JPMorgan, AmEx, Suntrust Raise Capital to Repay TARP

JPMorgan Chase said Monday it plans to raise $5 billion of common equity, which it said will enable it to repay this month the $25 billion it took from the government's bank bailout plan.

SunTrust Banks and American Express also announced plans to raise capital. (See below.)

The New York-based bank plans to raise the capital by selling common stock, and to price the offering by Tuesday morning, a person close to the matter said.

JPMorgan , the nation's second-largest bank, was among 19 U.S. lenders to recently undergo government "stress tests" of its ability to weather a deep recession, and was one of nine that regulators said did not need more capital.

The bank said that once it completes its latest capital raising, it will have met all the conditions to repay the $25 billion it took from the Treasury Department's Troubled Asset Relief Program.

It said it expects to repay the government "before the end of June," and that doing so "is in the best interests of the country and the company."

Many banks have criticized TARP for its restrictions, including on compensation, and the perception among investors that recipients are desperate for capital.

JPMorgan Chief Executive Jamie Dimon has called it a "scarlet letter" for a bank to be involved in TARP.

JPMorgan shares closed Monday down 79 cents at $36.11 on the New York Stock Exchange.

American Express to Sell $500 Million In Stocks

Separately, American Express said it will sell $500 million worth of its common stock in a public offering, and use the proceeds in part to pay back government bailout funds.

The New York-based credit card company says it will use the proceeds for general corporate purposes, including repurchasing some of the $3.4 billion worth of preferred shares it issued to the U.S. Treasury as part of the government's capital purchase program.

American Express said last month that it was seeking permission to repay the government investment. The Federal Reserve determined the company must conduct a public equity offering as a condition to repurchasing the preferred shares.

SunTrust Speeds Up Capital-Raising Plan

SunTrust Banks, a U.S. Southeast regional bank ordered by federal regulators to raise $2.2 billion of equity capital, on Monday speeded up a previously announced capital-raising plan, hoping to benefit from recent investor demand for banks' securities.

The Atlanta-based bank said it plans to sell $1.4 billion of common stock, raise $300 million of common equity from selling securities, and raise $250 million of common equity from buying back up to $1 billion of preferred and hybrid securities for cash.

After the markets closed, the bank priced the offering of 108 million stocks at $13.00 per share, below Monday's closing price of $13.80. SunTrust said the underwriters will have up to 30 days to buy an additional 16.2 million shares.

The bank has said it also expects to sell $260 million of common stock under a plan announced May 15 to sell $1.25 billion of stock in an "at-the-market" offering. SunTrust said it has suspended and expects to terminate the offering.

The government last month ordered SunTrust to raise $2.2 billion of equity capital following a "stress test" of its ability to weather a deep recession. SunTrust on May 15 cut its quarterly dividend to a penny per share from 10 cents, the third reduction in a year, saving about $128 million a year.

—The Associated Press contributed to this report

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