While Citigroup still enjoys a Tier1 by 11

The American authorities rallied the temporary nationalization without saying. For the third time in four months, Treasury flew to the rescue of Citigroup, the third American Bank by assets, in announcing Friday, converting more of half of preferential shares (25 on $ 45 billion) in shares at a price of 3.25 dollars per title. At the end of the operation that there are no new injection of public money but aims to strengthen the capital structure of the Bank, the Treasury will focus its share in Citigroup from 7.8 to 36, becoming very far its first shareholder. A partial nationatisation who will be accompanied by a next recomposition of the Council of the Bank.

"This operation, which requires no additional investment of taxpayers ' money, not change strategy, activities, nor the governance of Citigroup, acted as the CEO of the group, Vikram Pandit. But Richard Parsons the former boss of Time Warner, close to Barack Obama, appointed to the Presidency of the Council of Citigroup in January did not hide its intention to proceed, to more quickly, a redesign of the Board of Directors. The operation is accompanied by an offer of conversion of the preferred securities in the amount of $ 27.5 billion to other preferred shareholders (Government of Singapore Investment Corp., Capital Research Global Investors and the prince Al-Waleed...) at the same price of $ 3.25 per share (or a premium of 30 from the last course). On the other hand, the existing common shareholders will see their interests heavily diluted by 74. The operation is essentially to restore the confidence of investors in the Bank allowing it to increase its ordinary capital ("tangible common equity") to $ 81 billion against less than 30 billion dollars at the end of the fourth quarter.

"Although we are convinced that the Tier-1 capital remains the most important measure of financial soundness of banks, we recognize that markets are in the ratio of ordinary capital (TCE) an important measure," explained Vikram Pandit. While Citigroup still enjoys a Tier-1 by 11.8, the ratio of capital in tangible assets (excluding "goodwill") did not exceed 1.5 at December 31. After this operation, the latter should be 4, more close to the market standard. At the same time, Citigroup announced a charge of "goodwill" of $ 9.6 billion in the fourth quarter, due to the "rapid deterioration of the financial markets", which brings its annual net loss to 27.7 billion (compared with 18.7 billion announced in January).

"Economic revolution".

"It is a new step towards creeping nationalization." "This country is experiencing an economic revolution," said the former President of the SEC (Securities and Exchange Commission), Arthur Levitt, Bloomberg. But market freshly welcomed the announcement of the conversion operation Friday, a decline of 39 of the title. For the third time in two months, Moody's degraded note of Citigroup (from A2 to A3), while Standard & Poor's placed under negative surveillance by invoking the risk of need for a new Government assistance. Many analysts are skeptical about this provok announced before even the result of the "stress test" scheduled for late April, which could not solve the basic problems of the American Bank where the Government has already injected $ 45 billion, in addition to a guarantee of toxic assets of $ 301 billion. Despite the reluctance of the pattern of the Federal Reserve, Ben Bernanke, Economist Nouriel Roubini remains convinced of the need for a free temporary nationalization "at the Swedish" major US banking groups to avoid their transformation into "zombie banks" as in the Japan.