Mexico City — Citigroup (C), one of the largest US banks, reported a US$92 million impact on after-tax earnings in second quarter, linked to its divestments in Asia and the separation of Banamex, its consumer banking business in Mexico.
The bank recorded $79 million in operating costs related to Mexico and indemnities for the exit of some businesses in Asia, the company said in its quarterly report.
Citi decided in 2022 to separate its retail and institutional banking businesses in Mexico as part of a strategic review that considered the sale of its consumer banking business in several markets. After months of anticipating a potential outright sale of Banamex, Citi decided in May to opt for an initial public offering expected in 2025.
During the second quarter of 2023, costs from divestments in other markets and the separation of Banamex contributed marginally to a 36% drop in Citi’s quarterly net income to $2.9 billion. This figure was 1.78% higher than expected by a Bloomberg consensus.
Without the effect of divestment impacts, the contraction in net income would have been 33%, according to the bank. The main cause of the decline in net income was higher expenses, higher credit costs and lower revenues, Citi said in the quarterly report.
Like Citi, other major banks such as JPMorgan and Wells Fargo reported results that beat already remarkably low estimates, sending their shares higher before the market opened Friday.