Citigroup's stock price drops 4% amid reports of potential acquisition of regional banks

Investing.com - Citigroup (NYSE:C) shares fell 4% on Friday after Bloomberg reported the bank is considering acquiring a regional bank.

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According to Bloomberg, senior leadership at the New York-based bank held preliminary discussions over the past few months about acquiring a regional bank to boost deposits, which could support its lending and trading businesses. Some executives raised the possibility in meetings this year with U.S. regulators, who said they are willing to review a formal proposal.

Citigroup is currently subject to two consent orders that require it to obtain regulatory approval before carrying out any acquisitions. The bank denied the report, saying, “Claims that Citigroup is planning to acquire a regional bank, a wealth brokerage firm, or any other financial services company are purely baseless speculation.”

Under the report, Citigroup may be targeting banks with assets of around $500 billion, including Truist Financial Corp. (NYSE:TFC) and PNC Financial Services Group Inc. (NYSE:PNC), both of which have market capitalizations exceeding $50 billion. The bank also said it is interested in acquiring brokerage firms such as Stifel Financial Corp. (NYSE:SF) or Raymond James Financial Inc. (NYSE:RJF).

Citing people familiar with the matter, Bloomberg reported that the talks are still in the early stages and that there is no guarantee the company will make a formal acquisition offer.

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