Citigroup sets aside $600 million more to cover legal costs
Citigroup Inc (C.N) said it was setting aside an extra $600 million to cover legal expenses in the third quarter due to “rapidly evolving regulatory inquiries,” while also disclosing that it was subject to foreign exchange market probes.
Citigroup is one of six major banks that are expected to settle with Britain’s Financial Conduct Authority by mid-November over allegations that the banks manipulated foreign exchange markets.
The banks are aiming to settle for a total of around 1.5 billion pounds sterling, or $2.42 billion, sources have told Reuters. Barclays Plc, another of the six banks, said on Thursday it had set aside 500 million pounds for the third quarter to cover potential fines.
Like most banks, Citigroup does not disclose how much money it has set aside to cover legal costs that it can dip into in the future, known as its “reserves.” Bernstein Research analysts estimated before Thursday’s announcement that Citigroup’s remaining reserves were about $2.5 billion at the end of September.
Citigroup did not say specifically that the additional legal expenses were recognized in anticipation of a settlement of the foreign exchange probes.
Source: Reuters-Citigroup sets aside $600 million more to cover legal costs
