CITIGROUP’S imminent exit from the shade of the US government’s protection is a symbolic development, analysts said yesterday.
Having paid back a $20bn (£13.4bn) loan to Washington in December, Citi chief executive Vikram Pandit will be looking forward to a future without the shadow of state ownership hanging over the company.
Recent reforms implemented at Citi speak of a refreshed mindset. Pandit has made the bank smaller, reducing headcount and overhauling risk management to cut costs by $13bn every year. The government’s departure from its 27 per cent shareholding is the natural next step.
“It’s a sign that the government policymakers are trying to move back towards a ‘normal’ situation by returning the banks to the private sector,” said Paul Dales of Capital Economics.
He added: “It’s also a sign of confidence in the strength of financial markets and the financial sector.”