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Citigroup Confirms Russia Exit with $1.2 Billion Fourth-Quarter Hit

MarketDash Editorial Team
3 hours ago
Citigroup is finally closing the book on its Russian operations by selling AO Citibank, a move that will cost the bank roughly $1.2 billion in pre-tax losses during the fourth quarter of 2025.

Citigroup Inc. (C) announced Monday that its board has approved a plan to sell AO Citibank, marking the final chapter in the bank's withdrawal from Russian operations. It's been a long time coming, and it's going to hurt the bottom line.

AO Citibank currently sits within Citi's Services, Markets, Banking, and All Other—Legacy Franchises segments, which is basically banker-speak for "stuff we're dealing with." Starting in the fourth quarter of 2025, the business will be classified as held for sale, with the transaction expected to be signed and wrapped up during the first half of 2026.

The Price of Leaving

Here's where it gets expensive. Citigroup expects to record an estimated pre-tax loss of approximately $1.2 billion, or $1.1 billion after tax, in the fourth quarter of 2025. That's not pocket change, even for a major bank.

The bulk of that damage comes from roughly $1.6 billion in cumulative currency translation adjustment losses, which is what happens when you've been holding assets in a currency that's taken a beating. The good news is that this hit gets partially offset by about $200 million tied to the anticipated derecognition of a fully reserved net investment, plus another $200 million in expected sale proceeds, based on figures as of September 30, 2025.

Interestingly, when you factor in both the CTA loss recognition in the fourth quarter and the release of amounts from Accumulated Other Comprehensive Income at closing, the whole thing is expected to be capital neutral for Common Equity Tier 1. In other words, it stings on the income statement but doesn't fundamentally alter the bank's capital position. Of course, the final loss could shift depending on foreign exchange rate movements between now and closing.

Looking Ahead

Earlier this month, CFO Mark Mason provided some color on the bank's near-term outlook. Fourth-quarter Markets revenue is expected to decline in the low- to mid-single digits year over year, while investment banking fees are projected to climb in the mid-20% range. That's a solid showing for the investment banking side, which has been enjoying a rebound in deal activity.

Management also noted that severance costs will tick up in the fourth quarter but should decline next year, alongside lower transformation expenses. The bank remains committed to hitting its target efficiency ratio of below 60% in 2026, a key metric investors will be watching closely.

Mason also addressed the leadership transition to incoming CFO Gonzalo Luchetti, emphasizing that the handoff is structured to ensure continuity. Luchetti, for his part, expressed confidence in improving returns as he steps into the role.

C Price Action: Citigroup shares were up 0.29% at $118.46 during premarket trading on Tuesday. The stock is approaching its 52-week high of $122.84.

Back to Stock Market News

Citigroup Confirms Russia Exit with $1.2 Billion Fourth-Quarter Hit

MarketDash Editorial Team
3 hours ago
Citigroup is finally closing the book on its Russian operations by selling AO Citibank, a move that will cost the bank roughly $1.2 billion in pre-tax losses during the fourth quarter of 2025.

Citigroup Inc. (C) announced Monday that its board has approved a plan to sell AO Citibank, marking the final chapter in the bank's withdrawal from Russian operations. It's been a long time coming, and it's going to hurt the bottom line.

AO Citibank currently sits within Citi's Services, Markets, Banking, and All Other—Legacy Franchises segments, which is basically banker-speak for "stuff we're dealing with." Starting in the fourth quarter of 2025, the business will be classified as held for sale, with the transaction expected to be signed and wrapped up during the first half of 2026.

The Price of Leaving

Here's where it gets expensive. Citigroup expects to record an estimated pre-tax loss of approximately $1.2 billion, or $1.1 billion after tax, in the fourth quarter of 2025. That's not pocket change, even for a major bank.

The bulk of that damage comes from roughly $1.6 billion in cumulative currency translation adjustment losses, which is what happens when you've been holding assets in a currency that's taken a beating. The good news is that this hit gets partially offset by about $200 million tied to the anticipated derecognition of a fully reserved net investment, plus another $200 million in expected sale proceeds, based on figures as of September 30, 2025.

Interestingly, when you factor in both the CTA loss recognition in the fourth quarter and the release of amounts from Accumulated Other Comprehensive Income at closing, the whole thing is expected to be capital neutral for Common Equity Tier 1. In other words, it stings on the income statement but doesn't fundamentally alter the bank's capital position. Of course, the final loss could shift depending on foreign exchange rate movements between now and closing.

Looking Ahead

Earlier this month, CFO Mark Mason provided some color on the bank's near-term outlook. Fourth-quarter Markets revenue is expected to decline in the low- to mid-single digits year over year, while investment banking fees are projected to climb in the mid-20% range. That's a solid showing for the investment banking side, which has been enjoying a rebound in deal activity.

Management also noted that severance costs will tick up in the fourth quarter but should decline next year, alongside lower transformation expenses. The bank remains committed to hitting its target efficiency ratio of below 60% in 2026, a key metric investors will be watching closely.

Mason also addressed the leadership transition to incoming CFO Gonzalo Luchetti, emphasizing that the handoff is structured to ensure continuity. Luchetti, for his part, expressed confidence in improving returns as he steps into the role.

C Price Action: Citigroup shares were up 0.29% at $118.46 during premarket trading on Tuesday. The stock is approaching its 52-week high of $122.84.