Citigroup offered its first glimpse Tuesday into how it is spending the $45 billion in government bailout money that the ailing bank has received in recent months. (See: Citi gets $20 billion cash injection and support for $306 billion bad assets).

Faced with intense scrutiny from taxpayers and Capitol Hill about its spending habits in recent weeks, the New York City-based bank issued its first quarterly progress report on its spending of funds from the government's Troubled Asset Relief Programme, or TARP.

Citigroup also said it created a special committee that will approve and track how the company uses TARP money.

As of the fourth quarter of 2008, $36.5 billion has been approved for these initiatives:
$25.7 billion for US residential mortgages
$5.8 billion for credit card lending
$2.5 for personal and business loans
$1.5 billion for commercial loan securitization
$1 billion in originating student loans through the Federal Family Education Loan Programme

Citigroup did not indicate how it spent the remaining $8.5 billion of the $45 billion in government funds. Isaac Baker, a spokesman for the US Treasury Department, said the announcement was "a step forward," but added that more needed to be done to remedy the ongoing credit crunch.
 
Treasury officials are expected to provide details about how they plan to spend the second half of the government's $700 billion rescue package early next week, including new transparency and accountability measures.

Citigroup has three goals with TARP capital: To help expand available credit for consumers and businesses, restore liquidity and stability to the capital markets, and support the recovery of the US economy.

''Americans from all walks of life are facing real economic hardship, and Citi must do whatever we can to help them. Our responsibility is to put TARP capital to work quickly, prudently, and transparently to support US consumers, businesses and our communities during these challenging times,'' Citi CEO Vikram Pandit said in the report.

American financial institutions have come under a lot of flak for being unable to prevent the sub-prime mortgage crisis, and then indulging in profligate spending and huge bonuses for executives. Hoping to deflect some of the criticism of their spending, Citigroup and other big banks are also trying to offer a bit more transparency about what they are doing with TARP funds.

Rival Bank of America, which has received $45 billion in government aid, said last week it would file quarterly reports on its lending activity. And West Coast banking giant Wells Fargo revealed Monday that it paid a $371.5 million quarterly dividend to the US Treasury in exchange for the $25 billion that the Treasury Department invested in the bank last autumn.