Citigroup Inc (NYSE:C) announced additional $600 million funds to cover up for legal issues amid increasing regulatory inquiries. At the same time, the financial institution mentioned inquiries related to the foreign exchange market and associated services.
Citigroup is one of the many banking institutions facing inquiries related to foreign exchange rates manipulations and the bank expects legal costs of $5 billion in addition to its current litigation reserves for the quarter, as mentioned in a SEC filing. Citigroup Inc (NYSE:C) is to settle legal issues with the Financial Conduct Authority of Britain, along with five other major banks, as the bank faces probe in foreign exchange rates manipulation.
The concerned group of banks is likely to settle the matter for $2.42 billion. Barclays PLC (ADR) (NYSE:BCS) is another major institution to announce additional cash pile of $800 million to settle the legal matters with the UK Financial Conduct Authority. Royal Bank of Scotland Group PLC (NYSE:RBS), HSBC Holdings plc (ADR) (NYSE:HSBC), UBS AG (NYSE:UBS), and JPMorgan Chase & Co. (NYSE:JPM) are the banks under the scanner.
AG (NYSE:UBS) has additional reserves of £1 billion to settle the matter and JPMorgan Chase & Co. (NYSE:JPM) is also said to maintain additional reserves to settle these probes.
Despite of the increasing litigation expenses and scrutiny, none of these banks is much concerned about the legal matters. The analysts of Bernstein Research are opined that Citigroup Inc (NYSE:C) is likely to make up to $28 billion in pre-tax profits in the upcoming five quarters, which keeps its legal worries away.
Earlier this month, Citigroup announced its third quarter 2014 results with net income of $3.4 billion over the revenues of $20.0 billion. The bank announced more investments in the Global Consumer Banking (GCB) targeting its largest financial markets with the potential of high-end growth.
This article has been written by Prakash Pandey.