AIG’s Benmosche Expects Up to $10B Profit for Taxpayers
Once American International Group repays the estimated $45 billion it still owes for the bailout it received during the financial crisis, CEO Bob Benmosche on Monday said the insurer will produce a profit of up to $10 billion for taxpayers.
“We want to show the taxpayer gets back all of their money, plus a profit,” Benmosche told “Mad Money” host Jim Cramer. “All over, the American people — between the Fed and U.S. Treasury — they’ll make between $5 and $10 billion profit when this is done.”
AIG received a total of $182 billion from the government during the crisis. It has paid down what it owed in a special purpose vehicle called AIA Aurora more than one year ahead of schedule. The repayment will free up AIG's collateral against AIA Aurora, which was set up in December 2009 in exchange for a reduction in the debt that AIG owed the New York Fed at the time.
The Treasury's current total investment in AIG is now $35.7 billion while the New York Federal Reserve's loan to the company is valued at $9 billion.
In March alone, the Treasury has recovered more than $14.6 billion on its investment in AIG, including the $6 billion from its sale of AIG stock, the department said. The U.S. government still holds a 70 percent stake in the company.
Benmosche would like to "end this chapter" and see the government sell out of AIG. But at the same time, he said the government being a shareholder is not the problem.
"They let us run the company," he explained. "This is not about the government telling us what to do and so we've got to be smart. We've got to do the right thing for the shareholders, the biggest shareholder being the government."
Watch the video to see Cramer's full interview with Bob Benmosche.
—Reuters contributed to this report
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