# Citigroup says will close Russian consumer, commercial business
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-25
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Citigroup to close consumer and commercial banking in
Meta Description: Citigroup Inc. announced plans to shut down its retail and commercial banking operations in Russia, incurring roughly $170 million in charges over the next 18
URL: https://financedigest.com/citigroup-says-will-close-russian-consumer-commercial-businesshtml

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By Lananh Nguyen

(Reuters) -Wall Street giant Citigroup Inc will close its consumer and commercial banking businesses in Russia starting this quarter and expects to incur about $170 million in charges over the next 18 months as a result, the company said on Thursday.

The U.S. [bank with the largest presence in Russia announced plans in April 2021 to leave the retail](https://www.financedigest.com/uk-retail-banks-is-irrelevance-curtailing-opportunity.html "UK Retail Banks: Is Irrelevance Curtailing Opportunity?") business as part of a broader departure from some overseas markets. It expanded the scope of that exit in March to include local commercial [banking after Russia’s](https://www.financedigest.com/russia-bans-western-investors-from-selling-banking-key-energy-stakes.html "Russia bans Western investors from selling banking, key energy stakes") invasion of Ukraine, but has been unable to find a buyer for either business.

The closure https://www.citigroup.com/citi/news/2022/220825a.htm will affect about 2,300 of [Citi’s 3,000 employees in Russia across](https://www.financedigest.com/russia-strikes-cities-across-ukraine-gas-supplies-in-focus.html "Russia strikes cities across Ukraine, gas supplies in focus") 15 branches, the bank said. Citi joins other major Wall Street players which have also shut or [announced plans](https://www.financedigest.com/eu-announces-plans-to-lead-green-industrial-revolution.html "EU announces plans to lead green industrial revolution") to close operations in Russia, in line with sanctions imposed by Western countries.

This seems to be a good move,” said Siddharth Singhai, [chief investment officer](https://www.financedigest.com/tips-for-choosing-the-right-chief-finance-officer-for-your-business.html "Tips for Choosing the Right Chief Finance Officer for Your Business") of Ironhold Capital in New York. That’s because lending in Russia is high-risk and the country may undergo a severe economic [slump](https://www.financedigest.com/oil-slumps-on-economic-data-stronger-u-s-dollar.html "Oil slumps on economic data, stronger U.S. dollar") due to economic sanctions.

[Shares of Citigroup were up 1.3% to $51.68 in early trade](https://www.financedigest.com/russian-central-bank-gives-legal-entities-green-light-to-trade-foreign-shares.html "Russian central bank gives legal entities green light to trade foreign shares").

The [bank had disclosed Russia exposure of $8.4 billion](https://www.financedigest.com/first-abu-dhabi-bank-could-renew-35-billion-offer-for-stanchart-bloomberg-news.html "First Abu Dhabi Bank could renew billion offer for StanChart -Bloomberg News") at the end of the second quarter, down from $9.8 billion at the end of 2021. Around $1 billion of that exposure is related to the [consumer and local commercial banking](https://www.financedigest.com/30-per-cent-of-uk-consumers-would-use-amazon-google-facebook-or-apple-for-banking-services.html "30 Per Cent of UK Consumers Would Use Amazon, Google, Facebook or Apple for Banking Services") businesses, it said in the statement.

Eric Compton, equities strategist at Morningstar, said Citi’s exposure is for all of the outstanding positions related to Russia, distinct from shutting down [offices and letting go of employees](https://www.financedigest.com/hundreds-of-tyson-foods-employees-to-depart-as-company-closes-offices-wsj.html "Hundreds of Tyson Foods employees to depart as company closes offices – WSJ").

The main takeaways are first, additional clarity for the [bank as they come to a final ending](https://www.financedigest.com/testing-waters-hungarys-central-bank-flags-cut-in-top-end-of-rate-corridor.html "Testing waters, Hungary’s central bank flags cut in top end of rate corridor") point for another one of the units they have been trying to get rid of, and two, we now know there will roughly $170 million in costs associated with the wind down,” he said.

For a [bank where we project over $50 billion](https://www.financedigest.com/td-other-banks-reach-1-35-billion-settlements-to-end-stanford-litigation.html "TD, other banks reach .35 billion settlements to end Stanford litigation") in expenses for 2022, this is a rounding error.

We have explored multiple strategic options to [sell these businesses](https://www.financedigest.com/reasons-why-you-should-hire-a-business-broker-to-sell-your-business.html "Reasons Why You Should Hire a Business Broker to Sell Your Business") over the past several months,” Titi Cole, Citi’s chief executive officer of legacy franchises, 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 exit will affect deposit accounts, investments, loans and cards.

Chief Executive Jane Fraser, who took the helm last year, has moved to simplify the [Wall Street](https://www.financedigest.com/weary-wall-street-cheers-improved-consumer-confidence.html "Weary Wall Street cheers improved consumer confidence") giant, which has been shrinking its overseas footprint by exiting non-core markets, recently announcing agreements to sell its consumer businesses in Bahrain and India.

Citigroup also said on Thursday it will [continue to support](https://www.financedigest.com/adnami-appoints-burnett-and-bukholt-to-support-continued-expansion.html "Adnami appoints Burnett and Bukholt to support continued expansion") its multinational institutional clients, particularly those which are undergoing the complex task of winding down their operations in Russia.

(Reporting by Lananh Nguyen in New York and Manya Saini in Bengaluru;additional reporting by Saeed Azhar in New York and Mehnaz Yasmin in Bengalaru; Editing by Shailesh Kuber, Kirsten Donovan and Jonathan Oatis)


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