The department of justice has struck again, this time imposing a $7 billion fine on Citigroup Inc. (NYSE:C) as a charge on the bank being found liable of misleading customers with its mortgage securities during the peak of the economic crisis. Despite receiving the huge fine from the Department of Justice, Citigroup was still able to beat estimates with its second-quarter earnings, posting a profit of $1.24 per share for the quarter.
Despite the unending tussle with the Department of Justice over its mortgage practices, Citigroup Inc. (NYSE:C) was able to generate revenue of nearly $19.4 billion against estimates of $18.8 billion. Citigroup is not the only bank that has been under the scrutiny from regulators over illegal mortgage lending practices, JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo &Co (NYSE:WFC) and Bank of America Corp (NYSE:BAC) have also found themselves in the same troubles.
FBR Capital Markets managing director, Paul Miller, has told Fox Business that despite the numerous challenges that Citigroup Inc. (NYSE:C) faced in the quarter, they put-out a decent number in terms of earnings. Focus now shifts to Bank of America, which, Miller believes, could experience a huge fine of up to $13 billion.
Citigroup Inc. (NYSE:C) soared on the announcement of the solid results that beat estimates with Mr. Miller saying the fine could be the bulk of it, seen by the fact that company stock soared on the announcement of the solid results. Citigroup is required to pay $4 billion of the $7 Billion fine in cash “It wasn’t that much, just $7 billion it is really four and half billion in cash, so it gets a big chunk behind them” said Mr. Miller