Citigroup is looking to pare back its business in Russia. But the banking giant still has a significant presence there...and that is hurting the company and its investors.
Shares of Citi (C) fell 4% Monday morning after the company disclosed in its annual report filing with the Securities and Exchange Commission that it had $5.4 billion "in Russia credit and other exposures" as of the end of 2021. That's down from $5.5 billion at the end of the third quarter but still up slightly from 2020 year-end levels.
Citi said in the filing that it has a total of $8.2 billion in third-party exposure to Russia when cash and placements with the Bank of Russia and other financial institutions and reverse repurchase agreements with various counterparties are also included.
Citi noted in the filing that it is "pursuing the exit" of its global consumer banking business in Russia but it still expects to have a presence in Russia through its institutional clients group for businesses.
But Citi acknowledged in the annual report how uncertain conditions are regarding Russia.
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."