Three bidders left for Citi's Banamex after Banorte drops out

Just three contenders are in the running to buy Citigroup's Banamex unit, according to Mexican President Andres Manuel Lopez Obrador, after Grupo Financiero Banorte said it's no longer pursuing a purchase.

Lopez Obrador made the announcement during a press conference Friday without naming the remaining bidders. Banorte announced in a filing earlier in the day that it's no longer pursuing the acquisition, and said it would call a shareholder meeting. Banorte — Mexico's second-biggest bank by total loans, behind only Banco Bilbao Vizcaya Argentaria — was seen as the top contender for Banamex.

Banamex is likely to attract offers of about $7 billion to $8 billion as the field of bidders narrows, people familiar with the matter said in August. Carlos Slim's Grupo Financiero Inbursa, mining tycoon German Larrea and Grupo Financiero Mifel were still in the running as of last month.

Jeoffrey Guillemard/Bloomberg

Citigroup kicked off the sale process at the start of the year when it announced it would exit consumer, small-business and middle-market banking in Mexico as part of Chief Executive Jane Fraser's turnaround of the New York-based lender. The bank plans to continue offering services to large corporations and wealthy clients in Mexico even after the exit.

Banorte's announcement comes a day after CEO Marcos Ramirez declined to comment on his bank's bid for Citigroup's retail operations in Mexico, or even say if Banorte was still in the process.

Banamex is likely to attract offers of about $7 billion to $8 billion as the field of bidders narrows, people familiar with the matter said in August. Carlos Slim's Grupo Financiero Inbursa, mining tycoon German Larrea and Grupo Financiero Mifel were still in the running as of last month.

Read more: Citi's Banamex Seen Above $7 Billion as Slim Eyes Bank

Banorte's decision comes three months after Banco Santander SA said it was eliminated from the bidding process for Banamex.

For months, Citigroup has said the Banamex exit could ultimately take the form of a sale or a public-market alternative, and will be subject to regulatory approval. The units included in the plans have about $44 billion in assets and take up about $4 billion in average allocated tangible common equity.