Citi to quit Argentina custody business

Citi Building Sign

Citibank said it will quit the custody business in Argentina after a U.S. judge refused to let the bank process local bond payments just weeks before a March 31 deadline for the nation to pay bondholders.

Bloomberg News reports that failure to make the payment would force the bank to violate Argentine law and endanger its ability to do business in the country, Citibank claimed.

Citigroup, the unit’s parent, is seeking to avoid taking larger steps that might include the sale of the entire unit or relinquishing its Argentine banking license.

'If the bank doesn’t make the payment the government will have legal grounds to revoke its license', said Javier Magnasco, a banking lawyer at Estudio Beccar Varela. 'Some options are nationalizing the bank or distributing its assets among other financial institutions'.

To access the complete Bloomberg News article hit the link below:

Citibank to Drop Argentine Bond Custody After U.S. Ruling

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