Citigroup Takes $1.2B Hit to Finalize Russian Market Exit
Sale of remaining operations to Renaissance Capital for a Q4 loss marks the end of a multi-year retreat and removes a significant geopolitical overhang for the bank.
Citigroup is set to absorb a significant financial blow to finalize its departure from Russia, with the bank's board approving the sale of its remaining operations in the country to Renaissance Capital. The deal is expected to trigger a pre-tax loss of approximately $1.2 billion in the fourth quarter of 2025, marking the definitive end to a complex, multi-year strategic retreat.
The divestment, which requires treating the Russian unit as "held for sale," will result in an after-tax loss of around $1.1 billion. In a statement, the bank clarified that the loss is primarily driven by the reversal of previously accumulated currency translation adjustments, reflecting the ruble's volatility since the bank began its exit. Shares of Citigroup traded down about 1.9% to $118.13 in late afternoon trading, near the stock's 52-week high, suggesting investors had largely anticipated the move.
The sale of AO Citibank, its Russian subsidiary, represents the final step in a process that began long before many of its rivals. Citigroup initially announced plans to exit its Russian consumer banking business in April 2021 as part of a broader global strategic refresh led by CEO Jane Fraser. The scope of the exit was expanded in March 2022 to include its local commercial banking operations following the geopolitical crisis in Ukraine.
Over the past few years, Citigroup has been methodically winding down its exposure, which stood at $8.4 billion in mid-2022. The process involved discontinuing services for nearly all institutional clients, closing its last retail branch in November 2024, and deactivating local debit cards. The sale to Renaissance Capital, a deal which received official authorization via a Kremlin presidential order, allows for a complete severing of ties.
For investors and analysts, the move is being viewed as a painful but necessary step in Fraser's ongoing mission to simplify the $221 billion banking giant and improve its returns. By shedding the volatile and unpredictable Russian assets, Citigroup eliminates a major source of geopolitical risk and management distraction, allowing it to sharpen its focus on core businesses like treasury services, trade solutions, and wealth management.
While the fourth-quarter loss is substantial, it is seen by many as the price of certainty. Analysts have long viewed the Russia exit as a logical component of Fraser's strategy to de-risk the bank, even as they acknowledge the steep road ahead in the broader turnaround effort. The final loss is in line with potential charges that analysts had estimated as far back as March 2022.
The transaction is expected to formally sign and close within the first half of 2026. With the Russia chapter coming to a close, Wall Street's attention will now pivot entirely to the execution of Citigroup's core strategic plan and its ability to close the profitability gap with its peers.