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U.S. Citigroup Faces Massive Loss in Russia Exit Deal
(MENAFN) Citigroup announced Monday it will absorb a massive financial hit as it finally divests its remaining Russian operations, marking another costly retreat by a Western financial institution from Moscow.
The American banking behemoth revealed the sale of its Russian subsidiary to Renaissance Capital will trigger approximately $1.2 billion in pre-tax losses during the fourth quarter of 2025. This figure primarily stems from currency translation adjustment losses accumulated since the bank initiated its withdrawal strategy.
Citigroup first signaled its intent to exit Russia in August 2022, joining a wave of Western corporations fleeing the country following international sanctions targeting Moscow for its actions in Ukraine. At that juncture, AO Citibank—the lender's Russian division—held roughly $10 billion in assets, with initial exit costs projected at $170 million. The institution previously offloaded its ruble-denominated consumer loan portfolio to Uralsib bank in December 2022.
"The approvals result in a pre-tax loss on the sale for the fourth quarter of 2025, largely related to the currency translation adjustment (CTA) losses that will also remain in accumulated other comprehensive income until closing," the bank said in a separate statement.
Currency translation adjustments represent an accounting mechanism that records financial gains or losses when converting a foreign unit's statements from local currency into the parent corporation's reporting currency.
Citigroup cautioned the loss figure remains subject to fluctuation based on foreign exchange volatility. The bank will reclassify its continuing Russian presence as "held for sale" starting in the fourth quarter of 2025.
Russian President Vladimir Putin authorized Renaissance Capital's acquisition last month. According to a filing with the US Securities and Exchange Commission, the transaction is projected to finalize during the first half of 2026.
The American banking behemoth revealed the sale of its Russian subsidiary to Renaissance Capital will trigger approximately $1.2 billion in pre-tax losses during the fourth quarter of 2025. This figure primarily stems from currency translation adjustment losses accumulated since the bank initiated its withdrawal strategy.
Citigroup first signaled its intent to exit Russia in August 2022, joining a wave of Western corporations fleeing the country following international sanctions targeting Moscow for its actions in Ukraine. At that juncture, AO Citibank—the lender's Russian division—held roughly $10 billion in assets, with initial exit costs projected at $170 million. The institution previously offloaded its ruble-denominated consumer loan portfolio to Uralsib bank in December 2022.
"The approvals result in a pre-tax loss on the sale for the fourth quarter of 2025, largely related to the currency translation adjustment (CTA) losses that will also remain in accumulated other comprehensive income until closing," the bank said in a separate statement.
Currency translation adjustments represent an accounting mechanism that records financial gains or losses when converting a foreign unit's statements from local currency into the parent corporation's reporting currency.
Citigroup cautioned the loss figure remains subject to fluctuation based on foreign exchange volatility. The bank will reclassify its continuing Russian presence as "held for sale" starting in the fourth quarter of 2025.
Russian President Vladimir Putin authorized Renaissance Capital's acquisition last month. According to a filing with the US Securities and Exchange Commission, the transaction is projected to finalize during the first half of 2026.
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