Three banks plan stock offerings to repay gov't loans
NEW YORK -- Three banks that received a clean bill of health on their stress tests are announcing plans to raise capital to repay taxpayer loans they got last fall.
U.S. Bancorp also plans to sell medium-term notes.
Last Thursday, the government announced results of its stress tests of the 19 largest U.S. banks. U.S. Bancorp, Capital One and BB&T are among 9 banks deemed to have enough capital to withstand a deeper recession.
U.S. Bancorp took $6.6 billion from the government's Troubled Asset Relief Program, while Capital One took $3.55 billion and BB&T $3.1 billion.
Hundreds of lenders took money from TARP, which was designed to spur lending and improve the economy.
Yet many now view TARP as an albatross that imposes too many restrictions, including on executive pay, and suggests that recipients are desperate for capital.
"Rational, objective lending is one of the most important purposes of the banking system, and when you inject Congress and the administration into it, it effectively politicizes the process, which is not healthy," BB&T Chief Executive Kelly King said in an interview Monday.
King also faulted the stress tests, saying they unnecessarily created "huge levels of anxiety and concern" among investors. "Regulators have always had the ability to assess the capital of institutions, and require more if they chose," he said.
On Friday, Wells Fargo and Morgan Stanley, each found to need more capital under the stress test, sold $8.6 billion and $4 billion of stock, respectively. Morgan Stanley also sold $4 billion of debt.
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