Citigroup obtained crisis loans from taxpayers which might pay off

Citigroup got enormous amounts from working class individuals in emergency loans but may be the success story among bailouts. When remaining shares are sold, it’s likely to net a revenue for the Treasury. As it stands, the government ought to revenue about $12 billion. Citigroup is trying to keep individuals from feeling like they are making some kind of a payday cash loans off their customers.

May actually are good to give emergency money to Citigroup

More than two years 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 Troubled Asset Relief Program, or TARP, has caused a lot of controversy. So have the bailouts. Even the most fiscal conservative could be happy to hear probably 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 in the business are kept by the Treasury. As a condition of getting short term loans, the Treasury was given the shares. This might leave a $12 million profit from the loans to Citigroup. Taxpayers should be happy about that.

Citigroup shares make it so Treasury can get 27 percent profit

The government kept 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. 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 was made. It is about 26.7 % total.

Citigroup a model bailout company

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 business. Ideally, the shares of other bailed out firms, such as General Motors, could have a similar outcome.

Articles cited

USA Today

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