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Banamex, the Sale of the Mexican Banking Jewel in Check

If the valuations are accurate, the exact current value of Banamex should be around 9.2 billion dollars.

This figure is lower than the 12.5 billion dollars paid in 2001 for the Mexican bank. At the time, there was no shortage of analysts who claimed it had been an expensive purchase; today, the numbers and poor management seem to prove them right.

Grupo México explained that its offer ultimately aims to keep the bank in Mexico and preserve its structure and clients. Without providing many numerical details, it indicated that it would respect the valuation at which businessman Fernando Chico Pardo acquired 25% of the shares.

The sale of Banamex by Citigroup seemed to be a smooth process that would finally bring certainty to shareholders, employees, and the market in general about the fate of the historic Mexican bank, considered one of the jewels of the country’s banking system. Everything pointed that way until the afternoon and evening of Friday, October 3. Grupo México, led by the second-wealthiest man in Mexico and Latin America, announced that it had made an offer to Citi to acquire 100% of Banamex.

September 24: Everything Seemed Settled

Just on September 24, a surprising financial announcement positively shook the Mexican market: businessman Fernando Chico Pardo announced, along with Citigroup through Ernesto Torres Cantú, International Director of the U.S. bank, the sale of 25% of Banamex’s shares for an equivalent of 42 billion pesos, that is, 2.3 billion dollars, which valued the bank at a total of 9.2 billion dollars.

The transaction still needed to meet the corresponding regulatory requirements and was expected to close in the second half of 2026, although both parties expressed optimism, noting they had the approval of the Mexican government since the operation had been previously discussed with the relevant authorities and even with President Claudia Sheinbaum.

In a subsequent press conference, Torres Cantú noted that although Citigroup was willing to sell more shares of Banamex, the buyers would be very minority investors, as the reference shareholder would be Fernando Chico Pardo.

Up to that point, everything indicated a smooth sale process for Banamex, pending the IPO planned for sometime in late 2025 or the first half of 2026, as well as the arrival of new investors.

But that Friday evening, another announcement reminded everyone that the sale of Banamex has always been a controversial process, full of uncertainty and even risks for the country’s banking system. This is the story.

Grupo México Strikes Back, Offers to Buy 100% of Banamex

Grupo México, led by Germán Larrea Mota-Velasco, the second-wealthiest man in Mexico and Latin America, with a personal fortune estimated at around 55.4 billion dollars according to Forbes, presented its offer stating that its terms are “more attractive” for Citi and that the transaction, if completed, would ensure that the entity remains part of a majority Mexican group.

Without providing many numerical details, the company suggested it would respect the valuation at which businessman Fernando Chico Pardo acquired 25% of the shares, that is, a total value of 9.2 billion dollars.

Since Chico Pardo apparently would have no problem retaining 25% of Banamex, Grupo México could acquire the remaining 75%, as despite its offer being for 100%, it also expressed willingness to keep Chico Pardo as a minority investor. This would mean a disbursement of approximately 6.9 billion dollars for the remaining 75% of the bank’s shares.

Citi Says It Has Not Received Another Offer

Citigroup immediately responded to Grupo México’s announcement, stating in a Friday night press release that the only bidder it had a deal with was Chico Pardo.

“The agreement we announced last week with Fernando Chico Pardo and our proposed IPO remains our preferred path to achieving that outcome. So far, we have not received an offer. If Grupo México presents an offer, of course, we will review it responsibly and consider, among other risk factors, the ability to obtain the required regulatory approvals and the certainty of closing a proposed transaction,” said Citi.

In any case, Grupo México’s announcement is by no means a joke. Analysts noted that by the early hours of Monday—or perhaps over the weekend—Citi would likely have Grupo México’s official proposal on the table. A new period of uncertainty now begins regarding the fate of the iconic Mexican bank; once again, its sale is filled with controversy.

The Multi-Billion-Dollar Sale to Citi

Citibank will sell Banamex—whether to Fernando Chico Pardo and a multitude of investors (possibly including an eventual IPO), to Grupo México, or to some combination of all of them—for less than 10 billion dollars. If the valuations are accurate, the exact current value of Banamex should be around 9.2 billion dollars.

This figure is lower than the 12.5 billion dollars Citigroup paid for the Mexican bank 24 years ago. At the time, there was no shortage of analysts who claimed it had overpaid; today, the numbers and poor management seem to prove them right.

Banamex has been losing relevance in the Mexican market over the past 20 years. When it was acquired by Citigroup, it was ranked second or third in the system, depending on the source consulted. Today, it remains within the top 10 banks in the country but far from the top spots, which belong to BBVA, Banorte, and Santander.

A second group includes banks such as Scotiabank, HSBC, Banamex, Inbursa, Banco del Bajío, BanCoppel, and Banco Azteca. It is a fact that Banamex will be sold for at least 2.5 billion dollars less than what it cost Citigroup 24 years ago—a multi-billion-dollar operation that today reflects no added value for the bank or its former buyer.

