Citi Board Clears Exit From Russia With $1.2bn Hit Following AO Citibank’s Sale Approval

Citigroup has moved closer to fully exiting Russia after its board approved the sale of AO Citibank, its Russian subsidiary, to investment firm Renaissance Capital, a deal that will crystallize a pre-tax loss of about $1.2 billion, largely driven by currency translation effects.

The U.S. lender said on Monday that the transaction is expected to close in the first half of 2026, subject to remaining regulatory and closing conditions, according to a filing with the U.S. Securities and Exchange Commission. The approval marks a significant milestone in Citi’s multi-year effort to unwind its presence in Russia following the invasion of Ukraine and the sweeping sanctions that followed.

Citi said the board approvals will result in a pre-tax loss being recognized in the fourth quarter of 2025. The bulk of the impact stems from cumulative currency translation adjustment (CTA) losses, which arise when the financial statements of a foreign subsidiary are converted into the parent company’s reporting currency.

“These 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 (AOCI) until closing,” the bank said in a separate statement.

CTA reflects gains or losses caused by exchange rate movements over time, while AOCI is a balance sheet equity account that holds certain unrealized gains and losses not recognized in net income. Citi noted that while the accounting loss is substantial, the cumulative impact of the transaction will be capital neutral to its common equity tier 1 (CET1) capital ratio, a key measure of bank solvency closely watched by regulators and investors.

The bank cautioned that the final loss could still change, depending on factors such as foreign exchange movements between now and the closing date.

As part of the transaction process, Citi said it will classify its remaining Russian operations as “held for sale” in the fourth quarter of 2025, an accounting step that reflects management’s intent to complete the disposal and further separates the unit from its ongoing operations.

The deal follows explicit approval from the Russian government. Last month, President Vladimir Putin authorized Renaissance Capital to acquire Citibank’s Russian operations, a necessary step given Moscow’s tight controls on foreign asset sales since the start of the war. Such transactions have often required presidential sign-off and have been subject to strict conditions, including pricing constraints and special levies.

Citi has been among the Western banks with the largest and most complex exposure to Russia, and its exit has taken longer than that of many of its peers. In August 2022, the bank announced it was winding down its consumer banking and local commercial banking businesses in the country as part of a broader strategy to reduce risk and simplify its global footprint.

Since then, Citi has continued to pare back activities, manage down assets, and navigate regulatory hurdles in order to leave the market in an orderly manner. The sale to Renaissance Capital represents one of the final steps in that process.

Also, the Russia exit fits into Citi’s wider overhaul under CEO Jane Fraser, who has been reshaping the bank to focus on core businesses and improve returns. While the $1.2 billion pre-tax loss underscores the financial cost of geopolitics and prolonged currency weakness, the bank has consistently argued that fully exiting Russia removes a source of operational, regulatory, and reputational risk.

Once completed, the transaction will effectively close the chapter on Citi’s decades-long presence in Russia, ending a withdrawal that has become emblematic of how deeply the war and sanctions regime have reshaped the global banking industry.