The Wall Street Journal, 3/3/14
Citigroup Inc. is seeing the limits of its global reach. The New York bank said Monday it received subpoenas from the Federal Deposit Insurance Corp. and U.S. prosecutors, three days after the bank disclosed it had found allegedly fraudulent billings at its Mexico unit that cost it up to $400 million. A regulatory filing Monday disclosed that Citigroup and related parties—including the U.S. unit of its Mexico business, Banco Nacional de Mexico, or Banamex—have received grand-jury subpoenas issued by the U.S. Attorney’s Office for the District of Massachusetts tied to anti-money-laundering requirements.
Meanwhile, Citigroup’s exposure to Russia and Ukraine came under the spotlight. The instability in the region hammered stocks and bank stocks in particular. Of major U.S. banks, Citigroup shares fell the most Monday, losing 2.1% to $47.61. So far this year, they are down 8.6%, also last among the big six U.S. banks. Citigroup executives are fond of saying their “large global footprint is an asset, but it’s looking like a liability,” said KBW analyst Brian Kleinhanzl. He pointed to Citigroup’s exposure to places like Argentina, where investors have harbored concerns due to emerging-market volatility.