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WASHINGTON (Reuters) - The U.S. Treasury plans to sell off its shares in about two-thirds of the remaining banks that took government bailout money during the financial crisis over the coming year, the department said on Tuesday.

The government still owns stakes in 218 banks following controversial rescues that proved deeply unpopular.

"We're confident that we'll have made significant additional progress winding down our remaining TARP Capital Purchase Program bank investments by the end of next year," said Timothy Massad, assistant secretary of Treasury for financial stability.

The remaining institutions are expected to pay back or restructure investments dating to the 2008 financial crisis, though that part of the process may take longer, the Treasury said.

In total, these banks owe about $7.5 billion.

Over the years, the U.S. Treasury has been liquidating its stakes in banks - including Bank of America <BAC.N> and Citigroup <C.N> - that received assistance through the financial bailout program, known as the Troubled Asset Relief Program (TARP).

More than 90 percent ($380 billion) of the $418 billion disbursed for TARP has already been recovered to date through repayments and other income.

Last week, the Treasury said it had completed its final sale of common stock in American International Group <AIG.N>, reducing its shares in the insurer to zero four years after a massive government bailout.

(Reporting by Sakthi Prasad in Bangalore and Washington Economics Team; Editing by Theodore d'Afflisio)

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