Citigroup’s Pandit Said to Plan to Thank Taxpayers for Bailout
Citigroup Inc. Chief Executive Officer Vikram Pandit plans to tell U.S. taxpayers he’s grateful for the $45 billion bailout that helped stave off a deposit run at the bank in 2008, a person close to the company said.
Pandit, scheduled to appear in Washington today before a panel overseeing the bank-bailout program, will acknowledge that the infusion stabilized Citigroup, said the person, who requested anonymity because the planned testimony isn’t public. Pandit will thank the government for providing the money, the person said.
Pandit, 53, is scheduled to answer questions about the impact of government assistance on the New York-based bank. The five-person Congressional Oversight Panel, led by Harvard Law School Professor Elizabeth Warren, is charged with reviewing the Treasury’s expenditures under the $700 billion Troubled Asset Relief Program.
Citigroup, the third-biggest U.S. bank by assets, repaid $20 billion of bailout funds in December. The Treasury holds a 27 percent stake after converting $25 billion of funds into common stock. The government currently has a $1.15 billion paper profit on the stake, based on its 7.7 billion shares and yesterday’s stock price of $3.40. The Treasury said in December it plans to liquidate its common stake this year.
Molly Meiners, a Citigroup spokeswoman in Washington, declined to comment.
Pandit testified in Washington in February 2009 alongside fellow CEOs Jamie Dimon of JPMorgan Chase & Co., Lloyd Blankfein of Goldman Sachs Group Inc., John Mack of Morgan Stanley and the since-retired Kenneth Lewis of Bank of America Corp.
At the February 2009 hearing, Pandit pledged to cut his own salary to $1 a year until the bank returned to profitability. Citigroup lost $1.6 billion in 2009, compared with the record $27.7 billion net loss in the previous year.
“I get the new reality and I will make sure Citi gets it as well,” Pandit said then. Pandit ended up getting $125,001 last year because he collected paychecks in early 2009 before he made the pledge.