Citigroup is set to close Banamex USA operations and has agreed to pay a fine of $140m to regulators who alleged that the bank had not done enough to correct weaknesses found in its 2012 anti-money laundering programs.
The penalty, which has been levied by the Federal Deposit Insurance, includes $40m in civil penalties to be paid to California’s Department of Business Oversight.
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The US-based banking major in a statement said that it would liquidate Banamex USA, as well as shut down its offices in Houston and San Antonio in October 2015.
The bank announced its plans to shut down the unit after concluding that it "has not been able to operate to the scale necessary to generate consistent quality earnings."
Citi said in a statement: "Throughout the wind down, we will remain focused on three priorities: continuing to remediate BSA/AML and other issues identified in the FDIC/DBO Consent Order; delivering excellent service to customers; and working with impacted employees and assisting them in pursuing opportunities both inside and outside of Citi."
California-based Banamex USA is an affiliate of Banco Nacional de Mexico (Banamex), which was acquired by Citigroup in August 2001.
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By GlobalDataBanamex USA operates with three branches in California and Texas and about 300 full-time employees, managing assets of over $500m and a deposit base of nearly $460m.
