Wells Fargo to Repay TARP ‘Shortly’
Wells Fargo & Co. plans to repay the U.S. bank bailout program “shortly” without selling equity, a tactic that would protect stakes held by investors including Warren Buffett’s Berkshire Hathaway Inc.
“We will pay it back, but we’re going to pay it back in a shareholder-friendly way,” John Stumpf, president and chief executive officer of the San Francisco-based lender, said yesterday in an interview on Bloomberg Television. “We are now earning capital so quickly, organically, we don’t want to dilute our existing shareholders.”
Wells Fargo has chafed under extra government scrutiny that came with a $25 billion investment from the Troubled Asset Relief Program. Regulators told the bank in May to bolster its balance sheet after “stress tests” found a $13.7 billion capital gap, spurring speculation that Wells Fargo would sell shares. The stock dropped 11 percent this year through yesterday.
“We will pay it back shortly,” Stumpf said in the interview. He declined to give a date because an agreement depends on talks with the Federal Reserve, adding that he’s confident about reaching an accord. “Of all the issues I’m dealing with, this one doesn’t keep me up at night,” he said.
Comment: 'Bout time!