A few weeks ago, Citigroup CEO Vikram Pandit thanked the government for the $45 billion it gave his bank, which he said “built a bridge over the crisis to a sound footing on the other side.” Well, now it’s the government’s turn to thank Citigroup, because the Obama administration is about to sell its stake in the bank and make an $8 billion profit. Yay!
A quick recap on how we got here: Back in November 2008, the government gave Citigroup $45 billion for preferred stock shares. That package was later restructured so that $20 billion became a loan and $25 billion became common stock. Now that stock is worth $33 billion and when the government sells it, the $8 billion profit will be the most made from any company that took bailout money. The Washington Post says the profit will amount to a “validation of the rescue plan adopted by government officials during the height of the financial panic.” Finally! We’re glad that’s settled.
U.S. take if it sells its Citi stake to settle cost of bailout: $8 billion [WP]