Citigroup Will Be Repaying The Government

Citigroup Will Be Repaying The Government

18th December 2009

The sources which are close to the Citigroup have said that the last banking giant of the Wall Street with the funds of bailout on the books has increased efforts for repaying the federal loan worth $20 billon. The bailout funds of an amount of $45 billion were being given to the Citigroup, but out of this amount, the funds worth $25 billion had been converted to the common stocks, which in the company have given a substantial stake to the government while making an effort to the reduction in the size of the loan it took. It has been said in the New York Times that Vikram Pandit, who is the chief executive officer of the Citigroup and has asked permission from the Treasury in order to sell off the new stock. As a result of this the funds f the company would be increased greatly while diluting the current values for the shares of the company.

This particular move would not be splitting the bank completely from the support of the government. The government has given an amount of $301 billion for the frozen assets of the Citigroup. This deal comes with the preferred stock for which the bank has paid. What is going to happen with the policy of insurance is not clear right now.