Despite all this, Banamex remains a highly coveted bank by both domestic and foreign players—even by the Mexican government, which at one point considered the possibility of turning it once again into a state-owned entity.

Mexican Government Blocked Sale to Foreigners and Tried to Buy Banamex

In January 2022, after Citi’s announcement, the government of then-President Andrés Manuel López Obrador clearly and firmly stated that it would not authorize the sale of the bank to a foreign institution. This abruptly eliminated the intentions of global players like BBVA, HSBC, and Scotiabank to bid for the bank’s shares—or even of large funds like BlackRock, which had hinted at an interest in adding the bank to its business portfolio.

Later, the president himself placed an offer on Citi’s table to acquire Banamex’s shares, which would have returned it to what it once was, along with virtually the entire commercial banking system: a national credit institution, i.e., state-owned.

The idea caused a stir but also generated uncertainty and nervousness in the market. However, the Mexican government withdrew months later, and Citigroup announced it would entertain offers for the sale of Banamex. The country’s major capital holders readied their checkbooks—but something happened.

Carlos Slim and Germán Larrea: Two Tycoons, Two Withdrawals

The two biggest businessmen in the country and Latin America, Carlos Slim and Germán Larrea, ranked first and second on the wealth list, also expressed interest in Banamex.

In Slim’s case, all that became known when he withdrew from the acquisition of Banamex via his banking group Inbursa was that he apparently considered the price too high.

Germán Larrea, owner of Grupo México, was reportedly blocked by the Mexican government itself due to his then-obvious antagonism with President López Obrador. This is the second time Grupo México, and consequently Larrea, has expressed interest in Banamex, but it is currently unclear what the relationship with President Claudia Sheinbaum is like.

In Summary

The sale of Banamex has once again been put in check. For analysts closely following the matter, five key points stand out:

Citi said it has not received a formal offer from Grupo México, but it is certain that it either has it already or will receive it soon.
The offer from Grupo México (Germán Larrea) apparently does not differ much from the valuation through which businessman Fernando Chico Pardo acquired 25% of the Mexican bank’s shares.
Citi has already said it will review a potential offer from Grupo México—meaning it is not closing the door to a deal.
Fernando Chico Pardo’s position is still unknown; he has said nothing following Grupo México’s announcement. It will be important to know whether he would be willing to accept a minority stake. Clearly, he has been placed in an uncomfortable position, even though Citi stated on Friday that the deal with this businessman remained the only and most important one.
Whatever happens, the key factor will be the Mexican government’s authorization of Banamex’s sale—no matter who it is sold to or how. It will be essential for both Citi and the buyer(s) to have the government’s approval before making any announcement. Otherwise, uncertainty surrounding Banamex will only grow.

Thus, another chapter is written in the sale of Banamex—one that seems to grow more complicated by the moment, while its rivals continue to gain ground in a highly competitive market, and other tech-financial players also keep claiming larger shares of Mexico’s banking pie.

The Largest Marijuana ETF in the U.S. Soars Thanks to Trump

| By Amaya Uriarte | 0 Comentarios

largest marijuana ETF soars thanks to Trump — Wikimedia Commons

AdvisorShares Pure US Cannabis ETF (MSOS), an exchange-traded fund specialized in the cannabis industry in the United States, has experienced a meteoric rise after President Donald Trump’s social network, Truth Social, highlighted the health benefits of cannabis for older adults.

Launched on September 1, 2020, and managed by AdvisorShares Investments, it is the largest marijuana ETF by market capitalization, with approximately 973 million dollars in assets under management (AUM).

On Sunday, September 28, Truth Social posted that cannabidiol (CBD) derived from hemp could “revolutionize healthcare for older adults” by helping to slow disease progression and was shown to be an alternative to prescription medications.

In addition, President Trump had stated last month that his administration was seeking to reclassify marijuana, which could also result in a possible easing of criminal penalties for its use.

The reclassification would remove the tax burden that denies standard business deductions to cannabis companies. If the tax barrier is resolved, it could pave the way for more cannabis companies to be listed on U.S. stock exchanges and attract interest from institutional investors.

Booming Sector Companies and ETFs

Exchange-traded funds from AdvisorShares (MSOS) and Roundhill are on track for their largest recorded quarterly gains, each exceeding 70%, according to Reuters.

The AdvisorShares Pure US Cannabis ETF (MSOS) actively invests at least 80% of net assets in U.S. companies that derive a minimum of 50% of their revenue from the cannabis or hemp business. It may also use financial derivatives related to this same sector.

The ETF’s portfolio is diversified across approximately 96 securities, although concentration is high: the top 10 positions represent more than 98% of the assets. This reflects a clear focus on leading companies in the segment.

As of 2025 data, the AdvisorShares Pure US Cannabis ETF (MSOS) is the largest ETF in the cannabis segment by assets under management, followed distantly by other index funds such as the Amplify Alternative Harvest ETF and the AdvisorShares Pure Cannabis ETF (YOLO).

