US regulators have slapped Citigroup with a $136 million fine for insufficient progress in rectifying long-standing data management problems, dealing another blow to chief exec Jane Fraser's efforts to overhaul the bank.

The US Federal Reserve and the Office of the Comptroller of the Currency (OCC) jointly issued the penalty, citing Citigroup's failure to adequately address issues identified in a 2020 enforcement action. That earlier order had required the bank to implement a comprehensive plan to improve its risk management and internal controls.

"Citigroup violated the 2020 order through delays in completing milestones included in its approved plan," the Fed stated on Wednesday. The regulators found that the bank had not made satisfactory progress in repairing data management deficiencies and implementing necessary controls.

In response to the fine, Fraser acknowledged the setback in a memo to employees: "Setbacks like this one today are visible and I know they can be disappointing. But they absolutely cannot distract us from the work we're doing in every corner of the bank."

The chief exec also released a public statement, admitting, "Despite making good progress in simplifying our firm and addressing our consent orders, there are areas where we have not made progress quickly enough, such as in our data quality management."

The fine comes amidst Fraser's broader efforts to streamline Citigroup's structure and address regulatory failings. The bank has recently undergone significant layoffs, including employees working on regulatory compliance.

The OCC is now requiring Citigroup to implement a new quarterly process to ensure adequate resources are devoted to meeting its regulatory milestones. Fraser assured stakeholders that the bank would "spend what is necessary to address the regulatory issues".

This latest penalty follows a series of regulatory challenges for Citigroup, including a $400 million fine in 2020 for "ongoing deficiencies" in risk management and internal controls. More recently, US regulators raised concerns about the bank's plans for a "living will" in the event of bankruptcy.

As Citigroup grapples with these ongoing issues, Fraser emphasised the bank's commitment to improvement: "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."

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