Citigroup Erroneously Credited Client Account with US$81trn in 'Near Miss': FT

Moneylife Digital Team 28 February 2025

Economy & Nation

Citigroup mistakenly credited a client's account with a staggering US$81trn (trillion) instead of the intended US$280, in what has been described as a 'near miss', says a report from the Financial Times (FT). The error, which took place in April last year, underscores persistent operational shortcomings at the Wall Street bank.

According to the report, the internal transaction was approved after a payments employee and a second official tasked with checking the transfer failed to detect the mistake. "It was only after a third employee noticed discrepancies in the bank's account balances that the error was flagged—90 minutes after it had been posted. The erroneous payment was reversed several hours later, preventing any funds from leaving Citigroup, as per an internal account reviewed by FT and sources familiar with the event."

FT says the US$81trn near miss in April was reportedly caused by an input error compounded by a malfunctioning backup system. According to sources cited by FT, four transactions amounting to US$280 and intended for a Brazilian escrow account had initially been blocked due to potential sanctions concerns. After the payment was cleared, it remained stuck in Citi's system and required manual processing. The payments processing employee tasked with entering the transaction manually used a backup screen with a pre-populated amount field containing 15 zeros—an entry that was mistakenly left unadjusted, resulting in the astronomical figure.

Citigroup disclosed the incident to the Federal Reserve and the office of the comptroller of the currency (OCC), though near misses of this nature do not require formal regulatory reporting. The bank stated that its "detective controls promptly identified the inputting error between two Citi ledger accounts and we reversed the entry."

"While there was no impact to the bank or our client, the episode underscores our continued efforts to eliminate manual processes and automate controls," it added.

The latest revelation adds to a series of near misses at Citigroup, FT says. An internal report seen by FT indicated that last year alone, the bank experienced ten near misses—where incorrect transactions of US$1bn (billion) or more were ultimately recovered. This marked a slight decline from 13 similar incidents recorded the previous year. Citi declined to comment on the broader pattern of errors, the newspaper says.

FT says the persistence of such failures raises questions about the bank's ability to fix its operational deficiencies, nearly five years after a disastrous blunder in 2020 saw Citi mistakenly transfer US$900mn (million) to creditors involved in the financial restructuring of cosmetics giant Revlon.

That costly error led to the departure of then-chief executive officer (CEO) Michael Corbat, regulatory penalties, and the imposition of consent orders requiring Citigroup to overhaul its risk controls and data management systems.

Current CEO Jane Fraser, who succeeded Corbat in 2021, has publicly prioritised regulatory compliance and operational risk management. However, Citi was fined US$136mn last year by the OCC and Federal Reserve for failing to sufficiently address its risk control weaknesses, FT says.

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