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March 10, 2022

Ukraine crisis: Citi running out of options for Russian retail business

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict

After Russia invaded Ukraine, US banking major Citi’s plan to divest its Russian retail operations, which is being operated on a “limited basis”, has hit a roadblock. 

Citi will continue its efforts to exit the retail banking market in Russia, Citi global public affairs executive president Edward Skyle said in a blog. 

“As we work toward that exit, we are operating that business on a more limited basis given current circumstances and obligations,” Skyle added. 

As per the Financial Times’ report, the American banking giant is running out of options for its retail arm after the US and its allies bombarded Russia with financial sanctions.

“We are running out of options . . . shutting down everything might be our only option,” a Citi insider was quoted by the publication as saying. 

The sanctions have forced several American and European firms to rapidly reduce their Russian presence. 

Skyle said Citi is also helping its corporate clients in Russia as they are suspending or winding down their Russian operations. 

“With the Russian economy in the process of being disconnected from the global financial system as a consequence of the invasion, we continue to assess our operations in the country,” Skyle wrote. 

Last week, Citi warned that its Russian arm could lose billions of dollars as the geopolitical tensions due to the Ukraine crisis keep mounting. 

In Russia, where it operates both retail and investment banking units, Citi’s exposure was nearly $10bn at the end of 2021.