The American financial services company Citigroup has reaffirmed its commitment to its Mexican subsidiary Banamex with a massive cash injection and renamed it Citibanamex.
The name change and a US $1-billion investment in technology and upgrading branches was announced today by Citigroup Inc. CEO Michael Corbat, “to reaffirm our commitment to Mexico and our confidence in its prospects.”
The announcement comes as an investigation continues into a $400-million fraud by oil services firm and Pemex supplier Oceanografía that surfaced in 2014.
The new investment in Mexico, which comes as Citigroup gets out of retail banking in Brazil, Argentina and Colombia, will be focused on digital banking, technology platforms, branch updates, automated teller machines and the improvement of products and services, the company said in a statement.
More than 2,500 new ATMs will be installed and 100 new branches opened, the latter primarily in Mexico City, Guadalajara and Monterrey.
The investment will take place between now and 2020 and is in addition to a $1.5-billion injection announced in 2014.
Reuters reported today that some Citigroup investors have questioned the wisdom of keeping the Mexican subsidiary in light of U.S. presidential candidate Donald Trump’s statements on restricting trade with Mexico.
However, its return on shareholder equity is about 15%, well above Citibank’s target of at least 10% for the whole bank.
Citibanamex is Mexico’s second largest bank with almost 1,500 branches and 7,500 ATMs.