Banamex 'to pay $1.4bn dividend to Citigroup'

23 December 2010

Mexican financial firm Banamex is set to pay a dividend of around $1.4 billion to parent company Citigroup, which acquired the company in 2001 for $12.5 billion.

According to a report from the Wall Street Journal, filings submitted by Banamex - the country's second-largest bank - to the Mexican stock exchange confirmed shareholders of its Banco Nacional de Mexico arm had approved the payment.

Spokesman Paulo Carreno told the newspaper the dividend is only the second Banamex has provided to Citi since its takeover nine years ago, with 92 per cent of its profits invested in its Mexican operations.

He added that Citi's extensive recent financial support for its subsidiary reflects its confidence in the nation and insisted that 80 per cent of Banamex's returns will be reinvested in Mexico.

Yesterday (December 22nd 2010), Citigroup chief economist Dr Willem Buiter warned in an interview with the Daily Telegraph that the eurozone could be hit with fresh bank failures and sovereign debt defaults in the coming months.

By Asim Shah