Citigroup (C) in 1-for-10 Reverse Stock Split Before Dividend Reinstatement

Preparing to reinstate its quarterly dividend, Citigroup (NYSE:C) said in the second quarter they'll offer a penny a share after the completion of a 1-for-10 reverse stock split.

Monday's 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.

The Fed's move last week was seen as a sign of the industry's return to health, and some banks quickly announced plans to raise their dividends and buy back shares.

"Citi is a fundamentally different company than it was three years ago," CEO Vikram Pandit said in a statement. "The reverse stock split and intention to reinstate a dividend are important steps as we anticipate returning capital to shareholders starting next year."

Citigroup was trading at $4.465, down $0.035 or 0.78 percent, as of 11:30 AM EDT.






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