Citigroup to repay $20 billion in bailout money
Citigroup says it is repaying $20 billion in public bailout money.
That will free the banking giant from the close scrutiny and pay restrictions that came with the rescue program.
The government will also sell its stake in Citigroup.
Raising the new capital will significantly dilute current shareholders’ stake in the company, and Citi’s shares fell in early trading as a result.
Citigroup was among the hardest hit by the credit crisis and rising loan defaults, and received one of the largest bailouts of any bank during the financial crisis.
The government gave Citi $45 billion in loans and agreed to protect losses on nearly $300 billion in risky investments.
By approving the repayment, the government is saying Citi is on strong enough financial footing to stand on its own.