The Treasury Department said last Thursday that with the injection of $29.3 million into 10 banks it has wrapped up its taxpayer-funded bailout program for banks.
The fund comes from the $700 billion Troubled Asset Relief Program (TARP) initiated by the government after enduring extraordinary shocks in 2008. The government had taken this step to stabilize the financial system. We believe that the worst of the credit crisis is now probably behind us.
According to the Treasury, the latest capital injection in 10 banks is its last step to support banks under the TARP.
The 10 banks receiving support are: South Carolina-based Atlantic Bancshares Inc., New Mexico-based Union Financial Corp., Pennsylvania-based Mainline Bancorp Inc., Colorado-based FBHC Holding Co., Illinois-based Western Illinois Banc-shares Inc., Mississippi-based DeSoto County Bank, and Mississippi-based Lafayette Bancorp. Inc., Minnesota-based Private Ban-corporation Inc., Georgia-based CBB Bancorp and Illinois-based Illinois State Bancorp Inc.
Despite the government’s efforts, we continue to see bank failures. Increasing loan losses on commercial real estate are expected to cause more bank failures in the next few years. While the government is ending its support for banks, the Treasury Secretary Geithner is focusing on helping homeowners avoid foreclosures and small businesses get loans with government financial support.
Many of the large banks that have already repaid the bailout money include Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), Citigroup Inc. (C), Goldman Sachs Inc. (GS) and Morgan Stanley (MS).
However, there are lingering concerns related to the banks as well as the economy. Continued asset-quality troubles are expected to force many banks to record substantial additional provisions in 2010. This will be a drag on the profitability of many banks for extended periods and will further stress their capital levels.
Read the full analyst report on “BAC”
Read the full analyst report on “JPM”
Read the full analyst report on “WFC”
Read the full analyst report on “C”
Read the full analyst report on “GS”
Read the full analyst report on “MS”
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