Executive Brief

  • Citigroup Inc. agreed to sell a 25% equity stake in Grupo Financiero Banamex to CHPAF Holdings S.A.P.I de C.V., owned by Fernando Chico Pardo and family, for approximately MXN 42 billion (~USD 2.3 billion) at a 0.80x local GAAP book value multiple (Item 2.06).
  • The transaction involves approximately 520 million shares and is expected to close in H2 2026, subject to customary conditions including Mexican regulatory approvals (Item 2.06).
  • Upon closing, Fernando Chico Pardo will become Chair of Banamex’s Board; Ignacio Deschamps remains Chair of Banco Nacional de México, and Manuel Romo remains CEO of Banamex (Item 2.06).
  • Citi recorded a non-cash goodwill impairment charge of approximately USD 726 million related to this transaction, recognized in Other operating expenses within All Other—Legacy Franchises (Item 2.06).
  • The goodwill impairment is capital neutral to Citi and reflects a fair value below carrying value based on a quantitative test triggered by the agreed bid (Item 2.06).
  • Forward-looking statements caution that closing depends on regulatory approvals and other risks including macroeconomic and political conditions in Mexico (Item 2.06).
  • No other Items such as director changes, auditor changes, or voting results were reported.
  • Exhibit 99.1 lists Citi’s securities registered under Section 12(b) but contains no incremental transaction details.
  • The transaction marks the start of a strategic relationship with Fernando Chico Pardo and signals Citi’s partial divestiture of Banamex equity.
  • Key risk to monitor: regulatory approval in Mexico and macro/political conditions affecting closing and valuation.

Item-by-Item Analysis

Item 2.06 – Material Impairments and Item 8.01 – Other Events

  • What happened: Citi agreed to sell a 25% equity stake in Banamex to CHPAF Holdings (Fernando Chico Pardo and family) and recorded a USD 726 million non-cash goodwill impairment related to this transaction.
  • Parties/terms:
    • Seller: Citigroup Inc.
    • Buyer: CHPAF Holdings S.A.P.I de C.V. (Fernando Chico Pardo and immediate family)
    • Stake: 25% (~520 million shares)
    • Price: 0.80x local GAAP book value at closing
    • Estimated consideration: MXN 42 billion (~USD 2.3 billion)
    • Closing conditions: customary, including Mexican regulatory approvals
    • Expected closing: second half of 2026
  • Governance changes: Fernando Chico Pardo to be appointed Chair of Banamex Board; Ignacio Deschamps remains Chair of Banco Nacional de México; Manuel Romo remains CEO of Banamex.
  • Impairment: USD 726 million goodwill impairment recorded in Other operating expenses within All Other—Legacy Franchises; capital neutral.
  • Valuation: Fair value of reporting unit less than carrying value based on quantitative test triggered by bid.
  • Forward-looking statements: Risks include macroeconomic conditions, regulatory approvals, political and social conditions in Mexico, and other factors detailed in Citi’s 2024 Form 10-K Risk Factors.
  • New information: This is a new announcement of the transaction and impairment.
  • Source: (Item 2.06, paras 1-7), (Item 8.01, para 1)

Item 9.01 – Financial Statements and Exhibits

  • Exhibit 99.1: List of Citi’s securities registered under Section 12(b) of the Exchange Act as of filing date; no incremental transaction details.
  • Source: (Item 9.01), (Exhibit 99.1)

Exhibits Summary

  • Exhibit 99.1: Securities registered by Citigroup Inc. under Section 12(b); no new transaction details.

Financial & Dilution Impact

  • Non-cash goodwill impairment of approximately USD 726 million.
  • Estimated proceeds from sale: MXN 42 billion (~USD 2.3 billion).
  • No direct mention of dilution or share issuance.
  • Capital neutral impairment indicates no impact on regulatory capital.

Timeline & Required Actions

  • Expected closing in second half of 2026.
  • Closing subject to customary conditions including regulatory approvals in Mexico.

Risks & Monitoring

  • Regulatory approval risk in Mexico.
  • Macroeconomic and political conditions in Mexico.
  • Potential changes in banking sector conditions.
  • Impact of closing failure on goodwill impairment and strategic plans.

Metadata & Quality Checks

  • No OCR or formatting issues detected.
  • Non-GAAP reconciliation: Unknown (not referenced).
  • Forward-looking statements present: Yes.
  • Related-party elements: Buyer is a private entity owned by Fernando Chico Pardo and family; no conflict disclosed.

Final Checklist

  • Identified Items 2.06, 8.01, 9.01.
  • Extracted key financial and governance facts.
  • Noted forward-looking statements and risks.
  • Summarized Exhibit 99.1.
  • Quantified impairment and transaction value.
  • Provided timeline and closing conditions.
  • Highlighted investor takeaways and monitoring points.

Original Filing