Citigroup (C) has announced that it’s going to repay $20 billion to exit the government’s TARP program. Once out from the under the program, Citigroup will no longer be bound by the government’s pay restrictions. They were the last major bank that was still a part of the program.
Bank of America (BAC) left the TARP program last week. Ironically, Citi was worried that the pay restrictions left them vulnerable to having their employees poached by other firms. To pay off TARP, Citi plans to sell $20.5 billion of debt and equity.
This is good news for Citigroup but the company is a long way from being finally healthy. I still have the stock rated as a sell, but today’s news is a step in the right direction.