Citigroup to Rename Banamex, Invest $1 Billion in Unitby
The funds reaffirm the bank’s commitment to Mexico, CEO says
Investment focused on five areas including branches, ATMs
Citigroup Inc., seeking to move beyond a 2014 fraud case in Mexico and settle doubts over its commitment to the nation, plans to rename its local unit Citibanamex and invest $1 billion over four years in technology and branch upgrades.
“These investments in Citibanamex reaffirm our commitment to Mexico and our confidence in its prospects,” Chief Executive Officer Michael Corbat said Tuesday in a statement. “Our goal is nothing less than to create a state-of-the-art bank in Mexico, fully focused on delivering a richer, smarter, more intuitive experience.”
The funds will be deployed in five areas: digital banking, technology platforms, branch updates, automated teller machines and improving products and services, according to the statement, which said the New York-based company will complete the investments by 2020.
Citigroup is adding resources in Mexico even as it pulls back from other Latin America nations due to doubts about its scale and the region’s growth prospects. The firm announced plans in February to exit retail banking in Brazil, Argentina and Colombia, and analysts and media reports had suggested the bank might look to leave Mexico as well.
Banamex, as the local unit is known, attracted scrutiny in February 2014, when Citigroup alleged a $400 million fraud by a Mexican oil-services firm and cut 2013 profit by $235 million. The Mexico unit received a subpoena from the Department of Justice in January 2015 as part of an investigation into anti-money-laundering controls at Banamex USA, an affiliate of the Mexico business. Citigroup said months later it would close Banamex USA. The probe is ongoing.
“Citibanamex will honor our rich history in the country while acknowledging that together we offer more talent, experience and ideas,” Jane Fraser, the bank’s CEO for Latin America, said in the statement.
The unit has almost 1,500 branches, 7,500 ATMs and 5.7 million credit-card accounts, according to the bank.