Financial and investment company from the United States, Citigroup Inc. announced its business exposure in Russia following new sanctions announced by Western countries against the country led by President Vladimir Putin.
Citigroup's total exposure in Russia stands at nearly $10 billion. the figure is higher than previously communicated.
The announcement of the exposure value was delivered by Citigroup on Monday (28/2) in response to questions that came up whether to set aside and to cover potential losses.
Citigroup lists Russia as 21 of the 25 countries with the greatest exposure. Total credit exposure, securities and funding commitments as of the end of December 2021 stood at US$5.4 billion, down slightly from US$5.5 billion as of September.
Based on regulatory filings with US exchanges quoted by Bloomberg, Tuesday (1/3), this US$ 5.4 billion exposure represents 0.3% of Citigroup's exposure in 2021.
Citigroup also provided further exposure details that were not previously disclosed.
The United States, Britain, Europe and Canada announced new sanctions against Russia on Saturday - including blocking certain banks' access to the SWIFT international payment system - following Russia's invasion of Ukraine. The sanctions could affect the value of Russian assets held by international banks.
Citigroup said other exposures included $1.0 billion in cash at the Bank of Russia and other financial institutions and $1.8 billion in reverse repos with various counterparties, taking total third-party exposure to $8.2 billion.
Citigroup also said it had $1.6 billion of exposure to additional Russian counterparties outside the Russian subsidiary that was not included in the $8.2 billion.
Mike Mayo, Wells Fargo analyst in his research said, Citigroup may have to add US $ 300 million in reserves to anticipate a potential loss of nearly US $ 3 billion from funded loans.
Mayo reduced his previous forecast for a 2022 profit, which he had made before Western countries imposed new sanctions on Russia, to spare costs. He said the consensus estimate from analysts was 20% to 25% too high.
Citigroup has generally warned of a potential blow to its business from rising tensions between the West and Russia after the invasion of Ukraine.
"Citi continues to monitor the current geopolitical situation and economic conditions in Russia-Ukraine and will reduce its exposure and risk accordingly," Citibank said.
