December 16, 2014 / 4:50 PM / 6 years ago

UPDATE 4-Itaú's Setubal eyes Banamex as potential entry to Mexico

(Adds Citigroup comment, additional details throughout)

By Aluísio Alves and Guillermo Parra-Bernal

SAO PAULO, Dec 16 (Reuters) - Itaú Unibanco Holding SA , Latin America’s largest bank by market value, wants to enter the Mexican retail banking market and is eyeing Grupo Financiero Banamex SA as a potential way in, Chief Executive Officer Roberto Egydio Setubal said on Tuesday.

Speaking to shareholders at an event in São Paulo, Setubal did not elaborate on Itaú’s strategy for Mexico. Earlier, his brother Alfredo, Itaú’s senior vice president for investor relations, said Itaú was in no rush to buy a rival overseas as a currency slump made foreign acquisitions more expensive.

Itaú’s interest in Banamex, which was acquired by Citigroup Inc in August 2001 for $12.5 billion, comes as Setubal seeks to build the São Paulo-based lender into the largest Latin American financial conglomerate. Itaú has wholesale banking operations in the region’s main countries and is building a retail banking presence in Chile and Colombia through a tie-up with CorpBanca SA.

“Itaú Unibanco has an interest in entering the Mexican market ... Banamex is an option that could be evaluated,” Setubal said in response to a question from a shareholder.

Asked by reporters about his comments on Banamex, Setubal said “there has been no contact” with Citigroup or Banamex.

Banamex declined to comment.

Citigroup spokesman Mark Costiglio said that the New York-based bank has repeatedly affirmed its commitment to Banamex. In September, Citigroup CEO Mike Corbat announced a $1.5 billion multiyear investment program in Mexico.

Setubal, who became CEO in 1994, wants non-Brazil operations to account for 15 percent of Itaú’s profit by the end of the decade. This year, the bank gained control of Santiago-based CorpBanca, and expects to complete a merger of both lenders’ Chilean, Colombian and Peruvian operations next year as part of the transaction.

Setubal told Reuters in an interview two years ago that high prices had hampered Itaú’s attempts to purchase a rival in Mexico in recent years. A source with knowledge of Citigroup’s plans for Banamex said there was no active sale process for the Mexican bank at this time.

Preferred shares of Itaú, the bank’s most widely traded class of stock, declined 0.5 percent to 32.87 reais. Shares are up about 20 percent this year, compared with a 9 percent decline in Brazil’s benchmark Bovespa stock index.

Sales of assets have helped Setubal fund recent strategic moves. Itaú will continue to shed some nonstrategic insurance assets after the successful sale of a unit handling high-risk corporate insurance business to ACE Ltd for about $680 million in July, he noted. (Additional reporting by David Henry and Mike Stone in New York and Elinor Comlay in Mexico City; Editing by Chizu Nomiyama, Matthew Lewis and Lisa Shumaker)

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