Citigroup to wind down consumer banking operations in Russia
Wall Street heavyweight Citigroup said Thursday it will wind down its consumer and local commercial banking business in Russia as part of an effort to reduce operations and exposure to the country.
Citi expects to incur a roughly $170 million loss from the move across the next 18 months, driven primarily by restructuring, vendor termination fees, and other related charges.
“We have explored multiple strategic options to sell these businesses over the past several months,” Citi CEO of Legacy Franchises Titi Cole said in a statement. “It’s clear that the wind-down path makes the most sense given the many complicating factors in the environment.”
The bank was previously in talks with Russian private lender Expobank about the sale of its consumer banking franchise in the country — an effort that was complicated by the war in Ukraine and resulting sanctions.
The company announced its plan to exit consumer banking operations in Russia in April 2021 as part of a global “strategic refresh” to withdraw from consumer franchises in 14 markets across Asia, Europe, Middle East and Africa, and Mexico.
Citi added an exit from local commercial banking in Russia to its planned departure in March 2022 after the country’s invasion of Ukraine.
Citibank is the most globally-facing institution among U.S. big banks, with the largest presence in Russia compared to its Wall Street peers.
The bank’s remaining exposure to Russia totaled $8.4 billion as of the end of the second quarter. Exposure to Russia was roughly $9.8 billion at 2021 year-end, $1 billion of which was comprised by its consumer and local commercial banking businesses in the country.
The wind-down is expected to affect about 2,300 employees and 15 branches.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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