C - Citigroup Inc.
75.78 0.00 (0.00%)
After hours: 5:39PM EST
| Previous close | 75.33 |
| Open | 75.07 |
| Bid | 75.65 x 3100 |
| Ask | 76.09 x 800 |
| Day's range | 74.87 - 76.27 |
| 52-week range | 48.42 - 76.28 |
| Volume | 12,479,260 |
| Avg. volume | 11,719,995 |
| Market cap | 165.442B |
| Beta (3Y monthly) | 1.81 |
| PE ratio (TTM) | 10.05 |
| EPS (TTM) | 7.54 |
| Earnings date | 14 Jan 2020 |
| Forward dividend & yield | 2.04 (2.71%) |
| Ex-dividend date | 2019-11-01 |
| 1y target est | 84.44 |
- Yahoo Finance
Why Wells Fargo’s Mike Mayo is ‘banking on tech’
When it comes to investing in bank stocks, a flattening yield curve, Fed rate cuts and illiquid capital markets are typically considered red flags that send investors running for the hills.
- Bloomberg
Intel Is First to Share Detailed Pay Disparities. It’s Not Flattering.
(Bloomberg) -- It’s not really a surprise that white and Asian men dominate the top pay tiers among Intel’s U.S. workforce. That’s been true in the tech industry for years. What’s unusual is the excruciating level of detail about pay disparity the chipmaker is releasing Tuesday to the public—information it could have kept secret.In addition to its annual update on the outlook for women and people of color at the company, Intel on Tuesday released the results of a new report it sent to the U.S. Equal Employment Opportunity Commission that gives unprecedented pay, race and gender data for about 51,000 U.S. workers. Intel is the first company to release the otherwise private data.The results are not flattering. Among 52 top executives at Intel, who all earn more than $208,000—the top pay band the EEOC tracks—29 are white men, 11 are Asian men and 8 are white women. The remaining tally is 1 each for Asian women, black women and black men, with no Hispanic men among executives in that top tier.The ratio was similarly skewed across manager, professional and technician job classifications, with white and Asian men dominating top pay groups and women and people of color clustered in the lower bands. One in four white men at Intel are in the top salary tier, earning at least $208,000, a higher share than any other group. Rates are far lower for women and underrepresented minorities; less than 10% of black employees are top earners. “It’s difficult to really fix what you aren’t being transparent about,” said Barbara Whye, Intel’s chief diversity and inclusion officer and a vice president in human resources. The chipmaker is making itself “very vulnerable,” she says, to “do the right things,” and she hopes her peers will follow and share pay information, too. “These are industry-wide problems,” Whye said. “They are going to require industry-wide solutions to resolve them.” So far, no other companies have said they’ll do the same. Intel joins a small but growing number of companies that have released gender and racial pay data, often under pressure from investors. The transparency may be laudable, but it is often overshadowed by what is revealed. Annual diversity reports from the biggest tech companies from the last half decade have shown scant progress in advancing the numbers of under-represented workers.Companies that choose to release this kind of information risk backlash. Citigroup this year faced criticism after it voluntarily released median pay data that showed women at the bank earn 29% less than men do.Intel’s report finds that within job types—not just at the top—white men dominate the highest salary band. Two-thirds of employees fall into a job group called “professionals,” which includes includes non-managerial office workers and programmers. Nearly all earn at least $80,000 per year, but white and Asian men have the highest salaries. Black, Hispanic and other minorities are overrepresented in the bottom half of the pay ranges. Even if the numbers look bad, companies will ultimately benefit more from leading on disclosure than they would from dragging their heels, said Natasha Lamb, managing partner at Arjuna Capital, which pressures companies to disclose gender pay data. The point is not to beat up on organizations for telling the truth, she said. “It's much more important to have an accurate reflection of reality than to glaze over the simple truth,” she said. “These companies are not as diverse and equal as they could be.”In 2015, Intel set a goal to have women make up at least 26% of its workforce by 2020. The company met that last year and is working to increase the percentage of women among top executives now to 26%, too, Whye said. Intel says representation among its total U.S. workforce and for technical employees has improved—underrepresented workers make up 15.8% of the company up from 14.6% last year. Women as a percentage of the workforce fell slightly to 26.5% from 26.8%.Intel announced in January that it had met its goal of equal pay for men and women who do the same work. This EEOC data does not measure