Citigroup Steadfast to Mexico Investment Despite Trump's Wall Threats

U.S. bank Citigroup is standing strong with its commitment to invest $2.5 billion in Mexico, despite Trump’s promise of a border wall and the devaluation of the Mexican peso.
“The market’s view of Mexico perhaps is not quite as constructive right now as our view of Mexico,” Citigroup CFO John Gerspach told investors. “We still think there is a lot of value in that Mexico franchise.”
In October 2016, the bank announced plans to invest $1 billion in the Mexico City outfit and the re-branding of its Mexican bank Banamex to Citibanamex. As part of this investment, Citigroup is equipping its branches with smart banking technology and expanding operations in Guadalajara, Monterrey, and Mexico City.
This development followed the announcement in September 2014 of a a modernization program costing more than US$1.5 billion, bringing the total to $2.5 billion to be invested by 2020.
Citigroup’s shares have actually gained 9.2% since the election of Trump, versus a 12% climb in the KBW Bank Index, and Gerspach said the bank still sees “good returns” ahead from its Mexican franchise, which the bank purchased in 2001 for $12.5 billion.
“We’ll have to see exactly where this all translates to from trade protectionism,” Gerspach said, according to a transcript. “Is there a wall? Is it partially a fence? Maybe. I don’t know if that has any difference if part of it is a fence as opposed to a wall, but we’ll see. It’s too early to tell.”
With 1,500 branches and more than 20 million customers, Citigroup’s Banamex is the second largest bank in Mexico. It claims to be handling approximately 17.5 million transactions daily, and maintaining more than 7,500 ATMs and 5.7 million credit card accounts.