Citigroup cuts third quarter profit by $600 million

Citigroup has cut its third-quarter profit by $600 million because of “rapidly-evolving regulatory inquiries and investigations.”

The money will be used to pay off settlements of claims that the company was engaged in manipulating the foreign exchange market.

Various banks were involved in the manipulation of the market. Many, including Citigroup, are near a settlement with British regulators and expect to reach a deal by the end of November.

Citigroup announced the charge in a regulatory filing to the US Securities and Exchange Commission on Thursday.

The company had previously reported it would be spending approximately $951 million, following their recent statement that figure has now increased to $1.5 billion.

Citigroup shares dropped by 2% in after-market trading and reduced its third quarter income from the $3.44bn it had posted on 14 October, down to $2.84 billion.

Citigroup, along with other major investment banks, have been subject to investigations regarding mortgage lending, commodities and interest-rate trading.

Earlier this year Citigroup’s Mexican subsidiary, Banamex, was involved in fraudulent activity, costing the company $235 million.

In its filing, Citigroup also said that sanctions on Russia “had not had a material impact”.

Adding:

“Actions Citi has taken to mitigate its risks and exposures in response to the ongoing political instability, such as limiting its exposure to additional credit risk, have negatively impacted Citi’s ability to grow its consumer business in Russia,”