Citi, the New York-headquartered bank with a global presence that many American expats rely on, has announced that it will fully "wind down" its consumer banking and local commercial banking operations in Russia, as part of its continuing efforts to reduce its operations and exposure in the country.
As part of the wind-down, Citi said, it will also continue to "actively pursue sales of certain Russian consumer banking portfolios".
Actions to facilitate the wind-down of its consumer and local commercial banking in Russia will begin in this quarter, Citi said in its announcement, adding that the wind-down was expected to affect approximately 2,300 employees and 15 branches.
Consumer products and channels Citi said will be affected by the exit will include deposits, investments, loans and cards.
Citi made the announcement on Thursday (Aug. 25), having first unveiled its plans to exit consumer banking in Russia back in April 2021, as part of a so-called "global strategic refresh" that it said would see it closing its existing consumer franchises in 14 markets in Asia, Europe, the Middle East and Africa, and Mexico.
In March 2022, Citi said it was expanding the scope of its planned exit in Russia to include local commercial banking.
Citi: 'Continues to support its clients'
In its statement announcing the ending of its consumer banking and local commercial banking operations in Russia, Citi stressed that it "continues to support its multinational institutional clients, particularly those which are undergoing the complex task of winding down their [own] operations in Russia."
Titi Cole, Citi's chief executive of Legacy Franchises, said that over the past several months Citi had "explored multiple strategic options to sell these businesses", and that what had become clear was that "the wind-down path makes the most sense, given the many complicating factors in the environment."
Cole added: "We are focused on supporting our impacted colleagues, clients and partners during this period of transition."
Citi said the costs of the wind-down program unveiled on Thursday were expects to total approximately US$170 million, "primarily over the next 18 months, largely driven by restructuring, vendor termination fees and other related charges".
At the end of the second quarter of 2022, Citi’s remaining exposure to Russia stood at US$8.4 billion, down from US$9.8 billion at the end of 2021. Of this, according to Citi, approximately US$1 billion was related to its consumer and local commercial banking businesses in Russia.
Consumer banking operations
in Asia also reduced
As reported, Citi announced in April 2021 that it was to embark on a major shift in its operations in 13 markets across Asia and Eastern Europe that would see it put its consumer banking operations in these markets up for sale.
Published reports at the time suggested that the move would, as one publication put it, "[appease] investors who have pressed the lender to boost profitability", while enabling it to focus more closely on looking after the growing numbers of wealthy entrepreneurs, and their businesses, in the Asia Pacific region.
Citi's activities outside of the U.S. are watched with interest by many American expats and wealth managers, because it is one of the few U.S. banking groups that accommodates Americans who live outside of the U.S.
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