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Treasury set to sell government's shares of Citigroup

WASHINGTON - The Treasury Department plans to begin selling the government's 27 percent stake in Citigroup this year in what could become the biggest profit for the bank bailout program.

The Treasury will dispose of its 7.7 billion common shares of New York-based Citigroup over the course of 2010 using a "pre-arranged written trading plan," the agency said Monday in a statement.

The Treasury's stake - the biggest of any common shareholder - had a market value of $33.2 billion as of last week's closing price, for a paper profit of $8.2 billion.

The sale would finish the recovery of $45 billion given to Citigroup from the Troubled Asset Relief Program and bring the Treasury closer to President Barack Obama's goal of recouping "every single dime" of taxpayer money put into the bank rescue fund.

Citigroup, ranked third by assets among U.S. lenders, took infusions from the $700- billion TARP fund in late 2008 as waning confidence almost triggered a run by depositors.

"This is clearly a positive development for both the company and for the government and taxpayers," said Richard Staite, a London-based analyst at Atlantic Equities.

The government has been trying to unravel the investments it made in banks under TARP. Of the $45 billion Citigroup received, $25 billion was converted to the government's ownership stake in the bank. The Treasury paid $3.25 a share for its stake.

Manhattan-based Citi, which received one of the largest rescues in the program, repaid the other $20 billion it owed the government in December.

Shares of Citigroup finished down 13 cents Monday, to close at $4.18.

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