AIG share sales net US Treasury $15bn profit on bailout
- 11 September 2012
- From the section Business
The US government has said it has made a profit of $15.1bn (£9.4bn) so far on its bailout of insurer AIG, after selling stock in the firm this week.
The government bailed out the insurer to the tune of $182bn during the height of the financial crisis.
Following a raft of asset disposals by AIG and share sales by the Treasury, the US government will own about 16% of the company.
Further share sales will bring greater profit to the Treasury coffers.
The government sold 553.8 million shares at $32.50 each on Monday.
The Treasury then said the banks underwriting the share sale had exercised an option, allowing them to buy a further 83.1 million additional shares from the government - taking the total proceeds from this week's sale to $20.7bn from $18bn on Monday.
"Future sales of [the] Treasury's remaining AIG common stock holdings will provide an additional return to taxpayers," the Treasury said.
It previously said that the "Treasury and the Federal Reserve's combined $182bn commitment made to stabilise AIG during the financial crisis is now fully recovered".
This is the latest in a series of share sales by the government, designed to return taxpayers' money. The last sale, in August, raised more than $5bn.
"Taking action to stabilise AIG during the financial crisis was something the government should never have had to do, but we had no better option at the time to protect the American economy from the damage that would have been caused by the company's collapse," Treasury Secretary Tim Geithner said.
"To stabilise and then restructure the company with a very substantial positive gain for the American taxpayer is a significant accomplishment," he said.
The insurer, once the world's largest, has returned to profitability, reporting a second-quarter profit of $2.3bn, 27% more than a year earlier and much higher than expected.