Goldman passes test, sees repaying TARP "soon"

By Joseph A. Giannone

NEW YORK (Reuters) - Goldman Sachs Group Inc said on Thursday it expected to repay "soon" the U.S. Treasury's $10 billion (6.65 billion pound)capital investment in the bank after it passed the government's bank stress test.

The government, which assessed the financial strength of 19 large U.S. financial institutions, determined that Goldman would require no additional capital over the next two years even if financial markets became severely challenging.

Goldman said in a statement after the release of the stress test results that it believed it had met all requirements for repaying $10 billion of capital injected by the Treasury last fall.

That investment, part of the Troubled Asset Relief Program (TARP), came with several restrictions, including on bonus pay.

The bank said it was "highly confident that we will soon repay the government's investment from the TARP's Capital Purchase Program."

Last month, Goldman announced the sale of $5 billion of stock and $2 billion of debt that was not guaranteed by the U.S. Federal Deposit Insurance Corp (FDIC).

For months, Goldman has told investors it had plenty of capital, did not need the TARP money and was eager to repay the preferred securities, which have a 5 percent interest rate.

On Wednesday, federal officials said TARP recipients had to prove they had sufficient capital, could issue common stock and sell debt without government guarantees before they could seek to return the TARP money.

(Editing by Ted Kerr)