The government insists on buying Banamex and merging it with Banco del Bienestar

“The finance secretary has asked us to evaluate the different scenarios in which it might be beneficial for Mexico to acquire the bank,” the finance undersecretary told Reuters.

Yorio, who said that Mexico could seek a total or partial acquisition of the unit, made the remarks in a telephone interview during an official visit to Kuwait, Saudi Arabia, Oman, Qatar and the United Arab Emirates to boost commercial, financial and diplomatic ties. .

After the US bank announced the launch of an initial share offering, Mexican President Andrés Manuel López Obrador said the government could buy up to half of Citibanamex.

Before Citi’s change of heart, bank sources said Grupo México had been considering the unit for around $7 billion.

The undersecretary pointed out that Mexico has different development banks. “There are banks that are focused on financial inclusion and perhaps that is where the acquisition of another bank could potentially make sense in the use of infrastructure and also technology to increase financial inclusion in Mexico.”

Banco del Bienestar, which helps process government social assistance payments and has some 2,000 physical branches, “is a natural candidate to be able to make the best use of Banamex’s assets and structure,” he added.

Yorio stressed that a decision has not yet been made and that possible synergies are being analysed.

The deal to sell Citibanamex to Grupo México fell through as tensions between the conglomerate and López Obrador, which had already been escalating, erupted after the government moved to expropriate a stretch of one of its rail lines.

The dispute with Grupo México, along with other government demands on Citibanamex – including that it remain in Mexican hands and that no new owners be allowed to cut costs through layoffs – led the two sides to abandon the deal, the sources said.

The undersecretary highlighted that the most precious asset could be Citibanamex’s banking and payment systems.

“Banamex, in fact, has had a significant lag in its payment systems, precisely because it was in a sale process,” he said. “Now they have to rethink whether they are going to invest or upgrade their systems.”

Asked about Yorio’s comments about Citibanamex’s payment systems, a Citigroup spokesman referred Reuters to a May 24 statement in which the US bank said it has invested $2.5 billion over the past two decades to improve the unit’s digital and mobile banking capabilities.

Citibanamex will continue to report as part of the US financial group’s continuing operations until ownership falls below the 50% voting interest, the statement added.