Apr 14, 2009
Citibank Mortgage TARP Money
Citigroup has disclosed where $45 billion that the Treasury department paid for it is to be used.
Over half of it, about $25 billion will go to residentail mortgages such as housing market support that purchases prime residential mortgages and securities, and also direct home loans to home buyers. Five billion dollars will be used for credit card lending, increasing credit lines and new accounts.
An additional $1.5 billion will be invested in commercial loan securitizations, and the remaining one billion will go towards student loans through the Federal Family Education Loan Program.
The company will also spend $1.5 billion on consumer loans and $1 billion on business loans for those facing liquidity issues. “Our responsibility is to put TARP capital to work quickly, prudently, and transparently to support U.S. consumers, businesses and our communities during these challenging times,” said Vikram Pandit, Citi CEO.
The use of $36.5 billion in these funds is the “first stage of primary lending and secondary market activities directly linked to the TARP investments.”
After receiving $45 billion from the government, Citi set up a “Special TARP Committee” to approve and track how the company used the funds.
The company said it extended roughly $75 billion in new loans during the fourth quarter, while keeping approximately four out of five distressed borrowers with Citi-serviced mortgages in their homes throughout 2008.
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