Three Mexican financial institutions penalised by the Trump administration last week have experienced a series of economic setbacks after being accused of assisting drug cartels in laundering millions of dollars.

The US Treasury Department declared it would block transactions between US banks and the Mexican branches of CIBanco and Intercam Banco, along with the brokerage firm Vector Casa de Bolsa. All three institutions have strongly denied the allegations.

Mexico’s President Claudia Sheinbaum criticised US officials for failing to present evidence supporting their allegations, despite the sanctions announcement outlining specific details of how funds were moved through the companies.

The announcement described how “mules” transferred money via US accounts and highlighted transactions involving Chinese firms that US authorities claim supplied materials used to manufacture fentanyl.

Mexico’s banking regulator has announced a temporary takeover of CIBanco and Intercam Banco’s management to safeguard creditors.

On Tuesday, President Sheinbaum stated that the Mexican government is doing everything possible to protect creditors and acknowledged that they are fully “within their right” to withdraw their funds from the banks.

The US Treasury Department stated that the sanctions would take effect 21 days following the announcement.

Fitch Ratings has downgraded the three institutions and their affiliates, citing “anti-money laundering concerns” and noting that the downgrade “reflects the imminent negative impact” expected from the sanctions.

“The new ratings reflect the significantly more vulnerable credit profile of these entities in response to the aforementioned warnings, given the potential impact on their ability to meet their financial obligations,” according to a statement by the credit rating agency.

On Monday, CIBanco revealed that Visa Inc. had informed them with little notice that it had “unilaterally decided to disconnect its platform for all international transactions” through CIBanco. The bank accused Visa of disregarding the 21-day grace period specified in the sanctions.

“We would like to reiterate that your funds are safe and can be reimbursed through our branch network," the bank said. “We reiterate to our customers that this was a decision beyond CIBanco’s control.”

S&P Ratings also removed CIBanco from its ratings index, stating that the decision was due to the termination of its contracts with the bank following the US Treasury’s announcement.