that. Overrepresentation of white men in the highest-paying jobs contributes to the nation’s wage gap: American women earn 20% less than men do, and the gap is even wider for women of color. Intel’s disclosure shows that these disparities can’t be fixed simply by raising the salaries of women and minorities. Whye said the company’s task is to help underrepresented groups get promoted into more lucrative roles and keep them there. The data provided to the EEOC covered 2017 and 2018 and was collected from nearly all U.S. companies for the first time this fall under an initiative started by President Barack Obama. By law, the forms stay private unless a company makes them public. This could be the only time the EEOC collects worker pay broken down by race, sex and ethnicity, making Intel’s disclosure a unique window into company compensation, and how it results in wage gaps. The agency has been soliciting the data since July and could continue to do so until January under a federal judge’s order. But the EEOC has said it won’t pursue future collections in this form. In the U.K. where companies are required to publicly report wage gaps between male and female workers, the disclosures have shown the benefits and limits of transparency, said Harini Iyengar, a lawyer who advocates for equal pay in Britain. “A lot of members of the public who don't pay an interest generally in labor market issues are quite shocked at the scale of the pay disparity,” she said. “So that's been very positive because people are genuinely shocked.” But so far the nationwide initiative has not resulted in measurable change, she said: “What I'm seeing is collective hand-wringing about, ‘Oh no, this is not good enough. But look everyone else in our industry sectors is in the same boat. So that's all right then.’” \--With assistance from Lucy Meakin and Paige Smith.To contact the authors of this story: Jeff Green in Southfield at jgreen16@bloomberg.netHannah Recht in New York at hrecht@bloomberg.netTo contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.net, Rebecca GreenfieldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Zacks
Morgan Stanley Slashes 2% Jobs Amid Tough Operating Backdrop
Morgan Stanley (MS) is reducing workforce to control expenses as its top line is likely to be under pressure in the coming days.
- Business Wire
Citi Leads £625MM Financing for Jaguar Land Rover Automotive with a First-Ever UK Export Finance Guarantee Issued Under its General Export Facility Program
Citi, together with a syndicate of international banks, completed a £625 million term loan facility with Jaguar Land Rover Automotive plc in October this year. The facility is backed by a £500 million guarantee from UK Export Finance under its new General Export Facility programme (GEF).
- Zacks
Citigroup (C) Dips More Than Broader Markets: What You Should Know
Citigroup (C) closed at $75.33 in the latest trading session, marking a -0.63% move from the prior day.
- Bloomberg
South Africa Hit by Record Blackouts, Raising Recession Risk
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth Africa’s state power company intensified rolling blackouts to a record, signaling a deepening crisis at the debt-ridden utility and raising the risk of a second recession in as many years.Eskom Holdings SOC Ltd. said on Monday it will move to Stage 6 load-shedding from 6 p.m. local time, meaning it will cut 6,000 megawatts from the national grid, after a technical problem at the giant new Medupi Power Station curbed supply. That’s the biggest cut yet. The utility downgraded the status to Stage 4 as of 10 p.m.The utility is curbing power for a fifth straight day as it struggles with breakdowns at plants and heavy rains that have soaked coal used as fuel. The blackouts have a debilitating effect on the economy by curtailing mining and factory output and causing crippling traffic delays.“It does mean that the economy is heading for a recession,” Iraj Abedian, chief executive officer of Pan-African Investments and Research Services, said by phone from Johannesburg. “There’s no way that hot on the heels of the previous quarter’s negative growth in GDP with this type of humongous and material disruption to the continuity of business that the economy can register positive growth.”South Africa’s statistics office announced last week that gross domestic product shrank an annualized 0.6% in the three months through September. Power cuts also dented the economy in the first quarter, when it contracted the most in a decade, led by a drop in manufacturing, mining and agriculture outputEskom’s announcement marked the end of a torrid day on Twitter for South African President Cyril Ramaphosa. His weekly letter to the nation highlighting how Medupi is a fitting symbol of the importance of state-owned companies was derided on the social-media site.At 10 p.m. local time he issued a statement commiserating with his countrymen.