Citigroup announced its decision to take public its retail banking services division Banamex, which is based in Mexico.

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Last Wednesday, May 24, the financial institution announced its intention to conduct the first public offering of shares (IPO) of Banamex. Last year, the lender withdrew from the Mexican consumer banking market.

Jane Fraser, CEO of Citigroup, said that after a detailed study of the options for achieving the maximum value of the Mexican division and ways to optimize work processes, it was concluded that these goals could become real if the concept of a dual approach was abandoned and focusing exclusively on the IPO of the business.

Citi’s attempts to sell the bank faced a serious obstacle in the form of opposition from Mexican President Andres Manuel Lopez Obrador. The head of the country said that the transaction should be coordinated with the Mexican tax policy. The President also demanded that in this case the protection of workers’ rights be ensured. Separately, he noted that guarantees are needed that Citi’s collection of Mexican works of art will remain in Mexico.

Lopez Obrador said this week that his administration is exploring the option of bidding for Banamex. This scenario of actions is being considered in case the deal with businessman Herman Larrea does not take place.

Citi says Banamex will retain credit cards, retail banking, consumer loans, residential mortgage lending, insurance, annuities, pension asset management, deposits, and commercial banking products.

About 38 thousand employees of the Mexican division will remain part of Banamex. The corresponding guarantee was announced by Citi.

The financial organization announced its intention to continue doing business in Mexico based on a local license through the Group of Institutional Clients (ICG), which provides a network of banking and advisory services to private and public institutions, financial sector clients, and investors.

Citi has been seeking to exit the ICG business ever since it announced its plan to separate Banamex. Activities aimed at implementing this intention, including obtaining permits from regulators, continue. The financial institution expects that the separation of the business will be completed in the second half of 2024, and the IPO will take place in 2025.

The decision on the future of Banamex was made last year and was part of a campaign to move away from retail banking. The financial institution also sold consumer banks in Malaysia, Vietnam, Thailand, and Indonesia to Singapore’s United Overseas Bank. The value of this transaction was $3.7 billion.

As we have reported earlier, Citigroup Winds Up Consumer Banking in China.