The US Attorney General said the bank had
admitted its misdeeds
Banking giant
Citigroup will pay $7bn (£4bn) to US authorities to settle an
investigation into risky sub-prime mortgages.
Citigroup will pay $4bn (£bn) to the Department of Justice and
$2.5bn for "consumer relief".
Consumer relief includes investment in affordable homes and
mortgage relief.
Following the decision, the bank reported a stronger than
predicted quarterly profit, and saw its share price rise by 3.02% to
$48.42 (£28.34).
Government investigations
Second-quarter earnings fell by 96% to $181m, but that was after
a $3.8bn (£2.2bn) charge related to the settlement.
The settlement stems from the sale of securities made up of
sub-prime mortgages, which were at the centre of the 2008 financial
crisis.
Citigroup is the second major bank to pay a settlement since
President Obama launched an investigation into housing loans.
JPMorgan Chase paid $13bn last year to settle government
investigations.
The Citigroup fines are said to have surprised stock analysts and
people inside the bank, who had hoped to settle for less.
'Move forward'
According to the US Attorney General, Eric Holder, "under the
terms of this settlement, the bank has admitted to its misdeeds in
great detail".
He said the settlement "does not absolve Citigroup or its
employees from facing any possible criminal charges in the future".
Citigroup's chief executive, Michael L Corbat, said that the
decision was the right one for shareholders.
"We believe that this settlement is in the best interests of our
shareholders, and allows us to move forward and to focus on the
future, not the past," he said.
Investors welcomed the decision, as the company's share price
rose in New York trading.
Banking giant
Citigroup will pay $7bn (£4bn) to US authorities to settle an
investigation into risky sub-prime mortgages.
Citigroup will pay $4bn (£bn) to the Department of Justice and
$2.5bn for "consumer relief".
Consumer relief includes investment in affordable homes and
mortgage relief.
Following the decision, the bank reported a stronger than
predicted quarterly profit, and saw its share price rise by 3.02% to
$48.42 (£28.34).
Government investigations
Second-quarter earnings fell by 96% to $181m, but that was after
a $3.8bn (£2.2bn) charge related to the settlement.
The settlement stems from the sale of securities made up of
sub-prime mortgages, which were at the centre of the 2008 financial
crisis.
Citigroup is the second major bank to pay a settlement since
President Obama launched an investigation into housing loans.
JPMorgan Chase paid $13bn last year to settle government
investigations.
The Citigroup fines are said to have surprised stock analysts and
people inside the bank, who had hoped to settle for less.
'Move forward'
According to the US Attorney General, Eric Holder, "under the
terms of this settlement, the bank has admitted to its misdeeds in
great detail".
He said the settlement "does not absolve Citigroup or its
employees from facing any possible criminal charges in the future".
Citigroup's chief executive, Michael L Corbat, said that the
decision was the right one for shareholders.
"We believe that this settlement is in the best interests of our
shareholders, and allows us to move forward and to focus on the
future, not the past," he said.
Investors welcomed the decision, as the company's share price
rose in New York trading.
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