Why 2025 Could Be Another Record Year for Global Dividends

| By Amaya Uriarte | 0 Comentarios

global dividends record year 2025 — Canva

Global dividends recorded a strong increase in the first half of 2025, with a year-over-year rise of 7.7% in gross terms, reaching a record figure of 1.14 trillion U.S. dollars—almost matching the total for the entire year of 2017—according to Dividend Watch, part of the Capital Group Global Equity Study.

As explained in its conclusions, the total income figure for the first half was boosted by the weakness of the U.S. dollar, as dividends from Japan and Europe, in particular, were converted at much more favorable exchange rates. However, the growth of “core” dividends—which adjusts for factors such as special dividends, exchange rates, and other minor elements—was an encouraging 6.2%.

“2025 is shaping up to be another strong year for global dividends, with a solid first half and balanced growth across all regions and sectors. We remain optimistic and believe that the second half of 2025 will continue to show strong global dividend growth,” says Alexandra Haggard, Head of Asset Class Services for Europe and Asia-Pacific at Capital Group.

In her view, dividend flows can be a strong indicator of a company’s financial health and stability. “Companies that consistently pay and increase dividends typically demonstrate solid earnings, healthy cash flow, and disciplined management. By tracking dividend trends, investors can better understand company performance and their resilience to economic challenges,” she explains.

Finances Will Be Key Factors in 2025

In examining sector trends, the report identifies that the combination of the financial sector’s large size and favorable economic conditions led it to contribute two-fifths of global dividend growth in the first half of the year. The sector recorded a 9.2% year-over-year increase in core payments, reaching a record 299 billion U.S. dollars. In this regard, banks accounted for just under half of the total increase in the financial sector, and the 13 banks that contributed most to dividend growth in the first half came from various markets, indicating widespread global strength.

Other sectors that experienced robust growth included transportation—particularly shipping and airports—machinery, especially aerospace and defense groups, and software. Globally, 86% of companies increased or maintained their dividends in the first half, with an average corporate-level “core” dividend growth of 6.1% year-over-year.

Regional View: Japan, the Leader
Total income in the first half reached record levels in the United States, Canada, Japan, much of Europe, and some emerging and Pacific markets, although there was notable weakness in Australia, Brazil, Italy, China, and the United Kingdom.

Growth was strongest in Japan, where core payments rose 13.8% year-over-year, more than double the rate of the rest of the world. The record payments of 54.9 billion U.S. dollars reflect unprecedented profits and a shift in corporate culture that is returning more capital to shareholders.

The United States was the largest contributor to the year-over-year increase of 71.3 billion U.S. dollars in global payments in the first half, due to its massive size. Its core dividend growth rate of 6.1% was in line with the global average, although lower extraordinary income tempered the increase in gross income.

The second quarter is the key dividend season in Europe, and growth this year was slower compared to the past four years. Core dividend growth for the first half was 5.6% year-over-year, a rate lower than the rest of the world. Cuts by European car manufacturers, in particular, caused the region’s dividend growth to fall by a third in the first half of the year.

As highlighted by Mario González, Head of Capital Group in Iberia, US offshore, and Latam, Spanish dividends reached a record 16.7 billion U.S. dollars in the first half of 2025, representing a 12.7% increase in the core figure. “Companies that pay dividends have long served as a safe harbor in the storm, offering investors a cushion when markets turn volatile. Their ability to generate income even in times of recession makes them an attractive anchor for clients in Spain seeking resilience and reliability,” he comments.

Brazil, Chile, and Mexico: Three Stories with Nuances in Their Growth

| By Amaya Uriarte | 0 Comentarios

Brazil Chile and Mexico nuanced growth — Canva

One of the most frequently repeated observations among experts from international asset managers is that Latin American countries are in a relatively advantageous position regarding tariff risks compared to other regions. However, according to Principal AM in its economic outlook, this reality could be changing, especially for Brazil and Chile.

“Although the impact on growth could be limited, uncertainties about the effects of tariffs could generate greater volatility in the region, precisely at a time when discussions around local elections are gaining importance. The good news could be related to inflation. With slower economic activity, if currencies remain stable thanks to a weaker dollar (DXY), tariff announcements could have a disinflationary effect in the region,” they point out.

Brazil: Maintaining the Pace

According to the asset manager, the most recent economic data confirmed that growth is slowing in Brazil. “Although second-quarter GDP surprised positively by growing 0.4% quarter-on-quarter, the underlying details point to a broader economic slowdown, with weakening in both consumption and investment. More importantly, preliminary data from July and August suggest a more pronounced slowdown in the third quarter,” they comment.

Looking ahead, they highlight that the short-term inflation outlook remains favorable. As a result, they maintain that the good performance of the exchange rate and the sharp slowdown in wholesale inflation point to a downward bias for inflation in the coming months. “As a result, inflation expectations for 2025 have continued to decline in recent weeks, while long-term expectations remain unanchored. In this scenario, the likelihood increases that the Central Bank will begin a monetary easing cycle in the coming months. Despite the need to maintain tight monetary restrictions, the slowdown in activity and the behavior of inflation allow some room for initial easing. We adjusted our projection for the start of rate cuts to the first quarter of 2026, with a terminal rate of 13% by year-end,” they add.

