Citigroup to Buy Wachovia’s Banking Operations

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He's meant to be jailbait, not a lifemate!! Photo: Getty Images

The FDIC has helped ailing bank Wachovia reach a deal with Citigroup in which the banking giant would absorb $42 billion of Wachovia's loan losses, and the FDIC would absorb the rest. “For Wachovia customers, today’s action will ensure seamless continuity of service from their bank and full protection for all of their deposits,” FDIC chairman Sheila C. Bair told the Times in a statement, emphasizing that the bank did not fail. “There will be no interruption in services and bank customers should expect business as usual.” Citigroup will now control 30 percent of America's deposits, placing it in the orbit of JPMorgan Chase and Bank of America, which over the last few weeks have become so huge and powerful that they now have unprecedented power to set loan rates. The negotiations for the deal took place over the weekend, during which Citigroup's only competition for the bank was fellow lender Wells Fargo. Citigroup CEO Vikram Pandit is personally overseeing the talks to finalize this deal, as it could mark the end of the group's long search for a way to enter the consumer banking industry.

Citigroup to Buy Wachovia Banking Operations [NYT]