New York finance giant Citigroup Inc. announced Wednesday it will shut down its Los Angeles subsidiary Banamex USA after agreeing to a $140 million settlement with federal and California regulators over the bank’s failure to adequately monitor possible money laundering.

The settlement, announced in a Wednesday statement by the Federal Deposit Insurance Corp., includes $40 million to be paid to California’s Department of Business Oversight. In its statement, the FDIC said that the bank had “failed to implement an effective Bank Secrecy Act/anti-money laundering compliance program over an extended period of time.”

Citigroup released a Wednesday statement confirming its decision to shutter Banamex, which has been the subject of recent industry rumors.

“Banamex USA has not been able to operate to the scale necessary to generate consistent quality earnings,” Citigroup said in its statement.

Banamex, headquartered in the north tower of Century City’s Century Plaza, specialized in moving money between the United States and Mexico. It has one branch in Los Angeles and two in Texas. In its statement, Citigroup said it plans to close both Texas branches in October, while keeping the Los Angeles office open through a wind-down period.

Banamex reported assets of slightly more than $1 billion as of March 31, making it L.A.’s 18th largest bank. In its statement, Citigroup said the bank currently has assets just north of $500 million.