AIG, autos offset Treasury bank bailout profits
WASHINGTON (Reuters) - U.S. taxpayer profits from bank bailout investments are being offset by estimated losses from American International Group and automakers and mortgage payment cuts for struggling homeowners, a U.S. Treasury report showed on Monday.
The Treasury estimated net losses on its $700 billion bailout program at $68.5 billion for the fiscal year ended September 30, 2009.
The December report for the Troubled Asset Relief Program, or TARP, showed that the fiscal 2009 net loss included estimated losses of $30.4 billion for AIG and $30.4 billion for automakers, with $27.1 billion in losses from the Home Affordable Modification Program.
These were much larger than a $15 billion profit registered from the Capital Purchase Program for banks and $4.4 billion in profits from other bank investments, asset guarantee and lending programs.
A senior Treasury official said the bank investments will ultimately produce a positive return for taxpayers. But the department was not yet ready to update its estimate of the final taxpayer costs for the bailouts.
The official said the Treasury would update its cost estimates on a quarterly basis as the bailout program shifts its focus toward small business lending and housing relief in its final 10 months of operation.
The Treasury in November said TARP's ultimate cost estimate had been reduced to about $141 billion from $341 billion earlier in the year. Further reductions in the final cost estimate could aid the Obama administration as it faces pressure to produce a new budget that starts to show deficit reductions.
(Reporting by David Lawder; Editing by Dan Grebler)