Core Viewpoint - Citigroup has received board approval to divest its last operational entity in Russia, AO Citibank, to Renaissance Capital, marking the end of its withdrawal from the Russian market amid geopolitical tensions [1][2] Group 1: Divestiture Details - The divestiture is part of Citigroup's strategy to reduce its exposure to Russia, initiated after the 2022 invasion of Ukraine and subsequent international sanctions [2] - The transaction is expected to result in a pre-tax loss of approximately $1.2 billion in Q4 2025, translating to about $1.1 billion after taxes, primarily due to currency translation adjustments [3][4] - Citigroup plans to reclassify its remaining Russian assets as "held for sale" in the current quarter's financial reporting [4] Group 2: Financial Implications - The divestiture is anticipated to strengthen Citigroup's capital position by offloading risk-weighted assets, positively impacting its Common Equity Tier 1 (CET1) ratio [5] - The deal is projected to be finalized in the first half of 2026, pending regulatory approvals [5] Group 3: Strategic Alignment - This move aligns with CEO Jane Fraser's strategy to streamline operations and focus on higher-return areas such as wealth management in Asia and the Middle East [6] - The sale reflects a broader trend of Western banks retreating from Russia due to strict exit rules and high costs associated with departures [6] Group 4: Renaissance Capital's Position - For Renaissance Capital, the acquisition aims to enhance its domestic presence by absorbing clients and infrastructure left by foreign banks [7] - The transaction highlights how geopolitical risks are reshaping international banking, emphasizing stability over expansion in volatile markets [7]