✦ Banamex: Selling Mexico in PiecesNarrow moat

Citigroup (C) — the future bets

Citi is selling Mexico a slice at a time, and will book about $9 billion of old currency losses when it lets go.

The largest remaining exit is Mexico. Citi announced in January 2022 that it would leave consumer and commercial banking at Banamex1. It sold 25% of Banamex to a company owned by Fernando Chico Pardo on 15 December 2025, at 0.80 times local book value, for about $2.3 billion2. It sold another 22.6% to institutional investors and family offices on 29 April 2026, with 1.4% more expected in the third quarter3. That is 47.6% sold4. A public offering of the rest is still only proposed5.

Banamex exitJan 2022exit announcedDec 202525% sold at0.80x book,about $2.3bnApr 202622.6% soldto investorsQ3 20261.4% moreexpectedEarly 2027deconsolidation;about $9bn CTACitigroup Form 10-K FY2025 and Form 10-Q Q2 2026
Half sold; deconsolidation next.

The accounting cost is large and deferred. Citi had about $9 billion of unrealised currency translation losses on Banamex, and said it may recognise them in earnings and deconsolidate Banamex in early 20276. The losses already sit in equity, so recognising them moves them from one line to another; Citi calls the effect regulatory capital neutral7.

What it buys is simplicity. Legacy Franchises revenue was $2,053 million in the second quarter of 20268, a business that will leave the income statement when Banamex does.

The April sale cost something too: Citi recorded a net loss of about $0.5 billion, mostly in additional paid-in capital rather than earnings9.

The first sale also cost an impairment. The 2025 results include a goodwill impairment of about $726 million in the third quarter, related to the agreement to sell 25% of Banamex10. Citi's near-term return target excludes Banamex's results from its build11, and the expected loss on deconsolidation is the "notable item" in the 11% to 13% range12.

The partners in Mexico now share the profit. Noncontrolling interests took $162 million of All Other's earnings in the second quarter of 202613.

The April sale added capital: Citi counted the net impact of the 22.6% stake sale among the reasons its CET1 ratio rose to 12.8% in the second quarter14.

The date is the test. Banamex still consolidated at the end of 2027 would mean the last big exit had slipped a year.

Moat trajectory: Widening

47.6% sold; deconsolidation expected early 2027.

The number that tests this moat
Reported
Legacy Franchises revenue, latest quarter
$2,053M (Q2 2026), up 21% year on year

The business leaving with Banamex; still on the books at the end of 2027 would mean the exit had slipped.

