Citigroup obtained emergency loans from taxpayers which may pay off

Citigroup got enormous amounts from taxpayers in crisis loans but may be the success story among bailouts. When the Treasury sells the rest of its shares in Citigroup, it will likely be for a profit. Citigroup is likely to have made about $12 billion for the government. Citigroup is attempting to help keep individuals from feeling like they’re creating some kind of a money now off their consumers. Resource for this article – Citigroup turns emergency loans into profit for taxpayers by MoneyBlogNewz.

It is worth emergency loans to Citigroup

More than 2 yrs ago, Citigroup asked the United States Treasury for some hefty emergency cash loans, saying it direly needed some instant cash or the firm would perish. The bailouts, and also the Troubled Asset Relief Program or TARP, are the subject of a lot of controversy. Even the most fiscal conservative could be happy to hear the most recent announcement that came out. The rest of the Citigroup shares will be sold by the Treasury. USA Today reports that over 2 billion common shares within the company are held by the Treasury. The shares were given to the Treasury as a condition of receiving unsecured personal loans. If everything goes as outlined by plan, taxpayers stand to profit about $12 billion from the loans to Citigroup.

Citigroup ends up with a 27 percent profit to Treasury

Because of the bailout, about 7.7 billion shares of Citigroup were taken by the government. The Treasury had sold 5.3 billion of those shares as of Monday. As of Monday, about $4.35 a share is what the last 2.4 billion shares are worth when a net payday of about $31.8 billion plus $2.9 billion in interest could come in with the sale of all those shares. Combined with the payments Citigroup has already made, more than $20 billion, the Treasury should take in an estimated $57 billion for the $45 billion in loan cash and guarantees to Citigroup. That means practically 27 percent in profit had been made. It is about 26.7 percent total.

Bailout for Citigroup what it had been supposed to look like

If the sale of Citigroup shares by the Treasury does result in a profit of that much, or even close, that would make Citigroup a model bailout company. Ideally, the shares of other bailed out firms, like General Motors, can have a similar outcome.

Articles cited

USA Today

usatoday.com/money/industries/banking/2010-12-08-citi-bailout_N.htm