Citigroup to Discontinue Some Bank Operations in Venezuela

  • Venezuelan President Maduro calls plans ‘a financial blockade’
  • Bank remains committed to doing business there, spokesman says

Citigroup Inc. said it plans to discontinue some banking operations in Venezuela, a move the country’s president described as a “financial blockade.”

The lender has decided to stop correspondent banking and servicing some accounts in the South American nation, New York-based Citigroup said in an e-mailed statement. The firm said the decision “is not a reflection of our commitment” to the country, and that it will continue discussions with the administration of Venezuela President Nicolas Maduro.

“We decided to stop providing correspondent banking services to all clients in Venezuela, public or private,” Citigroup spokesman Juan Iramain said Tuesday in a phone interview from Miami, adding that about 20 clients were affected. “This doesn’t imply any decision to reduce our presence in Venezuela, or leave the country or stop operating there.”

Foreign companies have been pulling out of Venezuela amid soaring inflation, a shortage of hard currency and mounting political turmoil. Maduro is locked in a power struggle with opposition lawmakers who, in December elections, gained control of the National Assembly for the first time in 16 years and are pushing for a referendum to recall him.

‘Going Forward’

Maduro, speaking Monday on state television, said his government was notified by Citigroup that it will close accounts belonging to the Venezuela Central Bank within 30 days. The government, which put strict currency controls in place last decade, relies on the bank for foreign currency transactions.

“With or without Citibank, we’re going forward,” Maduro said.

Citigroup’s decision wasn’t political, Iramain said, adding that the bank has closed correspondent banking services in other countries this year. He said the lender, which has been in Venezuela for 99 years, is willing to help clients move their accounts to other banks.

The Venezuelan subsidiary has been closing some credit-card accounts since last year, but the consumer-banking unit will continue operations with a focus on “affluent and emerging affluent sectors in the principal cities where we have competitive advantages,” according to Ivette Saez, a Citigroup spokeswoman in Caracas.

“We can’t compete everywhere with everyone,” Saez said in a telephone interview. “We have to focus where we can be more competitive.”

Citigroup shares climbed 2.2 percent to $43.23 at 12:37 p.m. in New York. The stock has fallen 16 percent this year.

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