Citigroup Inc said its Russian unit agreed to sell a portfolio of personal installment loans to commercial bank Uralsib as the major US lender seeks to exit the country and reduce its exposure to Russia.
If customers agree, the bank will also sell a portfolio of credit card balances.
The financial terms of the transaction were not disclosed by Citi. Under the terms of the agreement, the bank will not transfer any of its employees or branches to Uralsib.
Uralsib, a privately owned bank that ranks among Russia's top 30 in terms of assets, did not disclose the value of the transaction but stated that the loan portfolio has a credit quality that is "significantly higher than the market average," allowing the bank to expand its client base in Moscow and St. Petersburg.
The agreement comes as Russia this week prohibited dealings with shareholder capital of 45 banks, mostly units of Western and Asian lenders, including UniCredit, Raiffeisen, and Citi itself, unless a special waiver is obtained from the Kremlin. more info
Central Bank of Russia When asked about Citi's deal with Uralsib, Governor Elvira Nabiullina told a press conference on Friday that the ban only applies to dealings with shareholder capital. She also stated that the criteria for allowing such transactions have yet to be established.
"Until such criteria are established, work is underway on the decree. The whole set of factors will be considered," Nabiullina said. "And as for the ability to sell assets, the decree applies only to transactions with shares."
Citi agreed to sell its retail operations in Russia last year as part of an overhaul led by Chief Executive Jane Fraser. Following the February 24 invasion of Ukraine, the scope of the exit was expanded in March to include its commercial banking business.
In August, the bank stated that it expected to incur approximately $170 million in charges over the next 18 months as it closed its consumer and commercial banking operations in the country.
Other major US banks, including Goldman Sachs Group Inc and JPMorgan Chase & Co, have also pulled out of Russia since the country was sanctioned by the West.
(Source:www.nasdaq.com)
If customers agree, the bank will also sell a portfolio of credit card balances.
The financial terms of the transaction were not disclosed by Citi. Under the terms of the agreement, the bank will not transfer any of its employees or branches to Uralsib.
Uralsib, a privately owned bank that ranks among Russia's top 30 in terms of assets, did not disclose the value of the transaction but stated that the loan portfolio has a credit quality that is "significantly higher than the market average," allowing the bank to expand its client base in Moscow and St. Petersburg.
The agreement comes as Russia this week prohibited dealings with shareholder capital of 45 banks, mostly units of Western and Asian lenders, including UniCredit, Raiffeisen, and Citi itself, unless a special waiver is obtained from the Kremlin. more info
Central Bank of Russia When asked about Citi's deal with Uralsib, Governor Elvira Nabiullina told a press conference on Friday that the ban only applies to dealings with shareholder capital. She also stated that the criteria for allowing such transactions have yet to be established.
"Until such criteria are established, work is underway on the decree. The whole set of factors will be considered," Nabiullina said. "And as for the ability to sell assets, the decree applies only to transactions with shares."
Citi agreed to sell its retail operations in Russia last year as part of an overhaul led by Chief Executive Jane Fraser. Following the February 24 invasion of Ukraine, the scope of the exit was expanded in March to include its commercial banking business.
In August, the bank stated that it expected to incur approximately $170 million in charges over the next 18 months as it closed its consumer and commercial banking operations in the country.
Other major US banks, including Goldman Sachs Group Inc and JPMorgan Chase & Co, have also pulled out of Russia since the country was sanctioned by the West.
(Source:www.nasdaq.com)
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