Is it now safe to go back to Citigroup?

Now that Citi's repaying TARP, is Pandit's kingdom back in favour as an employer?

As we reported not very long ago, Citigroup is expected to be among next year's hirers.

Equities sales and trading is likely to be an area of focus. The bank recently brought in a new head of EMEA equities and, according to headhunters, has gaps in its cash equities team which it will be looking to fill in 2010. In yesterday's statement about repaying TARP, it also highlighted its intention to 'continue upgrading talent' and expand in prime broking, commodities, G10 rates, and private banking.

So, if Citi calls, should you oblige?

Maybe. Having repaid $20bn, in 2010 Citi will escape the more draconian compensation restrictions imposed by the US pay Czar, including - it would appear - his latest decree that its 26th to 100th highest paid employees receive no more than $500k in cash.

As it points out, it also has trading floors in 75 countries, and a higher tier one capital ratio than JPMorgan.

However, disentangling from the state may not be as simple as that. Feinberg's compensation restrictions will still apply for 'services rendered in 2009.' The US government still owns 34% of Citigroup, which it plans to sell over the 6-12 months. Equally, as analyst Dick Bove points out, the bank still has a loss sharing agreement in place, with the US government covering losses on around $250bn of its assets,

Bove doesn't think Citigroup is a better bet now than it was in its TARP days. He downgraded the stock from buy to sell yesterday on the grounds that the TARP repayment dilutes shareholders without benefiting the company.

"This doesn't improve their ability to do business, change their place in the market, or adjust the nature of the businesses they're involved in. The only thing that's changed is their ability to pay people," Bove says.