Citibank, a longtime player in Haiti’s finances, leaves the country

Citi, the banking giant with ties to controversial financial dealings in Haiti’s history, announced July 8 that it is ceasing operations there.

With Citi’s departure, Haiti will no longer have any international banks operating within its borders. Despite the exit, the entity many Haitians still call Citibank will maintain its international and correspondent banking services for existing clients in the country.

“This difficult decision is part of a strategic business review done against client segments and market conditions and was made in part due to diminished international activity and lower institutional client demand in the country,” said Citi in a statement. 

The bank stressed that the decision would not materially affect its overall economic standing or its international clientele. The exit entails Citi surrendering its banking license with approval from Banque de la République d’Haiti (BRH).

A financial history marred by controversy 

The company first opened a branch in the country in 1971. Its departure ends a presence in Haiti that reaches back through the 19 and 20th centuries, through its predecessors’ controversial dealings during the U.S. occupation and indemnity Haiti paid to France after gaining independence from the former colonial power.

During the U.S. occupation of Haiti from 1915 to 1934, Citi, then known as National City Bank, took control of Haiti’s national bank and transferred the country’s financial reserves to the United States.

“Under heavy pressure from National City Bank, Citigroup’s predecessor, the Americans elbowed the French aside and became the dominant power in Haiti for decades to come,” The New York Times reported in a 2022 investigation looking into Haiti’s political journey since the country’s inception. 

“The United States dissolved Haiti’s parliament at gunpoint, killed thousands of people, controlled its finances for more than 30 years, shipped a big portion of its earnings to bankers in New York and left behind a country so poor that the farmers who helped generate the profits often lived on a diet ‘close to starvation level,’ United Nations officials determined in 1949, soon after the Americans let go of the reins.”

Even prior to the occupation, Citi played a significant role in the financial arrangements surrounding Haiti’s forced indemnity payments to France, which involved money borrowed from French and U.S. financial institutions, including Citi. In 1911, when such large payments became impossible for Haiti and defaults occurred,  the U.S. government funded the acquisition of Haiti’s treasury to ensure interest payments related to the indemnity. 

By 1922, the remaining debt to France was transferred to American investors, primarily through Citi, which acquired the Banque Nationale de la République d’Haïti (BNRH), now BRH. This acquisition meant that Haiti’s debt, initially owed to France, was now owed to American financial institutions, including Citibank.

Haiti continued to make payments on this debt until 1947, when the final indemnity remittance was made to Citi. This prolonged period of debt repayment had devastating economic consequences for Haiti, contributing to its chronic insolvency and instability.

Politics, violence take toll  

Haiti has faced a turbulent socio-political landscape over the last three years, marked by escalating violence that has caused immense economic decline across all sectors. 

The assassination of President Jovenel Moïse in July 2021 plunged the nation into chaos, creating a power vacuum and exacerbating existing issues. Leaders inside and outside Haiti have struggled to combat the rampant gang violence in Port au Prince, frequent kidnappings and violent protests that have severely curtailed daily life and the business environment.

The economy also worsened, with soaring inflation and scarcity of essential goods adding to the hardships many face. These conditions have made it increasingly difficult for businesses small and large to operate, prompting several international entities to withdraw from the country.

Other international banks and businesses have exited in recent years due to similar concerns. Scotiabank, which opened its first Haiti branch in 1972, ceased operations in 2017, selling its operations to UNIBANK, Haiti’s largest financial institution.