Mexican authorities say they will closely monitor Citigroup’s proposed sale of its Mexican unit Citibanamex, noting the deal raises “delicate” regulatory issues
Citibanamex is Mexico’s third-largest bank, and regulators are apparently concerned that whoever buys it could accumulate too much of the banking market.
“The withdrawal of such a large retail bank from the country raises delicate issues for financial and regulatory agencies…including fundamental issues of market concentration,” the country’s finance ministry said in a statement on Wednesday.
Citigroup announced on Tuesday that it would sell its retail banking business in Mexico as part of a global strategy to focus on the corporate market.
Hours after the announcement, Mexican retail and banking magnate Ricardo Salinas Pliego wrote on his Twitter account that he was weighing a bid for the bank. Salinas Pliego already runs the smaller Banco Azteca.
“I have always believed and invested in Mexico and Mexicans,” Salinas Priego wrote. “For this reason, I have asked my team to analyze the desirability of acquiring Citibanamex and double my bet on Mexico, the Mexicans and their future.”
Carlos González, head of economic analysis, equities and currency exchange at Mexico’s Monex brokerage, said the Citigroup sale “is a negative sign for our country because we are not seeing companies and multinationals. entry, but a sign of exit.”
“Citigroup’s decision does not affect its confidence in Mexico,” the Treasury said.
Announcing the decision, Citigroup CEO Jane Fraser said: “Mexico is a priority market for Citi – that will not change. We expect Mexico to become a key recipient of global investment and trade flows in the coming years. We have full confidence in the country’s trajectory.”