Citigroup 'growing frustrated with US Treasury'

4 December 2009

Citigroup is becoming increasingly frustrated with the US Treasury's refusal to sell off its 34 per cent stake in the bank, according to company insiders.

Without the Treasury selling off its 7.7 billion shares in Citigroup, it will not be able to exit the Troubled Asset Relief Programme (TARP) by raising funds through the divestment of stock.

Executives want the Treasury to announce its intentions for the stock as they believe investors are being put off purchases by the knowledge that a government sale may drive down share price, reports Bloomberg.

Under the TARP regulations, US pay czar Kenneth Feinberg has cut remuneration for its top 25 executives by around 70 per cent from 2008 levels.

Earlier this week, Bank of America announced its plans to repay its $45 billion TARP debts, a move that will leave Citigroup as the only major bank still under the program's restrictions.

Bank of America estimates that it will save around $3.6 billion a year in interest payments by paying back its debt as soon as possible.

By Gary Cooper

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