“The ongoing load-shedding is devastating for the country. It is causing our economy great harm and disrupting the lives of citizens,” he said. “The anger and frustration that this load-shedding has caused is understandable.”Municipalities were also caught off guard, with Johannesburg electricity distributor City Power saying it has no load-shedding schedule for Stage 6.The one thing that could prevent GDP from dipping as deep as it did in the first quarter is the fact that many businesses are winding down as the Christmas holidays approach.Growth would have to rebound about 0.8% in the fourth quarter to reach the government’s forecast of a 0.5% expansion in the three-month period, said Gina Schoeman, an economist at Citigroup South Africa. The economy is unlikely to grow that much, she said.Weak economic growth could lead to a further deterioration in public finances and heighten the risk of South Africa losing its last investment-grade credit rating with Moody’s Investors Service. The company cut the outlook of the nation’s Baa3 assessments to negative last month.Load-shedding at Stage 6 is “no cause for alarm as the system is being effectively controlled,” Eskom said in a statement. “Eskom’s emergency response command centre and technical teams will be working through the night to restore units as soon as possible.”Mining companies say they are probably bearing the full brunt of load-shedding because they are among the heaviest users of electricity. Sibanye Gold Ltd., the country’s biggest private employer, has to reduce power use by 20% during load-shedding, said spokesman James Wellsted.“It’s concerning and if it continues for a long time it will impact on production and the entire industry, not to mention the economy,” he said before Stage 6 load-shedding was announced.(Updates with latest from Eskom in second paragraph)\--With assistance from Felix Njini, Antony Sguazzin and Paul Vecchiatto.To contact the reporters on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net;Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.netTo contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Paul Richardson, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
UPDATE 5-Britain's Phoenix to buy Swiss Re's ReAssure business for $4.1 bln
LONDON/ZURICH, Dec 6 (Reuters) - Phoenix Group Holdings has agreed to buy the British ReAssure business of Swiss Re for 3.2 billion pounds ($4.1 billion) in cash and shares, the UK insurer's biggest deal to date as it bulks up on policies closed to new customers. The deal comes after ReAssure, which like Phoenix specialises in closed life insurance books, shelved a planned initial public offering (IPO) earlier this year. By consolidating the closed books of business, Phoenix aims to run them more efficiently.
- Bloomberg
Oil Unmoved After New OPEC Deal Leaves Supply Little Changed
(Bloomberg) -- Oil prices sputtered after OPEC failed to impress traders with what appeared to be a cosmetic revision to output quotas.Futures were unchanged in New York after gyrating throughout the session, at one point reaching the highest since September. A key committee recommended in Vienna that the group cut output targets by 500,000 barrels a day. While crucial details have yet to emerge, the latest move seems to formalize the extra supply reductions the group has already been making for most of this year.“This is a meaningless agreement since it doesn’t change supply of oil in market,” said Michael Hiley, head of OTC energy trading with LPS Partners. “Sure, its not wildly bullish but its not wildly bearish either, so that’s why the market is moving up and down.”The committee convened by the Organization of Petroleum Exporting Countries and its allies also agreed to leave condensates out of Russia’s quota from this month, Energy Minister Alexander Novak said in Vienna.Excluding condensate from the current deal would mean a new reference target that would exclude 1.4 million barrels a day of liquids, Citigroup Inc. analysts including Francesco Martoccia wrote in a note.West Texas Intermediate for January delivery settled unchanged at $58.43 a barrel on the New York Mercantile Exchange. Still, the benchmark is set for the largest weekly gain since September.Brent for February settlement advanced 39 cents to $63.39 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.05 premium to WTI for the same month.\--With assistance from Alex Longley.To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Mike Jeffers, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Business Wire
Citi Private Bank Issues Outlook 2020: Global Growth Can Endure Over the Coming Year
Citi Private Bank today released its Outlook report for 2020, titled, "Staying Positive in a Negative (Yielding) World." The twice-yearly publication provides in-depth insights into the global economy and financial markets for the coming year, and highlights important multi-year investment themes for client portfolios.
