Citigroup Plans to Finish Consent Order Requirements by Year-End

• CEO Jane Fraser stated the compliance work is 80% complete, with the bank expecting to spend less on remediation in 2026 versus 2025, though final approval rests with Federal Reserve and OCC regulators
• Citi was fined $400 million in 2020 and an additional $136 million in 2024 for failing to fix longstanding data governance and risk management issues
• Analysts expect the Trump administration's bank-friendly regulators may expedite approval, with Citi's stock rising 63% in 2025 amid restructuring efforts, though returns still lag rivals and fall short of the 11-12% ROE target

Citigroup Eyes Completion of Consent Order Requirements by Year-End

Key Developments:

Citigroup executives are increasingly optimistic about completing compliance work related to major consent orders by late 2024, according to sources familiar with the matter. CEO Jane Fraser stated the work is 80% complete, though the bank has not provided a definitive timeline pending regulatory approval.

Background:

The consent orders stem from 2020 when the Federal Reserve and Office of the Comptroller of the Currency (OCC) identified longstanding risk management and data governance problems. Citi was initially fined $400 million in 2020 and an additional $136 million in 2024 for failing to fix data issues. The bank has spent six years on intensive compliance work involving extensive data management, controls, governance, and compliance repairs.

Regulatory Progress:

Regulatory relief began in late 2024 when the OCC removed an amendment to the consent order and lifted a related restriction. However, the full 2020 consent orders from both regulators remain in effect. CFO Mark Mason indicated the bank would likely spend less on compliance in 2025 compared to 2024.

Market Implications:

Lifting the consent orders would mark a monumental shift, enabling Citigroup to:

• Focus on profit growth rather than compliance
• Pursue acquisitions currently barred under the orders
• Return to business as usual operations

Analysts view the timeline as realistic, with Wells Fargo's Mike Mayo naming Citi his top industry pick. The bank-friendly Trump administration is expected to facilitate approval, though officials emphasize no special treatment will be granted.

Stock Performance:

Investors have responded positively to CEO Fraser's restructuring efforts, with Citi's stock surging 63% in 2024. However, returns still lag competitors and fall short of the targeted 11-12% return on equity for this year.