Citigroup Unit Quits Argentine Bank
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MEXICO CITY (AP) _ Mexico’s Banamex bank, a unit of U.S.-based Citigroup Inc., said Monday it has sold its majority stake in Argentina’s Banco Bansud _ the first move by a large foreign firm to exit Argentina following the country’s financial collapse.
The terms of the sale, to Argentina’s Banco Macro S.A., weren’t divulged. But a statement from the Buenos Aires Stock Exchange listed the value of the transaction at $65 million.
Jose Ortiz Izquierdo, a spokesman for Banamex in Mexico City, said the sale was carried out ``to reduce the (bank’s) risk exposure″ in Argentina, where the government has defaulted on public debt, devalued the currency and limited bank withdrawals.
Ortiz Izquierdo said he had no immediate information on whether the sale price represented a significant lowering of the value of assets, or whether Banamex would report a loss on its Argentina holdings for the year.
Banamex had held 59.58 percent of Bansud’s capital and 76.17 percent of its voting rights.
Banamex first bought a piece of Bansud in March 1992, and raised its stake in November 1998 _ just as Argentina was entering what turned out to be a three-year recession.
Citigroup purchased Banamex in early 2001 for $12.5 billion.
Banks, many of them foreign-owned, are particularly vulnerable to Argentina’s financial problems because they hold both government and private debt in the country.
In a plan announced Sunday, Argentina’s new government said the first $100,000 of dollar-based mortgages, personal loans and small-business loans will be converted into pesos at the old one-to-one rate.
Outstanding debt will remain in dollars. Banks will be compensated for any losses by hard-currency government bonds financed through a new tax on oil exports over the next five years.