MEXICO

On January 12, Mexico’s Secretariat of Finance and Public Credit (SHCP in Spanish) published a press release officially announcing Citi Group’s decision to discontinue its retail banking business in Mexico. The U.S. entity assured that it will maintain its wholesale corporate banking activities in the country. In exchange, it will sell the Bank of Mexico (Banamex) brand, which will include its consumer banking operations. Once the sale is consummated, Citi will have to obtain a new banking license to continue its operations as a wholesale bank in Mexico, while it is formed as a new entity.

Through the press release, the Mexican authorities emphasize that Citigroup’s decision responds to its global strategic vision, as it is a policy consistent with its decisions in Europe, Asia and the rest of Latin America. However, the SHCP recognizes that the exit of such a large consumer bank represents a challenge, which is why the tax and regulatory authorities will carry out a “rigorous and demanding treatment”, including concentration issues.

Alberto Gómez Alcalá, executive of Citibanamex, explained that what would be sold is everything that does not have to do with corporate banking, that is, the license, the brand, branch operations, the card business, payroll business, mortgage portfolio, family and business credit, the equity part, the retirement fund administrator, the insurance company, and even the foundations and the cultural heritage of the entity. With respect to operating licenses, Banamex would keep its current license to operate, while Citi would have to obtain a new one from the Mexican authorities, so that at the end of the process, they would be two different entities.