Ameriprise Financial declines funding from U.S. Treasury Capital Purchase Program
May 15, 2009
On Friday, May 15, 2009, Ameriprise Financial announced that it had elected not to participate in the U.S. Treasury Capital Purchase Program (CPP). We encourage you to read the press release as well as the following Q&A.
Ameriprise Financial CPP Q&A
- Why did Ameriprise Financial decline funding under CPP?
- Why did Ameriprise apply for funding if the company did not intend to accept it?
- Why did Ameriprise not withdraw its application prior to the Treasury's decision?
- Why did you not respond more quickly to Treasury's decision?
- How much money would Ameriprise have been eligible for? What would the terms have been?
- What if markets turn downward again? Will Ameriprise apply for capital again?
Q: Why did Ameriprise Financial decline funding under CPP?
We have carefully evaluated our current position and expectations for the future, and we are confident that our current capital position and access to potential additional funding sources are more than adequate.
Our prudent management approach has allowed us to maintain solid balance sheet fundamentals, including a high quality asset portfolio, large liquidity pool, more than $1 billion in excess capital and conservative capital ratios.
Q: Why did Ameriprise apply for funding if the company did not intend to accept it?
We applied in November 2008 when the former leadership at Treasury was strongly encouraging healthy firms to apply.
Q: Why did Ameriprise not withdraw its application prior to the Treasury's decision?
Given that markets have improved and stabilized only recently, we believed it was prudent to maintain all options.
Q: Why did you not respond more quickly to Treasury's decision?
We did not have an indication of when Treasury would render its decision ahead of time, and we expected Treasury’s approval to remain confidential until we could respond. Confidentiality was not maintained.
Q: How much money would Ameriprise have been eligible for? What would the terms have been?
We believe we would have been eligible for the maximum amount allowable under Treasury’s guidelines, which stipulate that firms could receive as much as 3 percent of their risk-adjusted assets. Treasury issued standard terms for companies participating in the program, and those terms can be found at the Department of the Treasury’s website.
Q: What if markets turn downward again? Will Ameriprise apply for capital again?
While we can't predict the future, we have carefully evaluated our current position and expectations for the future, and we are confident that our current capital position and access to potential additional funding sources are more than adequate.