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Latin America Helps Citi

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A strong performance in Latin America helps offset Citi's declines in the United States. An in-depth look at the bank's LatAm operations and outlook.

BY CHRONICLE STAFF

While U.S. revenues fell, Latin America revenues grew strongly at Citi (NYSE: C) in the third quarter. The U.S.-based international bank posted total revenues of $3.9 billion from operations in Latin America (including Mexico) in the third quarter, an increase of 63.5 percent from the same period last year, a Latin Business Chronicle analysis shows. Net income grew by 57.3 percent to $1.1 billion.

"They would like to...reduce their reliance on the US," says Joe Scott, senior director in the financial institutions group at Fitch Ratings. "Latin America is certainly key to that strategy [and] key to their long-term growth strategy."

As the numbers show, Citi appears to be on the right track in Latin America.  "Even if they don’t do anything else, they have a good position in the region," says Celina Vansetti-Hutchins, who heads the banking analytical team for Latin America at ratings agency Moodys Investors Service.

Citis strength in Latin America includes a diverse range of products, including consumer, corporate and investor banking as well as a relatively good presence throughout the region, she says.  The bank boasts a network of 2,600 retail bank and consumer branches in 25 countries in Latin America.

One major weakness, though, is its lack of any significant retail presence in Brazil, Scott and Vansetti-Hutchins say. Another key weakness is the fact that one market alone - Mexico - is still so significant for Citi revenues and income in Latin America.

Manuel Medina-Mora, Chairman and CEO of Citigroup Latin America and Mexico, declined all interview requests for this and other articles, spokeswoman Lula Rodriguez says.  The bank has also repeatedly declined to provide other officials for interviews this year.

MEXICO

Mexico is by far Citis top market in Latin America, accounting for 43 percent of total...



Keywords: Banamex, Banco de Chile, Cuscutlan, Grupo Financiero Uno, Quiñenco, Redecard

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