Citigroup’s Sale of Banamex Stake Signals Confidence in Mexican Economy

MEXICO CITY (AP) — In a significant move for Mexico’s banking sector, Citigroup has announced its decision to sell a 25% stake in Banamex to prominent businessman Fernando Chico Pardo. The Mexican entrepreneur emphasized that his investment of $2.3 billion reflects a strong belief in both the current administration and the economic future of Mexico.

The transaction, which is anticipated to finalize next year pending approval from Mexican regulatory authorities, follows Citigroup’s earlier declaration in January 2022 about its intention to withdraw from retail banking in Latin America.

Former President Andrés Manuel López Obrador had expressed a desire for the bank to be “Mexicanized,” arguing that foreign entities often repatriate profits rather than reinvesting them in Mexico, thereby limiting local economic growth.

Chico Pardo revealed that he only engaged fully in negotiations with Citigroup around six months ago, marking the start of an important phase for both his investment portfolio and the Mexican banking landscape.

He elaborated, “I believe that the foreign investment which is so necessary for our country must complement domestic investment.” This statement underscores his commitment to bolstering Mexico’s economy through collaborative investment strategies.

Citigroup, which acquired Banamex in 2001, elevated it to become one of Mexico’s largest banking institutions. Under its ownership, Banamex expanded to the fourth-largest banking entity in the country, boasting over 1,300 branches and serving around 13 million customers.

Currently, Chico Pardo holds the position of chairman of the board at ASUR, which operates nine airports across southeast Mexico, in addition to managing the main airport in San Juan, Puerto Rico, and several airports in Colombia. Moreover, he is the president and CEO of Promecap, a private equity firm, and has an extensive background in the financial sector, having previously founded and led a brokerage firm.

The strategy moving forward includes a public offering of the remaining shares of Banamex, with Chico Pardo retaining his status as the primary shareholder, which signals further positive momentum for the bank and the broader Mexican economy.