Citigroup may have to sell Mexican subsidiary: Report

LONDON: The Supreme Court in Mexico is set to probe a case that could possibly force American banking major Citigroup to sell its profitable Mexican subsidiary, says a media report.

"Mexico's Supreme Court is this week set to probe a case that could potentially force Citigroup, the troubled US bank, to sell its profitable and highly prized Mexican subsidiary," The Financial Times has reported.

The daily said that a group of opposition senators has pointed out that the US government bail-out of Citi last year placed its Mexican subsidiary, Banamex, in breach of national law, which bans foreign governments from owning a stake in domestic banks.

"For Citi, the case is of vital importance. Banamex is one of the brightest jewels in the group's damaged crown, and today accounts for roughly 15 per cent of global profits. By some estimates, it is thought to be worth at least USD 20 billion," the newspaper noted.

The report said that Banamex-- Banco Nacional de Mexico -- is that country's second largest bank and remains "a potent symbol of Mexican nationalism".

In March, Mexico's finance ministry passed a ruling stating that Banamex's status was acceptable because the US government's stake in the financial institution was circumstantial and transitory, the report said

"However, the senators say they want the Supreme Court to decide whether that ruling is constitutional," it added.