Citigroup Inc. Chief Executive Officer Michael Corbat said the company will invest 20 billion pesos ($1.5 billion) in its Mexican unit's technology, data centers and physical infrastructure in the next four years.
The third-largest U.S. bank by assets also will allocate 130 billion pesos for financing related to the energy industry and 50 billion pesos for small- and medium-sized businesses, Corbat said at an event in Mexico City. He was joined by Manuel Medina-Mora, the Citigroup co-president who previously oversaw Mexican operations, as well as by Mexican President Enrique Pena Nieto.
Citigroup is moving to improve its Mexico operations after disclosing losses in February on $400 million of loans to oil- services provider Oceanografia SA against collateral that didn't exist. Corbat said at the event that Mexico's growth potential is among the highest in the world, as the government opens its state-controlled oil industry to private investment and injects more competition into the telecommunications business.
The Mexican unit, known as Banamex, is a "great source of pride" for Citigroup, Corbat said.
Pena Nieto, who led the push to change the energy and telecommunications laws, has said that the moves will increase long-term economic growth by about 1 percentage point by 2018.
Banamex's loan portfolio grew by 2.1 percent in the 12 months through July, compared with a 10 percent expansion the prior year, according to regulator data.