After the failure of negotiations on Banamex, AMLO analyzes the state bank

After negotiations between Mexico And Citygroup sell Banamex private sector in this country because of the conditions imposed by the President of Mexico, Andres Manuel Lopez Obradorthe president now plans to take on this acquisition single-handedly and create a large National Bankwhich raises doubts among analysts.

“If they do not want to sell, then we will talk to them, that is, we do not rule out the possibility (…) because we need a bank (…), this is a possibility, López Obrador commented at his conference from National Palace.

The President said that its acquisition could be carried out through a public-private partnership and assured that Government The Mexican has good finances and debt capacity.

Doubts in the state bank

Director of Economic and Financial Analysis, Banco Base, Gabriela Siller, Today, Citi’s announcement is believed to have eliminated all the “fear” and “risk aversion” that President López Obrador created in the Banamex purchase and sale process and prevented its value from depreciating.

He also pointed out that a possible purchase by the Mexican government would “go nowhere”. Not for the government, not for the company, not for anyone.”

Analysis Bank of Americawho concluded that the purchase by the Mexican government could affect the existing banking sector as it is the fourth largest bank in the country.

In addition, Deputy Director for Economic Analysis of the Financial Group Monex, Jeannette Quiroz speculated that going to Mexico would increase interest, knowing more precisely that it was a “profitable bank” for which she predicted “good demand”.

Besides, Daniel Becker, member Association of Banks of Mexico, He pointed out that Banamex’s listing on the stock market would be positive as it would end a decades-long drought in Mexican financial markets amid fewer issuers and delisted shares.

process truncated

In January 2022, Citi announced its intention to sell part of its Mexico business, primarily its consumer portfolio and some of its equity, while retaining its large corporate portfolio.

López Obrador has since conditioned his sale on factors such as that he was sold to Mexican capital, that taxes were paid for the deal, that there were no outstanding tax balances, and that Banamex’s cultural heritage remained in the country.

Some of the largest banks in Mexico joined the bid, such as inbursa, magnate Carlos Slim; Banco Azteca, Banorte, Santander and Mithel, among others.

However, one by one they abandoned their intention to the last merchant, Mexico groupat the height of the occupation Armed forces in concession from the company for 120 km of roads railways, which was qualified as expropriation.

This Wednesday, Citi announced that it would postpone the individual-to-individual talks and determined that the sale of Banamex would take place through the stock market through an initial public offering (OPI) in 2025.

In that sense, López Obrador said the public administration could have up to $3 billion and offer shares for $2 billion if the sale price was still around $7 billion.

“It’s good business,” Lopez Obrador said, as he argued that the government is the banks’ main customer.

Banamex, the country’s fourth largest banking group, was acquired by Citigroup in 2001 for $12.5 billion and currently has 1,300 branches, 9,000 ATMs, 6,600 commercial customers and 12.7 million retail customers, as well as 10 million holders. pension funds.

However, Citi clarified that the IPO will be completed in 2025, which means the president will leave office as no presidential re-election is allowed in Mexico, with the next election taking place in June 2024.

Siller explained that for this operation in Mexico or USAwill require permission from the competent authority, which in the country is National Commission for Bakery and Stock Industries.

Upon learning of the American group’s decision, the Mexican stock markets reacted immediately and raised their hands to be part of their foray into the Mexican stock market.

On the one side, Mexican Stock Exchange (BMV) indicated that it has “the infrastructure, the window to access funding and the ability to accompany a process of this magnitude and importance”, while Institutional Stock Market (Biwa) He emphasized that they are “the best option” for this operation, as they are “the most technologically advanced and innovative stock market.”


Source: Aristegui Noticias