Citigroup is using its $45 billion in government capital to make nearly that much in new loans. Citigroup said its committee overseeing the use of taxpayer money approved $44.75 billion in lending initiatives as of March 31.
That is up from the $36.5 billion in lending initiatives announced in February, and now includes $5 billion in loans to municipalities.
The loans being offered by Citigroup to state and local governments, municipal agencies, universities and non-profit hospitals would not likely have been made had the bank not received money from the Troubled Assets Relief Program, or TARP.
David Brownstein, Citigroup's managing director and co-head of public finance, said in an interview with The Associated Press that these municipal borrowers are still very secure, but their borrowing costs have shot higher because of turbulence in the credit markets.
In Citigroup's report, reviewed by the AP and scheduled for release Tuesday morning, the bank also said it is spending $2 billion more to finance suppliers, $1 billion more in residential mortgages, and $250 million more in auto loans.
In total, Citigroup has extended more than $200 billion in new credit in the United States since last October — when the bank got its first $25 billion injection of bailout money from the government.
Last fall, Congress approved the $700 billion TARP fund, which got handed out to hundreds of financial institutions in an effort to stabilize the financial system and revive lending.