We are not selling a bank with problems, but an institution that is healthy and has a great future. We want the buyer to value this.”
Francisco Ybarra, CEO of Citi’s Institutional Clients Division
When choosing the Banamex buyer, we are going to take into account many variables. We do not go into the sales process with a predetermined idea of the buyer’s nationality. “The most important thing is that it be a good buyer, for Banamex and for Citi,” says Paco Ybarra, CEO of Citi’s Institutional Clients Division and leader in the bank’s sale process.
“It is important that the buyer pays the value that we know it has, but it is also very important that the institution remains in a good situation in both parts: that Banamex remains one of the market leaders that it has always been and that the part of the business in Mexico with which Citi stays in an optimal position. Citi will continue in Mexico for many years and we aspire to be leaders in the markets in which we will continue here, in the business of institutional clients. By itself, this Citi business will be one of the six or seven largest financial institutions in Mexico.”
President López Obrador has said several times that he would prefer that the next owner of Banamex be a Mexican group, Ybarra offers his point of view on the subject: “We want to consider all the alternatives. It is logical that there is a lot of interest from local buyers, but we do not go into the process with a predetermined idea that the buyer is going to be local… Apart from the fact that the definition of what a local buyer is is complicated; sometimes a local bank has many foreign investors. We want you to be a good buyer. That is the most important. There may be local players who are not good buyers and foreigners who are excellent buyers”.
Francisco Ybarra is a Spanish banker with a 35-year career at Citigroup. He lived in Mexico between 1994 and 1996, when he was Treasurer of the financial institution. “It is a complicated operation. The idea is to separate what is now Citibanamex in two and sell one of those parts. It is a very complex process, which will take all of 2022 and part of 2023. We are doing it this way because we do not want to leave Mexico.”
He adds that they want to remain present, “intensely involved in the corporate part of the business. It would have been easier to sell the entire business. The complexity has to do, among other things, with the fact that it is one of the largest banks in Mexico. We are aware of what Banamex represents for the country because we are part of the history of this great institution. We are not selling a bank with problems, but an institution that is healthy and has a great future. We want the buyer to value this.”
Citi will focus in Mexico on the so-called institutional business. Ybarra is the one who runs that business on a global scale for the financial group. He spoke with El Economista at the Citibanamex headquarters in Santa Fe, in Mexico City. He mentions that “institutional business includes wholesale banking, capital and fixed income issues. Attention to Mexican companies that do business in the world and global companies that do business in Mexico… Also the high segments of private banking. It has a very high growth potential. Mexico will be one of the most important markets in the world for us.”
The Data Room will open shortly.
The list of interested parties in the bank includes Banorte, Azteca, Inbursa, Santander, Scotiabank and Itaú, among others. In the next few days, Citibanamex will offer information to potential buyers. The Data Room will open, “that will start a discussion about the real interest of the buyers. The information will help them better understand the entity, see the numbers, analyze the variables and assess the potential. It is the beginning of a process in which we are going to start with a large number of potential buyers and end with one”, explains Ybarra, who has been with Citi since 1987 and was appointed director of the Institutional Clients Group in May 2019. This position is one of the most important in the financial group, a kind of number two in an organizational chart headed by the CEO, Jane Fraser. The Institutional Clients Group accounts for half of Citigroup’s revenues and two-thirds of its profits.
The Mexican government has been very attentive to the sale process of this entity that has 36,000 employees, 23 million clients and has 1,465 branches. “We know that it is a very important operation for the Mexican authorities, as regulators and as the government of the country. We have been in constant dialogue with them. So far the whole process has worked very well. We hope that you will help us with the process, because we are going to require help with the paperwork that we must do. We offer collaboration and transparency.”