The Bank of England has fined the US bank Citigroup a record £44m for submitting incomplete and inaccurate regulatory information to the Bank between 2014 and 2018.
The Bank said Citigroup fell short of expected standards between 2014 and 2018, that the problems were “serious and widespread in nature” and meant the bank had not provided an accurate picture of its financial position.
The fine was levied by the Bank’s Prudential Regulatory Authority, responsible for monitoring the financial stability of about 1,500 banks, building societies, credit unions, insurers and large investment firms in the UK. It is the biggest fine ever levied by the Bank.
The PRA said the bank’s systems were inadequate, that Citi had failed to have enough people working on regulatory accuracy, that it had inadequate documentation and that its oversight and governance “fell significantly below the standards expected”.
It added that the errors and omissions included “six substantive matters”, which led to significant errors.
New York-based Citi is the third biggest bank in the US, and is designated as a “global systematically important bank”. It has assets of $2tn (£1.6tn) and operates in about 100 countries.
The PRA added: “The pervasiveness of the errors and misstatements identified in the firm’s returns raised fundamental concerns about the effectiveness of Citi’s UK regulatory reporting control framework.”
However, it also pointed out that Citi had better liquidity and capital requirements than the Bank demands at all times.
Citi would have faced a fine of £62.7m, but the bank cooperated with the PRA and therefore qualified for a 30% discount.
Sam Woods, deputy governor for prudential regulation and chief executive of the PRA, said: “Accurate regulatory returns from firms are vital for the PRA in fulfilling our role. Citi failed to deliver accurate returns and failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systemically important bank.”
A spokeswoman for Citi said: “Citi has fully remediated the past regulatory reporting issues identified by the PRA, and settled this matter at the earliest possible opportunity.
“Citi places a high priority on meeting its regulatory reporting requirements, and has devoted significant resources to UK financial reporting before, during and after the period to which the PRA’s notice relates. The PRA acknowledges that Citi has made substantial strategic enhancements to its regulatory reporting infrastructure in the UK, and has also conducted a review of the systems and controls underpinning its regulatory reporting framework.”
