Citigroup dismisses report of potential US regional bank acquisition

March 27 (Reuters) - Citigroup C.N on Friday dismissed as "baseless speculation" a Bloomberg News report that its top executives were weighing the acquisition of a U.S. regional bank, saying it remains focused on organic growth.

Bloomberg earlier reported that Citi's senior leaders had held preliminary discussions in recent months about a potential deal to boost deposits and had even raised the idea with U.S. regulators, citing people familiar with the matter.

"The suggestion that Citi is planning to buy a regional bank, wealth brokerage - or any other financial services firm - is baseless speculation," a spokesperson for the lender said in a statement to Reuters.

"At this time, we are solely focused on growing organically by executing our strategy and completing our transformation," the spokesperson added.

Shares of the bank recouped some initial losses and were last down 3% in afternoon trading, while an index tracking large-cap banking stocks fell 1.8%. Reuters could not independently verify the report.

Citigroup's multi-year turnaround under CEO Jane Fraser, launched after she took over in 2021, was aimed at simplifying the bank's sprawling global structure, cutting costs and closing profitability gap with rivals such as JPMorgan Chase JPM.N.

Its executives are becoming more optimistic that they will be able to finish compliance work on major regulatory punishments, known as consent orders, later this year, Reuters reported in February, citing sources.

Lifting of the consent orders would be monumental, enabling Citigroup to sharpen its focus on profit growth after six years of intensive compliance work that involved thousands of employees.

Citi's problems stretch back to 2020 when it was told to remediate longstanding risk management and data governance problems identified by the U.S. Federal Reserve and the Office of the Comptroller of the Currency.

Since 2024, regulators have acknowledged some progress, while investors have also cheered Fraser's efforts to streamline management, cut jobs and sell non-core businesses.