US Treasury sells remaining shares in Citi
Government says it will make a profit of at least $12 billion on the sale of its remaining shares in Citi, finally freeing the Wall Street Bank from the stigma of government ownership.
Citi has finally shaken off the stigma attached to having the US Government as its largest shareholder. According to newspaper reports, the US Treasury announced on Monday night that it had found buyers for its 2.4 billion shares in Citi and that it would make a reported $12 billion in profit on the sale of the shares.
Citi was one of the largest recipients of US government bail out money ($45 billion) and at one point the Treasury owned 34% of the bank. The bank's management has been trying to reduce the government's stake for some time. In December 2009 the Treasury appeared reluctant to sell its stake by not participating in a heavily discounted "common share offering" by the bank. It is probably patting itself on the back now for holding on to the shares and selling them at a profit to US taxpayers.
As one of the last major Wall Street banks in which the Government owned a stake, Citi faced criticism from some of its competitors who claimed that government ownership meant the bank would have to retreat internationally and focus more on its domestic business. The opposite in fact has been true with Citi looking to increase its presence globally, particularly in Asia and other emerging markets.
Date Posted:7th December 2010