Chile: Contraction Due to Temporary Factors

In the case of Chile, the report from Principal AM highlights that economic activity grew 1.8% year-over-year in July, slightly below the market’s median expectation of 1.9%, marking the weakest expansion since February. Meanwhile, in August, inflation posted a monthly variation of 0.0%, surprising on the downside relative to expectations. As a result, headline inflation dropped from 4.3% in July to 4% year-over-year, accumulating 2.9% so far in 2025.

“Activity grew 1% compared to the previous month and 2.3% year-over-year, reflecting some resilience but also signs of a slowdown. The decline in the mining sector was one of the main factors behind the result; however, much of this contraction is linked to temporary factors, such as the effects of international tariffs and the accident at the El Teniente mine, suggesting that recovery in the sector may take longer, although the medium-term outlook remains favorable,” it explains.

According to the asset manager’s view for Chile, although headline inflation remains on track to converge to the 3% target by the third quarter of 2026, “the process will be slower and will depend on the evolution of domestic demand and labor costs, leaving monetary policy in a neutral and data-dependent stance in the coming months.”

Mexico: Expansion Continues

Lastly, in the case of Mexico, the asset manager highlights in its outlook that the final estimate for second-quarter 2025 GDP confirmed that the economy expanded for the second consecutive quarter, with a 0.6% quarterly growth (seasonally adjusted) and 1.2% year-over-year (adjusted). “Although slightly below the preliminary estimate (0.7% quarterly), the result still points to a stronger transition into the second half of the year. GDP growth in the second quarter was driven mainly by heterogeneous dynamics within the services sector, supported by stable real wages and household incomes. Cumulative growth so far this year stands at 0.9% for the first half of 2025, suggesting that the economy has managed to avoid a mild contraction despite persistent challenges,” the report notes.

On inflation, the document indicates that the rebound seen in August was due to “base effects.” It observes that inflation in services remains elevated, reflecting a resilient tertiary sector, while goods prices continue to face cyclical and supply chain pressures, as recent business surveys suggest.

“Looking ahead, if headline and core inflation remain near current levels, it is likely that the easing cycle will continue, especially considering that the slowdown in the U.S. labor market gives the Fed room to resume its own rate cuts,” the document concludes.

The Risk Is an “Information Blackout” in Labor Market Data

| By Amaya Uriarte | 0 Comentarios

Since 1976, there have been 20 partial shutdowns with an average duration of one week, although the longest lasted 35 days. Throughout history, only four of these shutdowns extended beyond a single business day. The most recent was the 35-day standoff between late 2018 and early 2019—the longest shutdown in U.S. history—which occurred during President Trump’s first term. A new actual shutdown will now be added to that list as of October 1. What do investors need to know about this shutdown?

First, that shutdowns are not uncommon; and second, historically, Treasury bonds have served as a safe-haven asset during these periods—though it will be interesting to see if that remains the case given the recent challenges observed.

“The S&P 500 has shown little movement during shutdowns, but stocks and bonds typically fall before shutdowns and rebound once they begin, as expectations of a resolution increase. Prolonged shutdowns, like the 35-day one in 2018–19, can affect GDP and unemployment, although these effects tend to reverse once the crisis ends,” says Benoit Anne, Senior Managing Director and Head of the Market Intelligence Group at MFS Investment Management.

A Limited Impact

According to experts, the market impact is minimal. “As investors, we now find ourselves at a point where we must deal more regularly with the flow of news coming from Capitol Hill. Fortunately, the economic and market impact of shutdowns has always been limited. We expect the same to happen this time,” notes AllianceBernstein.

However, a limited impact does not mean no impact. As AllianceBernstein explains in its latest report, during the longest recorded shutdown—the partial shutdown of 2018—the cost reached approximately 11 billion dollars in GDP. Still, the Congressional Budget Office estimates that once payments resumed, only 3 billion were permanently lost. That amounted to around 0.02% of 2019 GDP, meaning the lasting economic impact was more moderate.

“Compared to the risks of hitting the debt ceiling, a shutdown is notably less severe. That said, consumer confidence has already been under pressure, and a prolonged shutdown could pose additional risks to consumer sentiment. This time, although some services and departments would continue to operate, many will pause unless alternative sources of funding are found. Most importantly for the economy: millions of federal civilian employees and active-duty troops will not be paid during the stalemate. Some are paid weekly, others biweekly—an important consideration if the deadlock lasts more than a few days,” the firm explains.

However, for the experts at Raymond James, this shutdown is not linked to the debt ceiling:

“Although the media often conflate the two issues, it’s important to understand that a government shutdown is not directly tied to the debt ceiling. In this case, if a shutdown occurs in the coming days, it would not imply a default on U.S. public debt. Remember, the debt ceiling was already raised by 5 trillion dollars (to 41 trillion) as part of the new fiscal law, likely deferring this issue until 2027.”

