Everything You Need To Know

With Citi’s exit from its consumer and corporate banking businesses in Mexico, US Bank will put them up for sale under the Banamex brand, an operation that will include its branches, Afor, insurance company, debit and credit card businesses; However, the financial institution assured that its clients would not be affected by this decision and would continue to operate as normal.

As part of this plan, according to Citibanamex’s Corporate Director of Institutional Development, Economic Studies and Communications, Alberto Gómez Alcalá, City will ask the authorities for a new license to work in the country, while the National Bank of Mexico (Banmex) will keep it.

In this sense, he explained that the US firm would retain wholesale banking, What is traditionally called corporate banking in Mexicoi.e. markets, brokerage houses and global private banking businesses.

“Branches for Sale are operations that have nothing to do with cards, payroll business, mortgage portfolio, family and business credit, equity portion, eForce, insurance company and of course all the arms of the foundation, social commitment and of course from real estate”, he specified.

In this sense, Gomez Alcala said that Once the transaction is complete, they will be two separate entitiesTherefore, a new license would be required to operate the City, as the transaction involves a license and a brand, but Banmex is a very important and recognized brand.

What will happen to your employees and customers?According to Alberto Gómez Alcala, there will be no impact on current CityBenemax employees, While the day to day operations of the bank continue, since the directive is that no customer is affected.

“The ultimate goal is that no one is affected here, customers will continue to be served normally, on a daily basis, without doing anything and it is our priority objective that no one is affected by their normal operations,” he explained.

According to the manager, customers who have mortgages, cards, etc. will continue to be served, as what is sold is part of the Banco Nacional de Mexico brand and Citi holds part of the institutional clients.

Once the sale takes place, most of the employees will remain at Banmex and Citi will only keep a relatively small portion.

Similarly, he reiterated that the decision had nothing to do with any issue relating to Mexico’s economic prospects; opposite of this, maintain an optimistic outlook and continue to view the country as a highly competitive economy, subject to investment flows that will continue and which, due to the contemporary state of the world, have very interesting opportunities for the City to maintain its investment programmes.

How long will it take for Citibanamex to buy the discontinued segment?

The authorization of sale before the National Banking and Securities Commission (CNBV) will be carried out by 2022; Whereas for SMEs the process of integrating payment systems, credit cards, debit cards, Affords, personal loans and credit will take two more years.

We must be thinking that if this process goes smoothly, The actual change in operations, employees and customers will occur between the end of 2023 and 2024, And when this happens, customers should remain calm and continue to make the services, payments and commitments received with Citibanamex.

How does news affect the markets?

In stock exchanges we will see mixed results with volatility in operations. There will be uncertainty about the likelihood that Citibanamex’s consumer and SME segment sales are the product of financial problems, mistrust in the decisions of the Mexican economy or the federal government,

But there will also be benefits when more details about the operation are released, opportunities that open up for s3 with this decision.

What risks does this bring to the customers and employees hired by Citibanamex?

Customers will not change will continue with its products and contracted works, Substantial changes will occur until CNBV authorizes the sale of Banamex; At that point, the migration and integration of customers into their new bank will begin.

There will be negative effect in favor of workers; Because the buying bank will seek efficiency, avoid duplicate structures or functions, and try to generate savings. This brings with it the risk of layoffs, reassignments and new work situations.,