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| Citigroup pays $7bn to settle sub-prime mortgage probe | Citigroup pays $7bn to settle sub-prime mortgage probe |
| (about 7 hours later) | |
| Banking giant Citigroup will pay $7bn (£4bn) to US authorities to settle an investigation into risky sub-prime mortgages. | Banking giant Citigroup will pay $7bn (£4bn) to US authorities to settle an investigation into risky sub-prime mortgages. |
| Citigroup will pay $4bn (£bn) to the Department of Justice and $2.5bn for "consumer relief". | Citigroup will pay $4bn (£bn) to the Department of Justice and $2.5bn for "consumer relief". |
| Consumer relief includes investment in affordable homes and mortgage relief. | Consumer relief includes investment in affordable homes and mortgage relief. |
| Following the decision, the bank reported a stronger than predicted quarterly profit, and saw its share price rise by 3.02% to $48.42 (£28.34). | |
| Government investigations | Government investigations |
| Second-quarter earnings fell by 96% to $181m, but that was after a $3.8bn (£2.2bn) charge related to the settlement. | Second-quarter earnings fell by 96% to $181m, but that was after a $3.8bn (£2.2bn) charge related to the settlement. |
| The settlement stems from the sale of securities made up of sub-prime mortgages, which were at the centre of the 2008 financial crisis. | The settlement stems from the sale of securities made up of sub-prime mortgages, which were at the centre of the 2008 financial crisis. |
| Citigroup is the second major bank to pay a settlement since President Obama launched an investigation into housing loans. | Citigroup is the second major bank to pay a settlement since President Obama launched an investigation into housing loans. |
| JPMorgan Chase paid $13bn last year to settle government investigations. | JPMorgan Chase paid $13bn last year to settle government investigations. |
| The Citigroup fines are said to have surprised stock analysts and people inside the bank, who had hoped to settle for less. | The Citigroup fines are said to have surprised stock analysts and people inside the bank, who had hoped to settle for less. |
| 'Move forward' | 'Move forward' |
| According to the US Attorney General, Eric Holder, "under the terms of this settlement, the bank has admitted to its misdeeds in great detail". | According to the US Attorney General, Eric Holder, "under the terms of this settlement, the bank has admitted to its misdeeds in great detail". |
| He said the settlement "does not absolve Citigroup or its employees from facing any possible criminal charges in the future". | He said the settlement "does not absolve Citigroup or its employees from facing any possible criminal charges in the future". |
| Citigroup's chief executive, Michael L Corbat, said that the decision was the right one for shareholders. | Citigroup's chief executive, Michael L Corbat, said that the decision was the right one for shareholders. |
| "We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past," he said. | "We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past," he said. |
| Investors welcomed the decision, as the company's share price rose in New York trading. | Investors welcomed the decision, as the company's share price rose in New York trading. |