Feb 21 2011
Citigroup Received Crisis Financial Loans From Taxpayers Which May Pay Off
Taxpayers Gain $12B From Citigroup Bailout
Citigroup, along with other companies, borrowed billions in emergency financial loans from working class individuals. However, it might turn out to be the model bailout. The Treasury will probably revenue off the sale of the rest of the federal government held shares in Citigroup. The taxpayers should realize a profit of around $12 billion. Citigroup is trying to keep individuals from feeling like they’re making some kind of a pay day loan off their customers.
Might actually are good to give emergency cash loans to Citigroup
Citigroup asked for emergency loans from the United States treasury in order to get some instant cash to avoid going out of business over 2 yrs ago. There has been a lot of controversy around the bailouts and the Troubled Asset Relief Program, or TARP. There was an announcement most recently that anyone will enjoy. It will make many happy. The rest of the Citigroup shares could be sold by the Treasury. USA Today reports that over 2 billion common shares within the company are kept by the Treasury. As a condition of getting short term loan, the Treasury had been given the shares. If everything goes according to plan, taxpayers stand to profit about $12 billion from the loans to Citigroup.
Citigroup would net Treasury a 27 % profit
The government held about 7.7 billion shares in Citigroup as a result of the bailout. The Treasury had sold 5.3 billion of those shares as of Monday. The remaining 2.4 billion shares are worth about $4.35 a piece as of Monday, and the sale of those remaining shares should net a emergency money of about $31.8 billion, plus another $2.9 billion in interest and dividends. About $20 billion has already been paid by Citigroup. Combine that and also you get $57 billion the Treasury gets back from the loan cash and guarantees made to Citigroup of about $45 billion. That means practically 27 percent in profit had been made. It is about 26.7 % total.
What the bailout was supposed to look like
Hopefully, the treasury really does profit that much from the Citigroup shares. Citigroup would be a model bailout company if which were to happen. In a perfect world, firms like General Motors and other bailed out companies would have the same things happen.
Articles cited
USA Today
usatoday.com/money/industries/banking/2010-12-08-citi-bailout_N.htm
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