Unofficial government spokesmen say that Citibanamex is for sale, despite its hefty earnings. It should be explained to them that past earnings do not guarantee future earnings and that clearly the balance of risks in the Mexican economy has worsened.
There is something, beyond the new global strategic vision of Citigroup, as justified yesterday, January 12, by the Ministry of Finance, for them to rush to leave a retail banking business that last year left them around 20,000 million pesos.
There is something in the opportunity cost of staying in the Mexican market that makes 24.7 billion dollars have fled the country in two years, something not seen since the financial crisis of 1994.
The past performance and stability of Mexico in the first two decades of the century undoubtedly no longer resemble the expectations of the years to come and is not only a product of the pandemic, but also of the decisions of the current regime.
That is also the vision of another financial group in the United States. It turns out that the Bank of America (BofA) has just drastically cut its growth expectations for the Mexican economy, from 2.5 to 1.5% by 2022.
BofA accompanies this highly pessimistic scenario with the explanation that this drop is the result of the combination of conservative public policies, great uncertainty and low growth expectations, along with increases in the cases of Covid-19. It is these forecasts that investment decision makers attend to, not the morning ones.
Thus, the “juicy profits” are diluted in a market with poor growth expectations and where the financial and political environment is breaking down as a result of public policies.
That same warning was made by the CEO of Citigroup herself, Jane Fraser, last winter when she said that Mexico should consolidate the business environment with greater stability and confidence. By the summer of 2021, Fraser came to visit President López Obrador to announce that they would sell Banamex.
There is nothing more politically correct for this US financial group and for the government itself than to present it as “a new global strategic vision.” But if he walks like a goose, he squawks like a goose and has the face of a goose …
This sale process will not be immediate, in fact, it will not be easy because a buyer, or buyers, who have the economic, technical and legal capacity to take control of a bank of this size has to appear.
From the outset, the Ministry of Finance has already closed the door to two institutions. In his communication yesterday he says that they will be rigorous and demanding on the subject of concentration. So if for practical purposes Banamex is the third largest bank in the country, one and two are out of the running.
And here begins to play another ideological factor that distinguishes the regime, nationalism.
May it never cross your mind that this is the opportunity to grow your Bank of Well-being. There yes, to see who turns off the light.
But they will certainly want, and will do everything possible, so that Mexican capital is the ones that preserve the operation and assets of this US bank.
Keep institutional clients
Citi will continue to operate its institutional client business with a local banking license.
In the first three quarters of 2021, the total businesses that Citi would be exiting represented $ 3.5 billion in revenue.
There are about 1,300 Citibanamex branches in Mexico and 9,400 ATMs.
Host of Televisa Newscasts
The great Depression
Degree in Communication Sciences from the National Autonomous University of Mexico, with a specialty in finance from the Autonomous Technological Institute of Mexico and a master’s degree in Journalism from the Anáhuac University.
His professional career has been dedicated to different media. He is currently a columnist for the newspaper El Economista and a host of newscasts on Televisa. He is the owner of the 2:00 pm news space on Foro TV.
He is a specialist in economic-financial matters with more than 25 years of experience as a commentator and host on radio and television. He has been part of companies such as Radio Programs de México, where he participated in the VIP business radio. He was also part of the management and talent team of Radio Fórmula.