CitiBanamex suffered losses in its Afore

CitiBanamex lost 2.6 million clients of its Retirement Fund Manager (Afore) during the last couple of years.

Within the process of market loss in several of its businesses that it has experienced, the Afore it owns decreased from 12.2 million clients at the end of 2019, to 9.6 million as of November last year.

It is equivalent to a loss of more than 2.6 million accounts, according to data from the National Commission of the Retirement Savings System (Consar).

Afore CitiBanamex is also part of the sales package that its US parent company Citi has put on the table as part of its business in Mexico, being one of the most important retirement savings administrators currently operating in the country.

Afore CitiBanamex ranks third by number of managed accounts, below Afore Azteca, owned by Ricardo Salinas Pliego, which has 15,977,000 clients, and Afore Coppel, with 13,800,000 accounts.

The numbers from the regulatory body show that, at the end of 2019, Afore CitiBanamex had reached its peak in the number of clients, which grew steadily for several years. However, as of 2020, a reduction began that took it to the current 9.6 million accounts, placing it in the range of 2016, when it had a similar number of affiliates.

Afore CitiBanamex is among the four that offer the best returns to workers, out of 10 administrators that operate 70.1 million accounts in Mexican territory.

For example, data from Consar indicate that in the Specialized Investment Company for Retirement Funds (Siefore), instruments in which administrators invest workers’ money, for those born before 1959, Afore CitiBanamex offers 3.55% of performance, only below Sura, PensionISSSTE and XXI Banorte.

In the Basic Siefore 85 and 89, which includes the investment of resources of workers born between 1985 and 1989, Afore CitiBanamex had 6.21% returns, occupying the third position, behind Profuturo and Sura.

Fewer commissions

Citi’s exit from its Afore business in Mexico also occurs at a time when the administrators experienced a sharp reduction in their main income, that is, the collection of commissions that they make to workers for managing their resources.

As of January of this year, Afore CitiBanamex charges 0.57% for this concept, after in 2021 its commission was 0.80%.

The reduction in commissions is part of the pension reform approved in Mexico during 2020, which forced the administrators not to exceed the 0.57% limit in the collection of commissions for balance management.

“An accelerated reduction in commissions poses a significant challenge for the industry, which consequently requires the search for alternatives that allow the system to be more efficient, complete and competitive,” said Manuel CitiBanamex, CEO of Grupo Financiero CitiBanamex last October. Blunt.

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