Citigroup Bailout To Make US Taxpayers $12.3b Profit [View All]

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Source: Guardian UK

US taxpayers are likely to make a $12.3bn (£7.75bn) total profit on their bailout of financial group Citigroup, according to government officials.

The US treasury expects to net $312.2m on Monday when it sells the rest of its stake in Citigroup. The government holds 465.1m warrants in Citi that entitle it to purchase common shares in the banking group.

The warrants, which it is auctioning, represent the remaining part of the US government's $45bn investment in Citi during the financial crisis.

Taxpayers are expected to end up with a $12.3bn profit on the bailout, made under the troubled asset relief programme (Tarp). The treasury sold its 34% stake of common shares of Citi last year.

"As we exit our investments in private companies and recover taxpayer dollars, it's clear that the cost of the Tarp programme will be a fraction of what many had once feared during the depths of the crisis," said Tim Massad, the treasury's acting assistant secretary for financial stability.

Read more: http://www.guardian.co.uk/business/2011/jan/26/citigroup-stake-sold-by-us-government