Citigroup
Citi’s Mexico Banamex Fraud Costs Bank $235m Reuters

Fraudulent activity at Citi's subsidiary in Mexico has hit the bank's balance sheet by $235m, bringing its 2013 net income down to $13.7bn.

According to the group's 2013 financial results, Banco Nacional de Mexico – also known as Banamex – conducted a range of fraudulent items of activity over the year.

"Although our inquiry into this fraud is continuing, we have been responding forcefully over the past week by assessing the overall exposure to Citi, coordinating with law enforcement, pursuing recovery of the misappropriated funds, and seeking accountability for anyone involved," said Michael Corbat, CEO at Citi.

"Specifically, we have been taking the following actions: first, we immediately began a 'rapid review' – throughout Banamex and the rest of Citi – of programs similar to the one at issue here. At this point, we believe this is an isolated incident."

"Next, we are exploring our legal options and coordinating with law enforcement agencies in Mexico," added Corbat.

"Banamex, in coordination with Pemex, has worked with Mexico's Attorney General to initiate criminal actions in connection with this matter that, in addition to imposing just penalties on the responsible parties, may allow us to recover damages. We are exploring every available option to recoup the misappropriated funds and we will be relentless in pursuing their recovery.

"I can assure you there will be accountability for those who perpetrated this despicable crime and any employee who enabled it, either through lax supervision, circumvention of our controls, or violating our Code of Conduct. All will be held equally responsible and we will make sure that the punishment sends a crystal clear message about the consequences of such actions."