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Grupo Financiero Banamex,
S.A. de C.V

File:Citibanamex logo.png
Trade name	Citibanamex
Company type	Subsidiary
Industry	Financial services
Predecessor	Grupo Financiero Banamex Accival
Founded	2 June 1884; 140 years ago (1884-06-02) as Banco Nacional de México (Banamex)
Headquarters	Mexico City, Mexico
Key people	Manuel Medina-Mora Escalante (Chairman of the Board) Ernesto Torres Cantú (CEO)
Products	Banking, financial
Revenue	US$ 18.3 billion (2010)
Net income	US$ 1.7 billion (2010)
Total assets	US$ 58.4 billion (2011)
Number of employees	41,390 (2012)
Parent	Citigroup
Website	www.banamex.com

Grupo Financiero Banamex S.A. de C.V. has its origins and is the owner of the Banco Nacional de México or Citibanamex (formerly Banamex). It is the second-largest bank in Mexico. The Banamex Financial Group was purchased by Citigroup in August 2001 for $12.5 billion USD. It continues to operate as a Citigroup subsidiary.

History

Banamex was formed on 2 June 1884 from the merger of two banks, Banco Nacional Mexicano and Banco Mercantil Mexicano, which had operated since the beginning of 1882. The newly founded bank had branches in Mérida, Veracruz, Puebla, Guanajuato and San Luis Potosí, and opened a branch in Guadalajara. After the start of World War I, the French managers of the bank left Mexico. After 10 years, Agustín Legorreta Ramírez who served as acting president managed to revive the bank. Following its reorganization, the bank collaborated with Banco de Mexico and US government officials. By 1937, 36 out of 50 bank branches in Mexico were owned by Banamex.

Banamex gradually introduced several financial product innovations to the Mexican market including the first credit cards in 1968 and an ATM banking system in 1972. In 1977, Grupo Banamex was formed by merging the bank with its investment and mortgage assets. Four years later, Banamex acquired the California Commerce Bank.

During a severe economic crisis in 1982, then Mexican president José López Portillo announced a major devaluation of the peso and nationalized all private banks in Mexico. For the next nine years, Banamex operated as a government-owned national credit association. In 1991, Banamex was reprivatized and it established 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 presided over an unprecedented expansion of private credit in Mexico. This expansion occurred 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 occurrence 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 decided to rescue the troubled banks through a government fund (Instituto de Protección al Ahorro Bancario or IPAB, 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 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.

From 1997 to 2001 Roberto Hernández Ramírez was the CEO. In 1997, Afore Banamex was created to access the newly created private pension fund market.

On 6 August 2001, Citigroup Inc. acquired Grupo Financiero Banamex-Accival for US$12.5 billion, which became 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.

In October 2014, allegations were made that employees had taken millions of dollars in kickbacks from vendors. Authorities in Mexico and the United States are investigating the allegations. Citigroup encouraged Manuel Medina-Mora to resign.

Subsidiaries

The following are subsidiaries of Grupo Financiero Banamex:

• Banamex
• Accival
• Afore Banamex
• Seguros Banamex
• Arrendadora Banamex
• Operadora e Impulsora de Negocios
• Acción Banamex
• Pensiones Banamex
• Fomento Cultural
• Fomento Social

Banamex USA

After Citigroup's purchase of Banamex in 2001, Banamex decided to expand into the U.S. by opening a subsidiary in the country and creating Banamex USA. Most of the banks branches were located in the Southwest with branches in California, Texas, and Arizona. The U.S. subsidiary didn't last long though and was shut down in 2015 after a 6-year investigation into Citigroup's and Grupo Financiero Banamex' money laundering scheme by the U.S. Department of Justice. This resulted in Citigroup having to pay a $140 million fine.

As per New York Times and others: “ banamex usa money laundering from www.nytimes.com May 22, 2017 · As part of the agreement, Banamex USA “admitted to criminal violations by willfully failing to maintain an effective anti-money-laundering” compliance”. It is extremely rare that Bank is not only fined and closed but the public admission of guilt in criminal violations by the Bank.

See also

• 1884 in Mexico
• Amero

References

1. ^ Banco Nacional de México, S.A. (2013). "Reporte Anual que se presenta de acuerdo con las Disposiciones de Carácter General aplicables a las Emisoras de Valores y a otros Participantes del Mercado de Valores respecto al ejercicio terminado el 31 de diciembre de 2012" (PDF) (in Spanish). pp. 6–7, 61. Retrieved 22 March 2014.
2. Grupo Financiero Banamex, S.A. de C.V (2013). "Consejo de Administración" (PDF) (in Spanish). Retrieved 22 March 2014.
3. ^ "History of Grupo Financiero Banamex S.A". Funding Universe. Retrieved 6 July 2020.
4. Juliana Etcheverry (19 July 2017). "The advantages of local acquiring in Mexico". Latin America Business Stories. Retrieved 6 July 2020.
5. Bernardo Batiz-Lazo, J. Carles Maixé-Altés, Paul Thomes (23 November 2010). Technological Innovation in Retail Finance: International Historical Perspectives. Routledge. p. 108. Retrieved 6 July 2020.{{cite book}}: CS1 maint: multiple names: authors list (link)
6. Mauro F. Guillén, Adrian Tschoegl (1 July 2008). Building a Global Bank: The Transformation of Banco Santander. Princeton University Press. p. 102. Retrieved 6 July 2020.
7. Jonathan Kandell (18 February 2004). "José López Portillo, President When Mexico's Default Set Off Debt Crisis, Dies at 83". The New York Times. Retrieved 6 July 2020.
8. "Another Scandal Hits Citigroup's Moneymaking Mexican Division". The New York Times.
9. "Citigroup Likely to Close Banamex USA". Stock Market Advice | Investment Newsletters - Profit Confidential. 1 June 2015.
10. "UPDATE 2-Citi to shut Banamex USA, pay $140 mln fine". 22 July 2015 – via www.reuters.com.

External links

• Citibanamex (in English)
• Afore Banamex (in Spanish)
• Fomento Cultural (in Spanish)

v t e Citigroup
People	Michael E. O'Neill Vikram Pandit Richard Parsons William R. Rhodes Lewis B. Kaden Al Waleed bin Talal Al Saud John Havens
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Notable former executives	Winfried Bischoff Michael Bloomberg Gary Crittenden Jamie Dimon Ahmed Fahour Stanley Fischer Lewis Glucksman Thomas W. Jones Sallie Krawcheck Victor Menezes George S. Moore Samuel Osgood Joe J. Plumeri Chuck Prince John Reed Robert Rubin James Stillman Rockefeller William Rockefeller Moses Taylor Sandy Weill Robert B. Willumstad Walter Wriston
Corporate directors	Michael Armstrong Alain Belda George David Kenneth T. Derr John M. Deutch Roberto Hernández Ramírez Manolo Falcó Jane Fraser Ann Jordan Klaus Kleinfeld Andrew N. Liveris Anne Mulcahy Richard Parsons Chuck Prince Judith Rodin Robert Rubin Franklin A. Thomas Sandy Weill
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Headquarters: 388 Greenwich Street, New York City, New York 10043, United States Category

• Citigroup
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