Citigroup sees net income plunge as Q4 legal costs soar to $2.9bn
Bank saw a dramatic rise in legal costs as net income fell by 86%
January 15, 2015 at 09:34 AM
5 minute read
The original version of this story was published on Law.com
Citigroup saw legal and related costs soar to $2.9bn (£1.9bn) in the fourth quarter of 2014, with the charges and trading conditions contributing to a significant drop in net income over the period.
The bank's latest financial trading report revealed the bank's profit stood at $350m (£330m) in Q4 2014 compared with $2.5bn (£1.6bn) for the same period the previous year – a fall of 86%.
A steep rise in legal and related charges in the quarter helped contribute to the drop in profits, with combined legal and restructuring costs for the last quarter standing at $3.5bn, up from $1bn a year earlier. Of this, legal and related costs accounted for $2.9bn up from $809m (£531m) in Q4 2013.
Over the three final months of the year, revenue stayed flat at last year's figure of $17.8bn (£11.7bn).
Citi is one of five banks that signed a $3.3bn settlement with financial regulators in the US and Europe, ending their involvement in the investigation into the manipulation of foreign exchange rates.
Covington & Burling was enlisted by the bank to act as legal adviser during the investigations and subsequent settlement.
Citigroup chief executive Michael Corbat said: "While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased both our net interest revenue and margin from 2013 levels. For the first time since its establishment, Citi Holdings was profitable for the full year."
Yesterday JP Morgan announced that it had also seen a steep climb in its legal fees for the quarter, which totalled $1bn.
The bank's latest financial trading report revealed the bank's profit stood at $350m (£330m) in Q4 2014 compared with $2.5bn (£1.6bn) for the same period the previous year – a fall of 86%.
A steep rise in legal and related charges in the quarter helped contribute to the drop in profits, with combined legal and restructuring costs for the last quarter standing at $3.5bn, up from $1bn a year earlier. Of this, legal and related costs accounted for $2.9bn up from $809m (£531m) in Q4 2013.
Over the three final months of the year, revenue stayed flat at last year's figure of $17.8bn (£11.7bn).
Citi is one of five banks that signed a $3.3bn settlement with financial regulators in the US and Europe, ending their involvement in the investigation into the manipulation of foreign exchange rates.
Yesterday
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