Business

U.S. Govt. buys $159-b worth bank shares in two rounds

NEW YORK: The U.S. government, under its $700-billion bailout plan, has purchased shares in 30 American banks for a total of over $150 billion, half of which have gone into Citigroup, JPMorgan Chase and Wells Fargo.

According to the latest transaction report of the Capital Purchase Program, the U.S. Treasury Department has purchased preferred stocks worth $25 billion each in Citigroup, JPMorgan Chase and Wells Fargo — three of the biggest banks hit by the worsening financial turmoil. The government spent $158.56 billion for purchasing shares in the 30 banks, which included Bank of America getting $15 billion, while Goldman Sachs, Morgan Stanley and Merrill Lynch got $10 billion each.

Other major recipients of the funds under this programme include Bank of New York Mellon ($3 billion), State Street Corp ($2 billion), Sun Trust Bank ($3.5 billion), BB&T Corp ($3.13 billion), Comerica ($2.25 billion), Regions Financial Corp ($3.5 billion), Capital One ($3.55 billion), KeyCorp ($2.5 billion) and US Bancorp (about $6.6 billion).

In the first round of the programme, the Treasury injected $125 billion for shares in nine banks, namely, Citigroup, BoA, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, State Street, Merrill Lynch and Bank of New York Mellon Corp. After the two rounds of capital purchase programme for publicly traded banks, the government said privately held banks can apply for assistance under the $700-billion bailout plan till December 8. A total of about 3,600 private banks are said to be eligible under this program. The Treasury said the institutions that have applied for a bank or thrift holding company status on or before December 8 are eligible to apply to the Troubled Asset Relief Program. — PTI

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