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Citigroup (C) Faces Fine in Nigeria Over Forex Violations

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The Central Bank of Nigeria has imposed fine of about N1.2 billion on Citigroup’s (C - Free Report) Nigerian unit over forex regulations violations. Also, it has asked three other banks along with MTN Group Limited (MTN - Free Report) to refund nearly $8 billion that had been transferred to their own country.

Per an article by Channels Television, the central bank’s Director, Corporate Communications, Isaac Okorafor, said that the actions were taken following the allegations of remittance of foreign exchange with irregular Certificates of Capital Importation issued on behalf of some offshore investors of MTN and subsequent investigations carried out by the apex bank in March 2018. The central bank has therefore asked managements of the penalized banks and MTN to immediately refund the sum that was illegally repatriated by the company.

The other three banks that have come under the scrutiny of Nigeria’s central bank are Standard Chartered Plc , Stanbic-IBTC and Diamond Bank. A total fine of about N6 billion has been imposed on the four banks.

The central bank’s spokesman said that the move to impose fines came after thorough investigations on the matter. Also, the companies in Nigeria were reminded of strictly complying with the laws involving foreign exchange transactions. Further, it was noted that that failure by management of the companies to abide by the existing guidelines would be punished by denying them access to the Nigerian foreign exchange market.  

The central bank’s investigation also disclosed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $400 million, the sum of $8.1 billion was illegally repatriated by the company.

Shares of Citigroup have lost 2.5% so far this year against 2.3% rally witnessed by the industry it belongs to.

Currently, Citigroup carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same space is Comerica Incorporated (CMA - Free Report) . The company has witnessed 5.2% upward estimate revision over the last 60 days. Also, its shares have rallied 44.3% in the past year. The stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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