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| * Government rescue of Banamex. ] - ] | * Government rescue of Banamex. ] - ] | ||
| The result of this aggressive expansion of credit was to strain the bank's balance sheet (] ratios and ] ratios). The ] macro-devaluation of the Mexican Pesos (see the ]) and the ensuing significant increase in domestic interest rates coupled with a dramatic ], caused Banamex's and much of the rest of the privatized banks to essentially become insolvent. | The result of this aggressive expansion of credit was to strain the bank's balance sheet (] ratios and ] ratios). The ] macro-devaluation of the Mexican Pesos (see the ]) and the ensuing significant increase in domestic interest rates coupled with a dramatic ], caused Banamex's and much of the rest of the privatized banks to essentially become insolvent. | ||
| In order to avoid the potentially catastrophic effects of generalized bank bankruptcies, the ] administration decides to rescue the troubled banks through a government fund (] or], later called ] or ]). IPAB enticed the banks' shareholders to inject fresh equity into the banks by pledging to buy from the banks ] ("]") in a two to one (or in some cases greater) ratio with respect to the newly injected fresh capital in exchange for a long-dated government note with capitalized interest. | In order to avoid the potentially catastrophic effects of generalized bank bankruptcies, the ] administration decides to rescue the troubled banks through a government fund (] or], later called ] or ]). IPAB enticed the banks' shareholders to inject fresh equity into the banks by pledging to buy from the banks ] ("]") in a two to one (or in some cases greater) ratio with respect to the newly injected fresh capital in exchange for a long-dated government note with capitalized interest. | ||
Revision as of 23:13, 13 December 2005
Banco Nacional de México or Banamex is Mexico's largest bank, belonging to the group that bears its name, Grupo Financiero Banamex. The Banamex group was purchased by Citigroup in August 2001 for $12.5 billion USD. It continues to operate as a Citigroup subsidiary.
Today, the bank operates more than 1,427 branches and 4,492 ATMs in the main towns and cities of all the states of Mexico.
History
- Banamex is Founded. 1884
Banamex was formed on June 2 1884 from the merger of two banks, Banco Nacional Mexicano Bank and Banco Mercantil Mexicano, two banks that had operated since the beginning of 1882. The newly founded bank had branches in Mérida, Veracruz, Puebla, Guanajuato and San Luis Potosi, and opened a branch in Guadalajara.
- Mexican Revolution. 1916
General Pancho Villa’s revolution interrupts the bank’s role as banknote issuer for the Porfirio Diaz regime.
- Reorganization. 1926
The bank is reorganized, becoming a financing bank and establishing the first agency of a Latin American bank in New York.
- Growth and Innovation. 1929 to 1972
Banamex introduces several financial product innovations to the Mexican market including savings accounts (in 1929), personal credit lines (in 1958), credit cards (in 1968), and ATM banking (in 1972).
- California Commerce Bank Acquisition. 1981
California Commerce Bank is acquired by Banamex.
In the midst of a severe economic crisis, President José López Portillo announces a major devaluation of the peso and a decree nationalizing all private banks in Mexico. For the next 9 years Banamex operates as a government owned national credit association.
In 1991, Banamex is reprivatized and establishes Grupo Financiero Banamex–Accival with the investment bank Acciones y Valores de México (Accival).
For the next four years Banamex and the rest of the Mexican private banks preside over an unprecedented expansion of private credit in Mexico. This expansion ocurred in an environment characterized by: i) the lack of a credit culture at the newly privatized banks, which had been bought at rich multiples by individuals and organizations without lending experience, and ii) lax oversight by regulatory authorities, which led in some instances to the ocurrence of irregular transactions (such as related party transactions).
The result of this aggressive expansion of credit was to strain the bank's balance sheet (loan portfolio quality ratios and capitalization ratios). The December 1994 macro-devaluation of the Mexican Pesos (see the December Mistake) and the ensuing significant increase in domestic interest rates coupled with a dramatic economic recession, caused Banamex's and much of the rest of the privatized banks to essentially become insolvent.
In order to avoid the potentially catastrophic effects of generalized bank bankruptcies, the Ernesto Zedillo administration decides to rescue the troubled banks through a government fund (Instituto de Protección al Ahorro Bancario orIPAB, later called Fondo Bancario de Protección al Ahorro or Fobaproa). IPAB enticed the banks' shareholders to inject fresh equity into the banks by pledging to buy from the banks non-performing loans ("cartera vencida") in a two to one (or in some cases greater) ratio with respect to the newly injected fresh capital in exchange for a long-dated government note with capitalized interest.
Banamex eventually sold $_ worth of non-performing loans to IPAB, and its shareholders injected $_ of fresh equity. The combination of these measures coupled with a recovery of the Mexican economy helped clean-up the bank's balance sheet.
- Post-rescue operations.
From 1997 to 1991 Roberto Hernández Ramírez was the CEO. In 1997 Afore Banamex is created to tap into the newly created private pension fund market.
- Sale to Citigroup. 2001
On August 6, 2001, Citigroup Inc. acquires Grupo Financiero Banamex-Accival for US$12.5 billion, which becomes Grupo Financiero Banamex. This was the largest-ever U.S.-Mexico corporate merger. Grupo Financiero Banamex's operations were integrated with Citibank's relatively small existing Mexico business under the Banamex brand name.
Subsidiaries
The following are subsidiaries of Grupo Financiero Banamex:
- Banamex
- Brokerage House Accival
- Seguros Banamex
- Afore Banamex
- Inteligia, joint venture with Accenture to provide software outsourcing
External link
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