Reuters.- Wall Street giant Citigroup Inc said on Thursday it will close its consumer and commercial banking operations in Russia starting this quarter and expects to incur about $170 million in charges over the next 18 months.
The US bank with the largest presence in Russia announced in April 2021 its intention to exit retail as part of a broader exit from certain foreign markets.
In March, he widened the scope of that exit to include local commercial banks after Moscow invaded Ukraine, but was unable to find a buyer for either. activities.
The closing this will affect about 2,300 of the 3,000 Russian employees in 15 branches, the bank said. Citi joins other big players on Wall Street who have also closed or announced their intention to close their operations in Russia, in accordance with sanctions imposed by Western countries.
“It seems like a good move,” said Siddharth Singhai, chief investment officer at IronHold Capital in New York. This is because lending in Russia is high risk and the country could suffer a severe economic downturn due to economic sanctions.
Citigroup disclosed that its exposure to Russia was $8.4 billion as of June 30.
“We have explored several strategic options to sell these businesses over the past few months,” Titi Cole, Citi’s franchise managing director, said in a statement. “Clearly the liquidation route makes the most sense given the many complicating factors in the environment.”
The exit will affect deposit accounts, investments, loans and cards.
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Chief executive Jane Fraser, who took office last year, has moved to streamline the Wall Street giant, which has reduced its overseas footprint by exiting non-core markets, recently announcing deals to sell its business consumption in Bahrain and India.
Citigroup also said on Thursday it would continue to support its multinational institutional clients, especially those undertaking the complex task of winding down their operations in Russia.
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