© Reuters. FILE PHOTO: A Citibank sign is seen outside a bank branch in New York March 4, 2009. REUTERS / Lucas Jackson / File Photo

By David Henry

NEW YORK (Reuters) – Citigroup Inc will exit its Citibanamex consumer banking business in Mexico, ending a two-decade retail effort that was the last of its retail banking projects outside the United States, the bank said Tuesday.

Citi said it intends to focus its retail banking business on global wealth, payments and lending and a targeted retail presence in the US

The output does not include City group (NYSE 🙂 institutional business in the country.

Citigroup’s Chief Executive Officer Jane Fraser, who took up the position in 2021, is reshaping the business, which has lagged behind the competition in its valuation. It is committed to simplifying the bank and leaving deals that are no longer seen as part of its core strategy. The bank is already moving its consumer goods businesses out of Asia.

The Mexican exit is in line with that “strategy refresh,” Fraser said.

Potential buyers could come from Canada, where the big six banks have stated that they have excess cash to do business with. One, the Bank of Nova Scotia, already has a sizable business in Mexico.

The local arms of Santander Bank (MC 🙂 and BBVA (MC 🙂 would have the money to bid, while Mexican institutions Banorte and Inbursa could use a takeover of Citi’s operations to challenge this duo.

Prior to becoming CEO, Fraser was responsible for Citigroup’s Mexico business and global consumer bank. In that role, she built on the bank’s investments to rejuvenate the Mexican consumer business known as Banamex.

By divesting the businesses, Fraser said in a statement, “we will be able to direct our resources towards opportunities that match our core strengths and competitive advantages, to focus on businesses that will benefit from being connected to our global network, and we will continue to simplify our bank. “

Fraser added that Mexico remains “a priority market” for Citigroup’s institutional businesses.

“We anticipate that Mexico will be an important recipient of global investment and trade flows in the coming years, and we are confident about the country’s development,” she said.

Institutional investors, frustrated by Citigroup’s relatively poor investment returns, have long called for the Citibanamex bank to give up.

Fraser’s predecessor as CEO, Mike Corbat, had invested https://www.reuters.com/article/us-citigroup-mexico-turnaround/citi-struggles-to-bring-back-shine-to-its-mexican-crown- Jewel-idUSKBN18K0EX stopped at Citibanamex even after suffering losses in a massive fraud at an institutional company funding a supplier to the Mexican oil company.

Corbat also invested in boosting retail banking with new digital technology.

Citigroup shares rose by up to 1% in after-market trading. The company announced the exit shortly after the market closed.

The bank did not estimate the cost of getting out of business or the potential income from a sale. The company currently has approximately $ 4 billion in tangible capital.

Citigroup has announced that it will release around US $ 7 billion in tangible capital from its exits in Asia.

The Mexican consumer companies had revenue of approximately $ 3.5 billion and pre-tax profit of $ 1.2 billion for the first three quarters of 2021, Citigroup said. They comprise $ 44 billion of Citigroup’s total assets of $ 2.36 trillion.

Citigroup said the timing of the exit depends on regulatory approvals in the US and Mexico.


Subscribe Us to receive our latest news in your inbox!

We don’t spam! Read our privacy policy for more info.


Please enter your comment!
Please enter your name here