History of Citi in Russia

First National City Bank branch in Russia, Petrograd, 1917

Citi named at that time National City Bank (NCB) first entered Russia on the eve of the Revolution in 1917 in Petrograd after underwriting bonds to support the government of the Russian Empire in 1916. Even as the battles raged in the streets of Petrograd, the bank established a new branch in Moscow, and then in Vladivostok. On March 13, 1920, all three branches were closed.

Between 1920 and 1970, diplomatic and economic difficulties, followed by WWII and then the Cold War prevented the bank from re-entering the country. In the 1970s, however, during the period of detente US-Soviet trade increased and there was greater contact between the two countries. In June 1973, the Soviet government gave Citi permission to establish a limited presence in the USSR and, in 1974, the bank opened a representative office in Moscow. Six years later, with the onset of the Afghanistan War and increasing tensions between the East and the West, the office was shut down.

In 1992, following the collapse of the Soviet Union and emergence of the Russian Federation on the global marketplace, Citi once again had the opportunity to open a representative office in Moscow. Having opened its office on October 1, 1992, by November 1, 1993, the bank had received all the necessary licenses to provide banking services in the Russian Federation, thus becoming one of the first international banks to enter the Russian market. In January 1994, Citi was inaugurated as a financial institution focused on corporate banking services, financing and trade. In 1995, Citi advised Mosenergo — the largest generating company operating on fossil fuel in Russia — on the first-ever ADR issue by a Russian company. It was Citi Russia’s first major deal after its opening. On February 7, 1996, the bank opened a branch in St. Petersburg. Citi engaged in business and development financing for government bodies and a wide spectrum of corporate clients.

In 1998, Russia was hit by a financial crisis; although many other international banks left, Citi remained. As a result, Citi Russia became stronger and greatly expanded its presence in the Russian market. In November 2002, the bank launched a retail banking business and began to expand its presence with new branches and sales centers. By 2010, Citi’s retail operations in Russia were serving more than one million Russian clients.

In 2010, Citi acted as the joint lead manager of a USD 5.5 billion bond placement for Russia, the second largest dollar debt placement by an emerging market and Russia’s first placement in the global capital markets since 1998.

In 2011, Citi was chosen by HSBC as its preferred partner for winding down its retail operations in the country. HSBC’s retail clients in Moscow and St. Petersburg have the option to transfer their current and deposit accounts to Citi Russia.

In 2013, Citi marked a major milestone in our role as a leading international debt capital market intermediary: $100 billion in funds raised for Russian and CIS Eurobond issuers since participating in the debut placement in 1997.

In 2014, Citi’s focus on innovative formats in the development of Citi’s branch network has been very visible. The bank opened three Smart Branches — full-service retail branches which place a strong emphasis on digital technologies and require minimal staffing. Smart Branches are helping Citi to make the consumer banking network one of the most efficient in the industry.

In 2014 Citi coordinated one of the major deals in that year with Phos Agro’s $440 million ECA-backed financing to fund construction of a new ammonia plant.

In 2015 according to Dealogic, Citi was No.1 in cross-border M&A in Russia. Citi advised on a number of Jumbo cross-border M&A deals, including Naspers’ $1.2 billion acquisition of a 50.5% stake in Avito, the largest technology M&A transaction ever in Russia and one of the largest Internet M&A transactions ever in EMEA. Citi played a key role in the one of the most significant cross-border M&A activity in Russia in 2016 — the sale of major stakes in Rosneft’s giant Vankor oil field to a group of Indian companies. This was not only the largest M&A deal of the year in Russia (totaling nearly USD 3 billion), it was also the largest ever acquisition by an Indian consortium outside of India.

In 2016 Citi employed for the first time a new escrow solution under Russian law for two foreign entities. Citi continuingly works on development of new client services, and in 2017 Citibank launched the new online service in Citibank Online — «Traffic fines and taxes». Clients are able to not only pay fines through this service, but also check traffic fines and overdue taxes.

In 2017 Citi also invested in its private client infrastructure in Moscow by opening an upscale office to serve its wealthy clients on the 10th floor of Lotte Plaza Business Center on Novy Arbat. Citi is a leading provider of depositary receipt services and in 2017 Citi’s Issuer Services business, acting through Citibank, N.A., has been appointed by PJSC «LUKOIL» («LUKOIL»), one of the world’s largest oil and gas companies, as the successor depositary bank for its sponsored American Depositary Receipt (ADR) programs.