Citigroup is seeking to part ways with a Mexican company that has brought it wealth and scandal.
Citigroup will be pulling out of its mainstream banking business in Mexico, where it has more branches than any other country, closing the curtain on a transaction that is both hugely profitable and beset by scandal.
The bank said on Tuesday it would sell or list Banco Nacional de México, better known as Banamex, which it bought in 2001 for $ 12.5 billion, as part of its “strategic refresh “.
Citi will continue to offer institutional and investment banking services for large corporations in Mexico and private banking options for ultra-wealthy residents of the country. But there will be no more branches to serve individual account holders or small and medium businesses. And it will no longer be linked to an operation that generated heavy regulatory control.
“We will be able to direct our resources to opportunities aligned with our core strengths and competitive advantages,” Citi Managing Director Jane Fraser said in an emailed statement to reporters. “We are going to further simplify our bank.
In 2014, Banamex revealed that one of its most important clients, a Mexican oil services company, had defrauded the bank of $ 400 million and that, in a separate case, bodyguards working for bank employees were receiving bribes from some of the bank’s salespeople.
In 2015, federal banking regulators and California fined US-based Citi affiliate Banamex USA $ 140 million for failing to put in place adequate anti-money laundering controls, conditions that regulators became aware of while trying to track the flow of drugs. money. Citi subsequently shut down the company in the United States and paid $ 97.4 million to settle a federal criminal investigation into the case.
Citi also announced that it would withdraw from its consumer activities in Asia and Europe, as part of a plan to “focus on centers of wealth globally,” according to its announcement on Tuesday. Citi earned $ 1.2 billion from its consumer business in Mexico in the first three quarters of 2021. The bank is expected to release its fourth quarter results on Friday.