Citigroup to Seek Initial Public Offering of its Consumer, Small Business and Midsize Business Banking Operations in Mexico trendswire

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Citi announced today that it will pursue an initial public offering (IPO) of its consumer, small business and midsize business banking operations in Mexico (the “Business”) following the planned spin-off of its lead institutional business that will remain part of Citi. As previously revealedCiti had been following a two-pronged process to exit the business, including preparing for a possible initial public offering, with a commitment to deliver maximum value for its shareholders.

The Business will retain the Banco Nacional de México (“Banamex”) brand and will continue to be one of the leading financial groups in Mexico. Banamex will continue to offer a complete set of financial services to consumers and owners of small and medium-sized businesses through an extensive distribution network of ~1,300 branches, ~9,000 ATMs, ~12.7 million retail banking customers, ~6,600 banking customers commercial and ~10 million clients of pension funds.

Jane Fraser, CEO of Citi, said: “After careful consideration, we have concluded that the optimal path to maximize Banamex’s value for our shareholders and advance our goal of simplifying our business is to move from our path focus dual to focus solely on an IPO of the business. Citi has operated in Mexico for more than a century, and we will continue to invest and grow our industry-leading institutional franchise in this critical global hub, bringing the full power of Citi’s global network to our institutional and private banking clients in this priority market.

Banamex will retain credit cards, retail banking, consumer loans, residential mortgage loans, insurance, annuities, pension asset management, deposits and a full suite of commercial banking products. The approximately 38,000 employees who currently support these businesses, as well as Banamex’s art collection and historic buildings, will continue to be part of Banamex.

Over the last two decades, Citi’s investments have significantly transformed Banamex into a cutting-edge bank, completely focused on delivering a richer, smarter and more intuitive experience for customers and customers. Citi has invested US$2.5 billion to improve Banamex’s mobile and digital banking capabilities. This investment strengthened Banamex’s technological infrastructure, deepened its national branch and ATM networks and relationships with key customer segments, and advanced financial inclusion in Mexico.

Citi will continue to operate a locally licensed banking business in Mexico through its Institutional Clients Group (ICG), which provides an unmatched global network of banking and advisory services to private and public institutions, financial sector clients and investors, as well as through Citi Private Banking for very high net worth individuals and families. Citi has been pursuing the separation of the ICG business since it announced its plan to spin off Banamex. This work, including obtaining the necessary regulatory approvals, is ongoing. Citi expects the separation of the businesses to be completed in the second half of 2024 and the IPO to take place in 2025.

Mark Mason, Citi’s CFO, said: “This decision demonstrates our commitment to choosing the best outcome for our shareholders and allows us to resume a modest level of share repurchases this quarter. Given the uncertainty regarding regulatory capital requirements, we will continue to assess buybacks on a quarterly basis.”

The Business will continue to be reported as part of Citi’s continuing operations until ownership falls below 50% voting interest, at which time the business will be deconsolidated.

Since announcing its intentions to exit consumer banking in 14 markets across Asia, Europe, the Middle East and Mexico as part of its strategic upgrade, Citi has signed sales agreements in nine markets and closed sales in seven markets, including Australia. , Bahrain, India, Malaysia, the Philippines, Thailand and Vietnam. The firm is advancing its previously announced liquidations of Citi’s consumer businesses in China and Korea, and its general presence in Russia.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security, to be made solely by means of a prospectus.