Citigroup has said that it will lend $25.7b in mortgages, $2.5b in consumer loans, $1b in student loans, $5.8b in credit cards, and $1.5b in corporate loans in the near future using $36.5b of the $45b in TARP funds it has received from Treasury. This should be seen as a welcome development after TARP creator and former Treasury Secretary Henry Paulson repeatedly called on banks to “redeploy” TARP funds after he started allocating the money to banks like Citi. More from the Bloomberg report below:
The $36.5 billion in new funds allocated for lending comes on top of the $75 billion that Citigroup doled out in new loans in the fourth quarter to people and businesses.
Citigroup said in the report that TARP capital will not be used for compensation and bonuses, dividend payments, lobbying or government-related actions or any activities related to marketing, advertising and corporate sponsorship.
…The U.S. economy continues to be hampered by a financial system that has lost more than $1 trillion on housing credits since the mortgage crisis began in 2007.
The Treasury has distributed more than $194 billion through its program of purchasing stakes in U.S. banks. It has also mounted rescues of Citigroup and Bank of America Corp., insuring a total of more than $400 billion of illiquid assets on their balance sheets.