What happened to Banamex?
In 2001, Citigroup agreed to pay $12.5 billion to what was then known as Grupo Financiero Banamex-Accival, Mexico’s second-largest bank at the time. Ultimately, this division became the US bank’s largest branch network in the world and one of its most profitable divisions.
But after a series of events, such as the Oceanography case and reviews of credit practices, Citigroup faced calls to divest from the Mexican division. In such a way that, in January 2022, Citigroup confirmed its decision to disassociate itself from Banamex and announced a sale process.
“In 2021, the last year in which Citigroup revealed the results of the unit (Banamex), revenues were reduced to 4.250 million dollars, less than half of what it was a decade earlier,” says Bloomberg.
After announcing that he would withdraw from his sale of Banamex in Mexico, Mark Mason, Citi’s CFO, said: “This decision demonstrates our commitment to choosing the best outcome for our shareholders and allows us to resume a modest level of share repurchases this quarter. Given the uncertainty regarding regulatory capital requirements, we will continue to assess buybacks on a quarterly basis.”
The business, Citi added in a statement, will continue to be reported to shareholders as part of Citi’s continuing operations until ownership falls below 50% voting interest, at which time the business will be deconsolidated. This means that Citi’s quarterly reports will continue to include the results of Banamex’s operation in Mexico, up to that point.
Since announcing its intentions to exit consumer banking in 14 markets across Asia, Europe, the Middle East and Mexico as part of its strategic revamp, Citi has signed sales agreements in nine markets and closed sales in seven markets, including Australia. , Bahrain, India, Malaysia, the Philippines, Thailand and Vietnam. The firm is advancing its previously announced liquidations of Citi’s consumer businesses in China and Korea, and its general presence in Russia.