Updated with final stock price movements throughout
NEW YORK (
was among the losers of the financial sector Wednesday, a day after the bank said it plans to repay bailout funds without the need to issue new shares.
CEO John Stumpf told
in an interview late Tuesday that the bank will pay back bailout funds "shortly" but will not raise new equity to complete the task. He did not offer a timeline.
Stumpf's comments came shortly after reports emerged that
Bank of America
is moving forward with plans to repay part of its Troubled Asset Relief Program dollars, which has put pressure on Wells Fargo to offer more information about its own TARP exit strategy.
Wells Fargo shares, which slumped 4.8% Tuesday, lost 12 cents, or 0.5%, to close at $26.09. By comparison, BofA shares slid 1.1% to $16.27, and
fell 1.9% to $40.86. Meanwhile,
tacked on 0.4% to finish at $4.56.
Turning to regional bank stocks,
sank after a Sandler O'Neill & Partners analyst questioned the abrupt reassignment of the bank's chief credit officer, Michael Willoughby. Regions shares ended down 35 cents, or 6.3%, at $5.19.
shares finished higher after a report the insurer was working to halve the fees paid to investment banks for initial public offerings.
report quoted AIG's CEO Robert Benmosche as saying he's looking to pay fees of "about 1%, not 2% to 2.5%." AIG has been working on an IPO of American International Assurance, a Hong Kong-based life insurer, and may issue a public offering of American Life Insurance. Benmosche also wants to rein in the fees charged by attorneys and consultant, the report said.
AIG is selling businesses and planning the IPOs in order to repay $85 million in U.S. bailout loans, and the insurer has been getting advice from banks including
, JPMorgan Chase, and
AIG rose $1.95, or 5.4%, to finish at $37.95. Among other insurers,
gave back 0.6% and
was up 0.4%.
declined Wednesday after the
proposed the breakup of the government-sponsored entities, or GSEs, and the creation of a new line of mortgage-backed securities.
The MBA recommended using Fannie Mae and Freddie Mac's infrastructure as the foundation for one or more regulated mortgage credit-guarantor entities, or MCGEs. The new plan would have these smaller privately held companies issue mortgage securities carrying an explicit government guarantee.
Fannie Mae shares dropped 13.8% to close at $1.37. Freddie Mac sank 13.7% to $1.64.
In other regulation news, Federal Deposit Insurance Corp. Chairman Sheila Bair told
late Tuesday that commercial loans are likely to be the biggest drivers of future bank failures. During the interview, Bair said commercial loans are "going to be a bigger driver of bank failures towards the end of this year into next year."
Bair added that residential mortgages were still where the credit distress was right now. Already,
Written by Robert Holmes in New York.