What happened with the sale of Banamex?
“After careful analysis, we conclude that the optimal path to maximize Banamex’s value for our shareholders and advance our strategic objective of simplifying our firm is to move from our dual path to focus solely on an IPO of the Business”, said the president executive, Jane Fraser.
Citi had announced plans to divest the unit more than a year ago as part of a strategic review by Fraser to exit 14 consumer banking markets in Asia, Europe, the Middle East and Mexico.
Until a week ago, everything seemed to indicate that a large part of Banamex would remain in the hands of businessman Germán Larrea while another -smaller- part will be listed on the Mexican Stock Exchange (BMV).
However, uncertainty began to grow after the Government of Mexico published a decree in the Official Gazette of the Federation to occupy a section of railways, in the hands of Ferrosur, owned by Grupo México of Germán Larrea.
The global bank said it expects the offering to be completed in 2025. Citi shares were down 1.7% in premarket trading.
On April 25, Citigroup CEO Jane Fraser said the company’s efforts to exit its retail banking operations in Mexico are taking longer than anticipated, even though the Wall Street giant was in active dialogue. about the effort.
Fraser reported that “a tremendous amount of work” is being carried out in the country to separate the banking operations of consumers, small and medium-sized companies from the institution that is being divested from the institutional business that it plans to maintain.
What does the purchase of Banamex include?
The transaction includes the bank’s retail business, that is, branches, offices, consumer credit business such as credit cards, payroll or personal loans, mortgage loans, auto loans, and SMEs.
The insurance business and the Afore are also sold, which until the end of 2022 had 9.9 million clients and manages resources for 815,699 million pesos.
Banamex has a wide cultural heritage that includes works by Diego Rivera and venues such as the Iturbide Palace, in the historic center of Mexico City; the Casa Montejo, in Mérida; the House of Mayorazgo de la Canal, in Guanajuato; and the Palace of the Count of Valle de Súchil, in Durango.
It also has a large historical collection of more than 2,000 pieces in which old coins and bills stand out, as well as other bank objects dating from 1884 to the present.
Who intended to buy it?
Since it was announced in January 2022 that Banamex was put up for sale, some of the largest financial groups were willing to bid for it.
The first to leave the negotiations was Ricardo Salinas Pliego, owner of Banco Azteca, who said that Banamex required “too much time and investment.”
Santander was the second financial group to exit the purchase-sale process. The group led by Ana Botín at a global level said that it submitted a non-binding offer and that Citigroup informed it that it was out of the process.
Banorte was the third financial group to ‘get off’ from the process and a few weeks later Inbursa, from Carlos Slim, also announced that it would not buy Banamex.