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Citigroup repays $20 billion to US

Citigroup Inc repaid USD 20 bn to the US, as the bank works to reduce govt involvement in its compensation practices.

New York: Citigroup Inc repaid USD 20 billion to the United States, as the bank works to reduce government involvement in its compensation practices.

The bank sold USD 17 billion in common shares and USD 3.5 billion in convertible notes to help raise capital to repay the government.

Citigroup received USD 45 billion under the US Troubled Asset Relief Program last year over two separate bailouts. In a third bailout this year, the US agreed to swap the Citigroup preferred shares it owned into USD 25 billion of common stock and another USD 20 billion of more debt-like securities.

Citigroup has repaid the USD 20 billion, but taxpayers still own common stock in the bank that is now worth about USD 25.2 billion.

The US had planned to sell up to USD 5 billion of that stock alongside Citigroup`s share offering, but demand for the bank`s sale was so low that any government sale would have resulted in a loss for taxpayers.

Citigroup and the US also ended an agreement to guarantee a roughly USD 250 billion portfolio of assets against losses.

With these steps, the bank is no longer subject to the oversight of US pay czar Kenneth Feinberg for 2010 compensation, although he still has say over 2009 compensation for the bank`s top 100 employees.

"Citigroup is no longer a recipient of `exceptional financial assistance,`" Feinberg wrote in a letter to Citigroup that was released publicly.

Bureau Report

From Zee News

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