NEW YORK (Reuters) - Citigroup Inc C.N plans to pay back $20 billion it owes the government when the bank sees more concrete signs of recovery, Chief Executive Vikram Pandit said on Wednesday.
He said Citigroup has plenty of capital to use to pay back the $20 billion.
“To us it’s really more about timing than capacity (to repay),” Pandit said, speaking at a conference at Barclays Capital in New York.
The comments were the bank’s most public indication that it is taking concrete steps to repay the money the government injected into Citigroup starting in October 2008.
Sources said earlier this week that Citigroup was talking to regulators about how to repay the funds and was considering issuing $5 billion to buy back trust preferred securities held by the government. Trust preferred securities have characteristics of both stocks and bonds.
The government has injected more than $45 billion into Citigroup since last October to stabilize a bank hobbled by bad securities and consumer loans.
The government’s funds initially purchased preferred securities, but earlier this month about $25 billion of those securities were converted into common stock, with the rest being swapped for trust preferred securities.
The government’s 7.69 billion common shares are now worth about $33 billion, based on Citi’s Wednesday afternoon share price of $4.23.
The government can sell its shares at any time, Pandit said.
The bank’s shares were up 2.7 percent in afternoon trading.
Reporting by Dan Wilchins; editing by John Wallace
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