Citigroup’s board approved a plan to sell its remaining Russian operations, AO Citibank, to investment bank Renaissance Capital. The transaction will generate a pre‑tax loss of roughly $1.2 billion in the fourth quarter of 2025, largely due to currency‑translation adjustments, and is expected to close in the first half of 2026.
The $1.2 billion pre‑tax loss translates to an after‑tax hit of about $1.1 billion, the largest single‑period charge in Citi’s recent history. The loss is driven almost entirely by the reversal of unrealized foreign‑exchange gains that had accumulated on the Russian balance sheet during the pandemic and the subsequent devaluation of the ruble. The company has confirmed that the transaction will be capital‑neutral for its Common Equity Tier 1 ratio, and the removal of risk‑weighted assets from the Russian portfolio is expected to provide a modest capital‑enhancement effect.
Strategically, the sale marks the final step in Citi’s exit from the Russian market, a move that aligns with the bank’s broader effort to streamline global operations and reduce geopolitical risk exposure. By divesting AO Citibank, Citi can reallocate capital and management attention to higher‑growth core segments such as Markets, Services, and U.S. Personal Banking, while also simplifying its regulatory footprint in a region subject to strict exit rules and sanctions.
In the context of recent performance, Citigroup reported net income of $2.9 billion on $19.6 billion in revenue in Q4 2024, and $3.8 billion on $22.1 billion in Q3 2025. The $1.1 billion after‑tax loss represents roughly 30% of the Q3 2025 net income, underscoring the materiality of the charge. However, the divestiture is expected to have a neutral or slightly positive impact on the bank’s capital ratios and does not materially alter the trajectory of its core business segments.
Market reaction to the announcement was mixed. Shares closed down 1.9% on the day of the announcement, but a slight post‑market uptick of 0.03% was noted. Analysts at JPMorgan maintained an “Overweight” stance on Citi, emphasizing the strategic benefits of exiting a high‑risk market and the expected capital neutrality of the deal. The market’s focus on long‑term benefits rather than the immediate accounting hit reflects confidence in Citi’s ability to streamline operations and strengthen its core balance sheet.
Overall, the sale of AO Citibank represents a significant strategic shift for Citigroup, removing a legacy exposure while preserving capital strength. The transaction’s financial impact is substantial but offset by the anticipated capital‑neutral effect, positioning the bank to concentrate on growth in its core markets.
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