Citibank has decided to exit custodial business in Argentina following a US court ruling that prevented it from passing interest payments from Argentina to local bondholders.
In a letter to the US district judge Thomas Griesa, the law firm representing Citibank said it made its decision in light of his March 12 order letting the injunction stand, and Argentina’s renewed threats to strip Citibank Argentina of its banking license and to impose criminal, civil and administrative sanctions.
"The precise manner by which Citibank Argentina will exit the custody business has yet to be finally determined, but it may include the sale of certain portions of the custody business or termination of account relationships with notice to its customers," the letter read.
The bank also again asked the judge to put his order, which it hopes to overturn, on hold as it prepares to exit the custody business.
The bank called itself the victim of an "unprecedented international conflict of laws."