NEW YORK ( TheStreet) -- Citigroup ( C) shares were rising modestly on Thursday as CEO Vikram Pandit spoke about the troubled company in testimony to the Congressional Oversight Panel. The stock tacked on 1.6%, or a nickel, to $3.46 in afternoon action on volume of 189.4 million. Citigroup's stock has been one of the most actively traded issues over the past year, and on average more than 521 million shares change hands each day. Pandit's testimony was the usual dog-and-pony show about how Citigroup is "fundamentally different" from the company he inherited two years ago, as it works to streamline operations and refocus toward core businesses in order to return to profitability. "Citi supports prudent and effective reform of the financial regulatory system," Pandit said in prepared comments. "With regard to financial institution reform, we at Citi believe that banks should operate as banks, focused completely on serving their clients. Our internal reforms have been totally consistent with these principles and we have publicly endorsed the general direction of financial regulatory reform under consideration by Congress." "Citi is now a smaller institution that is focused on being a bank - not a financial supermarket," he added in later comments. "In short, everything we have been doing is to ensure that Citi never again needs the assistance of the American taxpayer." The company received $45 billion in bailout funds and entered into an agreement where the federal government would backstop $306 billion of soured assets as the financial crisis nearly caused it to topple over from toxic securities as well as deteriorated mortgage and credit card loans. While the U.S. Treasury still owns a 27% equity stake, Citigroup has managed to pay back more than $20 billion of trust-preferred securities and canceled the loss-sharing agreement with the government in December. The issue of when the U.S. Treasury will exit its equity stake in the banking institution remains a hot topic. Plans to sell out in the equity offering that accompanied Citigroup's TARP repayment plan were scrapped after the new stock priced below the level where the Treasury owns its shares. A three-month lock-up period was subsequently put in the place on the Treasury's stake but that ends in March.
Herbert Allison, Treasury's assistant secretary for financial stability said in prepared comments Thursday that had the government resisted propping up Citigroup in late 2008, investors "might have begun to doubt the financial strength of other large U.S. financial institutions that might be seen as similarly situated," The Wall Street Journal reported. Allison also said the Treasury would look to sell its shares "as rapidly" as possible over the next year and at a profit, the Journal said. Pandit did answer some questions from the panel, and was quoted as attributing at least some of the weakness in Citi shares to short selling. The stock was up about 2.7% in 2010 based upon Wednesday's close but it has traded under $10 since November 2008 and even briefly broke below $1 in early March 2009. Short interest in both Citigroup and Bank of America ( BAC) has been on the rise of late. --Written by Laurie Kulikowski in New York.