Citigroup Inc. fell out of the ranks of the top five earners of fees from U.S. initial public offerings this year, while Goldman Sachs Group Inc. won the biggest share of the $923 million pie.

Citigroup, which was among the top three fee earners from 2005 to 2008, made $68.3 million arranging initial sales, a drop of 52% from a year ago and less than half the amount that each of the top three underwriters earned in 2009.

Citi, the last of the four largest U.S. banks to raise money to exit a taxpayer bailout, relinquished its position as the top underwriter for U.S. IPOs, a title it held in three of the past four years. The lender helped arrange $1.19 billion worth of initial offers, ranking sixth among banks. It fell out of the top five for the first time since 2004.

John Chirico, Citigroup's co-head of capital markets origination for the Americas, would not offer an explanation as to why Citi's share of IPOs shrank by more than half. "The franchise is strong," he said. "We're very bullish on 2010 from an IPO perspective."

Citi was a lead underwriter in the February IPO of Mead Johnson Nutrition Co., which makes the Enfamil infant formula. Mead Johnson, of Glenview, Ill., raised $828 million selling shares at the $24 maximum price that it sought in the first U.S. initial offering of 2009. The stock has since added 85%, beating the 36% gain in the Standard & Poor's 500 index.

Among the other IPOs that Citi helped arrange, three are trading below their offer prices, while five of the nine have underperformed the S&P 500 since their sales.

"When people look at underwriters, they look at the whole package," said Michael Holland, chairman of Holland & Co., a New York investment firm that oversees more than $4 billion. "With Goldman, people have no problem whatsoever with their franchise. With Citi, they've faced some very challenging times, so which one do you go with? People are voting with their fees in this case."

Goldman Sachs, which became a bank holding company last year and took $10 billion in taxpayer bailout money, earned the most from underwriting U.S. IPOs in 2009, after getting shut out of the top three in the prior two years, Bloomberg data shows. Goldman's fees rose 62% from $118.2 million last year.

In helping take 16 companies public this year, from Hyatt Hotels Corp. to Cobalt International Energy Inc., Goldman made $191.6 million,, an increase of more than 60% from 2008, preliminary data compiled by Bloomberg shows.

Bank of America Corp. was second in both fees and market share, as it charged companies less on average than any other bank in the industry.

B of A, which owns Merrill Lynch & Co., collected $158.2 million in fee income, data compiled by Bloomberg shows. That equals about 5.28% of proceeds from IPOs for which B of A was a lead underwriter.

Bank of America's fees were depressed by its offering of Verisk Analytics Inc. of Jersey City in the biggest U.S. IPO of 2009, according to Lisa Carnoy, B of A's global head of equity capital markets.

Bank of America and Morgan Stanley each received $43.1 million after charging the supplier of actuarial data to insurers 4% to underwrite Verisk's $2.16 billion IPO in October, the lowest percentage of any U.S. offering this year, data compiled by Bloomberg shows.

Morgan Stanley more than quadrupled the amount it made from underwriting IPOs, to $156.1 million, compared with 2008.

JPMorgan Chase & Co. made $105.4 million charging the industry's highest fees. It received 5.8% in fees from the $1.82 billion in IPOs that it helped underwrite, the highest percentage of those credited with $1 billion or more in IPOs.

This year, fees averaged about 5.63% of proceeds, up from a record low of 3.48% in 2008.

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