Citigroup will spin off its Mexico business through an IPO

Citigroup announced on Wednesday that it is planning an IPO of its Mexico business, Banamex, officially marking a long-announced spin-off.

The bank expects to complete the separation in the second half of 2024, with a public IPO expected to follow in 2025, it said. The company has not yet decided on a listing target, but a dual listing in Mexico and the US could be a possibility, a source familiar with the plans told CNBC.

“After careful consideration, we have determined that the best way to maximize the value of Banamex to our shareholders and to continue our goal of simplifying our business is to shift from our two-pronged approach and focus solely on an IPO company,” said CEO Jane Fraser in one press release.

Citigroup had considered a possible sale of the company. Just this month, media reports reported that a deal valued at around $7 billion was nearing completion.

Citigroup bought Banamex in 2001 for $12.5 billion. The bank first announced in 2022 that it was exiting the business, which operates about 1,300 branches with more than 12 million retail customers and about 10 million pension fund customers. It has around 38,000 employees.

The company also announced on Wednesday that it would resume share buybacks this quarter. Citigroup shares fell nearly 2% in premarket trading on Wednesday.

– CNBC’s Leslie Picker contributed to this report.

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