A $1 billion bond offering for BBVA México illustrates the bank business Grupo Financiero Citi México is pursuing after its separation from Banamex, even as Citi continues to reduce its stake in the Mexican lender.
Cleary Gottlieb, counsel to the dealers, identified Citi as one of four firms on BBVA México’s offering of subordinated preferred Tier 2 capital notes. The issue was priced Sept. 29, has an 8.35% fixed-reset rate and matures in 2042.
In an Oct. 20 interview with Reuters, Citi Mexico CEO Luis Brossier said the former combined structure had constrained efforts to win other banks as clients. He cited BBVA México as an example of financing work Citi can pursue and said Banamex itself is becoming a client.
The two Mexican businesses began operating separately on Dec. 1, 2024. Grupo Financiero Citi México retained Citi’s institutional operations, while consumer, small-business and middle-market operations became part of Grupo Financiero Banamex. That operating split did not complete Citi’s sale of its Banamex stake.
Banamex said Oct. 19 that it had placed $900 million in perpetual Additional Tier 1 capital instruments paying 9.50% annually. Brossier told Reuters that Citi led the issue. Banamex said it could redeem the instruments at its option beginning 5.5 years after issuance.
Brossier also described plans to expand commercial banking for midsize companies and private banking while doing more for existing corporate customers. He had discussed the aim of bringing other banks into Citi Mexico’s client base in a March interview with El País.
Citi outlined plans in 2023 to retain and grow its Mexican institutional business while pursuing a Banamex initial public offering. Its announcement at the time projected a 2025 listing.
At its Oct. 13 earnings call, Citi said it had sold 49% of Banamex. Citi CEO Jane Fraser said the company expects to deconsolidate the lender in 2027. A proposed initial public offering would follow, subject to market conditions and regulatory requirements.
