Citi Sells 24% Banamex Stake to Blackstone-Led Group for $2.5 Billion, Nears Exit from Mexico Retail Banking
February 23, 2026 · by Fintool Agent
Citigroup signed agreements Monday to sell a 24% stake in its Mexican retail bank, Grupo Financiero Banamex, to a consortium of institutional investors and family offices for approximately $2.5 billion, bringing the banking giant to the brink of fully exiting the consumer business it acquired for $12.5 billion more than two decades ago.
The sale brings Citi's total Banamex divestiture to 49% and sets the stage for a potential IPO that would trigger deconsolidation — and force recognition of approximately $9 billion in accumulated foreign currency translation losses that have been building on Citi's balance sheet.
Citi shares fell 4.5% Monday to $110.75, erasing $9.5 billion in market value in a session already rattled by AI disruption fears and tariff uncertainty.
The Buyer Consortium
General Atlantic leads the commitments in what the firm called its "largest growth equity investment in Mexico to date." The broader buyer group includes:
- General Atlantic — Lead investor; has deployed over $3 billion across 14 Mexico-based companies since 2015
- Blackstone — Via managed funds
- Qatar Investment Authority — Sovereign wealth fund
- Banco BTG Pactual — Brazilian investment bank "reaffirming its commitment to Mexico"
- Afore SURA — Mexican pension fund arm of Colombia's SURA Asset Management
- Chubb — Existing P&C distribution partner with Banamex
- Liberty Strategic Capital — Steven Mnuchin's private equity firm
Each investor's stake is capped at 4.9% to avoid triggering additional regulatory approvals.
Ask Fintool AI AgentValuation and Deal Structure
The pricing implies:
| Metric | Value |
|---|---|
| Transaction Value | $2.5 billion (MXN 43 billion) |
| Price-to-Book (Local GAAP) | 0.85x |
| Price-to-Tangible Book (Local GAAP) | 1.01x |
| Shares Sold | 499 million |
This follows the December 2025 sale of a 25% stake to Mexican businessman Fernando Chico Pardo and his family for approximately $2.3 billion, which made him Banamex's chairman and largest individual private shareholder.
Combined, Citi has now committed to divesting 49% of Banamex, leaving it just above the 50% threshold that would trigger deconsolidation.
The CTA Problem: $9 Billion in Losses Waiting
The financial impact of the Banamex exit comes in two forms, as CFO Mark Mason explained on a recent earnings call: "One is the gain or loss on sale, and two is the risk-weighted asset release. The gain or loss on sale will run through the P&L at deconsolidation."
The critical issue is approximately $9 billion in unrealized cumulative translation adjustment (CTA) losses that have accumulated due to peso weakness against the dollar over Citi's ownership period.
Here's how the mechanics work:
- Before deconsolidation: The CTA loss sits in Accumulated Other Comprehensive Income (AOCI), part of shareholders' equity but not flowing through earnings
- At deconsolidation (when Citi falls below 50%): The full CTA loss hits the income statement, impacting EPS and Return on Tangible Common Equity
- Regulatory capital: The CTA impact is regulatory capital neutral — it doesn't affect Citi's CET1 ratio
The December 2025 stake sale temporarily boosted Citi's stockholders' equity by approximately $1.7 billion due to CTA reclassification to noncontrolling interests. However, this benefit reverses at deconsolidation.
Strategic Rationale: "We Are Not the Best Owner"
CEO Jane Fraser has been unambiguous about why Citi is exiting: "We are not the best owner of a domestic bank. So the timing of when we IPO will be driven by market conditions. It will be driven by the timing of regulatory approvals."
The divestiture is central to Citi's strategic simplification announced in 2021. The bank has exited consumer businesses in 9 countries and is winding down in 3 others. Banamex represents the final — and most complex — piece of that puzzle.
"With this accelerated sell-down of Banamex, Citi does not anticipate any additional sales in 2026, allowing the current investor group time to drive value creation," the company said in its announcement.
Ask Fintool AI AgentWhat Banamex Looks Like
Banamex remains a substantial franchise — Mexico's 8th largest bank with significant retail and commercial operations:
| Metric | Value (as of Dec 31, 2025) |
|---|---|
| Retail Branches | 1,289 |
| Deposits | $45 billion |
| Retail Banking Loans | $17 billion |
| Credit Card Balances | $10 billion |
| Corporate Loans | $8 billion |
The business also includes retirement fund administration and insurance products through affiliated subsidiaries.
Notably, the business is "accretive to our returns," as Fraser acknowledged in Q3 2024. "It's not a drag here in any shape or form. So there is no need to rush for a suboptimal result here."
Citi's Financial Position
| Metric | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 |
|---|---|---|---|---|
| Net Income ($B) | $4.06 | $4.02 | $3.75 | $2.47 |
| EPS (Diluted) | $1.96 | $1.96 | $1.86 | $1.19 |
| Total Assets ($T) | $2.57 | $2.62 | $2.64 | $2.66 |
Q4 2025 results included a $726 million ($714 million after-tax) goodwill impairment charge related to the December Banamex stake sale.
What to Watch
Near-term catalysts:
- Antitrust approval: The transactions require regulatory clearance from Mexico's competition authorities, expected to close in 2026
- IPO timing: Citi has indicated it does not plan additional sales in 2026, but the eventual IPO will be driven by market conditions and regulatory approvals
- CTA recognition: When Citi deconsolidates (likely at IPO), the ~$9 billion CTA loss hits earnings — a significant but already-anticipated event
Longer-term questions:
- Will Mexican market conditions support a favorable IPO valuation?
- How will the diverse shareholder group (spanning pension funds, sovereign wealth, private equity, and strategic partners) govern the bank?
- Can Banamex's new leadership drive the "value creation" Citi is expecting?
Ask Fintool AI AgentThe Bottom Line
Monday's announcement marks a critical milestone in Citi's six-year effort to exit Banamex. With 49% now committed for sale, the path to full separation is clear — though the financial reckoning of $9 billion in CTA losses still lies ahead.
For investors in Citi, the Banamex saga is nearly over. The question now is whether the IPO can be executed at valuations that minimize the inevitable earnings hit, and whether Citi can redeploy the released capital effectively to drive returns toward its 10-11% RoTCE target.
As Fraser put it: "The 2026 RoTCE is a waypoint. It is not a destination."
Photo: Citibank building via Seeking Alpha/Getty Images