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Opinion

UK PRA hits Citigroup with record fine over mis-reporting

It appears that basic errors rather than deliberate attempts to game the system lay behind Citi’s large miscalculations of UK RWAs and CET1.

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Euromoney has read through the UK Prudential Regulation Authority’s (PRA) 44-page final notice on the £44 million fine imposed on the UK operations of Citigroup for regulatory reporting failures, so that you don’t have to.

Between 2015 and 2017, the three legal organizations – Citigroup Global Markets Ltd (CGML), Citibank NA London branch and Citibank Europe Plc UK branch – that the PRA supervises had to resubmit a substantial number of returns due to errors in original submissions, some of these multiple times over.

For example, in October 2016, CGML itself told the PRA it had been mis-reporting its liquidity coverage ratio between October 2015 and June 2016 by up to 47%.

That struck Euromoney as quite the error for a global systemically important bank. No surprise then that the PRA insisted it bring in a skilled person to assess its reports and the processes, and governance around them. This skilled person reported 106 findings in October 2017.

Here are the big numbers

The potential cumulative impact of the errors identified in CGML’s capital return resulted in an understatement as at December 2016 of $15.4

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