Public RelationsWells Fargo to raise $10.4 bn in share sale, repay funds
Wells Fargo & Co, seeking to wipe away the tarnish of US government bailout funds, kept pace with rival banks by announcing a $10.4 billion share sale to help repay the Troubled Asset Relief Program. The San Francisco-based bank plans to return all of the $25 billion that taxpayers invested last year, according to a company statement issued on Monday.
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The exit from TARP would put Wells Fargo on the same footing as Bank of America Corp, JPMorgan Chase & Co and Citigroup Inc, its largest competitors, which have already paid back the US or announced plans to do so.
Wells Fargo are lining up to repay TARP “because of the stigma of having the money,” said Blake Howells, an analyst at Becker Capital Management in Portland, Oregon, who spent 13 years at Minneapolis-based US Bancorp. “Some bankers who had their TARP and paid it back early got positive reaction from their clients and saw deposits increase.” Wells Fargo, whose largest shareholder is Warren Buffett’s Berkshire Hathaway Inc, rose 8 cents to $25.49 in New York Stock Exchange.