Citigroup Accidentally Sends $81 Trillion To Client, Reverses Error Within Hours (UPDATED)

Citigroup Inc C wrongly credited a client’s account with $81 trillion instead of remitting only $280.

Two officials failed to detect the wrong internal transfer last April, though a third employee detected the problem 90 minutes after the erroneous posting.

Citigroup reversed the payment several hours later, the Financial Times cited unnamed sources familiar with the matter.

"Despite the fact that a payment of this size could not actually have been executed, our detective controls promptly identified the inputting error between two Citi ledger accounts, and we reversed the entry. Our preventative controls would have also stopped any funds leaving the bank. While there was no impact to the bank or our client, the episode underscores our continued efforts to continue eliminating manual processes and automating controls through our Transformation,” said a Citigroup representative in an email.

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Citigroup did not face any loss of funds due to the error as per the Financial Times report and the bank promptly disclosed the matter to the Federal Reserve and Office of the Comptroller of the Currency.

A total of 10 near misses of $1 billion or more occurred at Citigroup in 2024, down from 13 in 2023, according to the Financial Times report.

The errors at Citigroup highlighted how the Wall Street bank grappled with operational glitches nearly five years after it mistakenly remitted $900 million to creditors engaged in a contentious battle over the debt of cosmetics group Revlon that led to the firing of then-CEO Michael Corbat, massive penalties and regulatory consent orders.

Citigroup had to pay a penalty of $136 million in 2024 to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve for inadequate data management progress despite CEO Jane Fraser prioritizing Citigroup’s regulatory issues.

In 2020, the Federal Reserve slapped a penalty of $400 million on Citigroup due to its longstanding deficiencies.

Recently, Warren Buffett’s Berkshire Hathaway Inc BRK BRK sold 74% of its stake in Citigroup.

Truist and Goldman Sachs, Keefe, Bruyette & Woods expressed their optimism about Citigroup after its fourth-quarter results, citing its franchise and recent management changes. Buybacks are expected to accelerate with a potential further acceleration should Basel III Endgame be meaningfully watered down.

C Price Action: Citigroup stock is down 0.32% at $78.62 at publication Friday.

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