Bank of New York Mellon Corporation (NYSE: BK), today announced that it repurchased warrants from the Treasury Dept. for $136 million. The warrants for approx. 14.5 million shares of the company’s common stock had been issued to the U.S. Treasury as part of the TARP Capital Purchase Program.
The custodial bank, which now becomes the sixth of the 10 big financial-services companies to buy back warrants, repaid the $3 billion it received back in mid-June as 10 companies were allowed last month to pay back $68 billion of investments and negotiate the value of related warrants.
Several companies, including Goldman Sachs (NYSE: GS), have bought back the warrants while others, notably Northern Trust Corporation (NASDAQ: NTRS), Capital One Financial Corp. (NYSE: COF), and JPMorgan Chase (NYSE: JPM), continue to negotiate with Treasury over their warrants’ value.
Bank of New York Mellon Chairman and CEO Robert Kelly said he “sees significant improvement in the financial markets” and is pleased to “have been able to repay the U.S. Treasury and provide taxpayers with a 12% annual return on their investment in [his] company.”
Last month the bank, which currently has $20.7 trillion in assets under custody and administration, reported 2Q income from continuing operations of $267 million, or $0.23 per share, compared with $303 million, or $0.26 per share on a y/y basis.
BK shares rose 87 cents, or 3.5%, to $29.40 in AH NYSE trading.
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