Citigroup Really, REALLY Wants to Pay Back TARP
Must suck being the remedial flunky in the classroom for degenerates, eh?
When Bank of America Corp. Chief Executive Officer Kenneth D. Lewis announced plans to pay back the government on Dec. 2, Citigroup Inc. CEO Vikram Pandit took the surprising news as a wake-up call.
Early the next morning, several Citigroup executives called officials at the Treasury Department to discuss their options, a person close to the agency said. They wanted to know how Bank of America negotiated such a quick exit from the Troubled Asset Relief Program and how Citigroup might follow suit.
Now Pandit is busy pressing regulators for an agreement that would allow the New York-based bank to repay its remaining $20 billion in funds from TARP, Bloomberg BusinessWeek reported in its Dec. 21 issue. (In September the government converted $25 billion of Citigroup’s bailout money into an equity stake in the bank.) Pandit is hoping to hash out a plan in the next week or so, people familiar with the situation said.
With Bank of America wiring the money to Treasury on Dec. 9, Citigroup is the only big bank with so-called exceptional assistance. The designation, which Citigroup received after getting a second helping of aid, means the bank must comply with federal limits on compensation. Stuck under the government’s watch, Citigroup risks losing top traders and bankers to rival companies dangling fatter paychecks.
Citigroup spokesman Jon Diat declined to comment for this story.
Meanwhile, $C U Next Tuesday is still hoping Timmy will unload the Treasury's 34% stake in the bank but that they'll do so in a nice roundabout sort of way so as not to disturb those sensitive markets.
Who the hell wants Citigroup anyway?
The U.S. Treasury Department aims to hold off on selling its 34 percent stake in Citigroup Inc. (C) until the bank and regulators agree on a broader plan to repay all obligations remaining from last year's $45 billion government bailout, a person close to the department said.
Treasury officials are concerned that a sale now of its 7.7 billion shares in the New York-based bank may weaken investor demand should Citigroup subsequently be required to raise capital as a condition of exiting the bailout program, said the person, who declined to be identified because the government hasn't publicly discussed the plans.
Citigroup executives have pressed Treasury for at least three months to sell the stake as a first step toward leaving the bailout program, according to people familiar with the matter. They want to escape government-imposed pay limits that may make the company vulnerable to employee-poaching by unfettered rivals. Bank of America Corp. (BAC), the only other large U.S. bank under pay limits, last week announced a plan to exit the program.
I hate to break this to Citigroup (no I don't) but getting unclipped from the TARP leash is going to take a whole hell of a lot more than some scheme to raise capital and a Treasury firesale of shitty Citi stake.
Call me, Pandit, I have some ideas. I lived in Nevada for awhile, I can tell you all about some creative ways to raise capital. Among other things. Bitch.