The U.S. Treasury's bank bailout program will move into a profit for the first time on Wednesday with the expected repayment of $7.4 billion in taxpayer funds, Treasury officials said.
The transfers to the Troubled Asset Relief Program will push recoveries from banks to $251 billion in repayments of capital, dividends, interest and other income. It invested $245 billion in banks during the financial crisis to help avert a U.S. financial system collapse.
The officials did not identify the banks expected to repay funds. But SunTrust Banks Inc and Key Corp said on March 18 that they planned to repay $4.9 billion and $2.5 billion, respectively. The repayment from the third bank would likely be much smaller.
The Treasury has estimated it will earn about $20 billion in profits from the bank portion of TARP. The bank bailouts sparked deep public anger in the aftermath of the financial crisis, boiling over into 2010 elections that swept a Republican majority into the U.S. House.
Treasury officials also have said they expect to at least break even on all of TARP's investments in banks, automakers and insurer American International Group. Any ultimate costs from TARP, now estimated at about $28.1 billion including former Fed interests in AIG, would come from expenditures for housing rescue programs.
But if Republican lawmakers have their way, those expenses could be curtailed. The House voted late on Tuesday to kill the Obama administration's main foreclosure avoidance program, although the bill is unlikely to clear the Democrat-controlled Senate.
© 2013 Thomson/Reuters. All rights reserved.