Regulators announced enforcement actions and a $400 million fine against Citigroup Inc., putting an initial price tag on the bank's effort to respond to renewed pressure to fix its risk management and internal controls. Analysts expect the bill to mount in the coming periods.

The bank had already highlighted $1 billion in extra spending on its infrastructure and controls that it planned for this year, following a mistaken disbursement of $900 million to Revlon Inc. creditors as the administrator of a loan to the cosmetics company. CFO Mark Mason said controls and infrastructure are management's top priority in a company presentation made shortly after a media report that the departure of CEO Michael Corbat had been hastened by regulators preparing the consent orders.

Analysts and investors braced for the possibility that the bank would have to prioritize compliance over growth, potentially for years, and Citi's shares fell by almost 18% in September, compared with a decline of about 7% for the KBW Nasdaq Bank Index. After the Federal Reserve and the Office of the Comptroller of the Currency announced the fine and made the consent orders public on Oct. 7, Keefe Bruyette & Woods analyst Brian Kleinhanzl said the "open-ended nature" of the conditions placed on Citi mean that complying with regulators' demands will probably be "a longer term process."

"We are now entering a period of uncertainty as the regulator's consent order could be an overhang for Citi over the coming quarters," he wrote in a note. In an earlier note on Oct. 1, Kleinhanzl predicted that "management's commentary around expenses in 2021 will lead shares to underperform on the day of earnings." Citi is scheduled to post third-quarter results on Oct. 13.

Capital Alpha analyst Ian Katz said regulators' move against Citi "is fairly tough, as expected, but could have been worse." In a note on Oct. 8, Katz highlighted requirements that Citi's board submit a compliance plan within 120 days, along with quarterly progress reports. The orders create "much internal work and [thrust] a lot of responsibility on Citi's board," Katz wrote.

Part of the reason Kleinhanzl expects Citi will take a while to satisfy regulators is that it said the bank failed to address deficiencies identified in previous consent orders related to anti-money laundering compliance and the foreign exchange business. The OCC also said lapses in Citi's risk management and controls had led to fines in 2019 over the bank's violations of the Fair Housing Act and this year over violations of rules governing the placement of flood insurance on loan collateral.

Still, Katz argued that "this isn't a Wells Fargo-type penalty." Wells Fargo & Co. is subject to an asset cap resulting from a series of consumer abuses, and the bank has said the growth restriction is squeezing revenues amid opportunities to enlarge its balance sheet during the pandemic.

The fine is also far lower than the direct monetary penalties Wells Fargo has faced, including a $3 billion settlement this year with the U.S. Department of Justice and the Securities and Exchange Commission. U.S. Bancorp paid more than $600 million in 2018 to settle allegations of anti-money laundering compliance violations, and entered into a deferred prosecution agreement with the federal government.

"The fine is manageable," Kleinhanzl said.

In a statement responding to the consent orders, Citi said it is "disappointed" that the bank has "fallen short of our regulators' expectations," but noted that the Fed and the OCC acknowledged that the company has "begun taking corrective action and has committed to taking all necessary and appropriate steps to remedy the deficiencies."

Citi's shares lost 0.27% on Oct. 8, compared with a gain of 1.59% for the KBW Nasdaq Bank Index.