- Posted December 11, 2014
- Tweet This | Share on Facebook
Citigroup to take $3.5 billion charge
By Steve Rothwell
AP Business Writer
NEW YORK (AP) - Citigroup said Tuesday that it will incur charges of $3.5 billion in the fourth quarter to cover legal and restructuring costs.
The bank will allocate $2.7 billion of that amount to cover legal costs associated with investigations into currency trading, the manipulation of a key interest rate, as well as anti-money laundering and related probes. The remaining $800 million will be spent reducing the bank's headcount and cutting its real-estate holdings.
Like other U.S. banks and financial institutions, Citi is still grappling with the fallout from the financial crisis and the tougher regulatory scrutiny that the industry is facing in the aftermath.
Citi's CEO Michael Corbat said in a statement announcing the charge that the bank's legal woes may now be nearing an end. He also said that, despite the charge, he still expected the bank to turn a profit in the quarter.
"These legal charges should cover a significant portion of our outstanding legal matters based on current information," Corbat said.
The bank's stock slumped on the news, falling $1.38, or 2.4 percent, to $54.98. The drop put the stock on track for its biggest slump in two months.
The charge is the latest in a long list of legal cost incurred by the bank.
In October, Citigroup was forced to cut its third quarter earnings by $600 million because of higher legal costs associated with regulatory investigations. In July, Citi agreed to pay $7 billion to settle a federal probe into its handling of risky subprime mortgages. The bank acknowledged misrepresenting residential mortgage-backed securities that later plunged in value.
The bank will report its fourth quarter earnings on Jan. 15, 2015.
Published: Thu, Dec 11, 2014
headlines Oakland County
- Meet the Judges
- Owner of twice-sunken Lake Michigan barge pleads guilty to felony
- Justice Dept. reaches civil settlement with victims abused by Lawrence Nassar
- Oakland County, Oakland Livingston Human Services Agency launch Oakland County Senior Chore Pilot Program
- U.S. Immigration Court judge to be keynote speaker at law school’s Law Day virtual celebration
headlines National
- New Legalese: You may have heard a deepfake, but what about ‘Twiqbal’?
- From Intake to Outcome: An in-house lawyer’s guide to matter management solutions
- 2 BigLaw firms in merger talks that could produce 1,600-lawyer firm with top 50 revenue
- Send in the paralegals
- Lawyer reprimanded after mistakenly emailing opposing counsel with plan to avoid judge’s call
- ‘I don’t play well’ judge who threatened to track down, jail misbehaving litigant gets tossed from case