NEW YORK —
Citigroup has slashed its third-quarter earnings by $600 million,
saying that recent investigations by regulators have altered the
results it reported earlier this month.
York-based bank on Thursday adjusted its quarterly net income to
$2.8 billion from a previously reported $3.4 billion, citing legal
operating expenses rose from $12.36 billion to about $13 billion.
reported third-quarter net income of $3.44 billion, or $1.07 per
share, on Oct. 14. The results exceeded Wall Street estimates,
with analysts calling for $1.12 per share, according to Zacks.
The company said
in a statement that the unexpected increase came from
"rapidly-evolving regulatory inquiries and investigations,
including very recent communications with certain regulatory
agencies related to previously-disclosed matters."
In a quarterly
regulatory filing Thursday, Citi outlined a bevy of pending legal
matters, investigations and inquiries that the company is facing.
Among them is a
probe of Citi's foreign exchange business by government and
regulatory agencies in the U.S., United Kingdom and Switzerland.
Citi noted that
it is cooperating with the investigations.
In July, Citi
agreed to pay $7 billion to settle a federal probe into its
handling of risky subprime mortgages. The bank acknowledged
misrepresenting residential mortgage-backed securities that were
which amounted to about half of Citi's $13.7 billion profit last
year, was part of a string of settlement deals between the federal
government and major financial institutions over the past 12
The major banks
sold securities that plunged in value when the housing market
collapsed in 2006 and 2007. Those losses triggered a financial
crisis that pushed the economy into the worst recession since the
nation's largest bank, agreed last November to pay $13 billion to
settle an investigation into toxic mortgage-backed securities.
Bank of America
agreed in August to a $16.65 billion settlement for its role in
selling shoddy mortgage bonds.
Goldman Sachs and
British bank HSBC each recently inked their own settlements deals
to resolve claims related to the mortgage meltdown.
Shares in Citi
shed $1.16, or 2.2 percent, to $51.99 in extended trading
Thursday. The stock ended regular trading up 51 cents at $53.15.