Citi Not In Deal With Treasury After All, Launching Huge Media Campaign

citibank sign tbi

The confusion surrounding Citi (C) is endless. Speaking yesterday at a conference in New York, Vikram Pandit refuted reports that the bank had been in talks with Treasury about selling 9.9 billion of its shares to the public.

Earlier this week, the Wall Street Journal reported that Citi had called Treasury over the weekend, saying they planned to raise outside capital in order to repay the outstanding bailout funds.

But today, Dick Bove says that Pandit, while acknowledging that the Treasury owned 7.7. billion shares of the bank’s common stock, said that it was at the Treasury’s discretion alone, as to when it would be sold.

[Pandit] said however, any redemption would be put off until there was a sustained period of economic recovery in place. Implicit in this statement is that the preferreds would not be redeemed simply to get rid of the government and it might take a year at least before a redemption was considered.

Bove notes that Pandit also said that on January 1, with the imposition of Basel II rules, Citi would be placing $160 billion in off balance sheet instruments onto its balance sheet. Thus, it might be imprudent to play with the company’s capital structure.

Pandit, meanwhile, went to great lengths to say that only 25 people at the bank were under comp restrictions, and since there is no limitation for the others, the bank does not have to rid itself of the TARP funds to be competitive in hiring. 

This is an 180 from what Citi execs said both about getting rid of the TARP and about the need to do so to remain competitive.

Apparently aware of the whole confusion they’re creating, Citi execs came with the great idea of launching a media blitz, to well, explain how great they are and how much good they’ve been doing with the TARP funds.

From the New York Post:

Though details of the ad campaign are scant, the media push is expected to spell out the positive strides that Citi has made in using taxpayer money, such as helping consumers stay in their homes by modifying home mortgages, and defend the bank and CEO Vikram Pandit against those pressing for a change of leadership, sources said. It’s not clear if Pandit will be featured in any ads. Top of Form

Good luck on that…

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