US banking heavyweights Citi, Wachovia and Wells Fargo have put all formal litigation activity on hold immediately until noon, Eastern Daily Time, today.

The statement had been expected in earlier media reports on the merger and acquisition row between the banks. The agreement was reached in consultation with the US Federal Reserve, which is anxious to avoid a prolonged dispute adding to current financial turmoil.

The three listed banks have become embroiled in a bitter dispute. Last week, Citi reached an agreement to buy Wachovia, but last Friday, Wells Fargo and Wachovia announced that the latter bank would be bought by Wells Fargo instead in a $15.1 billion deal. Citi has sued the two banks, claiming it had signed an exclusive deal to buy Wachovia and had already provided that bank with liquidity. Citi was in the process of suing the two banks for a total of $60 billion.

All three banks operate substantial wealth management businesses, with Wells Fargo and Wachovia being predominantly domestic concerns, while Citi has a large wealth management arm operating around the world.

Meanwhile, Wells Fargo may get as much as 80 per cent of Wachovia's deposits, with the remainder likely going to Citi, according to Reuters.

Citi could end up taking Wachovia's branches and deposits in the Northeast, while Wells Fargo may get the operations located in the Southeast. The report cited a person briefed on the matter, who added the outcome is still uncertain because negotiations are ongoing.