Reuters - Video



Citigroup nears $7 billion settlement

Wednesday, Jul 09, 2014 - 01:14

A source says Citigroup is close to paying about $7 billion to settle an investigation of mortgage securities fraud leading up to the financial crisis. Fred Katayama reports.

▲ Hide Transcript

View Transcript

Citigroup is close to putting a mortgage securities fraud investigation behind it, but a source says the bank will have to fork over about $7 billion. That's a lot more than analysts had been expecting, and roughly $3 billion less than what U.S. authorities had demanded last month. Analysts believe Citi has around $3 billion in reserves set aside for a related settlement. The cash deal would include several billion dollars to aid struggling borrowers. The source says a settlement could be announced as early as next week. Analysts will be closely listening for details or hints when Citigroup releases its quarterly earnings report on Monday. Citi's stock, which has shed nine percent this year, rose slightly at the start of trade. Keefe, Bruyette & Woods analyst Brian Kleinhanzl said, "We would be more constructive on shares of Citigroup if the company could put outstanding litigation issues behind it in the near term. ... Reducing litigation expense would be a meaningful catalyst to future earnings." The New York Times says that a deal with Citigroup would raise the stakes for Bank of America and its pending mortgage case. JPMorgan Chase had paid $13 billion back in November to resolve a similar investigation.

Citigroup nears $7 billion settlement

Wednesday, Jul 09, 2014 - 01:14

Top News »

Most Popular »

The Exchange »

Moving Pictures »