Citi restates earnings due to regulatory probes
NEW YORK (AP) — 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.
The New York-based bank on Thursday revised its quarterly net income to $2.8 billion from a previously reported $3.4 billion, citing legal expenses.
The bank's operating expenses rose from $12.36 billion to about $13 billion.
The company said in a statement the unexpected increase came from "rapidly-evolving regulatory inquiries and investigations, including very recent communications with certain regulatory agencies related to previously-disclosed matters."
Citi previously 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.
Like other major banks, Citigroup has been the target of lawsuits and government investigations for its role in the mortgage meltdown that helped spur the financial crisis of 2008.
Earlier this year, Citi reached a $7 billion settlement and acknowledged misrepresenting residential mortgage-backed securities that were toxic and led to both the housing boom and bust that triggered the Great Recession.
Bank of America, Goldman Sachs, and JPMorgan Chase & Co. have each inked similar settlements over the past year.
Shares in Citi shed $1.10, or 2.1 percent, to $52.05 in extended trading Thursday. The stock ended regular trading up 51 cents at $53.15.