Citigroup had to borrow enormous amounts in emergency loans from taxpayers, however that investment may have been a wise move. Citigroup will end up turning a revenue for taxpayers when the Treasury markets its shares. As it stands, the federal government ought to revenue about $12 billion. Citigroup is attempting to help keep individuals from feeling like they’re creating some kind of a quick payday off their consumers. Source of article – Citigroup turns emergency loans into profit for taxpayers by MoneyBlogNewz.
It is worth emergency cash loans to Citigroup
Citigroup asked for emergency money from the U.S. treasury in order to get some instant cash to keep away from going out of business over two years ago. The bailouts, and the Troubled Asset Relief Program or TARP, are the subject of a lot of controversy. There was an announcement just lately that anyone will enjoy. It will make numerous happy. The rest of the Citigroup shares can be sold by the Treasury. USA Today reports that over 2 billion common shares in the business are held by the Treasury. The shares were given to the Treasury as a condition of receiving unsecured personal loans. This might leave a $12 million profit from the loans to Citigroup. Taxpayers should be happy about that.
Citigroup would net Treasury a 27 percent profit
As a result of the bailout, about 7.7 billion shares of Citigroup were taken by the us government. By Monday, 5.3 billion of those shares were sold by the Treasury. The remaining shares being sold could mean about $31.8 billion in a quick payday along with an additional $2.9 billion in interest. This is assuming the last 2.4 billion shares sell at the $4.35 a share as the price showed on Monday. 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. About 26.7 % in simple profit had been made.
Seeming like a model bailout
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. 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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