Putin Approves Sale of Citi’s Russian Banking Operations

President Vladimir Putin has approved the sale of Citi’s banking business in Russia to Renaissance Capital, an investment firm owned by billionaire Mikhail Prokhorov, who once owned the Brooklyn Nets.

This confirmation came through a presidential order published on the Kremlin website, marking a significant move in CEO Jane Fraser’s strategy to exit the Russian market—three years after the onset of the war in Ukraine that has resulted in numerous casualties.

Renaissance Capital is part of Prokhorov’s Onesim conglomerate.

The 60-year-old Prokhorov sold his NBA team in 2019 for $2.3 billion, reportedly under pressure from Putin, and moved to Israel shortly after Russia began its military actions against Ukraine.

While the sale has faced challenges due to extensive Western sanctions and freezes on Russian assets, it still requires approval from U.S. regulators. This follows similar departures from firms like Goldman Sachs, Deutsche Bank, and Societe Generale.

A spokesperson for Citi noted that the transaction is contingent on additional approvals and refrained from providing further comments.

Details regarding the sale price or timeline were not disclosed in the announcement, though Bloomberg was first to report the news.

This development arrives shortly after Citi’s board elected Fraser as the chair and granted her a $25 million bonus in restricted stock.

Citi initiated efforts to divest its Russian consumer banking operations back in 2021 as part of Fraser’s broader restructuring plan. However, in August 2022, the company announced its decision to exit all consumer and commercial banking activities in Russia due to the ongoing conflict, which the Russian government refers to as a “special military operation.”

By the end of September, Citi’s exposure to Russia was approximately $11.7 billion, largely tied up in corporate dividends that the government is hindering transfers for.

Fraser intends to divest around 14 banking units globally, while Citi is also planning to shut down operations in South Korea and China and is in the process of selling its Polish subsidiary.

Additionally, Citi is weighing the sale of its Mexican consumer banking unit, known as Banamex, potentially through an IPO.