US govt bails out Citigroup

The US Government has stepped in to bail out banking giant Citigroup, agreeing to guarantee $306bn (£205bn) of high-risk assets. It will also inject $20bn (£13.4bn) of new capital, on top of $25bn (£15.3bn) Citi has already received, in its most sweeping rescue of a US bank yet.

In return it will receive $7bn (£4.7bn) in preference shares and the final say on executive pay agreements. The rescue by the Treasury, Federal Reserve, and the Federal Deposit Insurance Corporation comes after Citi’s shares plunged 60% over the last week. It followed the announcement it planned to cut 52,000 jobs globally.

At least 1,000 of the jobs are expected to come from the UK, which has 12,000 staff across its consumer, city banking and Egg online credit card and savings divisions.

The company is considered the most vulnerable among the major US banks, failing to make a profit in the past four quarters. It has a small consumer banking business in the UK, which it has planned to grow, but analysts say this is now unlikely.

It bought loss-making internet business Egg from Prudential in January last year for £575m as part of a global strategy to grow its credit card business.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here