Citi has been in hot water with regulators since 2020, paying a total of $400 million in fines for poor data management and risk controls. Despite spending over $7.4 billion and assigning 13,000 employees to a firmwide 'Transformation' initiative, Citi continues to face significant regulatory scrutiny. Analyst Mike Mayo noted that recent regulatory actions did not involve customers but focused on the bank's compliance with regulators, which indicates a shift in the regulatory environment.
Wells Fargo analyst Mike Mayo called Trump's win a 'regulatory game changer' and highlighted that Citi is still in 'regulatory purgatory.' However, he believes the bank could experience less scrutiny as the new administration might undo some of the regulatory restrictions imposed earlier. With a new set of regulators, there is a chance that the demands on Citi could be lessened, particularly regarding their quarterly submission of resource allocation plans.
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