- Zacks
Major Regional Bank Stocks Outlook Rosy on Decent Loan Rise
Major Regional Bank Stocks Outlook Rosy on Decent Loan Rise
- Bloomberg
Starbucks Discloses Gender and Racial Pay Gap: There Isn’t One
(Bloomberg) -- Starbucks Corp., for the first time, is disclosing how much less women at the coffee chain earn than men in the U.S.: zero dollars. That’s in contrast to the nation’s workforce overall, in which women make on average 19% less than men. Starbucks also says it has no racial pay gap.Starbucks joins Citigroup Inc. in reporting figures for median pay, a rarity among U.S. companies, which are not required to release diversity data publicly. The U.K. has required organizations to report such data for workers since 2018. There, women at Starbucks make 5% less than men. Globally, its female employees make 98.3% of what men do.“Starbucks has been focused on diversity and equity for a long time, and you can see it in their numbers,” said Natasha Lamb, managing partner at Arjuna Capital, which pressures companies to reveal pay data for greater gender equality. “But having little to no adjusted or unadjusted gender pay gaps really sets them apart.”Starbucks’ parity shows not only that women get “equal pay for equal work” but also that they have achieved as many high-paying roles as men.“Pay equity has long been a priority at Starbucks,” said Bailey Adkins, a spokesperson for the chain. “We’ve done serious work to ensure women and men are compensated fairly.”Pressured by Arjuna, some of the biggest banks and tech companies have disclosed the pay gap between men and women doing the same work—often referred to as pay equity. Companies have resisted sharing their median pay gaps, which could be embarrassing. After Citigroup reported that women at the bank earn 29% less than men, its peers chose not to follow. In the U.S., the bank also pays people of color 7% less than their white co-workers.On Wednesday, Microsoft Corp.’s shareholders voted down a measure calling for median pay disclosure. Arjuna says it will file resolutions at more than a dozen technology, financial and retail companies for the 2020 proxy season. It withdrew its proposal from Starbucks.\--With assistance from Leslie Patton.To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.netTo contact the editors responsible for this story: Rebecca Greenfield at rgreenfield@bloomberg.net, Philip GrayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Business Wire
Citi Partners with Rapid Addition to Grow Market Share in FX Electronic Trading
Citi (NYSE:C) has appointed electronic trading platform provider Rapid Addition as one of its core FIX platform partners for currency trading, based on the company’s latency performance and scalability to meet business requirements. Citi has integrated the Rapid Addition FIX engine, as well as the Rapid Addition Hub platform, in to its new pricing technology for spot foreign exchange transactions, which clients can connect to in co-locations across London, Tokyo, New York, and Singapore. The Rapid Addition FIX engine delivers market-leading speed for low latency trading, while the Rapid Addition Hub platform delivers scalability in client on-boarding and configuration.
- Bloomberg
Climate-Friendly Banking Might Be a Risky Thing
(Bloomberg Opinion) -- As part of Europe’s promise to become the first “climate-neutral” continent by 2050, the region is emerging as a leader in creating standards for green investments. But the push to get its banks to back sustainable assets needs careful scrutiny.At the core of the European Union’s project is the creation of a single set of definitions to determine what economic activities are sustainable and should count as green. To take just one example, for a transport project to be labeled green the passenger trains would have to have no direct emissions or they must be below a certain threshold. The initial aim is for these classifications to form the basis for framing green bond issues, but they will go beyond that: They might well shape government spending and central bank stimulus programs.In the world of finance, Brussels is especially eager to encourage green loans as well as bonds. The European Commission is examining whether banks should be encouraged to fund sustainable industries via a potential softening of the EU’s rules on capital charges on their lending. In Europe, where businesses use bank credit (rather than bond and stock markets) for much of their financing, addressing where these loans go will be critical in tackling global warming.But anything that encourages European banks to increase their risky lending will have industry regulators fretting, and rightly so. The wounds of the financial and sovereign debt crises are still fresh.Banks have, of course, become more resilient to shocks in recent years, By some metrics Europe’s lenders have more than doubled the capital they hold against their assets, when the latter are weighted by their riskiness. But negative interest rates, sluggish economic growth and the need to spend on technology mean profitability is still lackluster.Europe’s bankers are already chasing risky lending to try to boost returns, the European Banking Authority warned last week. This explains a headlong rush into commercial real estate, small and medium-sized businesses (SMEs) and consumer credit.So it’s no surprise that the idea of setting aside less capital for green loans is a red flag for supervisors. While it might improve short-term returns, it could stoke the return of excessive leverage. “Any capital relief for green assets must be based on clear evidence that they are less risky than non-green assets,” Andrea Enria, Europe’s chief banking regulator said last month.Valdis Dombrovskis, a vice-president at the Commission, favors a similar mechanism for lowering capital charges on green loans as is used for lending to SMEs. Recent data show such relief does spur credit expansion. Bank lending to smaller companies has increased by more than 20% since 2014, while loans to large companies have dropped 9%, according to EBA figures.But lending to SMEs is a risky endeavor, while banks’ vulnerability has yet to be tested by a sharp economic downturn. Incentives for green loans would add another source of potential weakness by adding exposure