Updated from 2:38 p.m. EDT
Financial stocks ended mostly higher Tuesday after the Treasury Department
gave its blessing to 10 of the largest U.S. banks to repay $68 billion in government bailout money.
Treasury has notified the institutions that they are now eligible to complete the repayment process. Combined with repayments received to date from other institutions, Treasury will have received approximately $70 billion in refunded investments made through the Troubled Asset Relief Program. Companies that repay their preferred stock have the right to repurchase the warrants Treasury holds at fair market value.
While the Treasury did not name the 10 banks that will return TARP money, each issued a press release noting it had received Treasury's approval to do so.
said it has been approved to repay the full $25 billion preferred investment,
confirmed it will repurchase $3.55 billion in preferred shares,
said it has approval to redeem $6.6 billion.
said it will pay approximately $3.13 billion to repurchase preferred stock,
Bank of New York Mellon
said it was approved repurchase of the $3 billion TARP capital investment,
said it has approval to redeem $1.57 billion in preferred shares and
will redeem $2 billion in preferred stock.
Rounding out the complete list,
said it will repay $10 billion in TARP funds,
spokeswoman confirmed the company is eligible to repay $3.4 billion, and
confirmed it would repurchase 10 million preferred shares.
Among the winners, American Express added 5%, Capital One rose 2.6%, BB&T added 2.4%, State Street rose 2.3%, Northern Trust climbed 1.8%, Bank of New York Mellon closed 0.9% higher, and Goldman Sachs tacked on 0.7%. Meanwhile, Morgan Stanley slid 1.3%, US Bancorp shed 0.9%, and JPMorgan dipped 0.4%.
Late Monday, the
approved capital-raising plans required by the government's stress tests submitted by 10 of the largest U.S. banks. "As supervisors, we will be working with the institutions to ensure their plans are implemented quickly and effectively," the central bank said in a statement.
Those 10 banks include
Bank of America
Fifth Third Bancorp
, Morgan Stanley,
GMAC financing arm.
More government stress tests could be on the way, if the Congressional Oversight Panel has its way. The panel released a report Tuesday that argues regulators should continue to perform stress tests on the largest U.S. banks if the monthly unemployment rage were to continue to increase. Stress testing should also be repeated so long as banks continue to hold large amounts of toxic assets on their books, the panel said.
The report also calls for internal stress tests by banks between formal government tests, as well as allowing regulators to have the ability to use stress tests in the future when they believe that doing so would help to promote a healthy banking system.
In other bank news,
could announce Wednesday it is
for $12 billion to $13 billion in cash and stock, according to
. The acquisition would be BlackRock's largest acquisition and the largest in the asset-management industry.
Barclays shares were higher by 4.6% to close at $19.19, and BlackRock jumped 7.6% to $182.14.
The Swiss government
said Tuesday it is holding talks with several potential buyers of its $5.5 billion stake in
. The six-month lockup period for its mandatory convertible notes expired Tuesday, leaving the government free. UBS shares eked out a 0.8% gain, finishing at $13.85.
Among analyst moves, Citigroup downgraded
to hold from buy, sending shares 3.5% lower to end the day at $14.28.