Citigroup has announced that it will return $20 billion that the U.S. government gave it in TARP bailout money last year. According to Bloomberg News, the banking giant "will raise the funds with a sale of $20.5 billion of equity and debt" and "also plans to substitute 'substantial common stock' for cash compensation." Notably, the move from under the government's thumb will also allow the firm to avoid executive pay restrictions.
CItigroup head Vikram Pandit said in a statement, "We are pleased to be able to repay the U.S. government’s trust preferred securities and to terminate the loss-sharing agreement. We owe the American taxpayers a debt of gratitude." The NY Times has details: "With its regulators’ permission, Citigroup will redeem $20 billion of preferred stock that the government received as part of the bank’s first two rescues late last year. It will end a loss-sharing agreement with the government on about $250 billion of troubled real estate and credit card assets. That will make the bank, not taxpayers, solely liable for losses in that portfolio."
Additionally, the Treasury will "wind down its 34 percent ownership stake in Citigroup, which it acquired by converting $25 billion of preferred shares into common stock in a third rescue this year." The Business Insider writes, "In the end, Citigroup will look exactly like it did pre-crisis (basically), which should be very scary."