to new types of assets.And banks cannot yet be fully trusted in how they judge the riskiness of their assets, which isn’t subject to external audit. Rules drafted by the Basel Committee on Banking Supervision will tackle some of this by limiting how far lenders can reduce their capital needs by using their own internal models, but they won’t be implemented fully until 2027.Lenders’ reporting of metrics including capital adequacy have shown worrying signs of fragility recently. In Britain, regulators found that Citigroup Inc. underestimated its risk-weighted assets in part because of governance failings, leading to a $57 million fine. The U.K. has now asked all deposit-taking institutions for details of any interpretations in their numbers and how they oversee reporting.While the climate emergency is naturally at the top of the EU’s agenda, loosening rules for the region’s lenders should not be done lightly. A stable financial system is essential too for a transition to a greener economy. To contact the author of this story: Elisa Martinuzzi at emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Zacks
The Zacks Analyst Blog Highlights: Walmart, NIKE, Citigroup, Intel and ResMed
The Zacks Analyst Blog Highlights: Walmart, NIKE, Citigroup, Intel and ResMed
- Investing.com
StockBeat: Netflix Falls on Downgrade as Analyst Says Valuation Too Hot
Investing.com – Netflix (NASDAQ:NFLX) needs to up its subscription prices in order to justify its current valuation, which is running too hot, Citigroup (NYSE:C) said as it cut its outlook on the streaming-media giant.
- Zacks
Citigroup (C) Stock Moves -0.76%: What You Should Know
Citigroup (C) closed at $74.55 in the latest trading session, marking a -0.76% move from the prior day.
- Bloomberg
Bankers Aren't Ready to Start Sharing Yet
(Bloomberg Opinion) -- Three years ago Tidjane Thiam stirred hopes that the banking industry was looking at new ways to tackle its bloated cost base. The chief executive officer of Credit Suisse Group AG said his company was working on a common platform with another lender to share expenses.The project has made little visible progress since then, and it’s not because the pressure on banks to become more efficient has eased; there’s a deeper resistance at play here to the notion of combining or outsourcing certain functions. Neither is Thiam’s false start the exception. Citigroup Inc. and Clearstream Banking SA announced a shared settlement and custody system in 2016, but UBS Group AG is the only other bank to have joined.Trying to share costs with your rivals rivals does present difficulties, but they shouldn’t be insurmountable. For a sector whose revenue outlook and profitability is deteriorating, the possible gains from outsourcing aren’t trivial, as was highlighted in a recent report from the management consultancy McKinsey & Co.Almost half of banks’ costs come from doing stuff that doesn’t set them apart from their competitors, McKinsey finds. Much like the car industry in the 1990s, the consultants argue that banks could outsource much of their “production” to third parties. Trade processing, collateral management and “know-your-customer” functions are just some of the things that could be farmed out.While one should bear in mind that consultants are always eager to promote outsourcing projects, seeing as it’s a service they offer, the financial benefits for the industry are tempting: Lenders could see their cost-to-income ratios improve by 4 percentage points and their return on equity (a key measure of profitability) could increase by as much as 1 percentage point, according to McKinsey. The industry’s average ROE has plateaued at about 10.5%.In Europe especially, where bank valuations are much lower than during the 1990s, every penny counts. So why have bankers not pushed harder on sharing costs?There are some practical reasons. Because financial services are exempt largely from value-added tax, they wouldn’t be able to recover the VAT they’d pay on outsourced services. That could offset some efficiency gains and potentially make some shared services less appealing.Then there are the regulatory concerns and demands. As much as 12% of a bank’s costs are soaked up by anti-money laundering processes and the monitoring of customers, making it a possibly fruitful area for cost savings. But sharing these processes with other banks wouldn’t shelter a lender from its legal duties. If anything went wrong, the responsibility would still lie with the individual bank. As such, it would still feel beholden to check this information even if it’s held on a common platform.That said, a raft of money-laundering scandals in Europe — and the hefty fines that will almost certainly follow — have added a sense of urgency. Six Nordic banks are creating a joint company to handle “know-your-customer” data.Generally, the biggest obstacle to shared services is getting buy-in from banks, with the efficiency gains often not deemed enough to offset the loss of control and flexibility.Until a year ago, executives were counting instead on a possible increase in interest rates to improve revenue. And for wholesale banks, saving a little here and there through complicated outsourcing projects is less attractive than trying to push their bankers to win a big-ticket initial public offering or a merger that can pay tens of millions in fees.But the industry outlook — especially in Europe — has become sufficiently grim to warrant a rethink. More than one-third of the world’s banks are sub-scale, according to McKinsey, while their business models are broken and they may have no option but to sell themselves in an economic downturn. With such a background, any chance to cut expenses shouldn’t be ignored.“Some banks would rather die than cooperate,” one senior bank executive told me recently. Too often they’re not willing to give up autonomy or write off legacy assets. While technology advances should make sharing easier, a round of banking M&A may come sooner than a reckoning on costs.To contact the author of this story: Elisa Martinuzzi at emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Zacks
Morgan Stanley Probes Alleged Mismarking in Currency Trading
Morgan Stanley (MS) is investigating alleged mismarking of securities and hence has fired four traders.
