Citigroup plans 1-for-10 reverse stock split

NEW YORK (AP) — Citigroup is launching a 1-for-10 reverse stock split and plans to reinstate a quarterly dividend of a penny per share in the second quarter.

The announcement comes three days after the U.S. Federal Reserve cleared the way for major lenders to increase their dividends. Banks had been forced to cut their dividends to preserve cash after the financial crisis that peaked in September 2008. That was a condition of the government’s massive bank bailout package.

Citigroup Inc. received $45 billion in taxpayer support late in 2008. The government has now recouped all of that.

Citi expects the reverse stock split will be effective on May 6. This will reduce the number of outstanding shares of Citigroup from about 29 billion to 2.9 billion.

Its shares are up about 3 percent to $4.64 in pre-market trading.

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