Citigroup Inc.'s Manuel Medina-Mora, head of consumer banking
and chairman of the company's troubled Mexico unit, is preparing to
leave in coming months, according to people with knowledge of the
situation.
The details of Mr. Medina-Mora's possible departure haven't been
finalized and could change, but people familiar with the bank's
thinking say he will leave or announce his departure by early next
year.
Several board members have pushed this year for the 64-year-old
Mr. Medina-Mora to leave, three people said. But Chief Executive
Officer Michael Corbat and Chairman Michael O'Neill have been
supportive of the executive, two other people said.
Mr. Medina-Mora's exit would come after a tough year for
Citigroup's Mexico unit, known as Banamex. The business was once a
crown jewel for Citigroup, buoying the bank through the 2008
financial crisis.
It also helped Mr. Medina-Mora gain a foothold on Citigroup's
corporate ladder, so much so that he was once considered a
contender for CEO.
But this year, the unit has been dragged down by disclosures of
alleged fraud, a particularly sensitive point for a bank already
under the intense scrutiny of regulators.
That and struggles at Citigroup's consumer business elsewhere
have put a mark on the career of Mr. Medina-Mora and caused
concerns among board members.
The bank declined to make Mr. Medina-Mora available for comment
on Tuesday. "Manuel Medina-Mora is a highly valued and
well-respected member of the management team, who has an
outstanding track record globally in consumer banking, as today's
results show."
Citigroup on Tuesday disclosed more troubles at Banamex,
announcing that it was shutting down a unit that offered
personal-security services for executives.
Citigroup said it had discovered that employees at the unit had
improperly provided services to people outside Banamex, and people
with knowledge of the situation said employees also had bought
audio files of illegally intercepted phone calls. Earlier this
year, Citigroup said Banamex had been duped in an alleged
accounting fraud by the oil-services firm Oceanografía which
resulted in a pretax loss of about $400 million.
Oceanografía hasn't been charged with wrongdoing. After nearly
two months under house arrest, Oceanografía CEO and controlling
shareholder Amado Yáñez Osuna was released in early June on $6.2
million bail. Mr. Yáñez, who is facing charges of bank fraud in
Mexico, hasn't made any comments on the matter.
The bank never said it blamed Mr. Medina-Mora for those
troubles. He has continued to be a strong presence at Banamex even
as his role expanded globally and his job took him from Mexico City
to New York.
Some board members are using the recent discovery of alleged
improprieties at the personal-security unit to turn up the pressure
on Mr. Medina-Mora, said people close to the situation. But Mr.
Medina-Mora also had been telling colleagues that he was thinking
about retiring, according to people with knowledge of the
matter.
Several Banamex executives have already departed, including
people close to Mr. Medina-Mora. Earlier this month, Banamex CEO
Javier Arrigunaga stepped down.
The bank recently named Michael Helfer, Citigroup's former vice
chairman, to the Banamex board, appointed veteran Citigroup banker
Rodrigo Zorrilla to be Banamex's president, and Mr. Corbat said
Tuesday Citigroup has strengthened controls in its Mexico
operations.
Citigroup bought Banamex, then run by Mr. Medina-Mora, in 2001.
The New York bank was eager to expand in a fast-growing country and
to benefit from the well-known Banamex name. Citigroup paid a
premium to persuade Banamex to sell itself, and, according to
several people, agreed to let the bank operate with a unique degree
of autonomy
Citigroup, in announcing a third-quarter profit rise of 6.6%, on
Tuesday, said it would ratchet back some of its international
consumer operations, saying it would exit from 11 countries,
including El Salvador and Guatemala.
The move is part of an agenda laid out by Mr. Corbat to focus on
wealthier customers in fast-growing countries--and to make the bank
more manageable and less risky in the eyes of regulators.
Citigroup's struggles in Mexico in particular highlight the
difficulties of running a sprawling global empire.
Mr. Medina-Mora's banking career started in 1971, when he was 21
years old. He followed a grandfather and uncle to Banamex and
worked his way up to the job of Banamex chief executive in
1996.
"When I entered the bank very young, I proposed this to myself:
You could become the chief executive of the bank one day. And that
was my professional objective," Mr. Medina-Mora said in a
videotaped interview last year with the Mexican website DCHIC.
Colleagues and competitors have praised Mr. Medina-Mora's
discipline and drive. His extensive experience in retail banking
also set him apart at a bank that has long emphasized services for
institutional customers.
After selling to Citigroup, Mr. Medina-Mora climbed through
Citigroup's ranks.
He polished his image, shedding eyeglasses and hiring a personal
trainer. Other bank executives say he is skilled at making
presentations and networking.
He also enjoyed the spotlight and was viewed as a celebrity by
the rank and file in Mexico. A caricature of Mr. Medina-Mora
holding a little red umbrella--a former Citigroup logo--adorns a
wall of his Mexico City office.
Branch employees would line up for photos with him when he
traveled, according to employees. After Citigroup changed the
retirement package for Banamex employees last year, he organized a
lunch for the nearly two dozen older executives who opted to
depart. One attendee remembers Mr. Medina-Mora naming each director
by name and area, thanking them personally for their service to the
bank.
Mr. Medina-Mora had wanted the Citigroup CEO job, but his odds
slipped after his ally, CEO Charles Prince, resigned under pressure
in 2007, according to people familiar with the matter. Mr.
Medina-Mora never cracked the inner circles of the next CEO, Vikram
Pandit, or Mr. Corbat, according to some of the people.
Among strikes against him, Mr. Medina-Mora refused to loosen his
control of the Mexican operation, often touting Banamex's profits
as a constant bright spot among Citigroup's global troubles,
according to people who worked with him.
His constant travels back to Mexico spread him too thin, people
said, and he failed to empower local executives at Banamex. He has
insisted that information be channeled through him, they say,
creating bottlenecks for the business.
Mr. Medina-Mora sent a note to employees Tuesday after the bank
reported earnings, noting that the global consumer bank's revenue
and net income were up over the year.
As for the 11 countries where the bank is exiting from consumer
operations, Mr. Medina-Mora wrote, "We wish you continued
success."
Subscribe to WSJ: http://online.wsj.com?mod=djnwires