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DECEMBER 8, 2010
Shares Rise 3.8% as Investor Interest Picks Up; U.S. Profits—on This Bailout By RANDALL SMIT H and AARON LUCCHET T I
Citigroup Inc. shares gained 3.8% after the U.S. sold the last of its stake in the bank, lifting the cloud of government ownership that had been hanging over the company and its stock price. In an internal memo, Citigroup Chief Executive Vikram Pandit, who has returned the bank to profitability this year after heavy losses brought the bank to the brink of collapse in 2009, expressed thanks to taxpayers and employees from Citi's offices at Johannesburg, South Africa.
View Full Image Darren Hayward/The Wall Street Journal
Citi's Vikram Pandit, in Hong Kong last month, thanked taxpayers.
"We remain deeply grateful to the American people for the assistance we received and are very pleased that we have provided a substantial return on their investment," Mr. Pandit said in an email. The Treasury's claimed profits of $12 billion on its $45 billion Citi investment mark the largest return from infusions into a series of financial and industrial giants that were threatened by
the market meltdown. The government is still in the red on other bailouts. It recouped $13.6 billion on a stock sale in the initial public offering of General Motors Co. last month, boosting its returns to $23.6 billion on a $50 billion investment in 2009. But at current market values, that leaves the U.S. with a paper loss on GM of roughly $9 billion. The prospects are even more iffy at other big holdings such as mortgage-finance firms Freddie Mac and Fannie Mae, which still have $134 billion from the U.S. even after paying the government preferred dividends. 2010 Media Report Investment bank Morgan Stanley managed the Citigroup and GM stock sales, and earlier advised the government Page 267 Villanova School of Business on Fannie and Freddie.
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