Plan to sell retail banks in Russia 'collapsed', Citigroup may have only option to close

 Plan to sell retail banks in Russia 'collapsed', Citigroup may have only option to close

Citigroup's plan to sell its retail banking business in Russia is facing legal troubles as Russia conducts its military campaign in Ukraine.

This means that Citigroup may have to actively reduce the scale of operations in this market, according to the Financial Times.

Citigroup's plan to withdraw from Russia was activated nearly a year ago amid CEO Jane Fraser's desire to reorganize the global retail banking business, which has not been as effective as expected.

However, at present, Citigroup does not have many potential partners for this position because Russia is suffering from a series of sanctions from Western countries. Experts say that this fact could lead Citigroup to accept an expensive asset write-off.

"We're running out of options… closing everything might be our only option," said a source inside Citi.

Citibank currently has 10 retail banking branches in Russia. (Photo: Reuters).

In a statement sent to the FT, Citi said it will continue to try to exit the retail business in Russia: "While trying to do that, we operate to a more limited extent given the situation and obligations present".

Hundreds of companies in Western countries have announced their withdrawal from Russia recently. Several companies, including major oil companies such as BP and ExxonMobil, have said they will withdraw shares in several joint ventures with Russia following a dispute between Russia and Ukraine.

"If you're a Western company trying to divest investments in Russia, whatever they may be, it's going to be very difficult to do so," said Brian O'Toole, a former Treasury Department employee. America, comments.

In its announcement on March 9, Citi said that it is still "supporting corporate clients in Russia, including many European and US multinationals, as they exit or downsize. With the Russian economy in the process of being disconnected from the global financial system, we continue to evaluate our operations here."

In fact, Citi wanted to sell its retail banking business in Russia before the dispute with Ukraine broke out. Last month, the US bank said it has nearly $10 billion worth of Russia-related assets in the form of loans, government debt and other assets, partly managed by its banking business. retailers in Russia.

Some Wall Street experts say that a sale made in a country amid many US and European sanctions is unprecedented "in the memory of people". alive".

Last week, Ms. Fraser said that the situation in Russia was "flowing" and that "it is still too early to know exactly how it will affect our buying and selling process".