Citigroup Inc. to Use $36.5 Billion to Boost Lending
US financial institution Citigroup said it will use $36.5 billion worth of bailout package to boost money lending, with huge portion of this fund going to home loans supported by government-backed mortgage lenders Freddie Mac and Fannie Mae.
Meanwhile, a source who asked for anonymity said Citigroup backed out from the baseball stadium sponsorship deal with New York Mets.
US financial institution Citigroup Inc said it will use $36.5 billion bailout package to boost money lending in the country, amidst government’s growing influence over this financial conglomerate.
According to experts, political pressure and government influence will affect every action of the company after receiving its bailout package following its $80 billion credit losses last year.
Earlier, Citigroup said it will allocate huge portion of the government financial aid to mortgage lenders Freddie Mac and Fannie Mae. According to the company’s spokesperson, they will use $10 billion for home loans supported by these two government-backed mortgage institutions.
Meanwhile, a Reuters report said that a source who asked for anonymity said Citigroup backed out from its baseball stadium sponsorship deal with New York Mets, which could amount to more than $400 million. With this decision, experts believed that government has now a direct influence over the financial conglomerate.
When asked for comments, Citigroup said it will not back out from its sponsorship deal with Mets and added it will not use the bailout package provided by the government.
In October 2008, the government created the Troubled Asset Relief Program (TARP) to help Citigroup after its massive credit losses and provided the company with $45 billion bailout plan.
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