Citigroup Inc will slash the number of common shares outstanding and reintroduce a dividend, taking another step in its long recovery from the brink of failure during the financial crisis. Many of the biggest US banks announced dividend hikes on Friday after the Federal Reserve completed a second round of industry stress tests and approved the increased payouts.
Citi said it would shrink the number of common shares outstanding to 2.9 billion from 29 billion through a 1-for-10 reverse stock split. It will start paying a quarterly dividend of 1 cent per share in the second quarter. It suspended dividend payouts two years ago. That penny per share is "almost symbolic," said Michael Holland, chairman of money manager Holland & Co.
The third-largest US bank largely finished extricating itself from US government ownership in December after taking $45 billion in bailout aid during the financial crisis. The bank reported a full-year profit for 2010, its first since 2007.
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