Citigroup puts more TARP $ to work
Banking giant says it made $8.2 billion in loans backed by TARP in first quarter. Citi has now authorized $44.75 billion in funding commitments since last fall.
NEW YORK (CNNMoney.com) -- Citigroup said Tuesday it authorized $8.2 billion in lending to U.S. consumers and businesses so far this year backed by taxpayer funding.
In its latest update on how it is spending government bailout money, the troubled financial giant said it made a number of loan commitments during the quarter, including a $5 billion direct loan program to state and local governments and $1 billion to help homeowners refinance their mortgages.
Citigroup (C, Fortune 500) and other large banks have been under intense scrutiny about their lending practices since taking in billion of dollars in taxpayer funds from the government's Troubled Asset Relief Program, or TARP, last fall.
Citigroup has been one of the biggest recipients of government aid to date, taking in approximately $45 billion in TARP funds.
"We are using this capital to expand personal and business lending in the United States, consistent with Citi's prudent lending standards, and will continue to explore every opportunity to put it to work in a disciplined, transparent and responsible fashion," Citigroup CEO Vikram Pandit said in Tuesday's report.
The bank said it also earmarked $2 billion in TARP money for purchasing small and medium-sized business debt and is making $250 million in new automobile loans to consumers via dealerships around the country.
Since first taking hold of government funds last fall, Citigroup has authorized $44.75 billion in loans and other commitments backed by TARP, the company said Tuesday.
That amount however, does not necessarily suggest that nearly all of the taxpayer aid has been spent. Experts have indicated that capital injected into banks tends to have a multiplier effect. So for every dollar of government capital, banks are able to make $10 in loans.
Tuesday's news comes just days after federal regulators revealed that Citigroup faced a $5.5 billion capital shortfall as a result of the so-called "stress tests" on the nation's 19 largest institutions.