6 banks repay government loans
WASHINGTON >> Six more banks repaid their government bailouts, bringing the bank capital program close to 99 percent recovery, the Treasury Department said yesterday.
The department received proceeds of $475 million when the banks repurchased preferred shares and other investments that the Treasury Department got in exchange for its cash injections.
Banks received a total of $245 billion under the program. The Treasury Department has collected about $244 billion in repayments, fees and other income from banks.
The department expects the bank program will finish with a profit of about $20 billion.
Losses are expected, however, on the administration’s struggling foreclosure-prevention programs. Money from those programs goes to homeowners, mortgage companies and investors. If homeowners’ payments are lowered successfully, the government can’t recover that cash.
Fed likely to OK higher dividends
NEW YORK >> Even as ordinary investors look forward to the prospect of larger dividend payouts by the big banks, another group is poised for a rich payday: bank chief executives. In the next few days, the Federal Reserve is expected to give a handful of institutions, including JPMorgan Chase and Capital One, permission to pay higher dividends, another sign of the remarkable comeback of banks since the depths of the financial crisis.
Jamie Dimon, chief executive of JPMorgan Chase, stands to eventually reap nearly $6 million a year in dividend payments from the stock he owns, an amount that equals almost a third of his total pay in 2010. Capital One’s chief executive, Richard Fairbank, could earn nearly
$3 million a year as the credit card giant weighs a similar move.
These figures are based on the number of shares the executives own and estimates from the banks about the percentage of earnings they plan to earmark for dividend payments.
The increase in dividends is likely to occur in stages, so it may take until 2012 for the executives to collect the entire amount.
Wholesale food prices jump by 3.9%
LOS ANGELES >> American consumers have long enjoyed a luxury that few others could boast: an abundance of affordable food.
But with prices of wheat, corn and other staples soaring, some economists and scientists are wondering how long that can last.
Yesterday, the U.S. Labor Department reported that wholesale food prices jumped 3.9 percent in February over January, the highest monthly increase in 37 years. Economists said they expect to see a similar uptick in what consumers are paying for food at retail, when the Labor Department releases its consumer price index today.
“Food prices have been rising a lot faster, because underlying costs have really shot up. You’re seeing some ingredients up 40 percent, 50 percent, 60 percent over last year,” said Ephraim Leibtag, a U.S. Department of Agriculture economist.
“When you see wheat prices close to 80 percent up, that’s going to ripple out to the public.”
Economists warn that such prices will probably remain high this year and possibly much longer, driven by a confluence of factors: the fall of the U.S. dollar, slowing growth in crop yields, political unrest in the Middle East, high crude oil prices and a revived interest in crop-based biofuels.
ON THE MOVE
Central Pacific Bank has appointed the following:
>> Arnold Martines to manager of the commercial real estate Hawaii division. He was previously the bank’s chief credit administrator and has 18 years of banking industry experience.
>> Pat Yamada to manager of retail and small-business credit delivery. He was previously the manager for the bank’s commercial real estate Hawaii division and has 36 years of banking industry experience.
The Hawaii Lumber Products Association has announced the following officers for 2011: Jeff Browning, president; Hap A. Person, vice president; Robert B. Kayser Jr., treasurer; and Connie Smales, secretary.
American Savings Bank has presented a $10,000 check to Maui Adventist School as part of its Bank for Education program, which was created to help Hawaii’s communities raise funds for their schools.