Citigroup gets US government bail-out

Once considered one of the world's most powerful banks, Citigroup was nevertheless forced to enter talks with the treasury over the weekend as fears grew of a collapse which would shake the financial markets to the core.

The government will receive preferred shares in exchange for its contribution, which follows a $25billion bail-out last month. CEO Vikram Pandit gathered senior executives for an emergency conference call last week following a worst-ever one-day fall of 26 per cent on Thursday. Monday's deal has been unanimously approved by the bank's board of directors.

Citigroup - whose European HQ is in Canada Square - has already announced plans to lay off 52,000 workers worldwide. Staffing levels peaked at 375,000 at the end of last year, but bosses are looking to add to the 23,000 cuts which have been made since the start of 2008.

While Citigroup is not required to remove its current management team, it must run its executive compensation package past the US government for approval.

CEO Vikram Pandit said: "This weekend, the US government and Citi worked together in an unprecedented way to address market confidence and the recent decline in Citi's stock price.
"We reached an agreement based on an innovative market solution to further strengthen our capital ratios, reduce risk, and increase liquidity. We appreciate the tremendous effort by the government to assure market stability.
"We are committed to streamlining our business and providing outstanding banking services to our clients around the world. We will continue to focus on opportunities and alternatives to further enhance the company's overall position and value."