The regulators fined Citi $400 million in 2020 after identifying ongoing deficiencies in its handling of various areas. Photo: Bloomberg. US bank regulators fined Citigroup $136 million for making “insufficient progress” fixing data management issues identified in 2020 and required the bank to demonstrate it was putting enough resources toward those efforts. . The joint enforcement action from the Federal Reserve and Office of the Comptroller of the Currency (OCC) concerns Citi’s efforts to repair data management problems and implement controls to manage ongoing risks, the Fed said on Wednesday.. Click here to connect with us on WhatsApp. The fines are the latest blows for CEO Jane Fraser as she tackles the bank’s regulatory failings and streamlines its structure after laying off thousands of employees.. The regulators fined Citi $400 million in 2020 after identifying “ongoing deficiencies” in its handling of various areas of risk management and internal controls, including data quality management.. The bank agreed a sweeping plan to fix its data faults, but a Fed exam last year found the lender still had deficiencies and had not made adequate progress, the Fed said.. “Citigroup violated the 2020 order through delays in completing milestones included in its approved plan,” the Fed said on Wednesday.. The OCC is also requiring the bank to enact a new quarterly process to ensure it is devoting enough resources to meeting its milestones, Fraser said in a memo to employees seen by Reuters.. “Setbacks like this one today are visible and I know they can be disappointing,” Fraser wrote. “But they absolutely cannot distract us from the work we’re doing in every corner of the bank…Efforts of this scale and importance are undeniably hard.”. A Citigroup spokesperson confirmed the contents of the memo, but declined to comment further on it.. Fraser’s sweeping reorganization included layoffs of employees working on the regulatory orders, according to two sources familiar with the situation who declined to be identified discussing personnel matters.. A company spokesperson declined to comment when asked about the job cuts.. The bank has intensified its focus and increased its investment in its transformation efforts over the last several months, Fraser said in a separate statement.. “Despite making good progress in simplifying our firm and addressing our consent orders, there are areas where we have not made progress quickly enough, such as in our data quality management,” she said.. Citi will spend what is necessary to address the regulatory issues, Fraser said, adding “we’ve always said that progress wouldn’t be linear.”. Shares fell 1.3 per cent in after-hours trading.. “Citibank has always had a few overhangs from regulators, so this isn’t increasingly surprising,” said David Wagner, portfolio manager at Aptus Capital Advisors, who remains positive on the shares. “It’s not material to an overall thesis for the stock.”. In February, Reuters reported US regulators asked Citi for urgent changes to the way it measures default risk of its trading partners, and the bank’s own auditors found a plan to improve internal oversight to be lacking.. Last month, the Federal Deposit Insurance Corporation also escalated concerns with Citi’s plansfor a living will, which would be carried out if the company were ever to go bankrupt.. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
