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Citigroup braces for profit miss: Report

More woes may be in the cards for Citigroup.

The New York-based bank is warning its investors it could miss a key profitability target, The Wall Street Journal reports.

This comes after the Federal Reserve rejected the bank's plans to increase dividend and stock buybacks last month. The Fed's decision is seen as a roadblock for CEO Michael Corbat, who has made it his goal to boost Citi's profitability since he took his position in late 2012.

Scott Eelis | Bloomberg | Getty Images

While the central bank's rejection doesn't rule out Citi's ability to meet its profit target, it could mean investors may not see an increase in dividend or stock buybacks until 2015.

The profit target—the ratio of profit to equity owned by shareholders—is a common way for investors to compare banks' profitability.

In other news for the nation's third largest bank, Citi agreed Monday to pay $1.13 billion to settle investor claims.

Shares are down by about 10 percent year to date. The bank reports earnings next week.

Read The Wall Street Journal's full story here.