"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."
The PRA has fined Citigroup’s UK operations £44 million for failings in their regulatory reporting governance and controls.
An investigation found that between 2014 and 2018, the firms’ UK regulatory reporting framework "was not designed, implemented or operating effectively". This led to them failing to submit complete and accurate regulatory returns to the PRA.
The PRA says these failures led to significant errors in the firms’ returns which were unreliable and did not provide the PRA with an accurate picture of CGML’s capital or liquidity position.
Citi agreed to resolve the matter and therefore qualified for a 30% reduction in the fine. Without this discount, the fine imposed by the PRA would have been £62,700,000.
Sam Woods, deputy governor for prudential regulation and CEO 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 Citi spokesperson commented: “Citi has fully remediated the past regulatory reporting issues identified by the PRA, and settled this matter at the earliest possible opportunity. As the PRA's notice makes clear, the issues identified relate to the reporting process and, throughout the period under review, the relevant Citi UK entities remained in surplus to their liquidity and capital requirements at all times.
“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.
“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.”