Citigroup today disclosed where a good chunk of the $45 billion it received via investments from the Treasury is expected to be used.
A significant amount to the tune of $25.7 billion will go to residential mortgage activities, such as direct home loan to homebuyers and housing market support via the purchase of prime residential mortgages and mortgage-backed securities.
Another $5.8 billion will be allocated to boost credit card lending, which includes both balance transfer offers, targeted increases in existing credit lines, and new account originations.
The company will also spend $1.5 billion on consumer loans and $1 billion on business loans for those facing liquidity issues.
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.
“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.
“To this end, Citi is working in partnership with the Government to increase available lending and liquidity in the U.S financial markets and to help put the U.S. economy back on track,” he added.
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 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.”
It’s unclear how the remaining $8.5 billion will be used, or when.
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.