Citigroup Inc (NYSE:C), the most internationally focused institution among the U.S. largest banks, is undoing its international expansion in some markets. Citigroup is said to be in talks to offload its retail operations in Latin America. People familiar with the plan said Citigroup could tap $1.5 billion from the sale of the assets. However, the value of the deal could change because talks are still ongoing.
In Latin America, Citigroup Inc (NYSE:C) is expected to exit consumer banking operations in five countries but will continue serving corporate clients in the markets. The bank is expected to sell its retail operations in Panama, Guatemala, Costa Rica, Nicaragua and El Salvador. The retail assets in the five countries could be sold to Banco Popular Espanol SA, according to the people privy to the talks.
Assumption of debt
The purchase of Citigroup’s Latin America retail operations could come with the assumption of liabilities. That also explains why the $1.5 billion price that has been cited could change in the final deal.
Citigroup Inc (NYSE:C) has previously dealt with Banco Popular. Last year, Citigroup sold its Spanish credit card and retail banking operations to the Madrid-based Banco Popular. As such, it is cited to be the top candidate to land Citigroup’s Latin America retail assets. The other reason Banco Popular is cited as a suitable buyer in the planned asset sale is that it is likely to cut fewer jobs compared to other contenders in the markets. The other potential buyer is Colombia banking group known as Grupo Aval Acciones y Valores SA.
Simplifying the company
Citigroup Inc (NYSE:C)’s CEO, Michael Corbat, is trying simply the bank while focusing on high-growth markets. The company has been moving out of international markets where returns are not good. Last year, the bank announced plans to exit retail banking in some 11 countries, including the five in Latin America. The countries that Citigroup plans to exit brought in revenue of $1.62 billion in the last 12 months.