Citi Turns 200: Mergers create banking giants abroad
In celebration of Citigroup's 200th Anniversary, we are sharing stories from our rich history here on this blog. The 32nd installment below covers how the bank merged with Banamex. Read the 31st installment explaining how Citi employees came together during the tragic events on September 11th, 2001, here.
Mergers create banking giants abroad
In Mexico and Poland, old-established banks with their own histories and traditions join the Citigroup worldwide network
Under the leadership of Sandy Weill, Citigroup pursued an active program of acquisition. In 2001, the company acquired Mexico's Grupo Financiero Banamex-Accival for $12.5 billion, the largest U.S./ Mexico corporate merger to that date. Three months after the merger was completed, Banamex celebrated its integration with Citigroup at an evening ceremony at its Santa Fe complex in Mexico City. Overnight, 35.9 million transactions had been transferred, 117 Citigroup systems had been interconnected, and 200 systems of both institutions had been closed down. The integrated operation comprised more than 1,400 branches and more than 4,200 ATMs.
"While similar integration processes in our country between banks that are our competitors have required 12, 15 and up to 24 months to be completed, we completed the most important phase in three months," said Manuel Medina-Mora. "Today we are one single bank. And we are making history."
Banamex was founded through the 1884 merger of Banco Nacional Mexicano and Banco Mercantil Mexicano, two banks that had operated independently since 1882. For the next 30 years, it had dual roles as both a commercial bank and a central bank, issuing banknotes and collecting taxes. It was nationalized at the onset of the Latin American debt crisis in 1982 (Mexico was one of the first countries to be seriously affected) and run as a state-owned credit association for nine years, before being reprivatized in 1991.
Citigroup itself has very deep roots in Mexico. The International Banking Corporation, later acquired by National City Bank, set up its first branch in Mexico City in 1903 and a second in Monterrey the following year. Although both were closed during the revolution which began in 1910, National City Bank opened in 1929. Three years later, it was not affected by a government order banning foreign banks from opening branches. As a result, until 1994, Citibank was the only foreign deposit-taking institution in Mexico.