The Key Issues

According to Kevin Thozet, member of the investment committee at Carmignac, the market’s mild reaction hides the complex economic dynamics beneath the surface, which could add to growing political uncertainty across the Atlantic:

“It’s unlikely that fundamental questions about the state of the U.S. labor market will be answered in the short term. And this is the crucial point in the debate over whether the U.S. economy is going through a temporary slowdown or entering a recession. In addition, the shutdown could lead the U.S. government to prolong the DOGE mission and cut some public spending, although the implementation or even the feasibility of such a plan remains unclear,” Thozet says.

For Luke Bartholomew, Deputy Chief Economist at Aberdeen Investments, routine is what explains why the market has responded calmly to this shutdown:

“After the shutdowns of the past 15 years, there’s now a well-established playbook, especially considering this one is not related to the debt ceiling. The longer the shutdown lasts, the greater the economic drag—it could mean a reduction in growth of around 0.15% per week,” Bartholomew says.

Still, the Aberdeen expert believes the most significant market impact could be the slowdown in the release of crucial labor market data:

“It is very likely that the Fed will cut rates again in October, but given how central the labor market is to its current approach, and the political pressures it faces, this lack of clarity in the data will certainly not make its job easier,” he adds.

Benoit Anne of MFS Investment Management agrees that one major consequence is the suspension of economic data collection by the government, which can leave investors and Federal Reserve policymakers temporarily in the dark:

“Overall, our Market Insights Group does not believe government shutdowns represent a significant market-moving event. However, they can create opportunities for investors to take advantage of short-term market disruptions caused by overreactions and headline-driven risks,” Anne adds.

In this regard, Amar Reganti, fixed-income strategist at Wellington Management, notes that:

“President Trump has alluded to the possibility of firing federal employees during the shutdown and not rehiring them afterward. This would add further downward pressure on the labor market and increase the likelihood that the Federal Reserve cuts official interest rates in its upcoming meetings.”

The Political Dimension

Experts explain that this shutdown has resulted from political disagreements between Republicans and Democrats on issues such as healthcare—but it reflects the country’s increasing political polarization.

In the opinion of Eiko Sievert, public and sovereign sector analyst at Scope Ratings, doubts about the independence and credibility of key institutions have intensified in recent months:

“Overall, this deterioration in governance standards will further increase political polarization in the coming years. The deeper these political divisions become, the greater the risk that key political agreements won’t be reached on time,” Sievert argues.

She believes this also applies to future standoffs over the debt ceiling—especially if the Republican Party loses control of the House of Representatives and/or the Senate following the 2026 midterm elections:

“Despite the 5 trillion dollar increase in the debt ceiling passed as part of the Big Beautiful Bill, it is likely that a new increase will be needed by 2028, given the weak fiscal outlook. We forecast deficits of around 6% of GDP and a rise in national debt to 12% of GDP over the next five years. Our base case remains that a technical default by the U.S. due to political disputes is unlikely, but the risk is rising and would have a significant impact if it materialized,” she concludes.

Vector Transfers Its Assets to Finamex, With CI Banco and Intercam on the Brink of Collapse

| By Amaya Uriarte | 0 Comentarios

With the beginning of October, everything indicates that the situation of CI Banco, Intercam, and Vector Casa de Bolsa—Mexican financial entities accused on June 25 by the U.S. Department of the Treasury of allowing money laundering operations—is about to be resolved. These institutions have been threatened with being disconnected from the U.S. financial system, a threat whose critical deadline, after two extensions, is set for October 20.

Vector Casa de Bolsa, a firm that had practically ceased all corporate communications following the scandal, announced this Wednesday the orderly transfer of its assets to Finamex Casa de Bolsa, including its investment fund manager (Vector Fondos). The announcement is striking not only for the business it represents but also because Vector was the only one of the three accused institutions that had not shown any movement related to its assets.

The brokerage firm clarified that the transfer is not a merger nor an acquisition of Vector’s license or corporation, but is exclusively a transfer of client portfolio and assets.

“After a rigorous and responsible analysis process, Vector determined that the best alternative was to carry out an orderly transfer of its assets to Finamex Casa de Bolsa, an institution with more than five decades of experience, recognized for its solvency, professionalism, and commitment to Mexico’s financial development,” the institution explained in a statement.

Vector emphasized that, with this transaction, client investments and assets remain intact and duly protected under the custody and supervision mechanisms established by Mexican regulations, and safeguarded by the Instituto para el Depósito de Valores (Indeval), ensuring their security and availability in accordance with applicable legal provisions.

According to Vector, the promoters and advisors currently serving clients at the firm will join Finamex, ensuring the same level of quality, closeness, and dedication. The operation is subject to the corresponding regulatory approvals.

The Business Buyer

“Finamex will acquire, through its investment fund operating company or any other affiliate it designates, the fixed capital stock shares held by Vector Fondos, S.A. de C.V. in 21 investment funds,” the entity specified in a brief statement.

Finamex was originally founded as Valores Finamex, S.A. de C.V. in 1974. The current entity, Casa de Bolsa Finamex, S.A.B. de C.V., was established in 1992. In 2024, Finamex operated a volume of 1.48 trillion Mexican pesos (approximately 74 billion U.S. dollars) in the capital markets, making it the leader in traded value that year, with an increase of 360 billion pesos (18 billion dollars) over the previous year.

