Business News
Citigroup pays back US bailout: 12 billion dollars profit for US
Dec 7, 2010, 17:53 GMT
Washington - Shares in Citigroup rallied Tuesday a day after the US government recouped the last of the bank's bail-out money, bringing its profit for US taxpayers to a total of 12-billion-dollars over the past months.
On Monday, the US Treasury Department sold its remaining stock in Citigroup Inc for 10.5 billion dollars for 2.4 billion shares of common stock, two years after the bank received a 45-billion-dollar taxpayer-funded bailout as it stood on the precipice of bankruptcy.
'By selling all the remaining Citigroup shares ... we had an opportunity to lock in substantial profits for the taxpayer and avoid future risk,' said Tim Massad, acting assistant secretary for financial stability, in a statement.
'With this transaction, we have advanced our goals of recovering (rescue) funds, protecting the taxpayer, and getting the government out of the business of owning stakes in private companies,' he said.
Citigroup shares had lost about 92 per cent of their value from a December-2006 high of 56.41 dollars, Bloomberg financial news service reported. By Tuesday morning, they had gained 5 cents to 4.50 dollars per share. That price represented more than a 34-per-cent recovery this year so far.
Citigroup also had to get 301 billion dollars of government guarantees on its riskiest assets, making the bailout the biggest among US banks.
Share prices of Bank of America Corp., the biggest US bank by assets, has declined 23 per cent this year while those of JPMorgan Chase & Co, the second-biggest, fell about 4 per cent.
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