The move is expected to affect around 2,300 employees and 15 branches, and would cost the company around $170m, related to restructuring, vendor termination fees and other related charges

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Citibank branch on Michigan Avenue in Chicago. (Credit: TonyTheTiger/Wikipedia)

Citigroup is set to close its consumer banking and local commercial banking businesses in Russia, to reduce its operations and exposure in the country.

As part of its plan, the US-based banking company would divest certain consumer and commercial banking portfolios in Russia, starting from this quarter.

The move is expected to affect around 2,300 employees and 15 branches, affecting consumer products and channels related to deposits, investments, loans and cards.

In addition, it would cost the company around $170m, primarily over the next 18 months, in expenses related to restructuring, vendor termination fees and other related charges.

Citi said that its wind-down process will be in line with applicable regulations and complement the obligations to clients, employees and partners.

Citi Legacy Franchises CEO Titi Cole said: “We have explored multiple strategic options to sell these businesses over the past several months.

“It’s clear that the wind-down path makes the most sense given the many complicating factors in the environment. We are focused on supporting our impacted colleagues, clients and partners during this period of transition.”

Citi had $8.4bn exposure to Russia at the end of the second quarter this year, which decreased from $9.8bn at 2021 year-end.

Amon the total exposure, around $1bn is related to the consumer and local commercial banking businesses in Russia, said the company.

In April last year, Citi has decided to exit from consumer banking in Russia, as part of its strategic plan to exit franchises in 14 markets in Asia, Europe, Middle East and Africa, and Mexico.

In March this year, the company has expanded its planned exit in Russia, to include the commercial banking operations.

Citi said that it will continue to support its global institutional clients, particularly those undergoing the complex task of closing operations in Russia.

Citi Europe, Middle East and Africa CEO David Livingstone said: “Today’s decision is part of our continuing efforts to reduce our activities in Russia.

“It is aligned with other actions, including limiting our service offering, reducing our exposures, and not soliciting any new business or clients.”