Wall Street Says "Thank You" Again for TARP (BAC, C, WFC)
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The month of December has been the biggest month in history for offerings, due in no small part to the $50 billion in capital raised by the nation's biggest banks to payback TARP. Now those same firms are raking-in large fees from putting together the offerings, according to a report from the New York Times.
Bank of America's (NYSE: BAC) $19.3 billion offering resulted in $482 million in fees, Citigroup's (NYSE: C) $17 million offering generated $425 million, and Wells Fargo (NYSE: WFC) accumulated $275 million in fees from its $12.2 billion offering.
Beneficiaries of the Citigroup offering included Morgan Stanley (NYSE: MS), BNP, Lloyds (NYSE: LYG) and ING, with the fees factoring into the bonuses paid to the investment bankers that were involved in raising the capital. Although the money has been raised for the banks that employ them, these bankers will be compensated at the end of the year for the work that they have done.
The irony is that the banks that once needed government aid to stay afloat are now getting a boost from raising the money they needed to replace the bailout money taken in.
This is probably not what the government had in mind when they started shoveling money into these banks.
According the New York Times, one investment banker, had a simple message to government pay czar Timothy Geithner when asked about the situation: "Thank you."
On a positive note, Citigroup has signaled that they will help the U.S. government sell their stake in the company without a fee. But after the sale was delayed the first time, due to lack of demand, it is uncertain what these shares will be worth when the U.S. goes to sell them. The U.S. Treasury said that it will not sell any of its Citigroup shares for at least another 90 days.
Bank of America's (NYSE: BAC) $19.3 billion offering resulted in $482 million in fees, Citigroup's (NYSE: C) $17 million offering generated $425 million, and Wells Fargo (NYSE: WFC) accumulated $275 million in fees from its $12.2 billion offering.
Beneficiaries of the Citigroup offering included Morgan Stanley (NYSE: MS), BNP, Lloyds (NYSE: LYG) and ING, with the fees factoring into the bonuses paid to the investment bankers that were involved in raising the capital. Although the money has been raised for the banks that employ them, these bankers will be compensated at the end of the year for the work that they have done.
The irony is that the banks that once needed government aid to stay afloat are now getting a boost from raising the money they needed to replace the bailout money taken in.
This is probably not what the government had in mind when they started shoveling money into these banks.
According the New York Times, one investment banker, had a simple message to government pay czar Timothy Geithner when asked about the situation: "Thank you."
On a positive note, Citigroup has signaled that they will help the U.S. government sell their stake in the company without a fee. But after the sale was delayed the first time, due to lack of demand, it is uncertain what these shares will be worth when the U.S. goes to sell them. The U.S. Treasury said that it will not sell any of its Citigroup shares for at least another 90 days.
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