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Citigroup details new loan commitments after U.S. infusion

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Citigroup Inc. is out today with a 43-page report that seeks to refute that the bank isn’t doing enough to boost lending and help the economy.

Citi, which has gotten $45 billion in government capital infusions and an additional federal guarantee on more than $300 billion of its troubled loans, says it has committed an initial $36.5 billion for lending programs as a result of the government’s help to bolster the bank’s finances.

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‘Americans from all walks of life are facing real economic hardship, and Citi must do whatever we can to help them,’ Citi Chief Executive Vikram Pandit said in a statement. ‘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.’

TARP is the government’s $700-billion Troubled Asset Relief Program that Congress approved last fall.

Of the total $36.5-billion lending commitment, Citi said $25.7 billion has gone or will go toward home mortgages and purchases of mortgage-backed securities.

Of course, $45 billion in capital normally should support new lending of perhaps 10 times that sum. That’s why Citi was careful to note that the $36.5 billion commitment is the ‘first stage’ of what it hopes to do now that Uncle Sam has become a major stakeholder in the bank.

Citi’s non-government shareholders don’t seem impressed: Citi’s shares were down 16 cents, or 4.4%, to $3.49 at about noon PDT, amid another broad sell-off in financial shares.

Among other major banks, Bank of America Corp. was off 63 cents, or 10.5%, to $5.37 and Wells Fargo & Co. was down 85 cents, or 4.4%, to $18.38.

The report today is a reminder to Wall Street of just how beholden Citi and other TARP-recipient banks are to U.S. taxpayers.

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-- Tom Petruno

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