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Citi gets £13bn bailout

The US Government has stepped up its bank bailout scheme with a £13.3bn ($20bn) into Citibank.

The group, which last week announced the redundancies of 50,000 workers worldwide, had crisis talks with the Feds over the weekend, leading to the US Government’s biggest single bailout yet.

This bailout comes after a £16.4bn ($25bn) bailout earlier this year. As a result of the new deal, the Government will receive preferred shares with an 8 percent dividend in return.

Citigroup shares fell 60 percent last week to $3.77, with worries that the bank would become the next high profile scalp of the credit crunch.

As a result of the bailout, Citigroup’s dividend will wiped out. The bank cannot pay out more than 1 cent per share per quarter over the next three years without government consent.

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