Citigroup Inc (NYSE:C) has announced plans for an initial public offering (IPO) of its retail banking operations in Mexico after earlier pursuing a dual process including a trade sale as it exits the business to boost value for its shareholders.
The US bank said it will retain the institutional business of Banco Nacional de México (Banamex), with the IPO including the consumer, small business and middle-market operations—as well as the Banamex brand.
Banamex will remain one of the leading financial groups in Mexico, offering a full suite of financial services through its roughly 1,300 branches and 9,000 ATMs, Citi said, adding that the bank has about 12.7 million retail banking clients, 6,600 commercial banking clients and 10 million pension fund customers.
“After careful consideration, we concluded the optimal path to maximizing the value of Banamex for our shareholders and advancing our goal to simplify our firm is to pivot from our dual path approach to focus solely on an IPO of the business,” Citi CEO Jane Fraser said in a statement.
“Citi has operated in Mexico for over a century, and we will further invest and grow our industry-leading institutional franchise in this critical global hub, delivering the full power of Citi’s global network to our institutional and private banking clients in this priority market.”
Citi said it will continue to operate a locally-licensed banking business in Mexico through its Institutional Clients Group (ICG), which provides banking and advisory services to private and public institutions, financial sector clients and investors, as well as through Citi Private Bank for ultra-high-net-worth individuals and families.
It expects the separation of the businesses to be completed in the second half of 2024, with the IPO following in 2025.
Earlier, Reuters reported that Mexico’s government was open to buying Banamex, citing a government statement issued on Tuesday following rumours that one of the bidders for the bank, Grupo Mexico's owner German Larrea, was dropping out of the process amid a dispute with the government.
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