Markets were pleased with Bank of America’s (NYSE: BAC) decision to repay its debt to the federal government under the Troubled Asset Relief Program and now analysts are wondering which bank will be the next institution to repay its public debt.
The remaining major players that are still participating in the Troubled Asset Relief Program include Will Wells Fargo (NYSE: FC), PNC Financial Service (NYSE: PNC) and Citigroup (NYSE: C). Other firms are less eager to get off the government dole because they don’t have the same pressure to bring on a new CEO. Bank of America board members had been complaining that government pay restrictions were hurting its ability to find a new CEO.
Both PNC and Wells Fargo have posted stronger profits and smaller losses from Bank of America and some analysts believe that these two firms will have the potential to earn enough in revenue organically to repay out its TARP debt within a few quarters. Both Wells Fargo and PNC Financial Services say that they want to repay their debt as soon as possible, but have yet to discuss a specific time table.
Although there may be a stigma associated with Citigroup’s business, most analyst believe that Citigroup has close to adequate capital and don’t expect that there will be a large delusionary release of new stock.
Citigroup received a rare piece of good news this week when the Wall Street Journal reported that Citi is getting a better end of a deal with the Abu Dhabi Investment Authority dating back to 2007. The deal is expected to boost Citigroup’s tangible equity by $1.875 billion, a step bringing Citibank closer back to having adequate capital levels.
