Citigroup accelerates exit from Russian operations

Citigroup on Friday announced plans to shut down its institutional banking operations in Russia as Vladimir Putin’s assault on Ukraine stretches into its seventh month.

Citi had said in August that it would wind down its consumer and local commercial operations in the country. At the time, the bank said it was not closing its investment banking or transaction services businesses in Russia, but was not taking on new clients.

Chief executive Jane Fraser on Friday said the bank “will be ending nearly all of the institutional banking services we offer (in Russia) next quarter”.

She added: “To be clear, our intention is to wind down our presence in this country.”

The bank said it had begun informing clients with operations in Russia that it would cease most services in the country by the end of the first quarter of 2023.

The announcement came as the bank reported a 25 per cent decline in third-quarter profit, driven by an increase in credit costs and lower revenue from markets and corporate banking.

Citigroup put its Russian consumer bank up for sale early last year as part of Fraser’s plan to turn round the company, but efforts to pull out of the country accelerated after Russia invaded Ukraine in late February. Since the beginning of the year, the group has reduced potential losses tied to its Russian exposure from $4bn to $2bn.

Overall, the New York-based bank reported net income of $3.5bn, or $1.63 a share, down from $4.6bn, or $2.15 a share, a year earlier. Revenue rose 6 per cent to $18.5bn, reflecting a one-time gain from the sale of Citi’s Philippines consumer business. Excluding the impact of the sale, revenue declined 1 per cent.

Analysts polled by FactSet had forecast earnings of $1.42 per share on $18.3bn in revenue.

Shares closed almost 0.7 per cent higher on Friday, outperforming a 2.4 per cent decline for the S&P 500.