Plans are advancing for an initial public offering of Citigroup’s Banamex business in Mexico after the bank finished separating the division from its broader institutional offerings in the country.
Citigroup now operates two separate entities in Mexico, Grupo Financiero Citi México and Grupo Financiero Banamex, according to a statement Monday. The New York-based bank is planning an IPO of Grupo Financiero Banamex — which has 1,300 branches and is home to 39,000 employees — as soon as regulators and market conditions allow for the public offering.
“This separation represents an important milestone in our simplification,” Chief Executive Officer Jane Fraser said in the statement. “We will now prepare for the Banamex IPO, focused on optimizing value for our shareholders.”
Grupo Financiero Citi México will maintain a “significant presence” in the country, with a team of about 3,000 employees serving roughly 2,000 clients, according to the statement.
Citigroup had been close to a deal to sell most of Banamex’s retail operations to Grupo Mexico last year. Although several bidders had been vying for Banamex up until that time, the pool of potential buyers had dwindled after Andrés Manuel López Obrador, then Mexico’s president, placed conditions on any deal, including a requirement that Mexican capital back the transaction and there be no massive job cuts.
The potential deals with Grupo Mexico and other bidders ultimately fell apart amid the scrutiny from López Obrador. The Wall Street behemoth switched to an IPO for the Banamex unit instead. It has previously said it hopes to pull off that debut sometime next year.
López Obrador also wanted to preserve the historically important art collection that Banamex owns. Citigroup on Monday confirmed that art collection, as well as the historical buildings Banamex owns, will remain part of the Banamex group.
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