WASHINGTON — The Treasury Department said today it has raised $10.5 billion from the sale of a total of 2.6 billion shares of Citigroup stock it received as part of the government’s rescue of the bank.
The government sold the shares at a profit as it seeks to recoup the costs of the $700 billion financial bailout in 2008.
Treasury says the latest sale of 1.1 billion shares, which figures into the total, completes its second phase of selling operations.
In the latest Citigroup sale, the stock sold for an average price per sale of around $4.03, Treasury said. That would represent a profit form the $3.25 price Treasury paid to obtain the shares.
The government still owns 5.1 billion shares of Citigroup stock and expects to continue selling shares at a future date.
Citigroup, hard hit by the financial crisis, received $45 billion in taxpayer-funded bailout money. That was one of the largest bank rescues by the government. Of the $45 billion, $25 billion was converted to a government ownership stake. The bank repaid the other $20 billion in December.
“We are pleased that Treasury has profitably sold a third of its common shares in Citi, adding to the substantial return for taxpayers realized last year,” said Jon Diat, a spokesman for Citigroup.
The government’s bailouts of banks and insurance giant American International Group Inc. has touched a nerve with the American public — and by extension — lawmakers on Capitol Hill. Ordinary people have been incensed that taxpayer money has helped banks, while so many Americans are struggling under near double-digit unemployment, soaring home foreclosures and lackluster wage gains.
Treasury Secretary Timothy Geithner told a watchdog panel last week that that banks have repaid about 75 percent of the bailout money they received. The government’s investments in aided banks have brought taxpayers $21 billion, he said.
At the same time, Geithner acknowledged there likely will be a partial loss from the rescue of giant insurer American International Group Inc., into which the government plowed $182 billion.
Geithner also said the auto industry has made significant structural changes, and the prospects that General Motors and Chrysler will repay the nearly $60 billion in bailout money have improved.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info