Goldman Sachs Pays $1.1 Billion for Treasury Warrants
By Christine Harper
July 22 (Bloomberg) -- Goldman Sachs Group Inc. agreed to the U.S. Treasury’s request for $1.1 billion to redeem warrants the government received when it invested in the firm, which reported record second-quarter profit last week.
The payment is in addition to $318 million in preferred dividends that Goldman Sachs paid on the $10 billion U.S. investment. On an annualized basis, the total return to taxpayers was 23 percent, the New York-based bank said today in a statement.
“This return is reflective of the government’s assistance, which benefited the financial system, our firm and our shareholders,” Chief Executive Officer Lloyd Blankfein, 54, said in the statement. “We are grateful for the government efforts.”
Unlike JPMorgan Chase & Co., the second-biggest U.S. bank by assets, Goldman Sachs agreed to pay the full amount sought by Treasury. JPMorgan, which has repaid $25 billion it received from the government, said earlier this month that it couldn’t agree with the government on its warrants’ value, leaving them to be sold in a public auction.
Goldman’s decision follows criticism of the bank by lawmakers who questioned its decision to set aside a record $11.4 billion to pay employees in the first half of the year.
The company’s warrant transaction “was the best deal for taxpayers yet,” said Linus Wilson, a finance professor at the University of Louisiana at Lafayette.
Reply With Quote
Originally Posted by Brian Defferding
Connect With Us