Grupo Elektra SAB will close Banco Azteca after Brazil’s central bank ordered its liquidation for “serious violations of legal and regulatory norms.”
“On May 8, 2015, Grupo Elektra announced that it began the withdrawal of its subsidiaries’ operations in Brazil. To finalize the closure, the Central Bank of Brazil today began the process of extrajudicial liquidation of Banco Azteca of Brazil,” the company said in a statement Friday.
Earlier, the Brazil central bank said Elektra’s Banco Azteca, which is controlled by Mexican billionaire Ricardo Salinas, has subjected creditors to abnormal risks. As of November, Banco Azteca had negative net assets of 11.1 million reais ($2.7 million) in Brazil. It has 17 employees and one branch in the country.
The shares declined 1.4 percent to 329.60 pesos at the close Friday in Mexico City after earlier dropping as much as 10 percent.
Salinas is Mexico’s fifth-richest man with a fortune of $4.9 billion, according to Bloomberg Billionaires Index. Banco Azteca offers lower-income consumers -- including those of his retailer Elektra -- long-term loans to pay off goods like flat-screen TVs and motorcycles. Elektra, which entered the Brazilian market in 2008, started closing operations in the country last May amid economic weakness.
In 2010, Banco Azteca had planned to double the number of branches in Brazil to 38, seeking to take advantage of a rebounding economy and growing market for its services. However, the country’s economy stagnated from 2011 through 2014, and economists have forecast contraction for 2015 and 2016.
Brazil’s central bank has nine other banks and 10 brokerage firms under liquidation status, according to its website.
(An earlier version of this story corrected the negative net asset amount in third paragraph.)