With the announcement, Vector Casa de Bolsa joins the banks CI Banco and Intercam, which have dismantled part of their operations, increasing market expectations that all three are fatally wounded and have little future—even if they manage to withstand the U.S. Treasury sanctions. The accusation alone has been devastating for their operations and nearly fatal in an essential factor for any financial institution worldwide: trust.

In July 2025, a few days after the Treasury Department’s announcement, Mexico’s Ministry of Finance and Public Credit decided to “temporarily” transfer the trust business of CI Banco and Intercam to other banks as a preventive measure—a temporality that now seems definitive. But how significant was this business for the banks?

Impact on the Trust Business

The trust business of the Mexican banking system—trusts managed by banks—was estimated at 11 trillion pesos (around 594.6 billion U.S. dollars) at the end of the first quarter of the year.

In this market, CI Banco was the dominant institution with an estimated 26% market share, equivalent to nearly 3 trillion pesos (162.162 billion U.S. dollars).

Intercam, in contrast, had a much smaller share, managing around 67.941 billion pesos (approximately 3.672 billion dollars), representing 1% of the total market.

An HR Ratings report noted that, at the end of last year, the trust business accounted for nearly 10% of CI Banco’s total revenue. There were no estimates available for Intercam’s income derived from its trust operations.

But trusts are not the whole story. The reputational damage is incalculable—not so much due to the outflow of funds from client account closures, but because regaining trust will be a years-long task, assuming operations even continue past the U.S. Treasury’s upcoming deadline.

Decline in Operations

According to data from the National Banking and Securities Commission (CNBV), in June—following accusations by FinCEN and the U.S. Treasury—CI Banco and Intercam reported a combined withdrawal of 16.132 billion pesos in client deposits (872 million U.S. dollars).

For CI Banco alone, deposits dropped from 50.948 billion pesos to 38.175 billion pesos (from 2.753 billion to 2.063 billion U.S. dollars), a decrease of 12.773 billion pesos (690.43 million dollars), or 25.33% in just one month.

Intercam experienced a similar situation. Though the absolute figures are smaller due to its size, client deposits fell from 40.172 billion pesos to 36.849 billion pesos (from 2.171 billion to 1.991 billion U.S. dollars), a decline of 8.53% in the same month.

CI Banco has also seen significant restrictions in its operations. For instance, its foreign exchange area is practically informally suspended to avoid any transactions that might further complicate its position with financial authorities in both Mexico and the United States.

Additionally, the agreement supporting the issuance of credit cards by the institution was unilaterally canceled, and ratings agencies—especially Fitch Ratings—have downgraded its credit rating.

Intercam is now considered nearly a “banking shell.” The brand itself has little future if it survives U.S. sanctions. So much so that on August 20, Kapital Bank—until then one of the smallest banks in the Mexican market—announced it had acquired assets from Intercam Banco, its brokerage, and its investment fund manager.

The acquiring institution also reported that it would invest 100 million U.S. dollars into the business to support Intercam’s clients.

There have also been confirmed reports that Bankaool, another small bank in the system, hired over 280 employees from Intercam’s foreign exchange desk. Actinver, an investment fund manager, confirmed that it acquired several trusts previously managed by CI Banco, primarily FIBRAs (real estate investment vehicles).

Vector and the Political Factor

Just last year, Vector Casa de Bolsa celebrated its 50th anniversary with much fanfare. At the time, its owner, businessman Alfonso Romo Garza, told the press that the future of his company was promising and toasted to the next 50 years.

“Vector’s main goal is to reach 300 billion pesos in assets under management (15.79 billion U.S. dollars) by 2025, to consolidate as the best independent brokerage firm in the system and continue making history,” said Romo Garza and Edgardo Cantú Segovia, the firm’s CEO, during the celebration.

Alfonso Romo is not just another businessman. Although he is not currently listed among Mexico’s top 20 wealthiest individuals—the most recent estimate of his personal fortune dates back to 1998 at around 2.4 billion U.S. dollars—his public presence in recent years has surpassed that of many top business figures in the country.

Romo Garza served as Chief of the Office of the Presidency from December 1, 2018, when Andrés Manuel López Obrador began his term, until December 2, 2020. His resignation, nearly four years before the end of the president’s term, did not sever his ties to the administration.

The reasons for his departure from what was considered the most influential office in the Mexican government were never fully disclosed, but he has always been regarded as one of the architects behind the rise to power of the long-time opposition leader and presidential hopeful.

Therefore, the U.S. Treasury’s money laundering accusation against the most important company in Romo Garza’s business group becomes a major political factor, especially considering the current government stems from the same party as López Obrador.

Romo Garza has not said a single word, while Vector Casa de Bolsa only issued one statement on the day the money laundering accusations became public. Since then, the firm remained silent and attempted to continue operations as normally as possible.

