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The sale of Banamex by Citigroup will imply a reconfiguration of the Mexican financial system in many ways. Due to its magnitude and type of assets involved, it will be a complex and long sale to begin in the spring. It occurs at a time when there is a technological transformation of banking services with the emergence of fintech that is challenging the conventional operation of banking and its branches. As expected, many questions have arisen.

Presto, López Obrador declared that “he would like the bank to become Mexicanized, to return Banamex to Mexico.” Yes? So what was taken from us? Then he added: “the profits go abroad and are not reinvested in Mexico.” This is ignorance, as was thought in 1970. In today’s globalized world it matters little whether the majority shareholder is foreign or not. He also savored that “now the operation will leave the government billions of pesos in taxes.”

Citigroup’s intention is to sell the entire package without splitting the sale. That is, in a single lot include retail banking with the banking license and the brand, the office and branch buildings, the insurance company, the Afore and the foundation with the art collection and the colonial buildings that are museums. Speculation has arisen about the possible starting price of the package. For this, it is necessary to know the valuation of each component. Valuing the retail banking operation requires applying a methodology that considers, among other factors, the utility, the minimum regulatory capital to comply with the capital guidelines and define the sale price as a multiple of the tangible capital. A reasonable estimate would be a price between 6.5 to 8.5 billion dollars, a prudent range that is equivalent to 1.6 to 2.2 times its book value. In a similar way, the Afore and the insurer should be valued. Regarding the cultural heritage, a good approximation is the appraisal for the assurance of said heritage. Thus, a preliminary figure of the package of 15 to 19 billion dollars has been handled.

The fate of the magnificent artistic and real estate heritage has caused concern. Citibanamex assumed a cultural vocation through the magnificent work of Fomento Cultural Banamex and the management of its two main museums, the Palacio de Iturbide and the Palacio de los Condes de San Mateo de Valparaíso. It will depend on whether the new owners assume this cultural responsibility or what they decide about that heritage. There are already voices calling for an expropriation of the heritage, which would be another serious mistake of the 4T.

As part of the package, the artistic heritage is clearly not the primary motivation for the purchaser. It is equivalent to buying a house and that the seller includes the paintings and furniture in the operation. It is not the determining factor for the transaction. But it is unusual to sell financial assets together with artistic assets. This could lead to taking cultural heritage out of the package and offering it individually or divided. Will there be any private sector interested in fully buying Fomento Cultural Banamex?

Twitter: @frubli

Federico Rubli Kaiser

Economist

IMEF Magazine

Economist graduated from ITAM. He has a Master’s degree and doctoral studies in monetary theory and policy, and international finance and trade. Columnist for The Economist. He has been an advisor to the Governing Board of Banxico, Director of Institutional Liaison, Director of External Relations and Coordinator of the Governor’s Office, Manager of External Relations, Manager of Macrofinancial Analysis, Deputy Manager of Macroeconomic Analysis, Deputy Manager of International Economy and Analyst.




www.eleconomista.com.mx

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