Citi to close banking businesses in Russia; 2,300 staff to be affected

Citigroup has announced that, as part of its continued efforts to reduce its operations and exposure in Russia, it will wind down its consumer banking and local commercial banking operations in the country.

The decision comes amid the ongoing Russia-Ukraine war. Russia invaded Ukraine in February this year.

As part of the winddown, Citi said it will also continue to “actively pursue sales of certain Russian consumer banking portfolios”.

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Citi announced its plan to exit Russian consumer banking in April 2021 as part of its global strategic refresh to exit consumer franchises in 14 markets in Asia, Europe, Middle East and Africa, and Mexico.

In March 2022, Citi expanded the scope of its planned exit in Russia to include local commercial banking.

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“Actions to facilitate the wind-down of consumer and local commercial banking will commence this quarter. The wind-down is expected to affect approximately 2,300 employees and 15 branches. Consumer products and channels affected by the exit include deposits, investments, loans and cards. The wind-down will be carried out in compliance with applicable regulations and Citi will honor its obligations to clients, employees and partners,” the US bank said in a statement on Thursday (August 25).

“As previously noted, Citi continues to support its multinational institutional clients, particularly those which are undergoing the complex task of winding down their operations in Russia,” it added.

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Titi Cole, Citi’s CEO of Legacy Franchises, said: “We have explored multiple strategic options to sell these businesses over the past several months. It’s clear that the wind-down path makes the most sense given the many complicating factors in the environment. We are focused on supporting our impacted colleagues, clients and partners during this period of transition.”

David Livingstone, Citi’s CEO of Europe, Middle East and Africa, said, “Today’s decision is part of our continuing efforts to reduce our activities in Russia. It is aligned with other actions, including limiting our service offering, reducing our exposures, and not soliciting any new business or clients.”

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At the end of the second quarter 2022, Citi’s remaining exposure to Russia stood at $8.4 billion, down from $9.8 billion at 2021 year-end, of which approximately $1 billion is related to the consumer and local commercial banking businesses in Russia.

In connection with the wind-down plan announced, Citi said it expects to incur approximately $170 million in costs, primarily over the next 18 months, largely driven by restructuring, vendor termination fees and other related charges.