Citigroup announces plan to repay bailout funds

Banking giant Citigroup on Monday announced it has reached an agreement with the federal government to repay $20 billion in TARP bailout money.

Citigroup said it would raise the funds through a combination of stock and debt offerings, most of which would come from a $17 billion stock offering. Citigroup received one of the biggest chunks of bailout funds, $45 billion, under the Troubled Asset Relief Program (TARP) last year.

"By any measure of financial strength, Citi is among the strongest banks in the industry, and we are in a position to support the economic recovery," Citigroup CEO Vikram Pandit said in a statement.

The announcement comes on a day when top banking industry figures met with President Barack Obama at the White House about lending more money to small business. Obama has been deeply critical of the banking industry for its role in last year's financial meltdown. 

Citi chairman Richard Parsons was one of three banking executives to not attend the meeting personally today due to "inclement weather." He instead participated via conference call.

The bank had been in lengthy negotiations with the federal government over its reimbursement. The Federal Deposit Insurance Corporation (FDIC) previously expressed apprehension about a repayment because of lingering questions about the stability of large, bailout firms.

The Treasury Department, however, backed a repayment so it could use the 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.

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