JPMorgan plans to sell $5 billion in stock in bid to exit TARP
"This is the only item we've been asked to address in order to repay" the government's investment, Dimon said in a conference call with investors. While the company hasn't received formal approval, JPMorgan expects the Fed will clear it repay the money by the end of June, Dimon said.
JPMorgan Chase is the only big bank seeking to repay funds received under TARP that has yet to sell stock this year, according to Bloomberg News. It has issued some $7.5 billion in non-guaranteed debt, executives said on the conference call. The Fed's "stress test" of bank balance sheets found JPMorgan didn't need to raise additional capital.
Before it will clear banks to repay investments under the Treasury's Troubled Asset Relief Program, or TARP, the Fed will require them to issue debt that's not backed by a government guarantee and sell stock in a public offering, it announced in statement after the markets closed today.
The Fed said in its statement that it will announce next week the first round of banks receiving approval to repay government's capital, with later approvals coming "periodically thereafter."