Citigroup has initially announced its plans to wind down its consumer business in Russia in April last year
The headquarters of Citigroup in Lower Manhattan. (Credit: Beyond My Ken/Wikipedia)
US-based Citigroup is planning to withdraw its operations from Russia, after the rival US banks’ recent exit from the country.
Recently, Goldman Sachs and JPMorgan Chase announced the winding down of their business in Russia, in response to the country’s invasion of Ukraine.
Deutsche Bank and MoneyGram International have also announced their decisions to suspend services in Russia.
Citigroup has initially announced its plans to wind down its consumer business in Russia in April last year.
Last week, the company has operated the consumer business arm on a limited basis, as part of its plan to divest the franchise, said Reuter’s report.
Citi, in its statement, said: “We have now decided to expand the scope of that exit process to include other lines of business and continue to reduce our remaining operations and exposure. Due to the nature of banking and financial services operations, this decision will take time to execute.
“We have also decided to stop soliciting any new business or clients. We are providing assistance to multi-national corporations, many of whom are undergoing the complex task of unwinding their operations.
“We will continue to manage our existing regulatory commitments and our obligations to depositors, as well as support all of our employees during this very difficult time.”
Citigroup had nearly $10bn in total exposure to Russia at the end of last year and could lose nearly half of it if any extreme condition emerges, reported Reuters.
The company said that it is looking to reduce its exposure to Russian assets using hedging and other strategies.
The publication also said that Citi had conducted health checks to determine the extent of its exposure that could be lost under different outcomes.
With the current decision, the company is expected to lose its institutional and wealth management clients in the country.
Citi chief financial officer Mark Mason said: “We’ve been working very closely with our risk management to run various scenarios as to what that exposure could mean under different stress scenarios.
“Looking at a severe stress scenario that number, on the high end, could be a little less than half of that exposure but it could also be a lot less than that depending on how the situation evolves.”