Citigroup Inc. said on Monday it had nearly $10 billion in total exposures to Russia at the end of 2021, and that is hurting the New York giant and its investors.
Shares of Citi fell 4% Monday morning after the company disclosed in its annual report filing with the Securities and Exchange Commission (SEC) that it had 5.4% billion “Russian credit and other exposures” as of the end of 2021. That’s down from $5.5 billion at the end of September 2021 but still up slightly from 2020 year-end levels.
Citigroup, which bills itself as the world’s truly global bank, said in the filing that it has a total of $8.2 billion at its investment banking and retail operations in Russia through corporate and consumer loans, reverse repurchase agreements, local government debt and deposits with Russia’s central bank, which was hit with sanctions on Sunday.
“Citi’s ability to engage in activity with certain consumer and institutional businesses in Russia and Ukraine or involving certain Russian or Ukrainian businesses and customers is dependent in part upon whether such engagement is restricted under any current or expected U.S., EU and other countries or U.K. sanctions and laws,” the bank said.
Citi added that “sanctions and export controls, as well as any actions by Russia, could adversely affect Citi’s business activities and customers in and from Russia and Ukraine” and that the bank “will mitigate its exposures and risks as appropriate.”
“Citi continues to monitor the current Russia–Ukraine geopolitical situation and economic conditions and will mitigate its exposures and risks as appropriate,” the bank said in the filing.
The exposure is a fraction of Citigroup’s overall business, with the bank holding $2.29 trillion of assets at the end of 2021. While it’s exposure, and not losses, it’s nonetheless an unwelcome distraction ahead of Investor Day on Wednesday where Jane Fraser, CEO since last year, will outline her road map for the bank.
As part of Fraser’s strategy, Citigroup is to exit about a dozen markets from its far-flung international retail network, including Russia. The New York giant said in the filing that it was still seeking to exit the Russian retail market.
Goldman Sachs estimated that its exposure to credit losses in Russia was $650 million, compared to $414 million at the end of last year.