Latin America: Target for ETF Distribution

| By Amaya Uriarte | 0 Comentarios

A study by Brown Brothers Harriman (BBH) explores the commercial potential and the challenges faced by asset managers, distributors, and service providers operating across Latin America.

The report notes that investors, in general, appreciate the evolution and innovation in the ETF industry, with exchange-traded products covering an increasingly broad set of assets and a range of investment strategies with ever-expanding geographic reach.

Competitive costs, flexibility, transparency, and the strong diversification potential of ETFs are also proving to be attractive features in an increasingly uncertain world.

And although much of the history of ETFs to date has focused on North America and Europe, other markets, such as Asia, are also catching the ETF fever. Elsewhere, ETF products are also generating growing interest in Latin American markets, particularly in Brazil, Mexico, Colombia, and Chile.

As ETF managers and issuers increasingly seek to expand the distribution of their funds, the sales of Europe-domiciled products have followed the evolution of regional investor interests. And according to the BBH study, Latin America has become a “clear target” for ETF distribution. It even cites some estimates suggesting that the Latin American ETF market could exceed $40 billion in size by 2030.

The region continues to register significant growth in the ETF market. Many of these products are domiciled in Europe and are distributed through cross-border UCITS funds.

While ETF / UCITS ETF sales in Latin America have been driven by institutional investors, such as local pension plans—especially in markets like Mexico—the firm believes that, over time, significant opportunities could also emerge in the retail market across regional markets.

The unique features of UCITS products (such as accumulation share classes that do not distribute dividends but reinvest them) are proving to be very popular among both Mexican retail investors and in offshore trading hubs in the United States and Canada.

Market Diversity
Although Latin America offers significant potential for managers promoting exchange-traded funds, the firm notes that the region “is far from being a homogeneous market.” As such, “it can be challenging due to local idiosyncrasies and fragmented investment cultures in the countries that comprise it.”

Additionally, the firm highlights that different regulatory standards may apply from one country to another, with some regimes more advanced and sophisticated than others. As an example, Colombia’s institutional investor regulations now allow for the direct allocation of ETFs as eligible instruments—through decree updates in 2024.

In Mexico, regulators have recently authorized pension funds, or Afores, to invest in active U.S. and international ETFs, although all must go through an approval process in order to be acquired by Mexican Afores. Traditionally, the funds have invested in passive ETFs.

Other local markets have also undergone recent regulatory changes. In Chile, for example, the local regulator—the Risk Rating Commission—modified its rules to allow pensions to invest in actively managed ETFs following a registration and approval process.

Varied Infrastructure
Market infrastructure also varies across the region. The Latin American Integrated Market (MILA) integration project offers cross-border operations that can streamline access for EU issuers targeting the participating markets of Chile, Colombia, Mexico, and Peru through a unified trading infrastructure.

A new project, NUAM, also promises greater integration of the stock exchanges of Colombia, Chile, and Peru through a brand-new, fully unified multi-country stock exchange. “Having a local presence or significant knowledge of the local market can be key for managers to earn the trust of local investors,” the BBH study notes, citing Colombia as an example. In this country, “working with local brokerage firms may be essential to access investors through Latin American ETF vehicles,” they point out.

A traditional path to market access in the region, according to the firm, is through European issuers partnering with global banks whose local branches can reach both institutional and retail clients. Digital wealth management platforms are also key channels for retail distribution and advisory in some Latin American markets. Here, there is strong support from European fund centers, such as Dublin and Luxembourg, which “have significant expertise and support asset managers targeting Latin America with UCITS ETFs and other products.”

The SEC Opens the Door for Asset Managers to Add ETFs to Mutual Funds

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SEC allows adding ETFs to mutual funds — Canva

The U.S. Securities and Exchange Commission (SEC) has published a planned order—currently open to public comment before any changes or developments—that specifically applies to Dimensional Fund Advisors and allows the firm to add exchange-traded share classes to mutual funds. According to experts, this is a discussion the industry has long anticipated.

“The Commission is taking a long-awaited step toward modernizing our regulatory framework for investment companies, reflecting the evolution of collective investment vehicles from being primarily daily redeemable funds to exchange-traded funds (ETFs),” said Commissioner Mark T. Uyeda.

As explained by Reuters, under the proposed change, a mutual fund could offer investors the opportunity to participate in its investment portfolio in the form of an exchange-traded product, known as an ETF share class. “Investors would be able to buy and sell shares of the exchange-traded mutual fund throughout the day at market price through their brokerage accounts, instead of waiting for a mutual fund order to settle at the end-of-day price. This has the potential to open access to a range of existing funds for investors who prefer owning ETFs due to their low cost, tax advantages, or liquidity,” they noted.

Offering different share classes of the same mutual fund is not new. As Reuters points out, these classes are currently often targeted at different investor groups or carry varying fee structures. However, they note that the change could blur the line between exchange-traded funds and traditional mutual funds.

In Uyeda’s view, this is a principled modernization. He emphasized that the application includes several safeguards: board oversight, adviser reporting, conflict monitoring, and investor disclosure. “These are not mere administrative formalities—they are essential guardrails and uphold the fiduciary duty,” he added.

