Treasury: Taxpayers Made Profit on TARP

The U.S. Treasury Department reports:

The U.S. Department of the Treasury announced that the Troubled Asset Relief Program’s (TARP) investment in banks has now turned a profit after three financial institutions repaid a total of $7.4 billion in TARP funds today to taxpayers.

“While our overriding objective with TARP was to break the back of the financial crisis and save American jobs, the fact that our investment in banks has also delivered a significant profit for taxpayers is a welcome development, ” said Treasury Secretary Tim Geithner. “We still have more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP.”

With today’s proceeds, taxpayers have now recovered $251 billion from TARP’s bank programs through repayments, dividends, interest, and other income. That exceeds the original investment Treasury made through those programs ($245 billion) by nearly $6 billion. Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime profit of approximately $20 billion to taxpayers.

Based on current market conditions, Treasury expects that TARP investment programs taken as a whole – including financial support for banks, AIG, and the domestic auto industry; as well as targeted initiatives to restart the credit markets – will result in little or no cost to taxpayers. The lifetime cost of TARP is likely to be limited to funds disbursed for Treasury’s foreclosure prevention programs, which were not intended to be recovered.