Banking Crisis

Citi In Race To Repay US Bailout Cash - Report

Tom Burroughes Editor London 7 December 2009

Citi In Race To Repay US Bailout Cash - Report

Citigroup is racing against the clock to convince the US authorities that it can be allowed to repay $20 billion of bail-out funds, with insiders and regulators arguing that unless the bank acts in the next 10 days it will have to wait for more than a month, according to the Financial Times.

The short window for a decision on the repayment of funds from the troubled asset relief programme raises the stakes for Citi in its quest to free itself from the shackles of the government, which also owns a 34 per cent stake in the lender, the newspaper said.

Meanwhile, the Kuwait Investment Authority, the Gulf state’s sovereign wealth fund, has made a $1.1 billion profit after selling its entire 5 per cent stake in Citi for $4.1 billion – less than two years after acquiring preferred shares in the ailing bank during the financial crisis.

US banks are pushing to repay money under the US Troubled Asset Relief Program, or TARP, as the existence of government stakes restricts banks’ ability to set their own business strategy and constrains their freedom on issues such as executive pay. Last week, Bank of America raised more than $19 billion as part of its move to repay a total of $45 billion of TARP money. Citigroup operates a large private banking business.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes