A majority of the settlement is expected to be
in cash, but the figure also includes several billion dollars in
help to struggling borrowers, the source said.
An announcement of the settlement between the bank and the U.S.
Department of Justice could come as early as next week, the
A Citigroup representative declined comment. A Justice
Department spokeswoman did not respond to requests for comment.
A settlement of around $7 billion for Citigroup would be higher
than analysts had expected based on the bank's mortgage
Some Wall Street analysts had previously estimated that
Citigroup likely had about $3 billion of reserves set aside for
a related settlement. U.S. authorities had demanded more than
$10 billion last month, Reuters reported.
Talks between U.S. authorities and Citigroup stalled last month
after both sides stood far apart on a settlement figure and the
Justice Department had prepared to sue the bank.
The bank is scheduled to report second-quarter results on
Monday. Analysts, on average, have estimated the company would
earn $3.4 billion.
U.S. Attorneys offices in Brooklyn and Colorado have been
investigating the bank as part of a larger task force probing
faulty mortgage securities that helped fuel the housing bubble
in the mid-2000s and contributed to its collapse.
JPMorgan Chase & Co paid $13 billion in November to resolve a
range of probes from the task force, in a deal that U.S.
authorities said would serve as a template for other banks. Bank
of America Corp has also been in negotiations to resolve similar
(Reporting by Aruna Viswanatha in Washington and Karen Freifeld
in New York, with additional reporting by David Henry in New
York; Editing by Lisa Shumaker)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.