Citigroup will leave its Mexican retail banking business after nearly a century of operations in the country, in the latest sign of the borrower’s shrinking global ambitions under CEO Jane Fraser.
The group has said it will withdraw from consumer and small and medium-sized commercial banking services, which it does mostly through its Banamex subsidiary. The move is part of Fraser’s “strategic refresh” of Citi, a major international lender trying to profitability gap with its larger American counterparts.
Citi said it could leave the businesses by selling them or turning them into a new public company. It will hold its investment bank and private bank in Mexico, along with its unit that caters to institutional clients in the country.
“Mexico is a priority market for Citi – it will not change,” Fraser said in a statement.
The bank, which has been operating in the country since 1929, plans to divert capital from the Mexican consumer business to areas where the borrower has “core strengths and competitive advantages,” she added.
Investors have been pushing Citi for years to sell its Mexican consumer unit, but executives have so far argued that it is a strategically important market despite poor returns.
The business accounted for about $ 3.5 billion in revenue in the first three quarters of last year, or about 15 percent of total consumer banking revenue. It generated about 11 percent of consumer bank profits.
The move follows Citigroup’s decision in April to withdraw from most of its consumer businesses in Asia, Europe, the Middle East and Africa. At the time, he identified 13 markets from which he wanted to withdraw.
It has since reduced its presence in less than half of those markets, a process that has led to more than $ 2 billion in depreciation.