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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 Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
. The Banamex Financial Group was purchased by
Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
in August 2001 for $12.5 billion
USD The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
. It continues to operate as a Citigroup
subsidiary A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
.


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 Veracruz (), formally Veracruz de Ignacio de la Llave (), officially the Free and Sovereign State of Veracruz de Ignacio de la Llave ( es, Estado Libre y Soberano de Veracruz de Ignacio de la Llave), is one of the 31 states which, along with Me ...
,
Puebla Puebla ( en, colony, settlement), officially Free and Sovereign State of Puebla ( es, Estado Libre y Soberano de Puebla), is one of the 32 states which comprise the Federal Entities of Mexico. It is divided into 217 municipalities and its cap ...
,
Guanajuato Guanajuato (), officially the Free and Sovereign State of Guanajuato ( es, Estado Libre y Soberano de Guanajuato), is one of the 32 states that make up the Federal Entities of Mexico. It is divided into 46 municipalities and its capital city i ...
and
San Luis Potosí San Luis Potosí (), officially the Free and Sovereign State of San Luis Potosí ( es, Estado Libre y Soberano de San Luis Potosí), is one of the 32 states which compose the Federal Entities of Mexico. It is divided in 58 municipalities and i ...
, and opened a branch in
Guadalajara Guadalajara ( , ) is a metropolis in western Mexico and the capital of the list of states of Mexico, state of Jalisco. According to the 2020 census, the city has a population of 1,385,629 people, making it the 7th largest city by population in Me ...
. After the start of
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, 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 The Bank of Mexico ( es, Banco de México), abbreviated ''BdeM'' or ''Banxico,'' is Mexico's central bank, monetary authority and lender of last resort. The Bank of Mexico is autonomous in exercising its functions, and its main objective is to ac ...
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 card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
s 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 José Guillermo Abel López Portillo y Pacheco (; 16 June 1920 – 17 February 2004) was a Mexican writer, lawyer and politician affiliated with the Institutional Revolutionary Party (PRI) who served as the 58th president of Mexico from 1976 t ...
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). It had 720 branch offices, 31,797 employees, assets of $26.2 billion and a customer base of four million people making it the largest financial group in Latin America at the time. As a result of the private credit aggressive expansion in Mexico, resulted in a strain of the bank's balance sheet (
loan portfolio quality In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
ratios and
capitalization Capitalization (American English) or capitalisation (British English) is writing a word with its first letter as a capital letter (uppercase letter) and the remaining letters in lower case, in writing systems with a case distinction. The term a ...
ratios). The December 1994 macro-devaluation of the Mexican pesos and the ensuing significant increase in domestic interest rates coupled with a dramatic
economic recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...
, 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 Ernesto Zedillo Ponce de León (; born 27 December 1951) is a Mexican economist and politician. He was 61st president of Mexico from 1 December 1994 to 30 November 2000, as the last of the uninterrupted 71-year line of Mexican presidents from t ...
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 Fobaproa (''Fondo Bancario de Protección al Ahorro''; "Savings Protection Banking Fund", in Spanish) was a contingencies fund created in 1990 by the Mexican government, led by then dominant Institutional Revolutionary Party (PRI) to attempt to re ...
or
Fobaproa Fobaproa (''Fondo Bancario de Protección al Ahorro''; "Savings Protection Banking Fund", in Spanish) was a contingencies fund created in 1990 by the Mexican government, led by then dominant Institutional Revolutionary Party (PRI) to attempt to re ...
). IPAB enticed the banks' shareholders to inject fresh equity into the banks by pledging to buy from the banks
non-performing loans A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and ...
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 Roberto Hernández Ramírez (born 1942 in Tuxpan, Veracruz) is a Mexican businessman. He is a former CEO of ''Banco Nacional de México (Banamex)'', Mexico's second largest bank, just after BBVA Bancomer, from Spain. He was a member of the board ...
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 bank 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.


See also

*
1884 in Mexico Events in the year 1884 in Mexico. Incumbents * President – Manuel González Flores until November 30, Porfirio Díaz from December 1 * Archbishop of Mexico – Pelagio Antonio de Labastida y Dávalos Governors * Aguascalientes: R ...
* Amero


References


External links


Citibanamex

Afore Banamex

Fomento Cultural
{{Authority control Citigroup Banks of Mexico Mexican brands