Citi announced today that it expects to incur legal and related charges of approximately $2.7 billion and repositioning costs of approximately $800 million in the fourth quarter of 2014. With these items, Citi expects to be marginally profitable for the quarter.
The estimated $2.7 billion of legal and related charges result from continually evolving inquiries and investigations primarily relating to previously disclosed matters. These include foreign exchange investigations, LIBOR-related investigations and anti-money laundering and related compliance investigations.
The $800 million of repositioning costs are higher than anticipated as Citi identified additional opportunities to lower headcount and rationalize its real estate footprint.
Citi CEO Michael Corbat said, “We have made significant progress in simplifying and streamlining our company and these repositioning actions will further enhance our ability to serve our clients efficiently and focus on those areas with the greatest potential for returns. Also, we believe these legal charges should cover a significant portion of our outstanding legal matters based on current information.”
Citi’s estimated legal and related charges for the fourth quarter of 2014 are based on currently available information and could change based on further developments. Citi will announce its fourth quarter of 2014 results on January 15, 2015.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.