Citigroup will exit its Mexican retail banking business after nearly a century of operating in the country, in the latest sign of the lender’s shrinking global ambitions under chief executive Jane Fraser.
The group said it would retreat from consumer and small and medium-sized business banking, which it mostly does via its Banamex subsidiary. The move is part of Fraser’s “strategic refresh” of Citi, a sprawling international lender that is trying to close the profitability gap with its larger U.S. peers.
Citi said it could exit the businesses by selling them or spinning them off into a new public company. It will keep 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 — that will not change,” Fraser said in a statement.
The bank, which has operated in the country since 1929, plans to redirect capital from the Mexico consumer business into areas where the lender has “core strengths and competitive advantages,” she added.
Investors have pressed Citi to sell its Mexican consumer unit for years but executives had until now contended that it was a strategically important market despite lacklustre returns.
The business accounted for roughly US $3.5 billion of revenue in the first three quarters of last year, or roughly 15% of overall consumer banking revenue. It generated about 11% of consumer banking profit.
The move follows Citigroup’s decision in April to retreat from most of its consumer businesses in Asia, Europe the Middle East and Africa. At the time, it identified 13 markets from which it wanted to pull back.
It has since reduced its presence in less than half of those markets, a process that has resulted in more than $2 billion of writedowns.
© 2022 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.