Monday, November 29, 1999

91 financial institutions defer May``s TARP pay

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New York, June 18 (PTI) In a clear signal that cash- strapped financial institutions are finding it difficult to pay the US government under the bailout programme, more than 90 lenders have missed the quarterly payment due in May. According to the data compiled by SNL Financial from the US Treasury report, 91 banks and thrifts suspended dividend payments due May 17 on preferred stock issued under the Troubled Asset Relief Programme (TARP). Of the total 91 banks and thrifts, 23 failed to make a payment for the first time since entering the programme. The number of financial institutions deferring their TARP payments increased for the third consecutive quarter. In February 74 lenders missed payments and in November last year 55 financial institutions suspended payments. Under the programme, the US Treasury has infused billions of dollars in financial institutions seeking for funds in exchange for preferred shares at the height of financial turmoil in 2008. The banks were required to make regular dividend payments to the Treasury, and can repurchase the stocks at some time in the future. The 91 institutions have received nearly USD 3.5 billion for preferred shares issued under Capital Purchase Programme, the report noted. The report said that 20 institutions have missed four payments, since the TARP established in 2008 while eight of them including Anchor BanCorp Wisconsin Inc, Blue valley Bancorp, Commonwealth Buisness Bank have halted five payments. While many of the US leadings banks --JPMorgan Chase & Co, Goldman Sachs Group, Morgan Stanley, American Express, US Bancorp and Bank of New York Mellon Corp--have repaid billions of dollars of Treasury aid. Still over 600 smaller banks are understood to hold USD 130 billion from TARP fund. As per SNL''s analysis, Westminster, Saigon National Bank recently missed its sixth dividend payment. And failure to make payments for six quarters in total --has the right to appoint two members to the board of directors. Besides, the report said that the next dividend payment is scheduled for August 16. The funds came from a USD 700 billion bailout package approved by the US Congress in October 2008 in the backdrop of the worst financial crisis since the Great Depression in 1929. PTI SP.

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