NEW YORK—Citigroup Inc., one of the biggest corporate bailouts in U.S. history, has also netted one of the biggest windfalls for American taxpayers.
The U.S. Treasury this week sold its remaining equity stake in banking giant Citigroup Inc.—ending its near two-year ownership in the bank—while recording a profit totaling $12 billion for U.S. taxpayers, the department said.
Citigroup—the No. 3 U.S. bank by assets—was one of the hardest hit U.S. banks during the financial crisis of 2008. The U.S. Treasury and Federal Reserve gave the bank bailout loans amounting to $45 billion, a portion of which was subsequently converted to stock. The bailouts were part of the 2008 Troubled Asset Relief Program (TARP).
On Monday night, the Treasury said that it would sell 2.4 billion shares in a special offering, priced at $4.35 per share.
“By selling all the remaining Citigroup shares today, 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 TARP funds, protecting the taxpayer, and getting the government out of the business of owning stakes in private companies.”
In total, the U.S. federal government sold 7.7 billion shares of Citigroup stock this year.
While many smaller banks have yet to pay back their TARP loans, all the major corporations that received contributions—including Citi, General Motors, and American International Group Inc. (AIG)—have either repaid their TARP obligations in full, or in the case of AIG, outlined plans to repay them.
According to the Congressional Budget Office, total TARP bailout outstanding is only around $25 billion, far less than the $700 billion the government handed out in 2008 to 2009.
The U.S. Treasury this week sold its remaining equity stake in banking giant Citigroup Inc.—ending its near two-year ownership in the bank—while recording a profit totaling $12 billion for U.S. taxpayers, the department said.
Citigroup—the No. 3 U.S. bank by assets—was one of the hardest hit U.S. banks during the financial crisis of 2008. The U.S. Treasury and Federal Reserve gave the bank bailout loans amounting to $45 billion, a portion of which was subsequently converted to stock. The bailouts were part of the 2008 Troubled Asset Relief Program (TARP).
On Monday night, the Treasury said that it would sell 2.4 billion shares in a special offering, priced at $4.35 per share.
“By selling all the remaining Citigroup shares today, 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 TARP funds, protecting the taxpayer, and getting the government out of the business of owning stakes in private companies.”
In total, the U.S. federal government sold 7.7 billion shares of Citigroup stock this year.
While many smaller banks have yet to pay back their TARP loans, all the major corporations that received contributions—including Citi, General Motors, and American International Group Inc. (AIG)—have either repaid their TARP obligations in full, or in the case of AIG, outlined plans to repay them.
According to the Congressional Budget Office, total TARP bailout outstanding is only around $25 billion, far less than the $700 billion the government handed out in 2008 to 2009.
