Sun | Jan 23, 2022

Mexico wary of Citibank sale, cites ‘delicate’ anti-monopoly issues

Published:Friday | January 14, 2022 | 12:06 AM

Mexican authorities said on Wednesday they are going to keep a close eye on Citigroup’s proposed sale of its Mexico subsidiary, Citibanamex, noting the transaction poses “delicate” regulatory issues.

Citibanamex is Mexico’s third-largest bank and regulators are apparently concerned that whoever acquires it could accumulate too big a share of the banking market.

The country’s Finance Department said in a statement on Wednesday, “The exit of such a large retail bank from our country poses delicate questions for finance and regulatory authorities ... including the fundamental issue of market concentration.”

Citigroup announced on Tuesday it would sell off its retail banking operations in Mexico as part of a worldwide strategy, to focus on the corporate market.

Hours after the announcement, Mexican retail and banking magnate Ricardo Salinas Pliego wrote in his Twitter account that he was weighing a bid for the bank. Salinas Pliego already runs the smaller Banco Azteca.

“I have always believed in and invested in Mexico and Mexicans,” Salinas Pliego wrote. “For that reason, I have asked my team to analyse the advisability of acquiring Citibanamex, and doubling down my bet on Mexico, Mexicans and their future.”

Carlos González, the director of economic analysis, stocks and currency exchange for Mexico’s Monex brokerage, said the Citigroup sale “is a negative signal for our country, because instead of seeing corporations and multinationals coming in, we are seeing signs of an exit”.

The Finance Department said, “Citigroup’s decision does not affect its confidence in Mexico.”

In announcing the decision, Citigroup CEO Jane Fraser said, “Mexico is a priority market for Citi – that will not change. We expect Mexico to be a major recipient of global investment and trade flows in the years ahead, and we are confident about the country’s trajectory.”

– AP