Citigroup, Inc. ( C ) shares are trading slightly higher on Monday.

The company’s expansion plans in China have reportedly encountered a setback with U.S. regulators after the Federal Reserve imposed a penalty on the bank for issues related to data management and risk controls, reported Bloomberg. 

Notably, in July, the U.S. bank regulators, the Federal Reserve Board, and the Office of the Comptroller of the Currency (OCC) fined Citigroup ( C ) $135.6 million for failing to comply with a 2020 enforcement action.

The report highlighted that the bank is experiencing delays in establishing a standalone securities firm because it has not yet received a clearance letter from the Fed, which is necessary for Chinese authorities.

In a statement to Bloomberg, the bank said it cannot comment on its conversations with regulators regarding the ongoing process of receiving a securities license in China. 

It was reported in January 2024 that the bank planned to launch its fully-owned China investment banking unit by the close of this year and aims to recruit approximately 30 individuals for the venture.

The team was expected to grow in the coming years with a combination of local hires and transfers from Hong Kong and other markets.

Citigroup ( C ) has been under scrutiny for its inadequate progress in addressing data management problems identified in the 2020 enforcement action.

In 2020, the bank was fined $400 million for ongoing deficiencies in risk management and data quality controls.

Investors can gain access to the stock via First Trust Nasdaq Bank ETF ( FTXO )  and Series Portfolios Trust InfraCap Equity Income Fund ETF .

Price Action: C shares are up 0.47% at $62.43 at the last check Monday.

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