Citi to sell Russian personal installment loan portfolio to Uralsib

Citigroup Inc (C.N) said on Friday its Russian unit had agreed to sell a portfolio of personal installment loans to commercial bank Uralsib, as the major U.S. lender seeks to retreat from the country and reduce its exposure to Russia.

The bank will also sell a portfolio of credit card balances, if it secures customers’ consent.

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

Privately-owned Uralsib, among Russia’s top 30 by assets, also did not disclose the value of the deal but said that the loan portfolio has a credit quality ‘significantly higher than market’s average’, allowing the bank to increase its client base in Moscow and St Petersburg.

The deal comes as Russia this week banned dealings with shareholder capital of 45 banks, mostly units of Western and Asian lenders, including UniCredit (CRDI.MI), Raiffeisen (RBIV.VI) and Citi itself, unless there is a special waiver from the Kremlin.

Russian Central Bank Governor Elvira Nabiullina, asked about Citi’s deal with Uralsib, told a briefing on Friday that the ban covers only dealings with shareholder capital. She added that criteria for allowing such dealings are 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 had last year agreed to shed its retail operations in Russia as part of an overhaul led by Chief Executive Jane Fraser. The scope of the exit was expanded in March to include its commercial banking business after the Feb. 24 invasion of Ukraine.

In August, the bank said it was expecting to incur about $170 million in charges over the next 18 months as it wound down consumer and commercial banking operations in the country.

Other big U.S. banks, including Goldman Sachs Group Inc (GS.N) and JPMorgan Chase & Co (JPM.N), have also been exiting Russia after the country was hit with sanctions from the West.