Citigroup got billions from taxpayers in crisis loans but may be the success story among bailouts. When the Treasury markets the rest of its shares in Citigroup, it will likely be for a profit. The working class individuals should realize a profit of around $12 billion. Citigroup is trying to help keep individuals from feeling like they’re creating some kind of a emergency money off their consumers. Resource for this article – Citigroup turns emergency loans into profit for taxpayers by MoneyBlogNewz.
Emergency loans to Citigroup pay down
It had been over two years ago that Citigroup claimed it would die if it didn't have instant cash. This is why it asked for emergency money from the United States Treasury. There has been a lot of controversy around the bailouts and the Troubled Asset Relief Program, or TARP. However, a recent announcement ought to please even one of the most ardent fiscal conservative. The Treasury can be selling the rest of its shares in Citigroup; it holds more than 2 billion common shares within the business, as outlined by USA Today. The shares were required by the Treasury to be received. This was a condition of getting the loans which were secured. This might leave a $12 million profit from the loans to Citigroup. Taxpayers should be happy about that.
Citigroup would net Treasury a 27 percent profit
The government held about 7.7 billion shares in Citigroup as a result of the bailout. The Treasury had already sold 5.3 billion shares. This was as of Monday though. The remaining shares being sold could mean about $31.8 billion in a instant cash loans along with an additional $2.9 billion in interest. This is assuming the last 2.4 billion shares sell at the $4.35 a share as the price showed on Monday. About $20 billion has already been paid by Citigroup. Combine that and also you get $57 billion the Treasury gets back from the loan cash and guarantees made to Citigroup of about $45 billion. About 26.7 percent in simple profit had been made.
Citigroup a model bailout company
Hopefully, the treasury really does profit that much from the Citigroup shares. Citigroup would be a model bailout company if that were to happen. Typically the same thing is supposed to happen with companies like GM. This includes any which were bailed out.
Info from
USA Today
usatoday.com/money/industries/banking/2010-12-08-citi-bailout_N.htm
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