a statement said.
It now estimates that total bank repayments should exceed $175 billion by the end of 2010, cutting total taxpayer exposure to the banks by three-quarters.
In addition, effective today, Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation and Citigroup terminated the agreement under which the US government agreed to share losses on a pool of originally $300 billion of Citigroup assets, the statement said.
This arrangement was entered into in January of this year under Treasury's Asset Guarantee Program (AGP) and was originally expected to last for 10 years.
The US government parties did not pay any losses under the agreement and will keep $5.2 billion of $7 billion in trust preferred securities as well as warrants for common shares that were issued by Citigroup as consideration for such guarantee.
With this termination, the AGP is being terminated at a profit to the taxpayer, the Treasury said.
The Department of Treasury currently estimates that TARP programmes aimed at stabilising the banking system will earn a profit thanks to dividends, interest, early repayments, and the sale of warrants.
Total bank investments of $245 billion in FY2009 that were initially projected to cost $76 billion are now projected to bring a profit.
Taxpayers have already received over $16 billion in profits from all TARP programs and that profit could be considerably higher as Treasury sells additional warrants in the weeks ahead, it said.
