FOLLOW US

Wall Street giant Citigroup will close its consumer and commercial banking businesses in Russia and expects to incur about $170 million in charges over the next 18 months as a result, the firm said on Thursday.

The U.S. bank has the largest presence in Russia. Citigroup announced plans in April 2021 to leave the retail 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 invasion of Ukraine.

The closure will affect about 2,300 of Citi’s 3,000 employees in Russia across 15 branches, the bank said

“This seems to be a good move,” said Siddharth Singhai, chief investment officer of IronHold Capital in New York. That’s because lending in Russia is high-risk and the country may undergo a severe economic slump due to economic sanctions.

Citigroup has disclosed its Russia exposure was $8.4 billion, as of June 30.

“We have explored multiple strategic options to sell these businesses 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.

Citigroup also said on Thursday it will continue to support its multinational institutional clients, particularly those which are undergoing the complex task of winding down their operations in Russia.