The announcement came late Monday, the same day Citigroup said it reached an agreement with the Treasury Department clearing the way for the bank to exit federal bailout programs. Wells Fargo becomes the last of Wall Street's major banks to repay funds obtained under the Troubled Assets Relief Program, The New York Times reported.
Wells Fargo said some of the money included in paying back the U.S. government would come from a $10.4 billion stock sale, the Times reported. Wells Fargo said its payment to the Treasury will include "$1.4 billion in dividends."
"TARP stabilized our country's financial system when confidence in financial markets around the world was being tested unlike any other period in our history," Wells Fargo President and Chief Executive Officer John Stumpf said in a statement.
In announcing the Citibank payback, Chief Executive Officer Vikram Pandit said "we owe the American taxpayers a debt of gratitude."
The Treasury Department said in a statement, "the United States never intended to be a long-term shareholder in private companies."
Intentions aside, few expected the largest U.S. financial firms would manage to repay TARP loans of billions of dollars within a little more than a year, analysts have said.
President Barack Obama met Monday with top bank executives and pushed them to do more lending. White House Chief of Staff Rahm Emanuel said Sunday "we have to get them (banks) off the sidelines and get them to play a more active role in our economic recovery."
Citigroup said it would raise $17 billion by selling stock this week, buy back $20 billion in preferred stock and extricate itself from a $250 billion asset insurance plan set up to protect it from losses on its frozen assets.
The Treasury Department, meanwhile, will sell its 7.7 billion in Citigroup shares during the next 12 months, the Times said.