Citigroup Inc. said it approved $6 billion of lending initiatives last quarter as part of its commitment to deploy capital amassed with the help of the Troubled Asset Relief Program.
The company also said it made $129.7 billion of U.S. credit available, up 8% from the first quarter.
But the environment for consumer and business lending remained weak in the second quarter, as job losses, falling incomes and continued declines in real estate values dampened demand for loans, the company said in its quarterly disclosure Tuesday of Tarp capital uses.
Citi has announced $50.8 billion of Tarp-related lending initiatives, but $15.1 billion had actually been put to work as of June 30.
More than half the money deployed so far has been spent on mortgage securities bought in the secondary market. Activity in that market moves faster than new primary lending programs, where it takes time to market new offers, process loan applications and release funds, the company said.
The $6 billion of initiatives approved in the second quarter by Citi's special Tarp committee included a $4 billion program to provide letters of credit to state and local governments, municipal agencies and other public finance clients. This initiative, which built on the $5 billion in direct lending commitments made to municipal clients in the first quarter, has yielded $2.3 billion in issued letters of credit, including $400 million for nonprofit health care systems in the Midwest and West.
Citi also announced that it worked with 108,000 homeowners in the quarter on mortgage modifications, extensions, forbearances, reinstatements or other loss-mitigation efforts. The company said it has helped 625,000 borrowers avoid foreclosure since the start of the housing crisis.
The Obama administration's Making Home Affordable plan was credited for helping Citi work during the quarter with distressed borrowers with mortgages held or serviced by Citi, so that nearly 90% of them were able to stay in their homes.
Also in the quarter, the company added 460,000 credit card customers to its forbearance programs, bringing the total involved in these initiatives to 1.4 million.
Another $2 billion in lending was approved for warehouse facilities designed to help mortgage originators extend credit.
"We recognize that we have a tremendous responsibility to contribute to America's economic future," chief executive Vikram Pandit said. Initiatives supported by Tarp capital are authorized by bank executives on the special committee. Citi got $45 billion in government aid.
