Citigroup abandons long-planned sale of Banamex to pursue IPO

Citigroup said it would spin off its Mexican retail bank through an initial public offering, reversing a plan made early last year to sell the unit.

The US lender plans to completely spin off its Banamex division, which has 38,000 employees and is one of the largest consumer banking franchises in Mexico, by the middle of next year. The bank said that the IPO of the unit is likely to come by the end of 2025.

Citi officials previously said they were following a two-pronged process to exit Banamex, and recently decided an IPO would be a better route for investors.

Chief executive Jane Fraser, who is leading a wide-ranging effort to downsize Citi, said in a statement: “After careful consideration, we concluded that the best way to maximize Banamex’s value for our shareholders and our The optimal path to advance our goal of simplifying the firm is to move from our two-track approach to focus solely on the IPO of the business.

The IPO plan marks the end of a more than a year-long effort to sell the unit. As recently as February, the Financial Times reported that Citi was in exclusive talks to sell Banamex to Grupo México, which is owned by billionaire German Larrea. The deal was expected to value the entity at up to $8 billion. It is not clear why or when those talks ended, or why the bank did not pursue offers from other interested bidders.

Citi did not say on Wednesday what it thought Banamex could achieve from the IPO.

Citi bought one of Mexico’s oldest and most iconic bank brands, Banamex, in 2001 to much fanfare for $12.5 billion. Since then, however, it has dropped from the country’s second-largest bank to fourth, after struggling to compete in a market dominated by other foreign lenders. Analysts and bankers have said a number of reasons are to blame, including poor management and limited costs from US regulatory requirements.

Citi said Wednesday it has invested $2.5 billion to upgrade the company’s “digital and mobile banking capabilities.”

US Bank also announced on Wednesday that it plans to resume share buybacks later this quarter.

Citigroup said it would spin off its Mexican retail bank through an initial public offering, reversing a plan made early last year to sell the unit.

The US lender plans to completely spin off its Banamex division, which has 38,000 employees and is one of the largest consumer banking franchises in Mexico, by the middle of next year. The bank said that the IPO of the unit is likely to come by the end of 2025.

Citi officials previously said they were following a two-pronged process to exit Banamex, and recently decided an IPO would be a better route for investors.

Chief executive Jane Fraser, who is leading a wide-ranging effort to downsize Citi, said in a statement: “After careful consideration, we concluded that the best way to maximize Banamex’s value for our shareholders and our The optimal path to advance our goal of simplifying the firm is to move from our two-track approach to focus solely on the IPO of the business.

The IPO plan marks the end of a more than a year-long effort to sell the unit. As recently as February, the Financial Times reported that Citi was in exclusive talks to sell Banamex to Grupo México, which is owned by billionaire German Larrea. The deal was expected to value the entity at up to $8 billion. It is not clear why or when those talks ended, or why the bank did not pursue offers from other interested bidders.

Citi did not say on Wednesday what it thought Banamex could achieve from the IPO.

Citi bought one of Mexico’s oldest and most iconic bank brands, Banamex, in 2001 to much fanfare for $12.5 billion. Since then, however, it has dropped from the country’s second-largest bank to fourth, after struggling to compete in a market dominated by other foreign lenders. Analysts and bankers have said a number of reasons are to blame, including poor management and limited costs from US regulatory requirements.

Citi said Wednesday it has invested $2.5 billion to upgrade the company’s “digital and mobile banking capabilities.”

US Bank also announced on Wednesday that it plans to resume share buybacks later this quarter.