U.S. Bancorp CEO: We could exit TARP in a few weeks
U.S. Bancorp
Speaking at a UBS financial services conference in New York, Davis said repaying TARP is a likely outcome after regulators complete a couple of more financial assessments of the nation's eighth-largest bank.
Minneapolis-based U.S. Bancorp, which operates mainly in the western two-thirds of the country, is one of nine lenders not ordered to raise capital after recently undergoing federal stress tests of their ability to handle a deep recession.
JPMorgan Chase & Co
TARP was designed to spur lending. More than 80 percent of the $700 billion available in the program has been distributed. But many banks now view participation as a sign of weakness and chafe at various restrictions, including some on compensation.
Earlier this week, U.S. Bancorp sold $2.5 billion of stock, and also sold $1 billion of debt not backed by the Federal Deposit Insurance Corp, a condition of paying back TARP.
Davis said the bank is not counting on an economic recovery in 2009 and loan appetite is quite low among borrowers.
He said, though, that U.S. Bancorp will consider buying more banks seized by the FDIC, after taking over the failed California lenders Downey Financial Corp in November.
Thirty-three U.S. banks have failed this year, and Davis said: we will look with the FDIC for opportunities every single Friday, the day the regulator usually closes failing banks.
Shares of U.S. Bancorp were down 59 cents, or 3.3 percent, at $17.30 in afternoon trading on the New York Stock Exchange.
(Reporting by Jonathan Stempel, editing by Gerald E. McCormick)
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