Wednesday, the government fined Citigroup Inc. $135.6 million because the bank didn’t follow through on a 2020 order that told it to improve how it manages risk and data quality.
The Federal Reserve board and the Office of the Comptroller of the Currency gave the fines. As Chief Executive Jane Fraser tries to make things easier at the bank by cutting back on business abroad and letting people go, they showed up. Fraser said the bank had made progress on compliance, but he also said it still had more work to do.
Citgroup was given a $60.6 million fine by the Fed. A $75 million fine was given by the OCC.
After trading hours, Citigroup C, +0.65% shares were down 1.3%. The stock is still up 30.2% so far this year, though.
The actions were also taken before Citigroup’s earnings report and conference call on Friday, when the issue could be talked about more in depth.
The Federal Reserve said in a statement on Wednesday that Citigroup had not made enough progress in fixing its problems with data-quality management and had not put in place adequate controls to handle its ongoing risk. “The board is still keeping an eye on Citigroup to make sure they are following the 2020 action, which is still in effect.”
In 2020, the Fed said it had told Citigroup to “fix several longstanding deficiencies” in “compliance-risk management, data-quality management, and internal controls.” Fraser said in a statement on Wednesday that the bank had failed to meet all of the requirements of the order.
“We have admitted that we have not made enough progress in some areas, such as our data-quality management,” Fraser said Wednesday. “We have made good progress in simplifying our firm and addressing our consent orders.”
“In those areas, we’ve sharpened our focus and put more money into them over the last few months,” she said. “These places will be where they need to be, just like we’ve done in other parts of the transformation.”
Deputy Comptroller of the Currency Michael Hsu said on Wednesday that Citi had made “meaningful progress overall.” He did say that more had to be done, though.
“Citibank must see its transformation through and quickly fix the problems that have been there for a long time,” he said.
