The Prudential Regulation Authority (PRA), the supervisory arm of the Bank of England (BoE), has fined Citigroup a record-breaking $56.3 million for not completing accurate returns between 2014 and 2018, according to a report by Reuters.
The regulator said the data it received from Citigroup was not acceptable, and the way the bank handled the reporting processes was not effective.
Banks have to regularly report financial data to make sure they’re operating within the law, and to make sure they have buffers against market shifts in terms of risk and capital.
“While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature,” BoE said.
The bank added that the returns did not provide a reliable picture of how much capital Citigroup had, or the amount of liquidity as well.
“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,” said BoE Deputy Governor and PRA Chief Executive Sam Woods.
Citigroup said it corrected the issues as soon as it became aware of them.
“Citi places a high priority on meeting its regulatory reporting requirements, and has devoted significant resources to U.K. financial reporting before, during and after the period to which the PRA’s notice relates,” the bank said in a statement. “Citi co-operated fully with the PRA throughout the process, and in 2019 a leading independent accountancy and audit firm confirmed that Citi had remediated the material issues identified.”
The PRA commented that the amount of the fine would have been more ($62.7 million) if the bank had not agreed to take care of the issue in a timely manner.
Citigroup was formed by a merger of Citicorp and Travelers Group in 1998.