Citi to Exit Consumer and Small Business Banking in Mexico

Posted on 01/12/2022

Citi announced that it intends to exit the consumer, small business, and middle market banking operations of Citibanamex as part of its strategic refresh. Citi will continue to operate a locally-licensed banking business in Mexico through its global Institutional Clients Group. Citi has operated in Mexico for more than a century and the country will remain among Citi’s top institutional markets outside of the U.S. Citi will continue to invest in and grow those institutional banking operations, along with its Private Banking franchise. Citi’s planned divestitures of its consumer businesses across Mexico, Asia and Europe are aligned with the repositioning of its consumer operations to focus on wealth centers globally as well as payments and lending and a targeted retail presence in the U.S. Citi is keen on simplifying the bank and focusing on wealthy customers and companies in Mexico. Citi revealed in last spring plans to exit 13 overseas markets.

All three of the Mexico’s biggest banks are owned by foreigners.

Citi CEO Jane Fraser said in a press release, “The decision to exit the consumer, small business and middle market banking businesses in Mexico is fully aligned with the principles of our strategy refresh – we’ll be able to direct our resources to opportunities aligned with our core strengths and competitive advantages, focus on businesses that benefit from connectivity to our global network, and we will further simplify our bank.”

Banco Nacional de México is a bank in Mexico. Citi has made investments in this business over the course of the last two decades, greatly enhancing its digital and mobile banking capabilities, strengthening its technology infrastructure, modernizing its branch and ATM network, deepening relationships with key customer segments and advancing its financial inclusion efforts. The businesses in the intended exit include the Mexico consumer and small business banking operations, reported as part of Citi’s Global Consumer Banking segment, as well as the Mexico middle market banking business, reported in Citi’s Institutional Clients Group segment. The Mexico consumer and small business banking operations included in the intended exit represent the entirety of the Latin America Global Consumer Banking unit. In the first three quarters of 2021, the businesses Citi intends to exit together accounted for approximately $3.5 billion in revenue, $1.2 billion in earnings before tax, $44 billion in assets, and $4 billion in average allocated TCE.

Citi paid US$ 12.5 billion to buy Banamex in 2001. Jane Fraser led the company’s original Banamex investment. The Mexican banking unit faced scandals. Citi eventually paid US$ 97 million to settle federal money-laundering claims. Citigroup renamed the unit Citibanamex in 2016.

Keywords: Citigroup, Inc.

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