When Banamex was sold to Citi in 2001, “the law stated that cross transactions on the Stock Market did not generate tax payments, the act was not taxed, so what the sellers Roberto Hernández and company did was pass the sale on the Stock Market, and Taxes were not paid, the Law said so,” Gabriel Reyes, the Federation’s fiscal attorney at the time, told Expansión.
Today the law tells you that you must pay taxes for operations on the Stock Market, “but the updated value of the shares gives a loss, the ISR must be paid when the updated value generates a profit, but in this case it does not,” Reyes explained.
“(The operation) did not make sense from the point of view that they were promoting a sale in which the price to be received is infinitely less, or at least less than 60% of what they received when Citi bought. sums that the value of the asset -whether in credits or in shares- has to be updated, the tax value of what is being sold far exceeds the sale price, therefore there is a loss. to pay absolutely nothing,” he added.
Every commercial operation generates taxes if it carries with it the issue of a profit, explained Ramón Martínez, an expert in corporate finance and academic at the Commercial Banking School (EBC).
For its offer on the Stock Market, Citi will have to disclose its share price, which is valued by audit firms (such as Deloitte, KPMG, EY, PWC) and must be approved by the National Banking and Securities Commission (CNBV). .
If the shares are purchased at a value greater than that valued by the audits, the seller, which in this case is Citi, would be receiving a value higher than the book value, for which they would have to pay taxes, which does not apply, if paid a figure lower than the market value, added the specialist.
He commented that the value of a financial company is based on tangible assets and loan portfolios that will generate profits.
“I mean what they have in savings and credit portfolios, they are resources that the company has, let’s remember that the business of a bank is intermediation; the price at which I buy the money, and the price at which I sell it, the differential is called the financial margin that is given by the rates; I buy money at a low price, and I sell money through credit at a high price,” explained Martínez Juárez.
It should be noted that last year, when Citigroup announced the sale of Banamex, Bank of America (BofA), Securities estimated at 15.5 billion dollars (mdd) all the assets of those businesses (branches, customer accounts, cultural heritage, credits payroll, cards, car mortgages and SMEs, as well as Afores and insurance). In 2001, Citigroup bought Banamex for $12.5 billion at that year’s prices.
During the offer for the direct sale in 2023, sources close to the process reported that Germán Larrea, owner of Grupo México, and the last contender to buy the bank, had reached an agreement with Citi to buy 80% of Banamex for $7.1 billion.
Just last Tuesday, May 23, President Andrés Manuel López Obrador said that under the assumption that Banamex was worth $7 billion, the government expected to collect $2 billion in taxes.
Among the factors and assumptions that influence when a company is valued, the following stand out: its infrastructure, the flows that may be generated in the future. In the case of a bank, factors such as new market conditions are analyzed, such as the presence and operation of fintechs, the assets that the company no longer uses, the competition, or how much the cards will be used in the future, “you contemplate a projection of 10, 20 years, everything influences”, explained Sergio García Quintana, member of the Technical Commission of Finance and Financial System of the College of Public Accountants of Mexico (CCPM).
“All these factors can increase or decrease income, that income is brought to present value and there you obtain a rate of return, then there you say, ok, in this purchase I am going to put less than all the present value, when the present value is positive with the rate of return you are asking for, then it is an acceptable investment”, added García Quintana.