WASHINGTON/NEW YORK (Reuters) - The Treasury said on Thursday it will earn a net profit of $2.246 billion on the sale of Citigroup trust preferred securities and has cut its ownership stake in the bailed-out banking giant to 12.4 percent.
In a statement, the Treasury said it sold all of the trust preferred securities it received in exchange for guaranteeing a pool of about $301 billion in Citigroup assets. The Treasury never made any payouts on the guarantee, which has been canceled.
The Treasury said it had completed the sale of a third tranche of 1.5 billion Citigroup common shares, bringing its stake down to 12.4 percent -- around a third of the 36 percent that it held at the peak of its bailout efforts last year.
Citigroup spokesman Jon Diat said via email that the company was "pleased" with the government's progress in selling off its stake.
Massive losses on soured loans forced Citigroup to take a record $45 billion in U.S. taxpayer funds over three government bailouts in 2008 and 2009.
The Treasury said that since launching a regular stock trading program earlier this year, it has sold a total of 4.1 billion Citigroup shares for gross taxpayer proceeds of about $16.4 billion.
It is still the bank's largest shareholder, with 3.4 billion shares, and expects to resume sales shortly after the end of a blackout period for Citi's third quarter earnings. The company is scheduled to report its results on October 18. (Reporting by David Lawder and Maria Aspan; Editing by Andrew Hay and Valerie Lee)
