© Reuters. PHOTOGRAPHY: Citibank logo seen in front of a bank branch in New York, March 4, 2009. REUTERS / Lucas Jackson / File Photo
By David Henry
NEW YORK (Reuters) – Citigroup Inc. will leave its Citibanamex consumer banking business in Mexico, ending a two-decade-long retail effort that was the last of its consumer banking ventures outside the United States, the bank said Tuesday.
Citi said it intends to focus its consumer banking business on global wealth, as well as payments and loans, and a targeted U.S. population presence
The output does not include Citigroup (NYSE 🙂 institutional business in the country.
Citigroup CEO Jane Fraser, who took over the role in 2021, is reshaping the business, which was lagging behind competitors. It has pledged to simplify the bank, leaving jobs that are no longer considered part of its core strategy. The bank is already withdrawing its consumer business from Asia.
Mexico’s exit is in line with that “refreshing strategy,” Fraser said.
Potential buyers could come from Canada, where six large banks said they had excess money spent on business. One, the Bank of Nova Scotia, already has a significant business in Mexico.
Local coat of arms Santander Bank “MC 🙂 and BBVA (MC 🙂 would have the money to bid, while Mexican institutions Banorte and Inbursa could use the takeover of Citi’s operations to challenge the duo.
Prior to becoming CEO, Fraser was responsible for operations in Mexico and for Citigroup’s global consumer bank. In that role, she worked on building an investment that the bank had invested in to rebuild the Mexican consumer business that was known as Banamex.
By giving up businesses, Fraser said in a statement, “we will be able to focus our resources on opportunities aligned with our core strengths and competitive advantages, focus on companies that benefit from connecting to our global network, and further simplify our bank.”
Fraser added that Mexico remains a “priority market” for Citigroup’s institutional affairs.
“We expect Mexico to be a major recipient of global investment and trade flows in the years ahead, and we are confident in the country’s trajectory,” she said.
Institutional investors frustrated by Citigroup’s relatively poor return on investment have long called on the bank to abandon Citibanamex.
Fraser’s predecessor as CEO, Mike Corbat, invested https://www.reuters.com/article/us-citigroup-mexico-turnaround/citi-struggles-to-bring-back-shine-to-its-mexican-crown – jewel-idUSKBN18K0EX more at Citibanamex even after suffering losses in a major fraud in the institutional business of financing a supplier to a Mexican oil company.
Corbat has also invested in raising the consumer banking business with new digital technology.
Citigroup shares rose as much as 1% in after-market trading. The company announced the exit just after the market closed.
The bank did not estimate the cost of leaving the business or what it could gain from the sale. The company currently uses about $ 4 billion in tangible common capital.
Citigroup said it expects to release about $ 7 billion in tangible common capital from its exits from Asia.
Consumer companies in Mexico provided about $ 3.5 billion in revenue in the first three quarters of 2021 and $ 1.2 billion in pre-tax earnings, Citigroup said. They include $ 44 billion of Citigroup’s total assets of $ 2.36 trillion.
Citigroup said the release time is subject to regulatory approvals in the United States and Mexico.