Citigroup CEO Michael Corbat on Wednesday reiterated his support for the company’s Mexican retail unit, downplaying concerns that protectionist policies from the White House may weigh on the unit’s future growth or harm the overall company's global strategy.
As part of his annual letter to shareholders, Corbat said the company’s $1 billion investment in Citibanamex “reaffirms our long-standing commitment to our North American neighbor and our continued confidence in its growth prospects.”
Citi announced the investment in October — a month before the election of President Donald Trump — as part of a plan to upgrade branches and improve technology in its Mexican division.
The surprise election of Trump, however, has prompted some analysts to question the move, given the potential negative impact that Trump’s “America First” trade agenda could have on the Mexican economy. In just two months in office, Trump has established a contentious relationship with the Mexican government, due in part to his plans to construct a wall along the U.S.-Mexico border.
Trump has also sparked widespread fears of a future trade war. He has promised to renegotiate the North American Free Trade Agreement and has also floated the idea of imposing tariffs on U.S. imports from Mexico.
Corbat addressed those concerns, as well as doubts about Citi’s global businesses, in his letter.
“While expectations for growth have gained conviction since the election of Donald J. Trump as U.S. president, some have questioned whether our globality is a vulnerability in the current political environment,” Corbat wrote. “To the contrary, we see it as an advantage.”
While trade policy may “take different forms” under the Trump administration, the importance of trade in a global economy has not changed, Corbat said.
“We have the right model, the right strategy, the right customers and clients, and the right people in the right places to meet our updated targets,” he said.