What happened
The stock market started out deep in the red Monday, but rebounded significantly throughout the first couple of hours of trading. By noon ET, the S&P 500 had recovered to the point where it was down by just 0.5% for the day.
However, mega-bank Citigroup (C -1.09%) was a major underperformer, with shares still down by 4% after being off by as much as 5% earlier in the session.
So what
Citigroup reported on Monday that it had $5.4 billion in exposure to Russian assets as of the end of December, and warned that it could potentially take a hit as nations around the world impose financial sanctions on that country and its banks in response to the invasion of Ukraine. Including indirect exposures, Citigroup has nearly $10 billion in total Russian exposure.
This is more Russian exposure than most other U.S. banks have. In fact, uniquely among major U.S. banking institutions, Citigroup operates physical branches and offices in both Russia and Ukraine. This explains why it is significantly underperforming its big-bank peers Monday.
Image source: Getty Images.
Now what
This is certainly a concerning issue, but it's important for investors to view it in context. Citigroup has nearly $2.3 trillion in assets. As such, its Russian exposure amounts to less than 0.5% of its total.
However, the reality is that Citigroup does hold billions of dollars in now-troubled Russian assets, and these could ultimately turn into substantial losses for the bank and its shareholders. Citi was already planning to sell its Russian consumer banking unit, but it hasn't done so yet, and the current situation will make such a sale much more complicated.
