Citigroup puts £25bn up for grabs as loans

Banking giant Citigroup has been shamed into pushing $36.5 billion (£25.4 billion) from funds it has received from the US taxpayer into consumer and mortgage loans, raising hopes that at last the banking system could start moving again.

Citi and other banks that received funds from the Troubled Assets Relief Programme (Tarp), have faced heavy fire from politicians and warnings from President Obama to start lending again.

Bloomberg says the bank will use $25.7 billion for mortgage lending, $2.5 billion for consumer loans, $1 billion for student loans, $5.8 billion for credit card lending, and $1.5 billion for corporate loans.

Obama is said to be preparing demands that banks boost lending to consumers and companies in return for taxpayer aid from the $700 billion Tarp fund, conditions never forced on them by the Bush Administration.

Citi received $45 billion from the fund last year.