Citibank’s Kazakhstani subsidiary has informed its clients that it would stop servicing Russian ruble accounts starting from Sept. 24, 2024, according to Frank Media, a Russian media outlet, citing the bank’s support service.
«Starting from Sep. 24, new Russian ruble currency agreements will no longer be accepted and existing accounts will not be serviced. This also applies to contract parties based in Russia,» a source from the media outlet explained.
Citibank Kazakhstan advises clients to convert their rubles to another currency or close their ruble accounts by the end of next month. Starting from Sept. 24, the bank will stop accepting payments and transfers to Russia and will no longer offer prices for any foreign exchange pairs involving the Russian ruble, including for incoming foreign currency proceeds. Until then, the maximum daily limit for transactions nominated in the ruble shall not exceed $1 million per client.
At the time of publication, Citibank Kazakhstan hasn’t responded to Kursiv.media’s inquiry. However, current clients of the Russian subsidiary are still able to execute cross-border transactions in the Russian ruble, while the new ones may not, due to the closing of the bank’s business in Russia.
The group reminded that, a year ago, it ceased almost all investment banking services in Russia but continues to offer only those services necessary to meet legal and regulatory obligations. The company is in the process of shutting down its retail and corporate banking operations in Russia, with only one branch remaining as of mid-June 2024.
After Russia waged a full-scale invasion of Ukraine in February 2022, Citigroup stopped attracting new customers but continued to fulfill its obligations to depositors. The group initially announced its intention to abandon the Russian retail business in April 2021.
Citibank was founded in 1812 as City Bank of New York and is now one of the largest banks in the world, part of the Citigroup financial conglomerate. It has been operating in Kazakhstan since 1994 and obtained a license for banking and securities market operations in 1998.
Citibank Kazakhstan reported a net income of $106.4 million over the first six months of 2024, representing an 11.7% decline compared to the same period in 2023. Year-to-date, the bank’s assets increased by 5.8% to $2.4 billion, while its liabilities rose by 4.2% to $2.08 billion. Equity capital reached $305 million, marking an 18.1% increase from January to June of the previous year.
RBC, a Russian business media outlet, reported in July that the average time for processing payments between banks in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Russian financial organizations increased to up to two weeks, representing a 15% delay compared to June. Additionally, the payment rejection rate among these banks allegedly rose by 30% since June. However, in response to Kursiv.media’s inquiry, Kazakhstani banks such as Kaspi Bank, Bank CenterCredit and ForteBank, stated that they had not observed more frequent refusals to process payments from clients in Russia unless those clients were under sanctions.
On July 3, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury released a list of individuals and entities warning that anyone dealing with them could be targeted with secondary sanctions. This list includes VTB Kazakhstan, which is the only remaining subsidiary of the sanctioned Russian bank in Kazakhstan.
