A major blow hit Citigroup on Wednesday as government regulators imposed a hefty $135.6 million fine on the bank for its failure to address longstanding internal control and risk issues. This penalty, issued by the Federal Reserve and the Office of the Comptroller of the Currency, comes as a setback for Citigroup’s CEO, Jane Fraser, who has been striving to streamline and simplify the bank’s operations.

The regulators pointed out that Citigroup had not fully met its obligations outlined in a 2020 consent order related to the bank’s risk and control problems. Despite some progress, significant issues persisted, leading to additional penalties being imposed by the OCC and Fed.

Acting Comptroller of the Currency Michael J. Hsu emphasized the importance of Citibank addressing its long-standing deficiencies promptly, stating, “Citibank must see through its transformation and fully address in a timely manner its longstanding deficiencies.”

In addition to the $135.6 million fine, Citigroup had previously paid a $400 million penalty in 2020 when the original consent order was issued. The recent fines include $61 million to the Fed and $75 million to the OCC.

In response to the penalties, CEO Jane Fraser admitted that the bank’s progress had not been as swift as desired but expressed confidence in Citi’s ability to reduce its risk profile. Fraser stated, “We’ve always said that progress wouldn’t be linear, and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our transformation.”

Citigroup, once synonymous with being “too big to fail” following the 2008 financial crisis, underwent significant restructuring efforts to enhance its stability. The bank restructured its operations, divested non-core businesses, and exited certain financial markets to mitigate risks associated with its size and complexity.