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U.S. could see $13-14 billion profit on Citi: official
December 14, 2009 / 1:58 PM / in 8 years

U.S. could see $13-14 billion profit on Citi: official

WASHINGTON (Reuters) - U.S. taxpayers could ultimately see a profit of $13 billion to $14 billion from Citigroup’s payback of bailout investments, including dividends paid, a U.S. Treasury official said on Monday.

<p>A man stands outside a Citi bank branch in New York August 13, 2009. REUTERS/Lucas Jackson</p>

That amount includes the gain on the government’s 34 percent stake in Citi common shares, which was close to $5.8 billion as of Friday’s close, as well as trust preferred securities with a $5.2 billion face value, received in a loss-sharing agreement backing a pool of Citigroup assets. The official also said the total also includes estimates of nearly $3 billion in dividends paid on the government’s investments in the bank.

Citigroup has struck a deal with the Treasury and U.S. regulators to repay $20 billion of government bailout funds, which will include the sale of some $5 billion of Citi common stock. It will sell the rest, about $20 billion worth, within six to 12 months.

The official said the biggest variable in the taxpayers’ ultimate profit will be fluctuations in the value of Citigroup common stock, and the value at which the government sells it over the coming year.

Reporting by David Lawder; Editing by Theodore d'Afflisio

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