Citi Moves Closer to Russia Exit, Braces for Over €1bn Loss

New York: Citigroup has secured the internal approvals required to proceed with the sale of its remaining Russian business, moving the US banking group closer to a long-planned exit from the market and preparing for a loss exceeding €1 billion.

In a statement earlier this week, Citi confirmed it has obtained the necessary internal clearances to sell AO Citibank, which houses the group’s remaining operations in Russia, to Renaissance Capital.

The transaction is expected to be signed and completed in the first half of 2026, subject to regulatory approvals and customary closing conditions.

In a filing with the US Securities and Exchange Commission, Citi said it anticipates recording a pre-tax loss of approximately $1.2 billion (€1.02bn) on the sale in the fourth quarter of 2025, equivalent to around $1.1 billion (€936 million) after tax.

The loss is largely driven by currency translation adjustment (CTA) losses, reflecting the cumulative impact of exchange-rate movements over time. Citi said roughly $1.6 billion (€1.36bn) of the loss stems from currency fluctuations, partially offset by the expected sale price and other accounting adjustments.

These currency-related losses are currently recorded separately on the bank’s balance sheet and will only be recognised in earnings once the transaction is completed. Citi said the accounting treatment will not affect its core capital strength.

However, the final size of the loss could still change, particularly if exchange rates move before the deal closes. The bank also said it will classify its remaining Russian operations as “held for sale” in its fourth-quarter 2025 financial statements.

The business is currently reported across Citi’s Services, Markets, Banking, and All Other – Legacy Franchises segments.

Despite the expected accounting hit, Citi said the divestment is projected to benefit its CET1 capital ratio, mainly through the removal of risk-weighted assets tied to its Russian operations.

Citi is among several Western companies that have remained in Russia longer than initially planned following Moscow’s full-scale invasion of Ukraine. While hundreds of firms announced withdrawals in 2022, many have faced delays due to Russia’s increasingly restrictive exit rules.

In recent years, Russian authorities have introduced tighter controls on foreign exits, including mandatory government approvals, discounted sale prices, and additional levies on divestments, measures that have made exits slower, more complex, and often less financially attractive.

Citi has already significantly scaled back its presence in Russia and said it continues to wind down operations while navigating regulatory and operational constraints. The bank cautioned in its SEC filing that the transaction remains subject to execution risks and regulatory uncertainty, meaning the timing and final terms could still change.