AIG: Financial Winners and Losers

( Updated with closing stock price movements throughout.)

NEW YORK ( TheStreet) -- American International Group ( AIG) was among the top performers of the financial sector Thursday after the insurer's new CEO said he expects to repay bailout funds to the U.S. government.

Bloomberg reported that Robert Benmosche, who last week took over as head of the troubled insurer, said he believes AIG will be able to pay back the government and also do something for the insurer's shareholders.

The U.S. government loaned AIG $182.5 billion in late 2008 after deciding that a failure would be too disruptive to financial markets. In return, AIG handed roughly an 80% stake to the U.S.

"The fact is we owe the U.S. government a lot of money and we are not going to be able to pay it back just by our profits, so we will sell some of the company off but only at the right time at the right price," Benmosche said in an interview, according to the report.

AIG shares surged by 21.3%, to close at $32.30. Other insurers finished the session higher as well, with MetLife ( MET) and Hartford Financial ( HIG) rising 3.1% and 3.8%, respectively.

AIG CEOs, Past and Present

Citigroup ( C) was the top performer among bank stocks after word it would begin charging annual fees on some of its credit cards in order to counterbalance the effects of new legislation that will likely increase costs and hurt profits.

Citigroup shares jumped 8.5%, to $4.48. Among other bank stocks, Wells Fargo ( WFC) closed up 3.3% to $27.48, JPMorgan Chase ( JPM) was higher by 2.4% to $42.42, Bank of America ( BAC) climbed 2.3% to $17.14, and Goldman Sachs ( GS) added 1.5% to $162.33.

Elsewhere, the Swiss government reportedly sold its stake in UBS ( UBS) for 5.5 billion francs, or about $5.1 billion, according to a Reuters report. A consortium of banks had been asked to place the government's 332.2 million mandatory convertible notes with institutional investors.

The sale of the Swiss government's 9% stake in UBS comes a day after a settlement was reached to reveal the names of approximately 4,500 U.S. account holders that allegedly hid assets and avoided taxes.

UBS shares rose $1.49, or 9.7%, to $16.93.

In other foreign bank news, Spain's Banco Bilboa Vizcaya Argentaria has won the bidding for Texas lender Guaranty Financial ( GFG), according to a Bloomberg report that cited people familiar with the matter.

Last month, Guaranty said it would probably fail after it was unable to raise capital. The acquisition, arranged by the Federal Deposit Insurance Corp., will become BBVA's sixth U.S. purchase in the last five years.

Guaranty Financial shares fell 8 cents, or 20.5%, to end the day at 31 cents.

Among analyst actions Thursday, FBR Capital Markets upgraded Prudential Financial ( PRU) to outperform from market perform, and the firm also raised its rating for Credit Suisse ( CS) to market perform from underperform.

On the other hand, Deutsche Bank downgraded Regions Financial ( RF) to hold from buy, although the firm maintained its $5 price target.

Prudential shares ended higher by 4.3% to $48.10, and Credit Suisse gained 1.1% to $49.90. Meanwhile, Regions Financial relinquished early gains and dipped 0.4% to $5.49.

In bank-related news, Reuters reports that the FDIC will meet next week to vote on a policy that would force private equity companies to maintain high capital levels and put a large amount of their own money at stake when investing in distressed banks.

The meeting, scheduled for Aug. 26, will likely see the FDIC soften the guidelines it issued in July. Those initial guidelines faced backlash from private equity groups, who called the proposed rules too harsh, the report said.