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FRIDAY, NOVEMBER 27, 2009
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Citigroup Wants to Repay Bailout, Cut Treasury Stake

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(Newser) – Citigroup is drawing up a plan to get out from under the government’s thumb, the Wall Street Journal reports. The bank called the Treasury over the weekend to say it was looking for ways to scale back the government’s investment, outlining a plan in which it would raise outside capital to repay bailout funds, and issue new public shares, while the Treasury sells some of its Citi stock.

Though the call didn’t amount to formal negotiations on the matter, the Treasury said it was open to reducing its 34% stake. But some analysts think it would be too soon to sell. “To get out with credibility, they'll have to show at least a few quarters of decent results,” says one analyst. Still, taxpayers would reap a tidy profit. Citi shares are at $4.52, up from the $3.25 the government paid, which translates into a $9.8 billion profit.

Citigroup chairman Richard Parsons, left, talks to former Securities and Exchange Commission Chairman William Donaldson at Federal Hall in New York, Monday, Sept. 14, 2009.
Citigroup chairman Richard Parsons, left, talks to former Securities and Exchange Commission Chairman William Donaldson at Federal Hall in New York, Monday, Sept. 14, 2009.   (AP Photo/Henny Ray Abrams)
A sign for Citibank is shown at Citigroup headquarters Thursday, April 30, 2009 in New York.
A sign for Citibank is shown at Citigroup headquarters Thursday, April 30, 2009 in New York.   (AP Photo/Mark Lennihan)
A pedestrian passes by a Citibank in New York, July 17, 2009. Citigroup Inc. surprised Wall Street Friday, reporting a $3 billion second-quarter profit instead of the big loss analysts expected.
A pedestrian passes by a Citibank in New York, July 17, 2009. Citigroup Inc. surprised Wall Street Friday, reporting a $3 billion second-quarter profit instead of the big loss analysts expected.   (AP Photo/Yanina Manolova)
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7 comments
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polytricks
Sep 15, 09 9:07 AM CDT
Why would our Treasury say "No" to repayment of bailout money, funded by the public? Who are these analysts? Reply
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IN RESPONSE:
Yourself
Sep 15, 09 10:26 AM CDT
if the bank doesn't show enough strength and is just paying it off as quick as they can, then it might come back to bite them in the ass later and need a second bailout. That's something the fed DOESN'T want to do. So instead they hold on till they're truly comfortable with the stability of the company. Of which is beneficial in terms of the profit they could make. It's just like any other investor, the only difference is that this investor is the Fed, and they care about the long term results of said company.
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+3
JonmarkP
Sep 15, 09 9:08 AM CDT
This is the funniest story I've read in a week, for obvious reasons. "We'd like a big dose of Socialism when we're on the skids, please, and a big dose of Capitalism when we're back on Easy Street." Reply
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+4
Berzelius
Sep 15, 09 11:20 AM CDT
Citi got screwed by the Fed in October of last year with the purchase of Wachovia. The FED told Citi to walk away from the deal to give to Wells Fargo in the end. If it hadn't been for Citi buying in the first place, Wachovia would have been doors closed and nothing for Wells to buy later that week besides a brokerage. CIti should want to be done with the FED. Reply
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0
Mad
Sep 15, 09 12:26 PM CDT
Nearly $10B profit! Wow! Can anyone name anything Bush squandered our national treasure on, that EVER ONCE gave us back a dime? Anything? Anything at all??? Reply
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+2

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