Citigroup Inc has officially severed its ties with Brazilian credit card processing company Elavon Inc. According to Reuters, sources have confirmed that Citigroup has put its stakes up for sale after a disagreement over additional funds.

The outlet reported that relations between the two companies have taken a sour turn when Brazil's central bank said the joint venture needed more cash, while the U.S. bank declined to give any additional funds. The venture, known as Elavon do Brasil, has also failed to gain tracktion in a processing market already dominated by Cielo SA and Rede, a unit of Itau Unibanco Holding SA and GetNet Servicos, which owns a combined 98 percent of the market. Elavon, on the other hand, captured a mere one percent.

A source also shared that Citi-Evalon needs another $52 million in new capital -- money that Citigroup does not want to deploy considering Brazil's current state in recession.

Citibank has a current 49.9 percent stake but Seeking Alpha noted that the amount hasn't been determined yet, and as of the moment, Citi's book value in Brazil is currently negative $50 million.

Citigroup has not been faring well in Brazil, especially considering that local lenders have had the bulk of market share over the past three years and now controls 90 percent of assets. It isn't supposed to be too bad for Citigroup -- last year, their assets grew by 8.7 percent, but this is still a low number considering that Banco Bradesco SA grew 14 percent, while Caixa Economica Federal grew 24 percent.

Their push for high-end customers also showed Citigroup's Brazilian banking unit to be losing money in recent years.

Helio Magalhaes, Citigroup Brazil's CEO has said that the exit of HSBC Holding Plc from Brazil earlier in the year could help the bank gain more clients, but competition is steep. For instance, Bradesco has paid $5.2 billion for the HSBC unit, for the same target market as Citigroup.

Alvaro Tayar, PWC lead partner for financial services said, "It's becoming difficult for global banks to compete with local banks in the retail banking segment because their franchise costs, such as global software and processing costs, have to be assumed by their subsidiaries, as well as the lag they have in terms of scale."

However, what has saved Citigroup from going under is their income from corporate and transaction banking, as the company remains to be Brazil's No. 1 custodian in foreign investments, with their currency trading platform, as well as increased transaction banking activity.