The brand, license and the entire retail and business business of Banamex is for sale, the group confirmed Tuesday after Citi’s exit from retail banking operations in Mexico was announced.
The operation includes the payroll portfolios; consumption such as credit cards; mortgages; the branch network, the Afore, insurance and historical buildings. These will be sold to the highest bidder completely, it became clear.
Jane Fraser, CEO of Citi, explained that the decision to exit the consumer banking and corporate banking businesses is fully aligned with the principles of the financial group’s new strategic vision.
“It will allow us to allocate resources to opportunities aligned with Citi’s core strengths, as well as our competitive advantages, and we will be able to focus on businesses that benefit from connecting to our global network. At the same time, it will allow us to further simplify our bank ”.
He assured that Mexico is a priority market for Citi and that will not change, and anticipated that the country will be an important destination for global investment and trade flows in the following years and they are confident in the path it will follow.
Alberto Gómez, corporate director of Institutional Development, Economic Studies and Communication of Grupo Financiero Citibanamex, assured that the sale of the bank “it has nothing to do with an issue of Mexico’s economic prospects, an optimistic view is maintained regarding the prospects for Mexico, and Citi’s investment programs in Mexico are maintained ”.
What does the announcement made by Citi mean?
Gómez explained that Citi will focus on the institutional business that includes the markets business, global private banking and brokerage house.
“It will focus on where it has not lost market”, for which it will request the Mexican authorities a new banking license to do that business, but under the Citi brand, he pointed out.
Banco Nacional de México (Banamex) will maintain its license and the retail, consumer and corporate business. Concentrated in it, it will be sold, along with all the cultural heritage and real estate that the bank currently has.
“It will not be sold in parts, it will be sold together. The retail bank, its brand and all its infrastructure are sold. The day to day continues, current investment programs will be executed, ”said Gómez.
Citi’s ‘goodbye’ to its consumer banking business in Mexico
This Tuesday, Citi announced that it plans to exit Mexico’s consumer and corporate banking, this as part of the push by CEO Jane Fraser to review the company’s strategy.
Investors have long pressured bank executives to seek to exit consumer-focused operations in Mexico, where it operates as Citibanamex.
Mexico is the largest international consumer market for the New York-based bank. In the first three quarters of 2021, all of the businesses that Citi would be exiting in Mexico accounted for approximately 3.5 billion in revenue, 1.2 billion in earnings before taxes.
Salinas Pliego is signed up
Ricardo Salinas Pliego, president of Banco Azteca, said he was interested in buying from Banamex. “I have always believed and invested in Mexico and the Mexicans. That is why I have asked my team to analyze the convenience of acquiring Citibanamex and redoubling my commitment to Mexico, the Mexicans and their future ”, he noted on his Twitter account.
“Let them say how much they want for their changarro and we see Citibanamex open from 9 to 9, 365 days a year,” he added.
“The news that was released regarding Citibanamex’s decision to divest itself of its retail business obeys a definition of its business model exclusively,” said on his Twitter account, the president of the Association of Banks of Mexico (ABM ), Daniel Becker.
Carlos Gómez, an analyst at Intercam, considered that due to issues of liquidity, available capital and size, it is difficult for a local bank to compete for Citi’s portfolio, which is why he estimates that it will be acquired by a large foreign bank. “We do not even rule out the interest of a global bank seeking to reach the Mexican market or a group of local investors,” he said.
Nau Securities, a UK consulting firm, profiles Santander as a potential buyer of Banamex. He estimated that the Spanish bank would buy Banamex for $ 13.2 billion. He calculated that the resulting entity would be the leader in generating profits, with a 23.8 percent share in the credit market, above BBVA.
“I hope that the sale of Banamex by Citi will allow that historic Mexican franchise to operate with greater versatility and without the great regulatory weight that the US authorities imposed on the current Citibanamex and as a pylon that it returns to Mexican investors,” he said via Twitter, Bernardo González, president of the Amafore.
With information from Bloomberg and Ana Martínez