NEW YORK (AP) — Citigroup has slashed its third-quarter earnings by $600 million, saying that recent investigations by regulators have altered the results it reported earlier this month.
The New York-based bank on Thursday adjusted its quarterly net income to $2.8 billion from a previously reported $3.4 billion, citing legal expenses.
The bank’s operating expenses rose from $12.36 billion to about $13 billion.
Citi previously reported third-quarter net income of $3.44 billion, or $1.07 per share, on Oct. 14. The results exceeded Wall Street estimates, with analysts calling for $1.12 per share, according to Zacks.
The company said in a statement that the unexpected increase came from “rapidly-evolving regulatory inquiries and investigations, including very recent communications with certain regulatory agencies related to previously-disclosed matters.”
In a quarterly regulatory filing Thursday, Citi outlined a bevy of pending legal matters, investigations and inquiries that the company is facing.
Among them is a probe of Citi’s foreign exchange business by government and regulatory agencies in the U.S., United Kingdom and Switzerland.
Citi noted that it is cooperating with the investigations.
In July, Citi agreed to pay $7 billion to settle a federal probe into its handling of risky subprime mortgages. The bank acknowledged misrepresenting residential mortgage-backed securities that were toxic.
That settlement, which amounted to about half of Citi’s $13.7 billion profit last year, was part of a string of settlement deals between the federal government and major financial institutions over the past 12 months.
The major banks sold securities that plunged in value when the housing market collapsed in 2006 and 2007. Those losses triggered a financial crisis that pushed the economy into the worst recession since the 1930s.
JPMorgan, the nation’s largest bank, agreed last November to pay $13 billion to settle an investigation into toxic mortgage-backed securities.
Bank of America agreed in August to a $16.65 billion settlement for its role in selling shoddy mortgage bonds.
Goldman Sachs and British bank HSBC each recently inked their own settlements deals to resolve claims related to the mortgage meltdown.
Shares in Citi shed $1.16, or 2.2 percent, to $51.99 in extended trading Thursday. The stock ended regular trading up 51 cents at $53.15.
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