Citigroup Nears Banamex Spin-Off Amid Organizational Overhaul

Citigroup, Inc. C is nearing spinning off its consumer, small business and middle-market banking operations in Mexico — Banco Nacional de México (“Banamex”). The news was reported by the Wall Street Journal. The move aligns with Citigroup’s CEO Jane Fraser's restructuring plan.Citigroup operates in Mexico as Citibanamex. In 2022, Citigroup announced plans to exit the consumer, small business and middle-market banking operations of Citibanamex as part of its strategic overhaul. In 2023, the company announced that it would pursue an initial public offering of its consumer, small business and middle-market banking operations in Mexico following the planned separation of its institutional business.Citigroup previously anticipated the separation of Banamex to be concluded in the second half of 2024 and the IPO to take place in 2025.Rationale Behind Citigroup’s Efforts to Spin Off BanamexThe spin-off demonstrates Fraser's larger focus on Citigroup’s core institutional customer business and efforts to simplify the bank’s operations. The intended divestment indicates a crucial change in Citigroup's profile in the nation.The plan to divest Banamex aligns with Citigroup’s restructuring efforts to exit the retail banking business in some markets and invest in sectors with greater growth potential. The bank divested several international retail banking businesses earlier in this overhaul. These exits are in addition to the major action announced in April 2021 to exit the consumer banking business in 14 markets across Asia and the EMEA. The company has already closed its business in Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand, Vietnam, Indonesia and China.These exits will free up capital and help the company pursue investments in wealth management operations in Singapore, Hong Kong, the UAE and London to stoke fee income growth.Our Take on Citigroup’s Efforts to Spin Off BanamexThrough this spin-off, C will enhance its focus and boost its operational efficiency within its key business segments. These efforts are expected to enhance the performance of the bank and reduce the cost base.Shares of Citigroup have gained 16.6% over the past six months compared with the industry’s growth of 26.8%. Image Source: Zacks Investment Research Currently, C carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Bank’s Efforts to Boost Operational EfficiencyIn August 2024, Societe Generale Group SCGLY announced the divestitures of its private banking subsidiaries in the U.K. and Switzerland, and the full 70% stake in its Madagascar subsidiary. The divestitures are in line with SCGLY’s strategy to achieve an efficient and more synergetic business model through streamlining.In July 2024, Barclays BCS announced the divestiture of its Germany-based consumer finance business, Consumer Bank Europe, to BAWAG P.S.K., a subsidiary of BAWAG Group AG. The divestiture financially supports BCS by freeing up significant capital, improving its balance sheet and allowing for better allocation of resources to high-growth areas. This move reinforces the company’s commitment to becoming a more agile and efficient institution well-positioned for opportunities.Must-See: Solar Stocks Poised to SkyrocketThe solar industry stands to bounce back as tech companies and the economy transition away from fossil fuels to power the AI boom.Trillions of dollars will be invested in clean energy over the coming years – and analysts predict solar will account for 80% of the renewable energy expansion. This creates an outsized opportunity to profit in the near-term and for years to come. But you have to pick the right stocks to get into.Discover Zacks’ hottest solar stock recommendation FREE.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Citigroup Inc. (C): Free Stock Analysis Report Barclays PLC (BCS): Free Stock Analysis Report Societe Generale Group (SCGLY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks