NEW YORK (TheStreet) -- While the biggest banks have generally recovered from the financial crisis -- or, in the case of Bank of America (BAC - Get Report), are recovering -- Citigroup (C - Get Report) goes from weakness to weakness.
Its big news today is a $1.13 billion settlement with institutional investors who were stuck with $59.4 billion in securitized mortgages in 2008.
That might be good news, except the settlement doesn't get the bank out of other investor claims concerning the mortgage pools. A $100 million charge will be taken against earnings on the agreement.
That's par for the course with Citigroup. While other big banks reach big settlements and put the past behind them, Citigroup drags its past around like Jacob Marley in A Christmas Carol, something Scrooge-like investors on Wall Street don't want to see.
Thus Citigroup's price-to-book ratio remains at a paltry 0.73, while rivals such as Wells Fargo (WFC) trade at more than double that.
Shares of Citigroup are down more than 10% so far this year, while the other big banks are all up on the year, albeit just marginally with the recent selloff.
Is there any reason to buy when Citigroup is facing a new criminal probe over a $400 million fraud at its Banamex unit in Mexico, while federal prosecutors in Massachusetts look at possible money laundering?
Citigroup bulls insist that the bank is loaded with potential thanks to $53 billion in deferred tax assets and $40 billion in book equity above what is necessary to support the business. The equity could be released as the tax assets are used.
But you need profits to use deferred tax assets and to release capital. Citigroup warned on Monday it may miss its 2015 goal for return on tangible common equity. CEO Michael Corbat had promised to raise that figure when he took over in 2012.
The Federal Reserve is in no mood to let Citigroup release any profits, having rejected the bank's capital plan late last month. The government decided the plan did not meet its stress tests, meaning the bank could go under if the economy turns sharply down again.
Under the plan, Citigroup would have quintupled its dividend and repurchased $6.4 billion in common stock. Chief Financial Officer John Gerspach took the hit for the failure, and Eugene McQuade will take over the stress test process as vice chairman for a year, delaying his retirement.
But what if the stress test failure had nothing to do with Gerspach? What if it was more systemic? What if Citigroup, six years after the market collapse, is still not on its feet?
While the government considers that, Citigroup continues to retreat internationally. It is pulling out of consumer banking in Honduras and is closing branches in South Korea. These are small nicks that add up to lower profit potential.
By last fall, Citigroup had reduced Citi Holdings, the "bad bank" created in the wake of the crash, to just 6% of assets. But is the rest of the bank really a "good bank?" Good enough for you to invest in?
At the time of publication the author owned shares of Wells Fargo and Bank of America.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.