How Citi's error-riddled loan reports led to a $136mn fine
Penalty shows how chief executive Jane Fraser is struggling to resolve chronic issues plaguing the bank
Citigroup inaccurately reported to regulators the details of tens of billions of dollars of loans, errors that could complicate its ability to fund dividends and buybacks.
The flawed loan files were a primary reason regulators slapped the Wall Street bank with a $136mn fine this month, said five people with direct knowledge of the matter. The previously unreported mistakes had also led to discord in the close relationship between Citi and McKinsey, the consulting firm the bank retained to help remedy shortcomings identified in a 2020 Federal Reserve consent order, three people said.
The Fed’s bank examiners uncovered the flaws in Citi’s annual stress test submission and gave it 30 days to submit a plan to fix the loan errors and other data issues. If regulators do not approve the plan, the group will face new limits on its ability to distribute profits to shareholders.
SNIP
Former Citi executives say Fraser has failed to change a culture where many employees search for short-term, least-cost fixes to deep-rooted problems, or try to avoid addressing them altogether. “At Citi, there are a lot of committees and working groups that get set up so people can sit around and talk about the issues,” one former executive said.
https://www.ft.com/content/7f9d7dba-9c87-48c7-9b15-40a4b4c15692
Unreal.
= new reply since forum marked as read
