Citigroup plans to wind down its consumer and local commercial banking business in Russia amid Moscow’s conflict with Ukraine and expects to incur nearly $170 million in costs over the next 18 months.
The company will also focus on selling “certain” Russian banking portfolios as it prepares to exit the country starting this quarter, it said in a statement posted on its website on Thursday.
Citi’s decision is expected to affect nearly 2,300 employees and 15 branches of the bank in Russia.
The bank, however, will continue to support its multinational institutional clients, which are undergoing the “complex task of winding down their operations in Russia”, it said.
“Today’s decision is part of our continuing efforts to reduce our activities in Russia,” David Livingstone, Citi’s chief executive of Europe, Middle East and Africa, said.
“It is aligned with other actions, including limiting our service offering, reducing our exposures and not soliciting any new business or clients.”
The move by the banking major comes as a number of companies are closing their operations in Russia, following sanctions imposed by Western countries on Moscow for invading Ukraine in February.
Oil and gas companies including BP, Shell and Equinor announced plans to exit Russia earlier this year. Starbucks, McDonald’s and Nike are also leaving Russia or have left.
“It’s clear that the wind-down path makes the most sense given the many complicating factors in the environment,” Titi Cole, Citi's chief executive of legacy franchises, said. “We are focused on supporting our impacted colleagues, clients and partners during this period of transition.”
At the end of the second quarter of 2022, Citi’s exposure to Russia stood at $8.4 billion — down from $9.8bn at the end of 2021. Nearly $1bn of its exposure is related to the consumer and local commercial banking businesses in Russia, the lender said.
Citi first revealed its plan to exit Russian consumer banking operations in April 2021, as part of a global strategy to close consumer franchises in 14 markets in Asia, Europe, Middle East and Africa and Mexico.
In March, after the war in Ukraine had started, Citi expanded the scope of its planned exit in Russia to include local commercial banking.
