Citigroup confirms $7B settlement with DoJ over RMBS case

|About: Citigroup Inc. (C)|By:, SA News Editor

Citigroup (NYSE:C) +1.2% premarket after confirming it reached a $7B settlement with the Justice Department in the U.S. government's investigation into mortgage-backed securities the bank sold in the run-up to the 2008 financial crisis.

The figure was more that twice what many analysts expected earlier this year but less than the $12B the government had sought originally.

Citi will pay a $4B civil penalty to the DoJ, plus $500M to the FDIC and several states, and will spend $2.5B on "consumer relief."

Citi says it will take a related pre-tax charge of ~$3.8B in Q2; the bank will report Q2 earnings shortly.