A simpler Citigroup begins to take shape
Subscribe to enjoy similar stories. Citigroup is nearing an important milestone in efforts to spin off its Mexican consumer bank, an important part of chief executive Jane Fraser’s turnaround strategy. The bank said it would complete a split next week of the systems that underpin Banamex from the rest of its operations in Mexico.
That is a precursor to its plan to list Banamex on U.S. and Mexican exchanges in late 2025 or after. Citi plans to unload a slice of its stake through an initial public offering, then continue to sell the rest of its holdings over time.
Banamex, with nearly 20 million customers and revenue of more than $4.7 billion in the first nine months of this year, is the biggest of 14 international consumer-banking businesses Fraser is shedding. In doing so, she plans to simplify the bank’s structure and focus on multinational companies and wealthy individuals. Fraser hopes that deepening ties to these core clients will help pull Citi out of a 15-year slump.
Citi’s share price has badly trailed peers and is still more than 80% below its record high. “The spinoff will free up capital to reinvest in some businesses that generate higher returns," Citi finance chief Mark Mason said. “Does Banamex fit the strategy? It’s a great business, but no.
We look at it as the further simplification of the company. Simpler model, less to focus on." Shedding Banamex has proved more complicated than Fraser and her team bargained for. After Citi announced plans to sell it, Mexico’s then-President Andrés Manuel López Obrador said the buyer would have to be Mexican, protect employees from job cuts, pay taxes on the sale and keep Citi’s prized collection of Mexican artwork in the country.
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