The government's sale of its remaining 2.4 billion shares of Citigroup (NYSE: C) went better than expected, generating $10.5 billion. That goes with $21.3 billion already raised from previous stock sales, $2.2 million in TruPS repayments, $20 billion in Targeted Investment Program Repayment and $2.9 billion in dividends--for a whopping total of $57 billion. That compares with a total bailout "investment" of $45 billion. So, taxpayers end up with a whopping $12 billion profit, which certainly lessens the sting of the bailouts.

The stock has rallied on the news as well. One big reason seems to be that market-capitalization weighted indexes like the S&P 500 will have to reweight the stock upward, which will essentially force more institutions offering index and other passive funds to buy. Institutional investors, of course, have shunned the stock for years due to concerns about government involvement. But the Treasury's sale make the separation formal.

So, what's next? Deal Journal speculates about a possible dividend hike. All big banks will be undergoing some stress tests to ensure there capital (with regards to Basel II and other rule sets) is adequate in light of expected uncertainty in the larger banking and credit card environment. If banks pass, they will be green-lighted for dividend hikes. Citigroup just might be in position to do this, which would certainly boost its institutional appeal. 

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