Cit­i­group to close Banamex USA, says re­port

The China Post - - WORLD BUSINESS -

Cit­i­group bank is ex­pected to close the U. S. unit of its Mex­i­can bank­ing sub­sidiary Banamex af­ter it was ac­cused of weak money- laun­der­ing con­trols, the Wall Street Jour­nal re­ported Sun­day.

Based in Cen­tury City, Cal­i­for­nia, Banamex USA spe­cial­izes in mov­ing money across the U.S. bor­der into Mex­ico. The bank is un­der­go­ing probes re­lated to its anti-money laun­der­ing con­trols, peo­ple familiar with the mat­ter told the Jour­nal.

Cit­i­group has raised the idea of closing Banamex with reg­u­la­tors as part of dis­cus­sions to set­tle the probes, the Jour­nal said.

Though U.S. au­thor­i­ties are not de­mand­ing Cit­i­group close Banamex, they want it to pay US$100 mil­lion to set­tle the al­le­ga­tions, the Jour­nal re­ported.

“As we’ve pre­vi­ously said, Citi is fully co­op­er­at­ing with all in­quiries into Banamex USA’s Bank Se­crecy Act and anti-money laun­der­ing pro­gram,” Cit­i­group spokes­woman Molly Mein­ers said in an email.

Banamex USA cur­rently has about US$1 bil­lion in as­sets and em­ploys some 300 peo­ple.

The U.S. Jus­tice Depart­ment is also prob­ing whether Banamex USA failed to alert au­thor­i­ties to bank­ing ac­tiv­ity sus­pected to have in­volved drug-car­tel mem­bers, the Jour­nal re­ported.

Banamex USA is the U.S. bank­ing arm of Banco Na­cional de Mex­ico, a lead­ing Mex­i­can bank Citi ac­quired in 2001.

Cit­i­group and Banamex USA ad­di­tion­ally face in­quiries from the Trea­sury Depart­ment’s Fi­nan­cial Crimes En­force­ment Net­work and the Cal­i­for­nia Depart­ment of Busi­ness Over­sight, ac­cord­ing to the bank’s cur­rent an­nual re­port to U.S. se­cu­ri­ties reg­u­la­tors.

That is on top of a pre­vi­ously dis­closed grand jury probe into Citi and Banamex USA led by the U.S. at­tor­ney of the state of Mas­sachusetts, and a sub­poena to Banamex USA from the Fed­eral De­posit In­sur­ance Cor­po­ra­tion.

In Fe­bru­ary 2014, Citi took a charge of about US$235 mil­lion, re­vis­ing its 2013 an­nual re­sults lower, say­ing it had dis­cov­ered “sig­nif­i­cant” fraud on the books of oil con­trac­tor Oceanografia af­ter hav­ing lent it US$585 mil­lion through a Banamex unit.

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