Citigroup has confirmed that its board has approved the sale of its Russian arm, AO Citibank, to Renaissance Capital, a move that will result in an estimated pre-tax loss of about $1.2 billion, largely tied to currency translation effects.

Details of the transaction were disclosed in a filing with the US Securities and Exchange Commission, with completion expected in the first half of 2026.

In a separate statement, the bank said: “The approvals result in a pre-tax loss on the sale for the fourth quarter of 2025, largely related to the currency translation adjustment (CTA) losses that will also remain in Accumulated Other Comprehensive Income (AOCI) until closing.”

CTA refers to the accounting process that records gains or losses when converting a subsidiary’s financial statements from its local currency into the parent company’s reporting currency. AOCI, meanwhile, is part of equity on the balance sheet that reflects specific unrealised gains and losses that do not flow through net income.

Citi noted that the overall effect of the planned sale would be capital neutral for its common equity tier 1 capital, although the size of the loss may change depending on foreign exchange movements.

The bank said it will classify its remaining operations in Russia as “held for sale” from the fourth quarter of 2025.

The approval follows Russian President Vladimir Putin granting permission last month for Renaissance Capital to acquire Citibank’s Russian business. Citi had earlier announced in August 2022 that it was winding down its consumer and local commercial banking operations in Russia as part of its wider exit strategy.