Citigroup’s shares gained on Nov. 12 after Russian President Vladimir Putin approved the sale of the US banking group’s Russian subsidiary to Renaissance Capital.
Citigroup stock rose 3.07% during Wednesday trading on the New York Stock Exchange, reaching an intraday high of $103.86. As of 18:53 New York time, gains tapered off to 2.68%, with shares trading at $103.47.
The decree grants permission for Renaissance Capital to acquire 100% of Citibank Russia, the Russian news outlet RBK reported.
Citigroup first announced plans to wind down its retail operations in Russia in spring 2021 as part of a broader strategy to scale back its presence in 13 markets.
After Russia launched its full-scale invasion of Ukraine in 2022, the group said it would halt almost all remaining operations, including services for individuals and small and medium-sized businesses.
In October 2022, Citibank Russia sold its consumer loan portfolio to UralSib Bank. “These transactions are part of Citi’s plan to reduce its operations and presence in Russia,” the group said at the time.
RBK wrote that Renaissance Capital, established in 1995, operates across Russia’s financial market, including securities and derivatives trading, equity and debt capital transactions, M&A advisory, and analytical research.
According to Bloomberg, Renaissance Capital is one of Russia’s longest-established investment banks, which rose to prominence during a period rife with post-Soviet privatizations and helped multiple companies list in Moscow and London.
While the firm scaled back its offices in London, New York and Johannesburg after 2022, its Russian operations have continued.
Putin has recently approved several exits by Western banks from the country, Bloomberg previously wrote.
Earlier this year, he allowed Goldman Sachs to sell its local business to Balchug Capital, weeks after granting similar approval for Natixis to leave the market. In January, ING agreed to sell its Russia operations to Global Development JSC, a Moscow-based investment company.
Under the decree governing transactions with firms from “unfriendly” states, the deals of companies leaving the Russian market require clearance from a special government commission and often involve steep valuation discounts or mandatory contributions to the state budget.
Despite pledges to wind down their operations, some Western banks have remained active in Russia due to regulatory restrictions and lengthy approval processes.
Citigroup, which has already terminated most institutional banking services and is closing its consumer and commercial operations, still reported $13.5 billion in Russia-linked exposure as of September – up from $9.1 billion a year earlier, largely due to corporate dividends received by clients in the third quarter.