Washington - The US government said late Sunday that it would move to save ailing bank Citigroup by guaranteeing it against huge losses in the midst of the global financial crisis brought on by banks crippled by bad loans.

The US Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation said in a joint statement that they would guarantee Citigroup against massive losses on its 306 billion dollars in mortgage-related assets. In return, the bank will grant the government shares of stock.

The government will also give Citigroup 20 billion dollars from the 700-billion-dollar financial rescue plan in exchange for stock with an 8 per cent dividend to the Treasury Department. The bank will also face restrictions on executive pay and other areas under the deal.

The hard-hit bank lost 60 per cent of its value last week and it was forced to dodge rumours it planned to sell off large parts of its business.

The largest US bank by assets has experienced four quarters of losses that amount to more than 20 billion dollars. Citigroup has cut more than 75,000 jobs, including 50,000 positions that were chopped just last week. (dpa)