July 20, 2024

Citi is showing a retail district in Mexico and analysts are speculating which Brazilian banks could buy it

4 min read
Citi is showing a retail district in Mexico and analysts are speculating which Brazilian banks could buy it
Citi is showing a retail district in Mexico and analysts are speculating which Brazilian banks could buy it

After Citigroup announced on Tuesday (11) that it plans to exit the retail operation in Mexico, where it has the largest network of agencies in the world, market analysts have already begun to speculate who will be the main interest in Citibanamex, as Maarouf.

Several analysis houses indicate that among Brazilians, Itaú Unibanco (ITUB4), nubank (NUBR33) e Bradesco (BBDC4) are among the main bets, along with other major Mexican banks.

For Morgan Stanley, in addition to Itaú Unibanco, Banco Azteca and Inbursa may be on the list of potential buyers.

In a report, analyst Jorge Corrie writes that Itau has a small operation in the country and that it has already tried to expand its reach over time. The challenge, however, will be evaluation The current rate of Mexican banks, between 1 and 1.8 times.

For Eduardo Rosman, an analyst at BTG Pactual, the main candidates to buy Citibanamex may be the largest Mexican banks, with the exception of BBVA, due to the potential difficulties of regulatory approval. According to him, Inbursa “could be a player that explores retailing more actively”.

Nubank is accelerating its expansion in Mexico, but the acquisition would go against the fintech strategy of building verticals from scratch, Rosman says.

Bradesco BBI also cited the digital bank, highlighting Nubank’s goal to expand its operations in Mexico and build a strong capital position “with the highest market capitalization in the region, which can facilitate transactions.”

Analysts Gustavo Schrodin, Otavio Tanganyelli and Eric Ito of BBI wrote.

The acquisition would also make sense for Banorty, according to the analysis team, given that it would be a defensive move against him. players Foreigners, while the bank can speed up the integration in Mexico and gain scale.

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However, it must be approved by regulators, although BBI does not see this as an issue in terms of market concentration, as the group estimates that the combined bank will make up about 25% of the total market, while BBVA has something Approximately 24%. “From a strategic point of view, we believe this potential acquisition would make sense for Banorty and would be positive,” the analysts wrote.

On the other hand, Credit Suisse estimates that a more moderate focus could come from the potential acquisition of Banorte or Santander, with a larger market share after the deal, but still lower or, substantially, in line with BBVA’s market share.

The focus may be less worrisome in the event of a takeover by HSBC or Inbursa, the bank wrote.

Credit Suisse further wrote that given the importance of the asset and the potential opportunity to take control of one of Mexico’s largest retail operations, the bank would not be surprised to see Itaú Unibanco as a potential competitor, perhaps even Bradesco.

“However, we believe that banks already operating in Mexico are much more likely given the significant opportunities for cost synergies, not to mention the high income tax regime for Brazilian banks,” the team wrote.

Unlike Morgan Stanley and Credit, BBI Itaú does not see Unibanco in the list of interested parties, given that the bank “has no appetite for this type of international acquisition at the moment”.

“The management said that the bank has no interest in other areas, while we note that Itaú continues to improve the profitability of Itaú Corpbanca in Chile,” the team wrote.

In a report, Itaú BBA wrote that Citibanamex had already been having problems for some time. “We believe the bank has been up for sale in Mexico for several years and the lack of interest in its assets leads us to believe an IPO is most likely,” wrote the BBA, which values ​​the bank at $9 billion.

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The BBA says it welcomes, from a strategic point of view, Banorte or Santander’s acquisition of Citi in Mexico, mainly because of synergies for further expansion in the consumer segment.

Citigroup announced last Tuesday (11) that it plans to exit its retail operations in Mexico. The deal, according to BBI, is similar to the sale of retail operations in Asia last year and reflects Citigroup CEO Jane Fraser’s strategy to streamline the bank’s structure, while focusing efforts on wealthy clients and credit cards.

According to a statement, the bank will preserve its institutions and investments, and de private banking no country.

the Infomoney She called Itai, who said she would not comment on the matter. Bradesco and Nubank had not submitted a position until publication.

(Bloomberg com)

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