NEW YORK (
) -- The U.S. Treasury Department is aiming to sell another big block of
shares by year-end, as the company's stock price struggles to stay above $4.
The government now holds a 12% in Citi, the the third-largest U.S. bank by assets. The Treasury Department said Tuesday that it plans to sell another 1.5 billion shares over the next few months, continuing to whittle down its stake in a "controlled manner" over time.
Taxpayers received 7.7 billion shares last year when the Treasury Department exchanged $25 billion worth of preferred stock into common equity to support the company's capital ratios. By Sept. 30, the Treasury Department had sold 4.1 billion shares in three separate blocks, receiving $16.4 billion in the process. Once the next stock sale is complete, the government will hold a 7% stake in the company, down from an initial high of 27%.
"We are pleased the U.S. Treasury continues to make progress in selling its shares of Citi common stock," the company said in a statement.
The Treasury Department's announcement comes a day after Citigroup reported strong third-quarter results, with a profit of $2.2 billion. Since receiving taxpayer support, the company has made great strides in divesting assets it considers "noncore," whittling down a big book of bad debt and executing on a growth strategy that's heavily focused on businesses overseas.
The Treasury does not hold common shares of Citi's large universal bank rivals,
Bank of America
. However, the government recently said that it plans to use a similar exit plan for
, in which the government will swap its $49.1 billion preferred stake in the insurance company for common equity.
is the sales agent overseeing the stock sale. The trading plan will end on Dec. 31, whether or not all 1.5 billion shares are sold, because of a blackout period ahead of Citi's fourth-quarter earnings report, which begins on New Year's Day.
Citi shares were most recently falling 1.1% to $4.12 on roughly 100 million shares in the first half hour of trading.
-- Written by Laurie Kulikowski and Lauren Tara LaCapra in New York
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