For many in the industry, this planned order signals the SEC’s intent and marks the direction of change the agency aims to pursue. In this regard, Uyeda was clear: “The publication of this notice represents a substantive step forward, not just a procedural formality. It’s a signal that the Commission is willing to reexamine outdated restrictions, embrace innovation, and consider an exemption that could equally benefit investors, fund sponsors, and markets. It reflects the same innovative spirit that led to the creation of the first ETF more than three decades ago.”

Carlyle and BECON IM Announce Strategic Distribution Alliance

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Carlyle BECON strategic alliance — Canva

The global investment firm Carlyle and BECON Investment Management announced on Tuesday a strategic distribution alliance focused on Latin America and the U.S. offshore wealth market, according to a joint statement from both firms.

“This alliance brings together Carlyle’s global investment capabilities with BECON’s deep expertise in regional distribution and strong knowledge of the Latin American wealth ecosystem,” the statement adds.

The alliance aims to meet the growing demand for alternative investments among qualified and high-net-worth investors in the region. The distribution will cover select Latin American markets (excluding Brazil and Chile) and the U.S. offshore market in general, with an emphasis on key wealth centers such as Miami, New York, Texas, and California. Through the agreement, BECON will distribute three of Carlyle’s most innovative semi-liquid vehicles through wealth management platforms, including broker-dealers, private banks, family offices, and multi-family offices.

“This alliance represents a significant step in expanding access to institutional-quality private market strategies. Both firms are committed to delivering long-term value and innovation to investors seeking diversification, performance, and liquidity in today’s evolving market landscape,” the firms stated.

“We are pleased to partner with BECON to bring Carlyle’s solutions to a broader range of qualified investors in Latin America,” said Shane Clifford, head of global wealth at Carlyle. “Demand for alternative assets continues to accelerate in Latin America, but access remains fragmented. By combining Carlyle’s capabilities with BECON’s strong relationships in the wealth channel, this alliance significantly expands the reach of our platform and helps democratize access to high-quality private strategies,” he added.

“We are proud to work alongside Carlyle, one of the most respected firms in global private markets,” said Fred Bates, managing director at BECON. “Through this alliance, we can offer differentiated, institutional-caliber strategies that address the evolving needs of our clients and their portfolios,” he added.

Financial Education Programs

As part of this collaboration, Carlyle and BECON will launch a series of initiatives to enhance financial education and strengthen the advisor experience. The program will include webinars and live events, targeted educational content, and technical training to support wealth managers and financial advisors in exploring the alternative assets market.

“Our goal is not just to distribute products, but also to foster knowledge and confidence around alternative assets,” said Lucas Martins, managing director at BECON. “Education is key to building long-term relationships and helping advisors better serve their clients,” he noted.

“We see this alliance as a bridge between global innovation and regional opportunity. Empowering advisors with the right tools and knowledge is fundamental to our mission,” added Juan Fagotti, managing director at BECON.

Carlyle is a global investment firm with broad industry experience, investing private capital across three business segments: global private equity, global credit, and Carlyle AlpInvest. With $453 billion in assets under management as of March 31, 2025, the firm has more than 2,300 employees in 29 offices across four continents.

BECON Investment Management is an independent, exclusive third-party distributor focused on the U.S. offshore and Latin American markets. BECON operates in key markets including Argentina, Uruguay, Paraguay, Chile, Brazil, Peru, Colombia, Venezuela, Ecuador, Bolivia, Panama, the Caribbean, Mexico, and the U.S. offshore market. The team has spent years building relationships with professional investors from diverse backgrounds, including institutional pension funds, private banks, broker-dealers, insurance providers, family offices, and independent financial advisors.

Citi Reincorporates Ramón Pacios as Wealth Group Executive

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Citi Ramon Pacios Wealth Group Executive — LinkedIn

Citi reincorporated Ramón Pacios as wealth group executive to oversee its Citigold wealth advisors in South Florida, according to the welcome post published on LinkedIn by David Poole, head of US wealth management at the American bank.

“Join me in welcoming Ramón Pacios back to Citi as our new wealth group executive. In this role, Ramón will oversee our #Citigold wealth advisors in South Florida, where his deep local ties will be invaluable,” wrote Poole.

According to the post on the professional social network, Pacios, with more than 32 years of experience in the industry, “is a proven leader who has led national and international teams.”

He joins the bank from Truist Wealth, where he was managing director–international complex director; he previously held leadership roles at Wells Fargo, where he managed advisors from bank and wirehouse channels. “His experience will be essential to driving our continued growth and success in this key market,” concluded David Poole on LinkedIn.

An economist from the University of Miami, he holds FINRA Series 3, 7, 9, 10, 24, 53, 63, and 66 licenses, according to his own LinkedIn profile.

According to BrokerCheck, Pacios worked at Citicorp Investment Services during two different periods, between 1994 and 1995, and from 2000 to 2005. He also served at Mony Securities Corporation (1996–2000) and Prudential Securities (1993–1994). He spent 16 years at Wells Fargo, and was with Truist Investment Services for the past 3 years.