Citi Sells 24% Stake in Banamex Mexico Retail Unit for $2.5 Billion
Citi has announced the sale of another 24% of its Mexico retail-banking unit, Banamex, for approximately $2.5 billion. The sale comprises 499 million shares and involves a consortium of investors, including private-equity firm General Atlantic, Brazilian bank BTG Pactual, insurance giant Chubb, funds managed by Blackstone, Liberty Strategic Capital, Qatar Investment Authority, and Afore Sura, the Mexican pension fund of Sura Asset Management.
The transactions are set to close by the end of the year pending regulatory approval in Mexico. Citi has not disclosed the specific stake each investor acquired but confirmed that none exceeds 4.9%.
Strategic Shift in Citi’s Retail Banking Operations
Citi’s decision to sell a portion of its stake in Banamex aligns with its broader strategy to exit retail banking in Mexico. The bank has been restructuring its international consumer banking portfolio under CEO Jane Fraser, aiming to focus on core markets and streamline operations.
Despite the stake sale, Citi will retain a majority ownership of 51% in Banamex. The bank initially acquired Banamex in 2001 for $12.5 billion and has been looking to optimize its return on investment through strategic divestments.
Investor Confidence in Banamex’s Growth Potential
The investors’ purchase of stakes at 0.85 times book value reflects their confidence in Banamex’s long-term growth prospects. General Atlantic, in particular, views Banamex as a pivotal player in Mexico’s financial ecosystem and a key driver of the country’s economic development.
Citi’s exit from targeted international consumer banking is nearing completion, with recent divestments in Russia and Poland. The bank’s ongoing restructuring efforts aim to enhance operational efficiency and focus on markets where it can achieve sustainable growth.
Overall, the sale of a portion of Banamex’s stake underscores Citi’s strategic realignment and commitment to optimizing its international banking operations for long-term success.
For more information, please visit here.
