Citigroup has told US regulators it could fill the capital shortfall identified in the government’s “stress test” by selling large businesses, asking more investors to convert their preferred shares into common stock and reducing its balance sheet.
Executives are trying to persuade the government Citi does not need more capital beyond its recent plans to bolster its battered balance sheet and cut costs.
However, with days to go before the results of the tests are announced, Citi, which has been bailed out three times by the authorities, is looking for ways to avoid receiving more government help if the authorities insist on an increase in capital.
And finally, save the best for last, a hilarious quote snuck in at the very bottom (Shittygroup probably figure the quote would be at the bottom of this article and no one would stick around to read it):
Some Citi executives believe the government may still have to convert more of its preferred shares into common stock, raising its holding above the 36 per cent it is due to take following the latest bail-out in February.
Citi shares closed down 5.9 per cent. BofA shares closed down 8.6 per cent at $8.15.
BofA declined to comment. Citi said its capital base was “strong”.
Looking at Citigroup's current capital base is probably very similar to watching Steven Hawking doing pushups.
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