Citigroup Cuts Russia Assets as Sanctions Threaten Franchise

Aug 01, 2014 7:59 am ET

Aug. 1 (Bloomberg) -- Citigroup Inc., the U.S. bank with the most branches in Russia, again cut its exposure to the nation amid sanctions intended to end the unrest in Ukraine.

Total exposure fell 5.3 percent to $8.9 billion in the three months ended June 30, the New York-based bank said today in a quarterly regulatory filing.

“The ongoing instability in Russia and Ukraine has been a cause of concern to investors in Russian assets and parties doing business in Russia or with Russian entities, including as a result of the potential risk of wider repercussions on Russian trade and investment, including the effects from current or additional sanctions,” the bank said in the filing.

Lenders in the U.S. and European Union are doing less business with customers in Russia as stiffer sanctions against companies there threaten to slow the economy or prevent debt collection. Bank of America Corp., the second-biggest U.S. bank by assets, cut loans to customers in Russia by 41 percent in the first half of the year to $3.9 billion.

Citigroup, which has more than 50 branches in Russia, returned to the country in 1992 following the collapse of the Soviet Union, ending a 72-year absence.