June 15 (Bloomberg) -- Citigroup Inc. is on the “road to recovery” and wouldn’t have access to another rescue from the government should the need arise, Chairman Richard Parsons said.
“I don’t think there is the political will” for another bailout, Parsons said today at a Bloomberg Link Boards & Risk Conference in Washington. He said the New York-based company has no need for more aid from the U.S.
Citigroup posted a $4.25 billion profit for the first quarter after recording $27 billion of losses in 2008 and 2009 that prompted a $45 billion government rescue. The $700 billion Troubled Asset Relief Program to stabilize the nation’s banking system prompted calls for legislation that would prohibit such government intervention in the future and impose restrictions on the types of businesses large financial institutions could own.
Parsons said he doesn’t think the government should break up large banks such as Citigroup because “the marketplace requires institutions like ours” to serve global companies with operations in more than 50 countries.
“Trying to bomb everybody back to the stone age, is the way I call it, trying to make everybody go back to being a community bank so that you’re not systemically important would be counterproductive, would be from a U.S. perspective shooting ourselves in the foot in terms of global competition,” Parsons said.
Parsons, 62, who took over as Citigroup’s chairman in February 2009, said he “basically” agrees with former Citigroup director John Deutch’s comments last year that all of the directors who served before the bank’s bailout should rotate off in an “orderly fashion.”
Parsons said he told new Citigroup directors that he would stay at the bank “at least until we got the ship off the sandbar and back out to deep water.” He declined to estimate when that might happen.
“I think the ship is lifting off the sandbar,” he said.
In December Citigroup repaid $20 billion of the bailout funds, and the government is now selling its remaining 21 percent stake in the lender.
The bank’s share price rose 11 cents to $3.99 as of 4 p.m. in New York Stock Exchange composite trading.
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