Hacienda View on Banamex Expected

News about the Mexican finance ministry’s position on a forced sale by Citi of Banamex is expected this week, according to RBC Capital Markets. “Hacienda is expected to define its view on the issue this week. We believe there are a number of Mexicans interested in the acquisition and that most members of the opposition would like the bank to return to Mexican hands,” says the shop in a report issued Monday. It adds that the issue will be a key driver for the MXP this week. Since Citi ran into severe trouble – and especially since the US government upped its stake – markets have been speculating about a sale of the lucrative Banamex operations. Under Mexican law the finance ministry will decide, say local attorneys. However, lawyers do not expect Hacienda to force a sale on legal grounds. Nonetheless, political pressure may become too great. Banamex is a sensitive case, as an iconic institution that has for many years been a leading domestic bank. It operates 19% of the Mexican system, according to Moody’s. Talk of local groups forming to buy Banamex continue to do the rounds. Itau is also mentioned as a potential bidder if Citi opts to sell. According to Rodrigo Conesa Labastida, partner at Ritch Mueller in Mexico City, the price of the US government stake would be 50% of the lowest of either book value or market value of the shares. Citi says it is not planning to sell Banamex.