Citi could "re-pace" Mexico investment over Trump uncertainty
Citi's CFO says the bank plans to move ahead with its $1bn investment in Citibanamex even if the US president-elect's Mexico policies are "unclear"
Citigroup may "re-pace" its planned $1bn
investment in Mexico because of uncertainty over how US
President-elect Donald Trump will carry out his campaign
pledges to overhaul trade and immigration policies between the
Citi intends to go ahead with the investment,
Citigroup CFO John Gerspach said during a Goldman Sachs
conference in New York on Wednesday. However, he said the
incoming Trump’s administration plans for policies
toward Mexico remain unclear.
"We really don’t know what the
administration is going to do," he said. "It’s
really unclear as to what they’re going to do, how
they’re going to do it and where that impact is
going to be."
He added, "We still feel very good about
Mexico’s ability to compete based upon labor
rates, access to natural resources. We like the reforms that
the new administration has put in. So, we feel broadly
constructive about Mexico."
The bank announced plans in October to upgrade its
retail business in Mexico, Citi’s second biggest
market. The bank also renamed its Mexican unit, previously
known as Banamex, to Citibanamex. The $1bn investment plan
through 2020 includes expanding Citibanamex’s ATM
network and increasing its mobile bank offerings.
"A lot of that investment has to do with improving
the infrastructure," Gerspach said. "A lot of that is an
efficiency play and, therefore, it makes a lot of sense to go
Citi’s investment in Mexico comes as
it has moved to sell off its retail businesses in other
countries in Latin America, including Brazil and Argentina. It
also follows a $1.5bn investment made two years ago.
While Trump’s election has cast a
shadow of uncertainty over business in Mexico, other companies
have also announced plans to increase investments in the
On Wednesday, Walmart, which is the biggest
retailer in Mexico, announced a $1.3bn investment. Walmart
plans to build new distribution centers and and expand
existing ones, Walmart México CEO Guilherme Loureiro