Citigroup Inc (NYSE:C) is not exactly looking pretty on the stock market right now as the news of the bank charging $3.5 billion on account of legal and restructuring expenses hits the market. The stock is down about 2.6% right now and trading at $54.9. CNBC’s Kayla Tausche reported on what exactly these costs comprise of.
“[…] $2.7 billion will go to legal and related matters for ongoing investigations, the company said that all of these investigations are previously disclosed matters, and they concern foreign exchange, LIBOR, anti money laundering, and related compliance investigations. Remember the company in early November reached the settlement with the Office of the Comptroller of the Currency, the CFTC as well as regulators in the UK for about a $1 billion for foreign exchange manipulations, but there is still an investigation ongoing at the Justice department and it is expected that this new sum could go to that in addition to some of these other issues […],” reported Tausche.
$800 million of the remaining $3.5 billion is set aside for the restructuring within Citigroup Inc (NYSE:C). Although this reshuffling, which mostly involves closing down businesses in some countries was announced before, but the estimated costs were not in line with the actual expenses that are to incurred. According to Tausche these mostly involved consumer businesses in about 11 countries.
Citigroup Inc (NYSE:C) is not alone in the thrashing that is taking place in the stock market today. The overall financial sector is down about 1.2% as of now with Bank of America Corp (NYSE:BAC), another prominent loser, down about 1.9%.
“[…] This of course is going to affect Citigroup Inc (NYSE:C)’s stock today. No investor wants to see a charge being taken off, although at this point guys it is better to see this upfront going into the end of the quarter rather than an adjustment like we saw for Citigroup Inc (NYSE:C) and Bank of America after the quarter has already ended, but nonetheless this will impact the Citi stock […],” said Tausche.
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