Citigroup will consider clawing back compensation or shrinking 2014 pay for any employees linked to a $400 million loan fraud at its Banamex unit in Mexico.

The loss hasn't yet prompted Citigroup to change 2013 awards to its highest-ranking and best-paid leaders, as an internal review is still in an early stage, the bank said yesterday in a regulatory filing. While the fraud was just uncovered last month, the firm said it did shrink pay 14 percent for Manuel Medina-Mora, a co-president who oversees the Mexico unit, as it considered "control issues" identified last year in Banamex's U.S. operations.

The threat of clawbacks for executives builds on Chief Executive Officer Michael Corbat's promise of accountability for fraud on loans to a Mexico oil-services firm that cut last year's profit by $235 million. Corbat has called the incident a "despicable crime" and vowed to punish anyone responsible. The firm already has shrunk the Mexico unit's compensation pool.

"This is certainly a good start," said Nell Minow, founder and a director of GMI Ratings, which evaluates governance risks at public companies. For Citigroup to maintain credibility with investors, "we're going to need to know a lot more about who, and how much, and what this means, because companies have a tendency to play a shell game — take money away this year and make up for it next year."

Medina-Mora, 63, was awarded $9.5 million for last year, according to the New York-based lender's filing yesterday with the U.S. Securities and Exchange Commission. That compares with $11 million for 2012.

Citigroup said last week it's cooperating with U.S. authorities after Banamex USA, part of the Mexico unit, received subpoenas related to compliance with the Bank Secrecy Act and federal anti-money-laundering rules.

The decision on Medina-Mora's pay considered "leadership accountability for disclosed control issues that were identified in 2013, including in Banamex USA," the bank wrote in yesterday's filing without elaborating.

After discovering the loan fraud in Mexico, the bank took back $40 million from variable compensation related to all of Banamex to defer costs, according to a statement last month.

"I've made crystal clear to all our employees that I expect the very highest standards from each and every one of them," Corbat, 53, wrote in an annual letter to shareholders posted yesterday. The firm is starting a program, including training, to support and enhance the firm's values, he said.

"They're hoping to inoculate themselves against criticism and lawsuits," Minow said. "It's not just a question of dealing with the past, but the government will come in and look for evidence of how meaningful the company's ethics policies are when they're thinking about things like settling litigation."

Citigroup awarded Corbat $14.5 million for his first full year as CEO. He also got $2.3 million under an earlier profit- sharing plan that was among pay practices shareholders rejected in 2012. The funds were tied to a one-time grant made in 2010 after the firm designed the awards to keep key employees from leaving in the wake of a $45 billion bailout.

James "Jamie" Forese, head of the securities and transaction-services businesses, received $14 million. Forese, 51, shares the co-president title. He got $5.4 million from the profit-sharing plan. His pay wasn't disclosed last year.

Citigroup, which has called the fraud an "isolated incident," reviewed supplier-finance programs in the wake of the Banamex loss and found unspecified "concerns" in three other instances, according to a research report yesterday by John McDonald, an analyst at Sanford C. Bernstein & Co.

The concerns involved less than $10 million in a review that covered $14 billion in collateral, McDonald wrote, citing a meeting with Chief Financial Officer John Gerspach. McDonald called them "manageable" given the size of the firm's earnings and balance sheet. The analyst didn't specify what the bank found or give locations. Mark Costiglio, a Citigroup spokesman, declined to elaborate.

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