Citigroup Frees Itself
Last week, Bank of America paid back the $45 billion it borrowed from the U.S. government last year. That left Citigroup the only big bank still under the watchful eye of Washington, and the only one still required to comply with limits on executive compensation. Citi CEO Vikram Pandit wasn't going to let that situation continue, was he? No, he was not. Following a "frenzied effort" over the past few days, Citigroup announced this morning that it will be paying back the $20 billion it received in bailout funds:
Citigroup Inc., recipient of the biggest U.S. bank bailout, struck a deal with regulators to repay $20 billion to taxpayers and escape government-imposed pay restrictions. Citigroup, the only major U.S. lender still dependent on what the government calls "exceptional financial assistance," will raise the funds with a sale of $20.5 billion of equity and debt. The New York-based company also plans to substitute "substantial common stock" for cash compensation, the bank said in a statement today.
As one might expect, Citigroup is feeling exceptionally relieved today. And the bank isn't forgetting that you—yes, you—played a vital role in helping them through the rough waters.
"These actions bring us closer to ending a very difficult period for our company, and we owe the U.S. taxpayers and the government a debt of gratitude for their extraordinary assistance," Pandit said in a memo distributed to Citi employees today. When the salary caps are removed in 2010 and Citi execs go back to paying themselves the big bucks they were accustomed to getting before the financial crisis, just remember: You helped make it all possible.
Citigroup Has Reached a Deal to Repay U.S. Bailout Funds [NYT]
Citigroup to Repay $20 Billion of Government Bailout [Bloomberg]
Citi's Internal Memo on Repaying Bailout Money [NYT]