Citigroup to spin off its Mexico business, Banamex, after sale efforts collapse
Jane Fraser, CEO of Citigroup Inc., during an interview for an episode of "The David Rubenstein Show: Peer-to-Peer Conversations" at the Economic Club of Washington in Washington, D.C., March 22, 2023.

Citigroup said Wednesday it plans to pursue an initial public offering of its Mexico business, Banamex, scuttling a 16-month effort to find a buyer for the unit.

The bank expects to complete the separation in the second half of 2024, with a public offering likely to follow in 2025, Citigroup said in a release. It hasn't yet decided on a listing destination, but a dual listing in Mexico and the U.S. is possible, a source familiar with the plans told CNBC.

Citigroup shares fell 3% Wednesday.

"After careful consideration, we concluded the optimal path to maximizing the value of Banamex for our shareholders and advancing our goal to simplify our firm is to pivot from our dual path approach to focus solely on an IPO of the business," CEO Jane Fraser said in the release.

Fraser has been overhauling the third-biggest U.S. bank by assets since taking over in March 2021. One of her first moves as CEO was to announce a dramatic reduction in the bank's global footprint. Plans to sell or IPO Banamex were disclosed in January 2022.