This Tuesday, the American Citigroup announced its exit from the consumer and corporate banking businesses in Mexico, to focus on its institutional clients within this market.
In a statement dated in New York, headquarters of Citi, it was specified that the exit of the consumer and business banking operations in Mexico could include a sale or a stock market operation.
Later in videoconference, Alberto Gomez Alcala, corporate director of institutional development, economic studies and communication of Citibanamex, explained that what is being sold is everything that has nothing to do with institutional banking or what is known in Mexico as corporate banking, that is, the largest clients, as well as investment banking, markets and brokerage houses.
What would be for sale, he pointed out, is the rest: the license, the brand, the operation of branches, what has to do with cards, payroll business, mortgage portfolio, family and business credit, the patrimonial part, the afore , the insurer, and even the foundations and the cultural heritage that it has.
The consumer banking Y business, he mentioned, today represents around 60 or 70% of the business of Citibanamex.
“What is going to be sold is as a whole, together; it is not going to be sold in parts, all together. Citi maintains these wholesale banking businesses and the rest is what is for sale”, he emphasized.
The director of Citibanamex stressed that Citi it would obtain a new banking license to continue with its operations in Mexico; while Banco Nacional de México (Banamex) would keep the current one.
“Once (the process) is completed, they would be two different entities, which is why Citi would need a new license to operate, because part of the disincorporation includes the licenses and the brand. They would be different institutions and one would operate as Citi and another as Banamex”, he explained.
The decision “has nothing to do with economic issues”
Alberto Gómez, clarified that the Ad of Citi It has nothing to do with any issue related to Mexico’s economic prospects, but on the contrary, the statement states that the US group maintains an optimistic view of the country’s prospects.
In this sense, he pointed out that it is a decision that is more in line with the group’s strategy of concentrating on businesses where it is widely competitive, which is that of institutional clients. This has already been applied in other markets in Latin America and Asia.
In his statement, Citi highlighted that it will continue to operate its Institutional Clients Business with a local banking license, and that Mexico will remain one of the largest institutional markets for Citi outside the United States.
In this regard, he stressed that he will continue to invest and promote the growth of said operations in Mexico, together with his franchise of Citi Private Bank.
About, Jane Fraser, executive director of Citi, stated that the decision to exit the consumer and corporate banking business in Mexico is completely aligned with the principles of its strategic vision and will allow allocating resources to opportunities aligned with the main strengths of the group, as well as to their competitive advantages, and they will be able to focus on businesses that benefit from the connection of their global network.
“Mexico is a priority market for Citi, that is not going to change. We anticipate that Mexico will be a very important destination for global investment and trade flows in the coming years and we are confident in the country’s trajectory. Citi is uniquely positioned to support our institutional clients’ activities in the international capital markets, as well as support trade flows to and from Mexico for our institutional clients, and we will continue to make significant investments in our institutional business in Mexico to remain as leaders in that market”, Fraser pointed out.
Citi He elaborated that the announced exits from the consumer banking businesses in Mexico, Asia and Europe are in line with the repositioning of consumer banking towards “Global Wealth” centers, and the strengthening of its presence in the payment and credit businesses. and retail banking in the United States.
They represent 3,500 million dollars of income
The financial group highlighted that the consumer banking and small business operations of which Citi would come out in Mexico, represent the entire unit reported under Global Consumer Bank of Latin America, and referred that in the first three quarters of 2021, all the businesses from which it would be leaving represented around 3,500 million dollars in income; 1.2 billion in earnings before taxes; 44,000 million in assets and 4,000 million in assigned average tangible capital.
He specified that the way and the times in which Citi will carry out the exit of the consumer banking and business banking operations in Mexico, which may include a sale or a stock market operation, will be determined by the group, and will be aligned with the objective of maximizing value for its shareholders and strengthening both the businesses Citi will be exiting and the ones it will keep.
He added that the exit process will be subject to various conditions and approvals, including regulatory ones that are applicable in both the United States and Mexico.
Citibanamex customers and employees would not be affected
Alberto Gómez Alcalá clarified that, with this announcement, customers will not be affected, since the bank will continue with its normal operations.
“Nothing happens. Customers who have a card, a mortgage, etc., of course we are going to continue serving them (…) the day to day continues. If you want a mortgage loan, or a card, knock on our door and we will assist you. If we have a program for the opening and installation of ATMs and branches, we are going to continue carrying it out; the current investment programs are going to be executed and they are going to continue, in that nothing changes”, he argued.
As for the collaborators Citibanamex, commented that there will not be an affectation either, and, in any case, the majority would remain in Banco Nacional de México.
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Reference-www.eleconomista.com.mx