Taxpayers to Take Big Ownership Stake in Citigroup

The federal government will own about 34 percent of Citigroup after the troubled mega-bank completes a stock-swap exchange it is beginning today.

Citigroup plans to convert $58 billion of its preferred stock into common stock as a way of raising capital.

The government, which as given Citigroup $45 billion in taxpayer money, will convert $25 billion of that sum, giving taxpayers about a 34 percent stake in the bank, making it, for all practical purposes, a state-owned bank.

In a visit to The Post earlier this spring, Citigroup chief executive Vikram Pandit told reporters and editors that Citigroup's strategy of being a "supermarket" bank -- offering a full range of services from handling consumer deposits to high-finance transactions -- proved to be a mistake. Pandit said his bank would shed its non-bank assets and would concentrate on its hundreds of retail banking outlets around the world.

-- Frank Ahrens
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