Citigroup Unveils Plans to Lend $36.5 Billion to Promote Consumer Borrowing

In an effort to pass the benefits of the TARP onto the real economy, Citigroup unveiled plans to spend $36.5 billion in a series of new initiatives to spur credit card, mortgage and other consumer and business lending operations.

The aims of the initiatives are, "to help expand available credit for consumers and businesses; restore liquidity and stability to the capital markets; and support the recovery of the U.S. economy," according to a new quarterly publication from Citigroup detailing how it plans to spend part of the $45 billion it borrowed from the U.S. Treasury's Troubled Asset Relief Program.

The firm plans to make $25.7 billion in direct loans available to homebuyers and support the mortgage-backed securities market, spend $2.5 billion in consumer and business loans, $1.0 billion for student loans, $5.9 billion in credit card lending and $1.5 billion in corporate lending activity.

Citigroup also said it made $75 billion in loans in the fourth quarter and plans to continue its 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," Citi Chief Executive Officer Vikram Pandit said.

In the minutes following the opening Bell on Tuesday, shares of Citigroup were up 1.92% at $3.72 per share.

By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009