Source: Citigroup Q2 2026 earnings release ↗
References
  1. ReportedCiti announced in January 2022 that it would leave consumer and commercial banking at Banamex.
    Citigroup Form 10-K for fiscal 2021 - the April 2021 strategic refresh: four wealth centers, exits of consumer franchises in 13 markets and the January 2022 Citibanamex exit announcement. — FY2021 · publ. February 2022 · source ↗
  2. ReportedIt sold 25% of Banamex to a company owned by Fernando Chico Pardo on 15 December 2025, at 0.80 times local book value, for about $2.3 billion.
    Citigroup Form 10-K for fiscal 2025 - business description, segments, history, footprint, employees and executives. — FY2025 · publ. 20 February 2026 · source ↗
  3. ReportedIt sold another 22.6% to institutional investors and family offices on 29 April 2026, with 1.4% more expected in the third quarter.
    Citigroup Form 10-Q for the quarter ended 30 June 2026 - divestitures: Banamex stake sales and CTA losses, the Russia and Poland sales, and Legacy Franchises balances. — Q2 2026 · publ. 6 August 2026 · source ↗
  4. Moat Explorer calcThat is 47.6% sold.
    Moat Explorer calculation from Citigroup and peer figures ($ millions unless stated). Deposit cost: Bank of America 34,513 / (1,469,705 + 514,477) = 34,513 / 1,984,182 = 1.74%; Citi non-interest-bearing share 202,705 / 1,363,051 = 14.9%, about 15%; gap to JPMorgan 2.57% - 1.80% = 0.77 points; 0.0077 x 1,363,051 = 10,495, about $10.5 billion a year; 10,495 / 19,828 pre-tax income = 53%, more than half; JPMorgan average deposits 2,506,565 / 1,363,051 = 1.84 times. Market value: JPMorgan 911.91 / Citi 225.24 = 4.05, about four times; Citi / JPMorgan 225.24 / 911.91 = 0.247, about a quarter, about 0.25. Card partners: 12% x 85,225 = 10,227, roughly $10.2 billion. Institutional deposits 934 / 1,403.6 = 66.5%, about two-thirds, about 67%; other deposits 1,403.6 - 934 = 469.6. Banamex stake sold 25% + 22.6% = 47.6%. Shares: period-end common shares 1,747.5 / 1,903.1 - 1 = -8.2%, about 8%; average diluted shares 1,873.1 / 3,007.7 - 1 = -37.7%, about 38%. Market value over tangible common equity at year end ($bn): 2018 127.14 / 151.078 = 0.84; 2019 174.42 / 148.809 = 1.17; 2020 128.37 / 153.389 = 0.84; 2021 119.83 / 157.077 = 0.76; 2022 87.60 / 158.151 = 0.55; 2023 98.45 / 164.025 = 0.60; 2024 133.13 / 167.698 = 0.79; 2025 208.79 / 169.618 = 1.23. Trailing twelve months to June 2026: net income 14,306 - 8,083 + 11,616 = 17,839; revenue 85,225 - 43,264 + 49,399 = 91,360; diluted EPS 6.99 - 3.92 + 6.21 = 9.28; P/E 225,250 / 17,839 = 12.6; P/S 225,250 / 91,360 = 2.47. Year-end P/E and P/S (market value over net income and revenue): 2015 154.16 / 17.242 = 8.94, 154.16 / 77.277 = 1.995; 2016 169.36 / 14.912 = 11.36, / 70.797 = 2.392; 2017 196.74 / 73.693 = 2.670 (net loss); 2018 127.14 / 18.045 = 7.05, / 74.036 = 1.717; 2019 174.42 / 19.401 = 8.99, / 75.067 = 2.324; 2020 128.37 / 11.047 = 11.62, / 75.501 = 1.700; 2021 119.83 / 21.952 = 5.46, / 71.574 = 1.674; 2022 87.60 / 14.845 = 5.90, / 74.982 = 1.168; 2023 98.45 / 9.228 = 10.67, / 78.066 = 1.261; 2024 133.13 / 12.682 = 10.50, / 80.722 = 1.649; 2025 208.79 / 14.306 = 14.59, / 85.225 = 2.450. More: end-of-period deposits 1,493 / 1,403.6 - 1 = 6.4%, about 6%; Markets average loans 176 / 794 total loans = 22.2%, about 22%; JPMorgan deposit-cost gap 2.72 - 1.70 = 1.02 points (2023), 3.06 - 2.08 = 0.98 points (2024), about 1.0 point; Bank of America non-interest-bearing share 514,477 / 1,984,182 = 25.9%, about 26%; Services old-basis average deposits 935 / 1,422 = 65.8%, about 66%; AO Citibank assets 13.5 / 2,657.2 = 0.51%, about 0.5%; loss 1.2 / 13.5 = 8.9%, about 9%. Card partners against the card segment: 10,227 / 18,258 = 56%, more than half. Return improvement to target: 14.5 - 8.8 = 5.7 points, roughly six. Forecast extrapolation: 2026 revenue 49,399 x 2 = 98,798; 2026 EPS 134.28 / 11.58 = 11.60; revenue growth (85,225 / 78,066)^(1/2) - 1 = 4.5% a year. — FY2015-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Citigroup's Forms 10-K and 10-Q, JPMorgan's and Bank of America's Forms 10-K, and market data from stockanalysis and companiesmarketcap; operands shown in the source line.
  5. ReportedA public offering of the rest is still only proposed.
    Citigroup Form 10-Q for the quarter ended 30 June 2026 - divestitures: Banamex stake sales and CTA losses, the Russia and Poland sales, and Legacy Franchises balances. — Q2 2026 · publ. 6 August 2026 · source ↗
  6. ReportedCiti had about $9 billion of unrealised currency translation losses on Banamex, and said it may recognise them in earnings and deconsolidate Banamex in early 2027.
    Citigroup Form 10-Q for the quarter ended 30 June 2026 - divestitures: Banamex stake sales and CTA losses, the Russia and Poland sales, and Legacy Franchises balances. — Q2 2026 · publ. 6 August 2026 · source ↗
  7. ReportedThe losses already sit in equity, so recognising them moves them from one line to another; Citi calls the effect regulatory capital neutral.
    Citigroup Form 10-Q for the quarter ended 30 June 2026 - divestitures: Banamex stake sales and CTA losses, the Russia and Poland sales, and Legacy Franchises balances. — Q2 2026 · publ. 6 August 2026 · source ↗
  8. ReportedLegacy Franchises revenue was $2,053 million in the second quarter of 2026, a business that will leave the income statement when Banamex does.
    Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - firm results, returns, efficiency, capital returned, tangible book value and All Other. — Q2 2026 · publ. 14 July 2026 · source ↗
  9. ReportedThe April sale cost something too: Citi recorded a net loss of about $0.5 billion, mostly in additional paid-in capital rather than earnings.
    Citigroup Form 10-Q for the quarter ended 30 June 2026 - divestitures: Banamex stake sales and CTA losses, the Russia and Poland sales, and Legacy Franchises balances. — Q2 2026 · publ. 6 August 2026 · source ↗
  10. ReportedThe 2025 results include a goodwill impairment of about $726 million in the third quarter, related to the agreement to sell 25% of Banamex.
    Citigroup 2026 Investor Day financial overview presentation - RoTCE targets, business targets for Services, Cards and Markets, efficiency ratio, transformation, liquidity and capital. — May 2026 · publ. May 2026 · source ↗
  11. ReportedCiti's near-term return target excludes Banamex's results from its build, and the expected loss on deconsolidation is the "notable item" in the 11% to 13% range.
    Citigroup 2026 Investor Day financial overview presentation - RoTCE targets, business targets for Services, Cards and Markets, efficiency ratio, transformation, liquidity and capital. — May 2026 · publ. May 2026 · source ↗
  12. ReportedCiti's near-term return target excludes Banamex's results from its build, and the expected loss on deconsolidation is the "notable item" in the 11% to 13% range.
    Citigroup 2026 Investor Day financial overview presentation - RoTCE targets, business targets for Services, Cards and Markets, efficiency ratio, transformation, liquidity and capital. — May 2026 · publ. May 2026 · source ↗
  13. ReportedNoncontrolling interests took $162 million of All Other's earnings in the second quarter of 2026.
    Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - firm results, returns, efficiency, capital returned, tangible book value and All Other. — Q2 2026 · publ. 14 July 2026 · source ↗
  14. ReportedThe April sale added capital: Citi counted the net impact of the 22.6% stake sale among the reasons its CET1 ratio rose to 12.8% in the second quarter.
    Citigroup second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - firm results, returns, efficiency, capital returned, tangible book value and All Other. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 28, 2026