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Citigroup raises estimate of uncovered legal risk

A man walks past a Citibank branch in lower Manhattan, New York October 16, 2012. REUTERS/Carlo Allegri
A man walks past a Citibank branch in lower Manhattan, New York October 16, 2012. REUTERS/Carlo Allegri

(Reuters) - Citigroup Inc on Friday raised the estimate of its possible legal and regulatory risk in excess of reserves to $5 billion from $4 billion.

The company included the new estimate in an annual filing of 2012 results and financial condition with the U.S. Securities and Exchange Commission. The previous estimate was made a year ago and had not changed materially at the end of September, according to a previous filing.

The company gave no specific reason for the change in possible costs over what it had already accrued.

In January, Citigroup officials said legal costs had risen in the fourth quarter to $1.3 billion from $529 million in the third quarter. It cited potential liability as regulators review alleged deceptive marketing of add-on products to credit card customers across the industry.

Regulators, including the U.S. Consumer Financial Protection Bureau, have already reached multimillion dollar settlements with American Express Co , Capital One Financial Corp and Discover Financial Services over such products, which include payment protection plans.

(Reporting by David Henry in New York; Editing by Gerald E. McCormick and Jeffrey Benkoe)

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