Citigroup earnings plunge 96% to $181 mn on legal costs

Citigroup reported Monday a 96 percent drop in second-quarter earnings due to a $3.8 billion charge for a much-anticipated settlement of US litigation on mortgage-backed securities sold ahead of the financial crisis.

Net income at the giant US bank sank from $4.2 billion a year ago to $181 million. Earlier Monday, Citigroup said it would pay $7 billion to settle charges by the US Justice Department and other agencies that it misled investors in the sale of mortgage securities from 2003 through 2008.