Citi sells Russian personal loan portfolio to Uralsib

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Oct 28 (Reuters) – Citigroup Inc (CN) said on Friday its Russian unit has agreed to sell a portfolio of installment loans to commercial bank Uralsib as the largest US lender seeks to pull out of the country and its involvement to reduce in Russia.

The bank will also sell a portfolio of credit card balances if it gets customers’ approval.

Citi did not disclose financial details of the deal. The bank will not transfer any of its employees and branches to Uralsib as part of the deal.

Privately-held Uralsib, which ranks among Russia’s top 30 companies by assets, also didn’t disclose the value of the deal, but said the loan portfolio had a credit quality “well above the market average,” giving the bank allow to expand their customer base in Moscow and Russia St. Petersburg.

The deal comes as Russia this week banned trading in shareholder capital of 45 banks, mostly units of Western and Asian lenders including UniCredit (CRDI.MI), Raiffeisen (RBIV.VI) and Citi itself, unless there are a special derogation Kremlin. Continue reading

Asked about Citi’s deal with Uralsib, Central Bank of Russia Governor Elvira Nabiullina said at a briefing on Friday that the ban only affects trading in shareholder capital. She added that the criteria for allowing such deals have yet to be determined.

“Until such criteria are established, the decree is being worked on. All factors are taken into account,” said Nabiullina. “And as for the ability to sell assets, the decree only applies to transactions involving shares.”

Citi last year agreed to wind down its retail operations in Russia as part of an overhaul led by Chief Executive Jane Fraser. The scope of the exit was expanded to include commercial banking in March following the February 24 invasion of Ukraine.

In August, the bank said it expects to incur costs of about $170 million over the next 18 months as it handles consumer and commercial banking in the country.

Other major US banks, including Goldman Sachs Group Inc (GS.N) and JPMorgan Chase & Co (JPM.N), have also exited Russia after the country was hit by Western sanctions.

Reporting by Niket Nishant in Bengaluru; Edited by Shounak Dasgupta, Arun Koyyur and Jonathan Oatis

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