Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

Concerns grow as hobby drone use increases

Read more

WEB NEWS

Buffalo residents share stunning images of the snowstorm

Read more

AFRICA NEWS

Senegalese photographer's flashbacks to Africans throughout history

Read more

MEDIAWATCH

Hollande photographed with Julie Gayet on Elysée Palace balcony

Read more

REVISITED

Is Beirut still haunted by ghosts of the civil war?

Read more

THE WORLD THIS WEEK

Band Aid 30 - Hit or Miss? Bob Geldof in Hot Water over Ebola Single

Read more

THE WORLD THIS WEEK

Deal or No Deal with Iran? Home Stretch to Reach Historic Agreement

Read more

FRANCE IN FOCUS

Football scandals: The ugly side of the beautiful game

Read more

#THE 51%

Ending violence against women: The dangers of trial by Twitter

Read more

Business

US Treasury begins sale of Citigroup stake

Text by News Wires

Latest update : 2010-04-27

The US government says it will start selling the first chunk of its Citigroup stock, worth around 37 billion dollars, as it seeks to claw back some of the $700 billion of taxpayers' money used to bail out the global financial system.

AFP - The US government announced Monday it would start selling 1.5 billion shares in Citigroup, as it begins one of the biggest stock sales in history.

It is the first block sale of Citigroup shares held by the government, which has begun to wind-up crisis investments in the hope of recouping taxpayers' cash.

"The US Department of the Treasury today announced the next steps in its plan to sell approximately 7.7 billion shares of Citigroup common stock," a statement said.

The US government owns around a quarter of the firm and shares worth around 37 billion dollars at Monday's pre-market rates.

"Treasury will begin selling its common shares in the market in an orderly fashion under a pre-arranged written trading plan," a statement said.

The prospect of 1.5 billion shares flooding the market sent Citi's stock price sliding over four percent as the Treasury tried to limit loses.

"We can sell today, it doesn't mean that we will," said a Treasury official trying to keep plans under wraps.

But despite the early losses, analysts said the Treasury's announcement would not radically alter the outlook for Citi.

"We expect gradual sales at market prices," said Matthew Albrecht, a financials analyst at Standard & Poor's Equity Research, maintaining his recommendation that clients buy Citi shares.

The announcement comes as Washington tries to claw back the 700-billion-dollars of taxpayers' money used to prevent the collapse of the global financial system in 2008.

At the depths of the crisis, the government injected a total of 45 billion dollars into Citi, once the world's biggest banking group.

The New York-based company faced massive losses in the wake of the mortgage crisis and came perilously close to seeing a run on its deposits as confidence in the system collapsed.

Despite repaying some 20 billion dollars to the authorities in December, Citi is still one of the last of the major banks operating in the shadow of a US government bailout.

The government had held off selling its share stake in the firm until now, no doubt dissuaded by its low market value.

The bank last week said it had returned to profit after two years spent largely in the red, posting a profit of 4.4 billion dollars in the first quarter of this year.

Since then it has risen almost 40 cents a share, a potential earning of around 300 million dollars for the Treasury.

Date created : 2010-04-27

  • BANKING

    US government to sell its stake in bailed-out Citigroup

    Read more

COMMENT(S)