Citigroup obtained emergency loans from taxpayers which might pay off

Right after being lent billions in emergency financial loans, Citigroup might be the model that organizations obtaining bailouts should adhere to. Citigroup will end up turning a revenue for taxpayers when the Treasury sells its shares. The company stands to have produced a net gain of $12 billion or even more for the government. Citigroup is attempting to help keep individuals from feeling like they’re creating some kind of a instant loans off their consumers. Article resource – Citigroup turns emergency loans into profit for taxpayers by MoneyBlogNewz.

It is worth emergency money to Citigroup

Citigroup asked for emergency loans from the U.S. treasury in order to get some instant cash to avoid going out of business over two years ago. The bailouts, and the Troubled Asset Relief Program or TARP, have been the subject of a lot of controversy. Even the most fiscal conservative will be happy to hear one of the most recent announcement that came out. USA Today reports that more than 2 billion common shares of Citigroup are held by the Treasury although it plans to sell the rest of them. The shares were required by the Treasury to be received. This was a condition of getting the loans which were secured. About $12 billion from the loans to Citigroup will be about what taxpayer's profit.

Treasury getting a 27 % profit form Citigroup

The us government got a lot of shares throughout the bailout. About 7.7 billion of those originated from Citigroup. The Treasury had already sold 5.3 billion shares. This had been as of Monday though. The remaining shares being sold could mean about $31.8 billion in a fast cash loans along with another $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. About $20 billion has already been paid by Citigroup. Combine that and you also get $57 billion that the Treasury gets back from the loan cash and guarantees made to Citigroup of about $45 billion. About 26.7 percent in simple profit had been made.

Model bailout

Citigroup would be considered a model bailout business if the Citigroup shares actually do profit the Treasury that much. Ideally, the shares of other bailed out firms, like General Motors, can have a similar outcome.

Articles cited

USA Today

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