NEW YORK (Reuters) - Wells Fargo & Co on Tuesday said it has not applied to repay the $25 billion it took from the government’s Troubled Asset Relief Program, a sum it has maintained it never wanted.
“We want to pay back the government’s investment on behalf of the U.S. taxpayer at the earliest practical date, but we haven’t applied yet,” spokeswoman Julia Tunis Bernard said in an email. “We will work closely with our regulators to determine the appropriate time to repay the TARP funds.”
The fourth-largest U.S. bank was one of 19 U.S. lenders to undergo “stress tests” of their ability of withstand a deep recession. Regulators ordered Wells Fargo to build a $13.7 billion capital buffer, the largest other than Bank of America Corp’s $33.9 billion.
Ten banks, including nine that underwent stress tests, won government approval on Tuesday to repay $68 billion of TARP funds, freeing them from limits on such things as compensation and dividend payouts.
Richard Kovacevich, Wells Fargo’s chairman, in March lambasted the government for retroactively imposing new curbs on lenders receiving federal bailout money.
He also called the stress tests “asinine,” saying the San Francisco-based bank tests the strength of its own portfolios.
Wells Fargo took on a $93 billion pool of troubled loans when it bought Wachovia. Many of these were adjustable-rate mortgages where borrowers made small monthly payments, only to be left under water as their homes lost value.
Bernard said Wells Fargo has been “derisking” Wachovia’s balance sheet and has used the TARP money “to continue lending to credit-worthy customers -- more than nine times the amount of the government’s investment.”
Wells Fargo shares closed Tuesday up 27 cents at $25.66 on the New York Stock Exchange.
Reporting by Jonathan Stempel; Editing by Steve Orlofsky