Citigroup transforms crisis financial loans into profit for working class individuals

Citigroup, along with other companies, borrowed billions in emergency loans from taxpayers. However, it may turn out to be the design bailout. When remaining shares are sold, it is likely to net a revenue for the Treasury. The company appears to have created a net gain of $12 billion or even more for the government. Citigroup is trying to keep individuals from feeling like they are making some sort of a paydayloans off their customers.

It is worth emergency money to Citigroup

Citigroup asked for emergency cash loans 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 also the Troubled Asset Relief Program or TARP, are the subject of a lot of controversy. However, a recent announcement ought to please even one of the most ardent fiscal conservative. 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. As a condition of getting unsecured loans, the Treasury had been given the shares. If everything goes as outlined by plan, taxpayers stand to profit about $12 billion from the loans to Citigroup.

27 percent profit to Treasury from Citigroup

The federal government got a lot of shares during the bailout. About 7.7 billion of those came from Citigroup. The Treasury had already sold 5.3 billion shares. This was as of Monday though. 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 instant cash of about $31.8 billion, plus one more $2.9 billion in interest and dividends. 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. That means almost 27 % in profit had been made. It is about 26.7 % total.

Seeming like a model bailout

Citigroup would be considered a model bailout business if the Citigroup shares really do profit the Treasury that much. Typically the same thing is supposed to happen with companies like GM. This includes any which were bailed out.

Information from

USA Today

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