Published: Thursday, 30 Jul 2009 | 2:21 PM ET

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One hundred ninety-seven years, one month and 14 days after its founding, Citigroup has given a roughly 34 percent stake to U.S. taxpayers.

Mark Lennihan / AP

While a few technical details still remain, the bank has completed a months-long effort to convert preferred shares held by the U.S. government into common stock.

Citigroup Thursday completed two exchange offers to bolster the capital position of the nation's third-biggest bank, widely considered the most troubled large U.S. lender.

Public investors, private investors and the government swapped close to $58 billion of preferred securities into common stock of the New York-based bank.

Citigroup has said the swaps would leave it with more than 21 billion shares, up from 5.51 billion at the end of June.

The $25 billion swapped by the government is part of its $45 billion infusion from the federal bank bailout plan, the Troubled Asset Relief Program. Another $20 billion of that sum will remain in the form of preferred shares, throwing off an 8 percent annual dividend.

The higher government stake could add to pressure on Chief Executive Vikram Pandit to improve performance and shed unwanted or toxic assets. Citigroup has also overhauled upper management and added seven new directors this year.

Earlier Thursday, Citigroup said it will sell a 64 percent stake in Japan's Nikko Asset Management to Sumitomo Trust & Banking for 75.6 billion yen ($790 million). Speaking in Kuala Lumpur, Malaysia, Pandit said the bank is moving "extremely fast" on asset sales.

Citigroup agreed to the exchange offers in February as part of a government bailout, following $37.5 billion of losses over the previous five quarters.

The swaps were originally expected to total $52.5 billion. They grew to $58 billion after regulators ordered Citigroup to build a buffer following a "stress test" of its finances.

Citigroup said the swaps will make it one of the world's best-capitalized banks, with about $100 billion of tangible common equity.Other large Citigroup investors include several sovereign wealth funds, and Saudi Prince Alwaleed bin Talal.

The bank's roots date to when City Bank of New York opened on June 16, 1812, with $2 million of authorized capital. Citigroup itself was created on Oct. 8, 1998 through the merger of Travelers Group and Citicorp.

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