Citi edges closer to Russia exit, bracing for over €1bn hit

Citi has secured the internal approvals needed to proceed with the sale of its remaining business in Russia, as Western companies continue to face legal and financial hurdles in exiting the market.

In a statement earlier this week, the US bank said it had obtained the necessary internal clearances to sell AO Citibank, which conducts Citi’s remaining Russian operations, to Renaissance Capital.

“Citi confirmed today that it has obtained the internal approvals required to proceed with the planned sale of AO Citibank, which conducts Citi’s remaining operations in Russia, to Renaissance Capital (RenCap),” the bank said.

The transaction is expected to be signed and completed in the first half of 2026, subject to regulatory approvals and other closing conditions.

In a filing with the US Securities and Exchange Commission, Citi said it expects to record a pre-tax loss of approximately $1.2 billion (€1.022bn) on the sale in the fourth quarter of 2025, equivalent to around $1.1 billion (€936mn) after tax. The loss is largely driven by currency translation adjustment (CTA) losses, which reflect the impact of exchange rate movements over time.

Citi said about $1.6 billion (€1.36bn) of the loss comes from changes in currency values over time, partly offset by the expected sale price and other adjustments. These currency-related losses are currently recorded separately on the bank’s balance sheet and will only be formally counted once the deal is completed.

The bank said this accounting treatment will not affect its core capital strength.

However, the final size of the loss could still change, particularly if exchange rates move before the sale is completed. The SEC filing also said Citi will classify its remaining Russian operations as “held for sale” in its fourth-quarter 2025 financial statements.

The business is currently reported within Citi’s Services, Markets, Banking and “All Other – Legacy Franchises” segments.

Despite the expected accounting loss, Citi said the overall divestment of its remaining Russian operations is expected to benefit its CET1 capital position, mainly through the deconsolidation of associated risk-weighted assets.

Citi is among a group of Western companies that have remained in Russia longer than initially planned following Moscow’s full-scale invasion of Ukraine.

While hundreds of firms announced withdrawals in 2022, many have delayed or scaled back exits, citing Russia’s large domestic market or the increasing difficulty of selling assets.

In recent years, Russian authorities have introduced stricter exit rules for foreign companies, including mandatory government approvals, discounted sale prices and additional taxes on divestments.

These measures have made exits slower, more complex and, in some cases, financially unattractive.

Citi has previously scaled down its Russian operations and said it continues to wind down its presence while navigating regulatory and operational constraints.

The bank warned in its SEC filing that the transaction remains subject to execution risks and regulatory uncertainty, meaning the timing and final terms could still change.