Citigroup: Accepting a Non-Cash Russia Exit Loss for a Cleaner Risk Profile and Modest Capital Uplift Supports Buy Rating

J.P. Morgan analyst Vivek Juneja has maintained their bullish stance on C stock, giving a Buy rating on December 19.

Vivek Juneja has given his Buy rating due to a combination of factors related to Citigroup’s restructuring of its Russia exposure and the modestly positive capital implications. He notes that while Citi will book a sizable accounting loss tied mainly to historical currency translation effects when it sells its remaining Russia operations, this largely reflects past movements already captured in accumulated other comprehensive income rather than a new hit to underlying earnings power. The planned sale, enabled by recent regulatory approval, represents the culmination of Citi’s gradual withdrawal from Russian consumer and commercial banking, reducing operational and geopolitical risk concentration.

Juneja also highlights that disposing of the Russian assets, much of which is cash placed with the Central Bank of Russia and subject to high regulatory risk weightings, should trim risk‑weighted assets and slightly lift Citi’s core Tier 1 capital ratio. The capital uplift, even if small in terms of basis points, improves the bank’s regulatory positioning while simplifying its balance sheet. In his view, the trade-off of a largely non-economic accounting loss for a cleaner risk profile and improved capital metrics supports a constructive outlook on the stock, underpinning his Buy recommendation on Citigroup.

In another report released on December 19, Piper Sandler also reiterated a Buy rating on the stock with a $120.00 price target.