Citigroup on Monday said its 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 US$1.2 billion that is largely related to currency translation.

The deal is expected to close in the first half of 2026, according to an SEC filing.

"The approvals result in a pre-tax loss on the sale for the fourth quarter of 2025, largely related to the currency translation adjustment losses that will also remain in Accumulated Other Comprehensive Income until closing," the bank said 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 unrealized gains and losses not recognized in net income.

The cumulative impact of the moves would be capital neutral to Citi's common equity tier 1 capital, it said.

The loss related to the sale is subject to further changes, including as a result of foreign exchange movements, Citi said.

Citi will classify its remaining business in Russia as "held for sale" as of the fourth quarter of 2025.

Last month, Russian President Vladimir Putin gave permission for Renaissance Capital to buy the Russian operations of Citibank.

In August 2022, Citi announced that, as part of its ongoing efforts to reduce its operations and exposure in Russia, it was winding down its consumer banking and local commercial banking operations.

REUTERS

Citigroup board approves sale of Russia unit, flags US$1.2 billion loss