"Citi's capital base is very strong and our Tier 1 capital ratio as measured at the end of the fourth quarter was 11.9%, among the highest in the industry," Citi said in a statement issued Sunday night. "We continue to focus and make progress on reducing the assets on our balance sheet, reducing expenses and streamlining our business for future profitable growth."
Comparing Citigroup's market capitalization with the number of preferred shares the government currently owns, if these shares were converted right now to common stock, they would worth more than 100 percent of Citi's total market capitalization.
Any additional money that Citi receives from the government automatically means a further stock dilution. While Obama Administration officials say this isn't nationalization, markets may interpret the situation differently and see it as de facto nationalization.
The move likely would make the U.S. government the biggest shareholder of Citigroup, owning a majority of its stock. This is de facto government ownership, or nationalization. What this ownership means at this point, nobody knows (See further discussion of this issue in the videos).
A Citigroup spokesman in Hong Kong declined to comment, but said in an emailed statement:
"Citi's capital base is very strong and our Tier-1 capital ratio as measured at the end of the fourth quarter was 11.9 percent, among the highest in the industry.