The U.S. Treasury Department announced Friday that it has received 936.1 million U.S. dollars from the sale of warrants of JPMorgan Chase & Co., a bank that obtained government support during last year's financial crisis.
The Treasury said it sold more than 88.4 million warrants in an auction Thursday at a price of 10.75 dollars each.
JPMorgan was the second finacial institution launching an auction of warrants -- a security that entitles the holder to buy stock at a price that is usually higher than the stock price at time of issue -- that had received aid from the government's 700-billion-dollar Troubled Asset Relief Program (TARP) since October 2008.
Last week, the Treasury received 146.5 million dollars in a sale of warrants it held from Virgina-based Capital One Financial Corp.
"These proceeds provide an additional return to the American taxpayers from Treasury's investment in the company beyond the dividend payments it received on the related preferred stock," the Treasury said in a statement.
Many banks that received TARP aid had repurchased their warrants when they repaid the assistance money.
In June, major U.S. banks began repaying the Treasury for capital injected into the financial system on the height of the crisis. JPMorgan
repaid the government for its 25-billion-dollar capital injection through the month.
But the goverment still has the right to stage an auction when the repurchase price posted by the bank fails to reach an acceptable level.
Treasury Secretary Tim Geithner said Wednesday that as a result of improved financial conditions and careful stewardship of the program, losses on TARP investments were likely to be significantly trimmed.
He said the banks that received support from the program will soon have repaid nearly half of the TARP funds they received. Therefore, TARP might just cost taxpayers at least 200 billion dollars, less than the previously projected 341 billion in the August Mid-Session Review of the President's Budget.
President Barack Obama announced Tuesday that some of the unspent funds in the program would be diverted to job creation efforts.