Citi (C), Wells Fargo (WFC) and US Gov't Battling Over Terms for TARP Repayment
As a WSJ article highlights, Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC) are tussling with the U.S. government over how much they will have to raise in order to repay TARP funds and get out from under government control.
Officials at Citi and Wells Fargo have attempted to receive similar terms as Bank of America (NYSE: BAC), which gained approval last week to make $45 billion in repayments of federal aid in order to relieve itself of restrictions placed by the government.
Citi and Wells Fargo see a competitive disadvantage if they are not able to quickly follow the actions of Bank of America.
Executives from Citi have been told that they would need to raise $20 billion in common stock in order to exit the restrictions levied by TARP, while Wells Fargo was told that it would need to create billions in new capital to do the same.
A Treasury official said banks "are pursuing discussions to understand what needs to be done to move ahead with repayment. We continue to believe that banks and our financial system are better off with private capital instead of government capital."
Shares for Citigroup are currently at $4.03 in the aftermarket session, while Wells Fargo shares are at $26.44.
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