American multinational investment giant Citigroup’s board approved the sale of its Russian unit, AO Citibank, to Renaissance Capital, in a deal that will lead to a pre-tax loss of about USD 1.2 billion that is largely related to currency translation. As per the latest SEC filing, the deal is expected to close in the first half of 2026.
“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 (AOCI) until closing,” the bank remarked in a separate statement.
“CTA is an accounting method that captures gains or losses from converting a foreign subsidiary’s financial statements from its local currency to the parent company’s reporting currency. AOCI is a component of equity on a company’s balance sheet that captures certain unrealised gains and losses not recognised in net income. The cumulative impact of the moves would be capital neutral to Citi’s common equity tier 1 capital,” the venture stated.
As per Citigroup’s leadership, the loss related to the sale is subject to further changes, including as a result of foreign exchange movements. The multinational investment giant will classify its remaining business in Russia as “held for sale” as of the fourth quarter of 2025.
In November this year, Russian President Vladimir Putin gave permission for Renaissance Capital to buy Citibank’s Russian operations. Since the beginning of the Ukraine war, Moscow has imposed strict exit rules for foreign businesses, requiring steep asset sales, mandatory “exit taxes,” as well as government approval, making it very difficult and costly for companies to leave.
In August 2022, Citigroup announced that, as part of its ongoing efforts to reduce its operations and exposure in the country, it was winding down its consumer banking and local commercial banking operations.