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It will be in the spring when the process for the sale of Banamex by the American Citigroup begins, the group’s executive director, Jane Fraser, revealed on Friday.
In a conference on the occasion of the presentation of the group’s results for the fourth quarter of 2021, he also reported that the process of disincorporating the retail and business banking business will be immediate.
“We will start the separation process immediately, and we hope to start the sale process in the spring,” he said. However, he did not mention anything about the amount of the operation.
Last Tuesday it was announced that Citigroup will leave its consumer and business banking businesses in Mexico, which will involve the sale of Banamex, to only keep institutional clients in the country, with a new banking license.
A jewel for others
Fraser was emphatic that the retail banking business that Citi will divest in Mexico is extremely profitable but that the group, as in other markets, will exit this business and focus more on its institutional banking. “It is a jewel for someone, not for us,” he said.
The global director of Citi highlighted that the opportunities with institutional clients in Mexico are clear, and recalled that this bank is a leader in this segment in the country. In addition, he commented that there is a very good future in this market, given the investments that are expected.
“Mexico will be a major recipient of global investment and trade flows in the coming years. We will maintain the bank’s local license and invest to obtain the highest returns”, he argued.
Fraser commented that with the announcement of its intention to focus its franchise in Mexico of its institutional and private banking businesses, the final decision has been made regarding the update of its strategy regarding the markets from which it intends to exit.
“We continue to make steady progress in executing our strategy, as recently demonstrated by the signing of an agreement to sell four consumer businesses in Asia,” he said.
In the presentation of the group’s results for the last quarter of 2021, Citi recalls that the strategy includes the exit of 13 markets from the consumer banking business such as Australia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, in addition to Korea, and now Mexico.
Exact time to sell
Earlier, in a teleconference, Mark Mason, Citigroup’s chief financial officer, stated that the exit from the retail banking business in Mexico is not due to a cost issue, and that consumer banking is a big business in the country.
“The consumer business in Mexico is a big business, we are keeping the institutional part because that is how we will connect with the rest of our global strategy (…) surely the new owners will find more value in it and it is the exact moment to sell that franchise,” he said.
Citigroup earned $22 billion last year
Businesses for sale contributed 1,100 million dollars to the group in 2021
These are the businesses from which the American Citi will withdraw, as announced last week
In the presentation of results of the American Citigroup for the fourth quarter of 2021, it was reported that in that entire year the group recorded a profit of 22,000 million dollars.
Similarly, it was emphasized that Citi’s consumer and business banking businesses in Mexico, through Citibanamex, represented 1,100 million dollars.
The report specifies that these businesses in the Mexican franchise generated 4,674 million dollars in income during 2021; expenses for 3,191 million, and an assigned average tangible capital of 4,000 million. Assets, according to Citi, represent $44 billion.
The global financial group specified that the exit of the consumer and business banking business from Mexico —which implies the sale of Banamex— is part of the strategy of exiting 13 markets (also in Asia and Europe), and focusing on attention of institutional clients.
“The planned divestments of consumer businesses in Mexico, Asia and Europe are aligned with the repositioning of our operations and strategy,” says the institution.
He adds: “(the strategy is) to invest to better serve institutional clients in Mexico, including private banking clients, as part of our global network.”
In fact, it is also noted there that among the 13 Asian countries that have an exit strategy in these same businesses, they added 354 million dollars in revenue; with Mexico, they add up to 1,440 million.
eduardo.juarez@eleconomista.mx
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