Citigroup has been fined more than half a billion dollars after CEO Jane Fraser staked her tenure on fixing the bank

The fines come from the Federal Reserve and the Office of the Comptroller of the Currency, which said in separate releases that Citigroup had failed to meet its obligations stemming from a 2020 consent order related to the bank’s risk and control issues. While the regulators said the bank had made progress, there were still significant problems at the bank that required the OCC and Fed to assess additional penalties.

“Citibank must see through its transformation and fully address in a timely manner its longstanding deficiencies,” said Acting Comptroller of the Currency Michael J. Hsu, in a statement.

The $135.6 million fine is on top of the $400 million fine that Citi paid back in 2020 when the original consent order was signed. Citi will pay $61 million to the Fed and $75 million to the OCC as part of this round of penalties.

In a statement, Fraser acknowledged the bank hasn’t made progress quickly enough and that it is possible for Citi make itself less risky.

“We’ve always said that progress wouldn’t be linear, and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our transformation,” she said.

Citigroup was the go-to example of “too big to fail” after the 2008 financial crisis. Its near collapse and government rescue required Citi executives to slim down its massive balance sheet, sell off businesses it no longer needed and exit financial markets that it couldn’t have a dominant position in.

Citi ballooned in size and complexity in the 1990s and early 2000s through a series of acquisitions and mergers in an effort at the time to make Citigroup a financial conglomerate that catered to every customer. But many of those acquired businesses had software and internal controls that do not cooperate with other parts of Citigroup. So while Citi is less complicated than it was in 2008, it’s still a bank that regulators harbor serious concerns about to this day because the lack of internal communication could lead to problems.

Banking regulators rejected Citi’s “living will” in June. That document was supposed to show how Citigroup could be wound down safely and orderly in case of failure.

Fraser staked her tenure as CEO on fixing the bank’s internal controls, saying the effort would require thousands of employees, billions of dollars and several years of work. Some of her efforts to slim down Citi have been successful, like selling parts of Citi’s consumer banking business, most notably the planned spin off of Citi’s Banamex operations in Mexico.

But investors still price Citigroup shares at a discount to its Wall Street peers including JPMorgan, Goldman Sachs and Morgan Stanley due in part to the ongoing costs that Citi faces in fixing its internal control problems.