Banking giant Citigroup cut its fourth quarter and full year 2013 estimates on Friday, as its profit was hit by fraudulent activity at a Mexico-based subsidary. The bank said in a statement that Banco Nacional de Mexico, or Banamex, had loaned $585 million in short-term money to a Mexican oil services company named Oceanografia. It was later discovered that the firm had been suspended by the government from being awarded new contracts, "Based on Citi's review, which included documentation provided by Pemex, Citi estimates that it is able to support the validity of approximately $185 million of the $585 million of accounts receivables owed to Banamex by Pemex as of December 31, 2013," Citi said. As a result of the incident, the bank will take an estimated $235 million after-tax, or $360 million pre-tax, charge against last year's earnings. The impact will lower 2013 net income from $13.9 billion to $13.7 billion.
Oh wow, you would think that Citi Bank would have investigated this a little more before loaning out that kind of money...they are a major banking institute you know! I once had a home loan through this bank and they appeared to be a clueless institute. I would never do business with this bank again because of all the drama I had to go through with them!
