SAN FRANCISCO (MarketWatch) -- The U.S. government made a 23% return supporting Goldman Sachs during the global financial crisis, the investment bank said Wednesday as it unwound one of the last taxpayer-funded investments it received last year.

Goldman GS, +1.94% said it paid $1.1 billion to redeem warrants the U.S. government received when it invested in the firm through the Troubled Asset Relief Program, or TARP.

In June, Goldman repaid a $10 billion preferred-stock investment of $10 billion from TARP. During the eight-month term of the investment, the firm noted that it also paid $318 million in dividends on those securities.

Including the cost of redeeming the warrants, Goldman said it paid $1.418 billion to the government, which works out to an annualized return of 23% for U.S. taxpayers.

"This return is reflective of the government's assistance, which benefited the financial system, our firm and our shareholders," Goldman Chief Executive Lloyd Blankfein said in a statement. "We are grateful for the government efforts."

A new bailout beneficiary

Since the financial crisis erupted last year, the U.S. government has invested roughly $200 billion in more than 621 financial institutions to prevent the U.S. banking system's collapse.

“ 'It is increasingly apparent that this may have been the best use of taxpayer 'funds,' from an investment standpoint, in the history of the republic.' ” — Richard Bove, Rochdale Research

More than 30 banks have repaid over $70 billion, but the bailouts have been heavily criticized for supporting some of the institutions that caused the crisis in the first place -- and doing so at taxpayers' expense.

Goldman's payments to the government suggest the opposite, banking industry analyst Richard Bove of Rochdale Research argued Wednesday.

"The government is making a great deal of money on its investments," Bove wrote in a note to clients. "It is increasingly apparent that this may have been the best use of taxpayer 'funds,' from an investment standpoint, in the history of the republic."

"So you will excuse me if the next time I hear about how bailing out the banks hurt the American taxpayer, I step outside to puke," he added.

'Full and fair'

The $1.1 billion that Goldman paid to redeem its government warrants was the value that the Treasury Department put on the securities, Goldman noted.

These warrants could have been valued through a public auction, but Goldman said the Treasury's assessment of the value of the securities was "full and fair," given "the extraordinary actions taken by the government to help stabilize the financial system."

Goldman shares rose 59 cents to $160.39 in afternoon action Wednesday. The stock is up 90% so far this year.