Citibanamex surprised almost everyone on Tuesday by announcing that “as part of its new strategic vision” it will exit the consumer banking and small business businesses and that, as soon as it obtains a new banking license, the American Citigroup or Citi will continue to operate only its institutional clients business or corporate wholesale banking, which includes investment and corporate banking, capital markets, private banking and transaction banking businesses.
The announcement surprised almost everyone, even the Secretary of the Interior, Adán Augusto López, who said yesterday at the presidential press conference that “the federal government was not notified of the sale or divestiture of Banamex assets and that surely in the next few hours , the tax authorities will be notified… ”.
Curiously, through a statement, the Ministry of Finance contradicted him, also yesterday, stating that “Citigroup promptly notified the Mexican tax authorities of his departure; For confidentiality reasons and in order not to cause speculation in the market prior to the announcement, the Treasury did not make it public. The president of the group, Jane Fraser, personally came to Mexico to explain this decision ”.
Citi’s exit from the country’s consumer banking is within its strategy of abandoning that business, as it announced last April, in Australia, Bahrain, China, India (where it is the largest foreign bank), Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand, and Vietnam.
For Fraser, focusing on institutional clients is a better business than serving individuals and small businesses.
The departure from Mexico could also be explained by the fact that Citibanamex has been losing strength compared to its competitors. The once most important bank in the country has been relegated to second, third and even fourth places in its market share.
Regarding its assets, it ranks third with a 12% stake, below BBVA (23%) and Santander (15%) and just above Banorte (11%). In terms of the volume of loans granted, it is also in third place, with 13% of the market, below BBVA (24%) and Santander (15%). In terms of the amount of deposits, it is in second place, with 14%, below BBVA (24%) and just above Santander (13%) and Banorte (12%).
It ranks second, after BBVA in the number of branches (1,722 vs 1,276) and employees (31,517 vs 31,440), but is in fourth place in terms of the number of ATMs installed, with only 9,012, below BBVA ( 13,636), Banorte (9,595) and Santander (9,508).
During the months to come, it will be defined how its assets will be sold, either in whole or in parts, and who or who will acquire it. Will the legendary Banco Nacional de México or Banamex resurrect?
For now, Bank of America said yesterday that these assets could be worth between 12,500 and 15,500 million dollars and not 44,000 million, as some have mentioned.
Unlike other transactions, the authorities must monitor it very closely in order to protect the country’s invaluable cultural and artistic heritage that is held by the bank, which must remain in Mexico and be accessible to all.
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