The sale of the bank, founded in 1884, will be one of the most important economic news of the year.
And there are many concerns in this regard for its millions of customers and even those who are not.
Let’s look at some of the most relevant.
1.- Has it been decided to sell Banamex for fear of economic problems in Mexico?
do not feel. Given Citi’s strategy over the past year, the decision to abandon its consumer or retail banking operations in markets as diverse as Australia, China, Poland or Vietnam is clear. That decision has to be made with the intention of focusing its resources on areas of the banking market where Citi has the greatest strength and best potential.
In other words, even if the Mexican economy has fared better, it would not have gone away if this decision had been taken. The competition from retail banking has displaced Citibanks in recent years and it makes sense to seek to focus on a segment where they feel most profitable.
2.- Will there be any impact on the customers of the bank?
If the effect is understood to change things for customers, chances are they will, and everything will depend on the buyer or buyers, who probably have different strategies for those that Citi has implemented to date. has done. If in effect it is understood that customers lose their savings or change the terms of their credit, for example, mortgages, such a thing will not happen. What will happen will be a transfer of control, which may also mean a change in the management of the bank. This will not be the first to happen in Mexican banking and it will not be the last. Actually, this has happened three times in Banmex. First, when the bank was nationalised. The other was privatized and sold to a group of investors led by Roberto Hernández and Alfredo Harp. Third, when the group sold control to Citi. And now there will be the fourth.
3.- Who could have bought Banmex?
We don’t know. But if the business units are sold together, their value could be around $12.5 billion to $15.5 billion, according to initial estimates based on current market valuations.
This means that the potential buyer or potential buyer must be sufficiently massive to make up that outlay.
It would also mean that the property to be sold gives a higher value to the buyer group.
Clearly, only Ricardo Salinas Plego has shown interest. But among financial experts, groups such as Banorte, Santander, Scotia and Inbursa are listed as much as possible.
And we shouldn’t rule out any group that doesn’t have a presence in Mexico and wants to enter the Mexican market, from Brazilians to Chinese.
4.- Can the authority select the buyer?
not directly. However, operations must be authorized by Mexican authorities such as the Ministry of Finance, Banxico, the National Banking and Securities Commission or Coffe. In the case of the former, also by Kansar.
Rogelio Ramírez de La O told Bloomberg yesterday that the authority will monitor the impact on competition, in addition to compliance with all financial and tax regulations. So, there will be a right of influence and veto power.
5.- What does this decision of the city represent in the background?
The financial market is changing very rapidly. According to a report by consulting firm McKinsey, the market cap of leading banks in the United States at the beginning of 2020 was 4.9x higher than that of the 10 highest-value fintechs. This ratio fell to 3.2 times compared to the last quarter of last year. And it will certainly go down even further in 2022.
As in almost all sectors of the economy, accelerated digitization, as well as the effects of the pandemic, have significantly modified the parameters of competition in financial markets and will further modify them in the near future. Banks have to adapt to that environment.
In this context, we can look at other relevant financial news in 2022.