- Zacks
3 Stocks for Value Investors to Buy as Market Reaches New High
The stock market closed at a record high today as the DJIA rose over 42 points and the S&P 500 gained 0.4%.
- Zacks
Citi Slapped With GBP43.9M Fine for Reporting Discrepancies
Citigroup (C) penalized with 43.9 million pounds ($57 million) by the Prudential Regulation Authority (PRA) for inaccurate reporting to regulators related to its capital and liquidity levels for years.
- Zacks
FDIC-Insured Banks' Q3 Earnings Disappoint, Costs Escalate
FDIC-insured commercial banks and savings institutions' Q3 earnings negatively impacted by higher provisions and expenses, partly offset by elevated net operating revenues and loan growth.
- Bloomberg
Citigroup's Record British Fine Is a Bad Look for Bankers
(Bloomberg Opinion) -- In the aftermath of the financial crisis, we’ve become accustomed to banks being slapped with sanctions running into the billions. So at the equivalent of $57 million, Citigroup Inc.’s new fine for reporting failures could well go unnoticed. That would be a mistake.The third-largest U.S. bank, with assets in excess of $2 trillion, inaccurately reported its capital and liquidity in the U.K. because of dysfunctional systems, governance and controls, the Bank of England’s Prudential Regulation Authority said this week. This is not what Britain expects of a systemically important bank, the PRA added, explaining why it was imposing a record fine.While the Wall Street giant’s measures of financial strength remained above the U.K.’s regulatory requirements during the four years in question, that’s little comfort given the magnitude of the flaws and the bank’s inadequate oversight.If Citi’s key financial figures can be repeatedly off the mark, what else might they be getting wrong? As the regulator noted in its 44-page assessment of how the errors came about, “firms that do not produce timely, complete and accurate data during periods of relative stability are less likely to produce it under stress.”The U.K. is Citi’s biggest market outside the U.S., accounting for about 16% of its total assets and about 9% of revenue; its trading activities there run across cash and derivatives markets. The securities unit is one of Europe’s biggest investment banks on a standalone basis.Because of the errors, which happened between June 2014 and Dec. 2018, the biggest of Citi’s three British entities at one point was reporting a common equity Tier 1 capital ratio of 11.8% when it should have been 10.3%. While the ratio was at 11% when allowing for differing interpretations of how to calculate risk-weighted assets, this was still a material divergence.In October 2016, the same unit (Citi’s U.K. broker dealer) informed the regulator that between October 2015 and June 2016 it had misreported its liquidity coverage ratio by a whopping 47%. While the figure was actually better than the bank had reported, in some months the bank’s short-term ability to fund potential outflows was significantly worse than first reported.At the root of the mistakes were loose controls which failed to meet the bank’s requirements, even though internal red flags were raised. Reports, which should have been closely monitored, were often prepared manually by teams in Mumbai and Budapest and the bank used the wrong currency for settling some positions.Most alarming, the bank’s top executives and governance committees had a limited understanding of the reporting requirements and which senior managers were responsible.In fairness, the bank stressed that it had “cooperated fully with the PRA throughout the process, and in 2019 a leading independent accountancy and audit firm confirmed that Citi had remediated the material issues identified.” By working with the regulator the lender qualified for a 30% rebate on the penalty.But the cascade of errors under seemingly careless management points to a cavalier attitude in global finance that hasn’t been fixed entirely. Banks’ books are far from being as safe as houses.To contact the author of this story: Elisa Martinuzzi at emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Yahoo Finance
Here are JPMorgan Chase's biggest digital banking priorities in 2020
Here's where JPMorgan Chase is focusing its efforts when it comes to digital in 2020.
