Putin green-lights Citi’s Russia exit as part of bank's worldwide reorganization
Russian President Vladimir Putin signed an order Wednesday permitting Citigroup (C) to sell its Russia-based division to emerging markets investment bank Renaissance Capital.
A Citigroup spokesperson confirmed the approval from the Russia Presidential Office for the potential sale, but added that additional approvals from US regulators are still needed for the deal to close.
Citi's stock rose 2.6% Wednesday morning. It's up 47% so far in 2025.
Citigroup first announced plans to sell its Russian consumer business in 2021 but pivoted to offloading its entire Russia-based subsidiary — known as AO Citibank — following the outbreak of the Russia-Ukraine war the following year.
Sanctions and other complexities of the international transaction made an outright sale of the unit difficult for years.
"Citi ended nearly all of the institutional banking services offered in Russia as of March 31, 2023. Today, our services are only those necessary to fulfill our remaining legal and regulatory obligations as we continue to wind down our business in Russia," a Citigroup spokesperson said in an emailed statement.
The bank had approximately $11.7 billion in clients' exposure to Russia as of the end of September, the majority of which were corporate dividends that the Russian government would not allow Citi to remit.
The deal is still subject to additional regulatory approvals. But getting the agreement signed by Putin marks further progress in one leg of the US banking giant’s sweeping transformation effort under CEO Jane Fraser, which includes plans to offload 14 different banking units worldwide.
Citi’s sale to Renaissance Capital would include all of what remains of Citi’s consumer and institutional business within the country.
It comes weeks after Citi’s board of directors voted to make her the bank’s board chair while awarding her a $25 million bonus of restricted stock. Those moves were broadly viewed by Wall Street as the board’s satisfaction with the bank’s turnaround progress and a consolidation of Fraser’s power over the megabank.
Citigroup has offloaded nine different international subsidiaries since Fraser became boss, with the end goal of cutting the bank's costs and boosting its profitability. The firm is awaiting a final close for the sale of its Polish subsidiary. Along with the Russia group, the bank is aiming to wind down operations in Korea and China.
Citi is also looking to sell its Mexico consumer banking unit, known as Banamex, through an IPO. Timing is dependent on regulatory approvals and market conditions, according a Citi spokesperson.
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