Citigroup (C) Seeks to Lift Consent Orders in Regulatory Review
To lift the 2020 risk-management consent orders tied to a $400 million Citibank fine, Citigroup plans to file with the Fed and OCC by year-end or early 2027.
Alpha Score of 56 reflects moderate overall profile with strong momentum, weak value, moderate quality, moderate sentiment.
Citigroup Inc. (NYSE: C) plans to submit documentation to the Federal Reserve and the Office of the Comptroller of the Currency by year-end or early 2027 to have its 2020 consent orders lifted. The orders, issued in October 2020, required the bank to improve its risk management and compliance systems after regulators found deficiencies, including a $400 million fine against Citibank.
As of Oct. 12, Citigroup was preparing a full audit and supporting documentation for the filing. The bank aims to show it has addressed the regulators' concerns. Lifting the orders would restore operational flexibility and reduce direct oversight of the bank's risk and compliance functions.
The consent orders date to a regulatory review that produced the fine and a set of mandated fixes. The constraints have been in place since late 2020. The Fed and OCC will decide whether the remediation work is complete.
Citigroup operates in nearly 160 countries and has a market capitalization of $221.29 billion. Its businesses span Services, Markets, Banking, Wealth management, and U.S. Personal Banking. The bank was founded in 1812 and is headquartered in New York.
The shares trade at $131.92. GuruFocus's GF Value calculation puts fair value at $92.32, implying a premium of 42.9%. The trailing P/E of 14.24x compares with a five-year median of 12.06x.
GuruFocus's GF Score for Citigroup is 78 out of 100. Growth and momentum are the strongest components. Profitability ranks highly. Financial strength trails, with a debt-to-equity ratio of 3.85 and a return on invested capital of 1.21% below the company's weighted average cost of capital.
The dividend is another factor. Citigroup offers a yield of 1.94% with a payout ratio of 25%. GuruFocus described the 25% payout as conservative. Dividend growth over the past three years ran at 4.4%.
Ownership data from GuruFocus shows 25 of the tracked premium gurus hold Citigroup. In the latest period, 20 trimmed and 3 added. Insiders sold about $23 million worth of stock over the past 12 months, and no insider purchases were reported. GuruFocus said the selling could signal a lack of conviction among those closest to the bank.
AlphaScala's Alpha Score for Citigroup is 56 out of 100, labeled Moderate. The GuruFocus metrics for the stock, including the GF Value inputs and GF Score components, are on the C stock page.
If the Fed and OCC accept the documentation, the consent orders would be lifted and the bank would move out from under the supervisory constraints imposed in 2020. If the regulators find the remediation incomplete, the orders stay in place. Citigroup expects to submit the paperwork by year-end or early 2027.
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