Citibank's $900M Blunder
I’m struggling a little on the details. Citi paid 900mm to lenders of which only 175mm went to Brigade.<p>Things I’d like to know:<p>-Who got the other amount and Did they return it?<p>-The 900mm mistake is actually several mistakes not just 1 simple typo? How is that possible.<p>As for wrapping my head around this. It’s a total debt of 1.5bn. Let’s drop some zeros and see how we think of it. Let’s say 15k credit card with AMEX. I owe 150 in interest but instead I send 1,500. Would they refund the mistake? Let’s go ahead and follow the headline and say I paid 9k of my 15k balance. Would they refund the mistake? (Honest question) This scenario is at the consumer level and zeros matter but I see sloppiness somewhere in Citi and their dealing with money when it’s specifically what they are trusted to do. As for the “loss”...<p>Let’s consider how this should likely play. The loss here of Citi isn’t materially that they lose the money. It would get rolled into a loan to Revlon at the same rates. Revlon still has to pay it, just Citi has to float the time. The material loss to Citi should be near zero - they could even sell the loan at a slight loss to get it off their plate. Oops we sent 900mm to you... Now we are the loan holder. They end up with money tied up and should Revlon go to bankruptcy then they will realize this loss.<p>Stats
-Citi has a 100bn market cap.<p>-They have currently 685bn in loans outstanding to borrowers.<p>-currently holding 26.4bn for credit losses for pandemic.<p><a href="https://www.citigroup.com/citi/news/2020/second-quarter-2020-earnings.htm" rel="nofollow">https://www.citigroup.com/citi/news/2020/second-quarter-2020...</a><p>The only news I really see here is how Citi ops let an unexpected amount get sent without proper authorizations.