LatinNews Daily - 13 January 2022

In brief: Citigroup’s exit from Mexico raises competition concerns

* Mexico’s finance ministry (SHCP) has stated that the exit of US multinational investment bank and financial services corporation Citigroup Inc from consumer banking in Mexico raises “delicate matters for the finance and regulatory authorities”, notably “a fundamental issue regarding concentration”. SHCP offered assurances that Mexico will continue to be a “key market” and “important global investment destination” for Citigroup. Citigroup announced plans to exit the consumer, small business and middle-market banking operations of Citibanamex in Mexico on 11 January. Financial analysts have floated several potential buyers of Citibanamex assets, including Mexican billionaires Carlos Slim and Ricardo Salinas Pliego, foreign banks such as Canada’s Scotiabank and Spain’s Banco Santander as well as Mexican banks such as Banorte. In a statement circulated in the local media, Felipe Carvallo, a senior credit officer at international credit ratings agency Moody’s, said Citigroup’s exit would have negative credit effects for Citibanamex, as “it significantly reduces the bank’s operations and profit diversification and limits its low-cost funding capacity with deposits, which historically has supported the bank’s strong profit generation”. 

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