The next US bank primed for legal and regulatory scrutiny would be Citigroup Inc. The bank is the next one after JPMorgan Chase & Co, who is now in the process of settlement on the results of the probe. This was the assessment from an analyst from Portales Partners LLC.
Citibank estimates it may need USD5 billion in legal costs that were not anticipated by midyear. This amount is second only to JPMorgan Chase, according to Charles Peabody of Portales during a Bloomberg Radio interview yesterday. According to Peabody, this only shows Citigroup would be bracing for more legal issues ahead.
Peabody said, "It's very conceivable that Citigroup will be next in the firing line. Their litigation costs have been accelerating faster than anyone else's." Citigroup is the third largest bank in the US in terms of assets. JPMorgan ranks first and both banks headquarters are located in New York.
Earlier this month, US Attorney General Eric Holder announced that banks after JPMorgan would be reviewed in the coming weeks and months. Since that announcement, Citigroup CEO Michael Corbat's legal costs had spiked to USD1.44 billion in the first half of the current year. At this rate, according to data collated by Bloomberg, the bank would be facing the most expensive legal costs since the financial crisis.
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