Banks--- Betting on the recovery Message Board

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Non-Tech : Banks--- Betting on the recovery

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Nov 7 9:30 AM EST

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From: tejek	7/1/2010 9:52:43 AM
	1 Recommendation of 1428

Treasury cuts Citi stake at $2 billion gross profit (Reuters) - The Treasury Department said on Thursday it has earned gross profit of about $2 billion so far on the sale of about one-third of its common stock holdings in Citigroup Inc. The Treasury said it took in gross proceeds of about $10.5 billion from the sale of 2.6 billion Citigroup shares under a written trading plan. The Treasury said that after selling its second tranche of common stock acquired after bailing out the banking giant, it still holds about 5.1 billion shares. Treasury said sales so far in the plan administered by Morgan Stanley (MS.N) averaged $4.03 a share versus acquisition cost of $3.25 a share. That would produce a gross profit -- before sales costs -- of around $2 billion for the stock sold so far. Under the plan, the government agreed to pay Morgan Stanley $0.003 for each share sold electronically and $0.0175 for each one sold otherwise. Costs for shares sold so far under that arrangement were $7.8 million to $45.5 million. Citi shares rose about 1 percent to $3.82 in premarket trade. Treasury expects to continue selling shares in the market in an orderly fashion once the blackout period related to second-quarter earnings ends. The bank is expected to report results on July 16. With Thursday's announcement, Treasury has cut its stake in the bank from nearly 27 percent to about 17.6 percent. Citigroup received a total of $45 billion in taxpayer funds under the Treasury's $700 billion bailout program and had paid back $20 billion. (Reporting by David Lawder and Maria Aspan; editing by Chizu Nomiyama and Jeffrey Benkoe) reuters.com

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