Citigroup poised to repay TARP bailout funds

Citigroup is poised to repay a portion of the $45 billion in TARP bailout funds it received last year through a $20 billion stock offering, CNBC first reported on Wednesday.

The move is expected to be announced as early as Thursday, according to Citigroup sources close to the negotiations.

Bank of America earlier on Wednesday announced it completed a plan to repay the $45 billion bailout chunk it received. 

There have been reports of ongoing tension among regulators as to whether or not to grant Citi final permission to repay its portion of the financial bailout.

The Federal Deposit Insurance Company (FDIC) has expressed worry that large banks are repaying their bailout funds too quickly because the firms may not yet be stable enough to operate independently.

Observers are also concerned about Citi's ability to repay their bailout funds because of the extraordinarily large portion of the government's holding in the company. The federal government owns about a third of the bank's common shares.

The Office of the Comptroller of the Currency, an arm of the Treasury Department, on the other hand, would like banks to repay the money to free up funds for other priorities.

By repaying the funds, Citi would no longer be subject to scrutiny from the Obama administration's "pay czar," which oversees executive pay for firms that received TARP funds.

---