Citigroup to shell out $7 billion to settle government probe

Citigroup has reportedly been directed by the US Attorney General to pay seven billion dollars in order to settle an investigation into sub-prime mortgages which were at the centre of the 2008 financial crisis.

 

The decision came in the wake of an investigation launched by President Obama into housing loans. The US authorities have directed the banking giant to pay four billion dollars to the Department of Justice and $2.5 billion for consumer relief which will include investment in affordable homes and mortgage relief, the BBC reported.

 

The report quoted Citigroup's Chief Executive Michael L Corbat as welcoming the decision by saying that it was in the interest of their shareholders and will allow them to focus on the future. However, the Attorney General added that the settlement does not exonerate the bank or its employees from facing criminal charges in the future.

 

The company's share price rose by 3.02% and positioned itself at $48.42  following the decision, the report added.

 

Citibank became the second major bank after JPMorgan Chase, to pay a settlement ever since the investigation was launched. The latter paid a settlement worth $13 billion  last year.