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Citigroup Inc said on Friday it recorded an additional $ 390 million in operating expenses in the fourth quarter of 2020 after a U.S. federal judge ruled it was not entitled to recover the money it he had mistakenly transferred to lenders from Revlon Inc last year.
As a result, Citigroup revised its fourth-quarter earnings to $ 1.92 per share, from $ 2.08, according to a filing.
CITIGROUP “ FAILURES ” CITED IN CEO PAY CUT AS HE TAKES LEAD OF EXIT
In August, an “operational error” caused Citigroup to send $ 893 million of its own funds to the cosmetics company’s lenders, appearing to pay off a loan not due before 2023, when it intended to send only $ 7.8 million in interest.
| Teleprinter | security | Latest | Change | Change% |
|---|---|---|---|---|
| VS | CITIGROUP, INC. | 65.88 | -1.53 | -2.27% |
To date, $ 389.8 million had been repaid to the bank at its request, but some lenders withheld the funds leading the bank to wage a legal battle against a group of hedge funds to recover the rest.
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This month, U.S. District Judge Jesse Furman in Manhattan said the transfers were full transactions not subject to revocation and refused to force defendants to return the funds. Citigroup plans to fight this move.
“I think we have good reason to appeal, and we will continue to do so,” CFO Mark Mason said at an industry conference Thursday.
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The unprecedented blunder was the latest mistake involving internal controls at Citigroup, which federal regulators fined $ 400 million in October for long-standing shortcomings.
Deficiencies in Citigroup’s internal controls were a factor in CEO Mike Corbat’s planned early retirement this month.
Jane Fraser will take the reins of the company on Monday.
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