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Banks begin repayment of Tarp funding

UP TO ten of the largest US banks were last night expected to begin paying back a combined $68bn (&pound;41.7bn) they received under the government&rsquo;s $700bn Troubled Asset Relief Programme (Tarp), after the Treasury gave them permission last week. <br /><br />Three of the largest Tarp recipients, JPMorgan Chase, Goldman Sachs and Morgan Stanley all stood ready to pay back the full $45bn they received between them yesterday, the first day they were allowed to do so. Goldman and Morgan Stanley received $10bn apiece under the scheme, while JPMorgan Chase took $25bn.<br /><br />Goldman&rsquo;s intention was revealed in a letter to US lawmakers, in which chief executive Lloyd C. Blankfein said the bank was &ldquo;grateful for the government&rsquo;s extraordinary efforts and the taxpayers&rsquo; patience&rdquo;.<br /><br />He added that stability could only return if the industry accepted that &ldquo;certain practices were unhealthy&rdquo;.<br /><br />The trio of Wall Street giants were joined by BB&amp;T, which said earlier in the day it would pay the Treasury $3.1bn to redeem preferred stock, plus a final dividend of around $13.9m.<br /><br />The bank also said it would buy back warrants linked to Tarp, which allow the Treasury to buy up to 13.9m shares at a fixed price.<br /><br />US Bancorp will also make a repayment to the tune of $6.1bn and will repurchase its warrants from the Treasury.<br /><br />Chief executive and president Richard Davis thanked taxpayers for their support and said that repayment represented a &ldquo;significant step forward&rdquo;.<br /><br />Other banks expected to pay back Tarp funds last night included American Express and Bank of New York Mellon.<br /><br />Repaying their Tarp funding will allow the banks to resume the payment of dividends and end government-imposed restrictions on pay and bonuses.