Citi will take out the Mexican consumer banking business to renew its strategy with Reuters

By David Henry

NEW YORK (Reuters) – Citigroup Inc will leave its Citibanamex consumer banking business in Mexico, ending its two-decade retail effort, the last of its consumer intentions outside the United States, the bank said Tuesday.

Citi said it wants to focus the consumer banking business on overall wealth, as well as payments and loans and a focused retail presence in the U.S.

Output not included Citigroup (NYSE:) Institutional business in the country.

Citigroup CEO Jane Fraser, who took office in 2021, is reshaping the business, whose rating has lagged behind rivals. It is committed to simplifying the bank by leaving businesses that are no longer seen in its core strategy. The bank is already taking its consumer business out of Asia.

Mexico’s departure coincides with that “strategy overhaul,” Fraser said.

Potential buyers could come from Canada, where six major banks have said they have too much cash to spend on deals. One, the Bank of Nova Scotia, already owns a large Mexican business.

Local weapons Bank of Santander (MC 🙂 and BBVA (MC 🙂 would have the tender money, and the Mexican organizations Banorte and Inbursa could use the purchase of Citi’s operations to deal with that pair.

Prior to being CEO, Fraser was in charge of Mexican business and Citigroup’s global consumer bank. In this role, the bank worked to build investments to renovate the Mexican consumer business known as Banamex.

By eliminating business, Fraser said in a statement, “We will be able to focus our resources on opportunities that match our core strengths and competitive advantages. We will focus and further simplify our banking.

Fraser added that Mexico remains a “priority market” for Citigroup’s institutional businesses.

“We expect Mexico to be a major recipient of global investment and trade flows in the coming years, and we are confident in the country’s trajectory,” he said.

Institutional investors who have been frustrated by Citigroup’s relatively low return on investment have long called for the bank to abandon Citibanamex.

Mike Corbat, former CEO of Fraser, invested https://www.reuters.com/article/us-citigroup-mexico-turnaround/citi-struggles-to-bring-back-shine-to-its-mexican -crown- jewel-idUSKBN18K0EX more Citibanamex was a supplier to a Mexican oil company even after suffering losses in massive institutional business fraud.

Corbat also invested in new digital technology to boost the consumer banking business.

Shares of Citigroup rose 1% in post-market trading. The company announced the exit as soon as the market closed.

The bank did not calculate the cost of leaving the business or what it may receive in a sale. The business currently uses about $ 4 billion in tangible ordinary assets.

Citigroup says it expects to release about $ 7 billion from Asian departures.

Mexican consumer business reported revenue of about $ 3.5 billion in the first three quarters of 2021 and $ 1.2 billion in pre-tax profits, Citigroup said. They raise $ 44 billion in Citigroup’s $ 2.36 trillion in assets.

Citigroup said the timing of the exit was subject to regulatory approvals in the United States and Mexico.