Racial inequality has cost the U.S. economy 16 trillion U.S. dollars in wealth over the last two decades, Citigroup said in a report Thursday.

The banking giant pledged to invest more than one billion U.S. dollars in strategic initiatives to help close the racial wealth gap, as it pointed out the drag from unequal pay, housing discrimination, education disparity and other longstanding ills in the country.

"Addressing racism and closing the racial wealth gap is the most critical challenge we face in creating a fair and inclusive society and we know that more of the same won't do," said Citigroup Chief Executive Michael Corbat in a press release.

The report notes the sizable wage gap for Black and Hispanic workers, the result of "an extended history of job discrimination, plus unequal access to quality education in the U.S."

Citigroup pointed to the problem of financial "redlining" that has left Black consumers more vulnerable to predatory lenders, or to unfavorable terms from banks.

Black entrepreneurs also face more barriers to finance than white firms, the report said, noting that "if Black-owned firms are passing the gauntlet along myriad metrics, but still not receiving funding, then the epsilon may be bias."

Addressing racial equity gaps could add five trillion U.S. dollars to U.S. growth over the next five years, Citi said.

Citi pledged a number of steps, including 550 million U.S. dollars to support home ownership for people of color and affordable housing by minority developers. Other programs support minority depository institutions, Black-owned suppliers and entrepreneurs.

U.S. companies have been unveiling more socially-oriented initiatives in the wake of nationwide racial justice protests earlier this year, but skeptics say more concrete action is needed to back up the expressions of outrage after the death of Black American George Floyd.

Much of corporate America remains dominated by white men at the highest levels, although Citigroup earlier this month tapped Jane Fraser as the first female chief executive of a large bank. Citi's chief financial officer, Mark Mason, is African American.

(With input from AFP)