Citi Backed Out of Banamex Sale Over Grupo México’s Demands for Greater Guarantees

Mexico’s President Andrés Manuel López Obrador revealed the reason behind the US bank’s U-turn, and says his government will explore the possibility of buying Banamex

Citi has abandoned plans to sell Banamex to Grupo México.
May 24, 2023 | 11:20 AM

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Mexico City — After Citigroup announced early Wednesday that it has abandoned plans to sell Banamex and will instead seek to launch an IPO in 2025, Mexico’s President Andrés Manuel López Obrador said that Citigroup suspended negotiations with Grupo México because the company led by billionaire Germán Larrea was demanding more guarantees.

AMLO, as the president is known, said in his morning conference that the Banamex sale process has been slow and reiterated that his government would be willing to acquire the bank in a public-private partnership.

Citi Abandons Banamex Sale Plan That Bore AMLO’s Scrutiny, Eyes a 2025 IPO

“We were informed yesterday by Citi that negotiations with Grupo México were suspended because they [Grupo México] are demanding more guarantees, but it is a matter between them, and I maintain that, if the bank is not bought, because they have been working on the negotiation for about a year and they are slow processes, if they do not want to sell, we will talk to them [Citi], that is, we do not rule out the possibility.”

Mexico's President Andrés Manuel López Obrador

The president said that his finance minister, Rogelio Ramírez, told him that Citi informed him that Grupo México was asking for more guarantees, but did not elaborate on the type of guarantees.

AMLO said that he will talk to Ramirez to explore the possibility of buying the bank through a public-private partnership.


Considering that buying Banamex would cost around $5 billion, the president calculated that the Treasury could put up around $3 billion, which is equivalent to approximately 60 billion pesos, a figure that is within the margins of public finances.

He assured that his government has a margin of three points of public debt as a percentage of GDP to be able to buy Banamex, since those points of the GDP, equivalent to approximately 900 billion pesos, are enough to buy the bank.

“We’re not showing off, but public finances are strong,” AMLO said.

“We need a bank and this is an opportunity,” he added, saying the government could put up $3 billion and the remaining $2 billion could come from private Mexican shareholders.

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