Citigroup to buy banking business of WachoviaSeptember 29th, 2008 - 9:17 pm ICT by IANS
New York, Sep 29 (DPA) US banking giant Citigroup Inc will buy the bulk of the operations of fourth-largest bank Wachovia Corp., the latest consolidation move under government watch in the ongoing credit crisis.Citigroup will buy the banking business of Wachovia and get government help in absorbing some of the losses related to the subprime-mortgage market, the Federal Deposit Insurance Corp. (FDIC) said in a statement.
But the FDIC insisted the takeover should not be viewed as a bail-out, and assured Wachovia customers that operations would continue to run smoothly in the transition.
Citigroup will take on more than $40 billion in losses.
Wachovia was in talks for days about a possible takeover after concerns over its capital position and a plunge in its stock price.
Just last week, Washington Mutual became the largest bank in US history to fail.