Citi says no to more government aid

Expands public offer by $5.5 b

With the US government asking Citigroup to raise $5.5 billion additional capital, the banking major has said it would not need more Federal funds to plug the gap and would generate the same through an expanded public exchange offer.

The Vikram Pandit-led Citi would expand its public exchange offer to raise the additional $ 5.5 billion capital, it said in a statement on Thursday.

Ability to boost capital

The move would help the entity to boost the capital without additional Federal funds or conversion of the Government’s securities into common shares.

Citi would increase the maximum amount of preferred securities and trust preferred securities that it would accept in exchange for common stock, from $ 27.5 billion to $ 33 billion, to further increase Tier I Common (capital) “without any additional US government investment or conversion of US government securities into common shares”.

Citi CEO Vikram Pandit said the “results also reflect 15 months of work, tough decisions and steady execution towards a stable Citi ”.

In a separate presentation on Thursday, Citi pointed out that previous actions such as increasing the capital, divesting risky assets, reducing expenses and trimming the head count, prepared the entity well for the stress tests.