Citigroup to Wind Down Russian Consumer, Local Commercial Operations

By Will Feuer

Citigroup Inc. said it would wind down its Russian consumer bank and local commercial banking operations in Russia, confirming an earlier report in The Wall Street Journal.

The New York bank said the wind-down is expected to affect about 2,300 employees and 15 branches. Citi said it expects to incur about $170 million in costs, primarily over the next 18 months, largely driven by restructuring, vendor termination fees and other charges.

The company had said it would exit Russian consumer banking in April 2021, part of a broad pullback from international consumer operations in 14 markets across Asia, Europe, Middle East and Africa, and Mexico.

The bank had been in discussions to sell operations in Russia to Russia's VTB. U.S. and European authorities have since sanctioned VTB to weaken Russia financially and undermine Moscow's war in Ukraine.

Citigroup executives had still hoped to sell the bank, which has branches in 10 cities throughout the country. In May, Chief Executive Jane Fraser said the bank was in active dialogue about selling the unit. But in July, she said, "we are considering the full range of possibilities to exit our consumer and commercial banking businesses, including portfolio sales."

Citigroup opened the retail bank in 2002 to serve wealthier citizens. It serves some 500,000 clients in Russia.

Citi's core business is serving multinational companies around the globe and is more exposed in Russia than other big U.S. banks. It has been cutting that exposure rapidly this year. In July, it said its worst case for losses on all the exposure was about $2 billion.

Write to Will Feuer at [e-mail]

(END) Dow Jones Newswires

August 25, 2022 08:30 ET (12:30 GMT)

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