By David Henry and Lauren Tara LaCapra
(Reuters) - Manuel Medina-Mora, who helped build Citigroup Inc (NYSE:C)'s Mexico business only to see it run into trouble after he stopped running it day-to-day, will retire in June, the bank said on Friday.
Medina-Mora, who heads global consumer banking at Citigroup, was expected to retire before his 65th birthday in August, people familiar with the matter said.
But the bank did not name successors for Medina-Mora, which spurred analysts to speculate that his departure came sooner than expected.
Citigroup said last year that Banamex had written off more than $500 million, before taxes, of bad loans after suffering from fraud. It was an embarrassing and costly matter for Citigroup that also tainted the legacy of Medina-Mora, who was known internally as "Mr. Mexico" and was once thought to be a candidate to become Citigroup's chief executive. Mark Costiglio, a spokesman for Citigroup, declined to comment on the timing of Medina-Mora's departure.
Medina-Mora joined Banamex in 1971 and was CEO of the franchise when Citigroup bought it in 2001. He was promoted to head its Latin American region in 2004 and to lead its global consumer banking business in 2010, remaining as Banamex chairman.
In a bank memo to its employees, Citigroup CEO Michael Corbat credited Medina-Mora with turning a scattershot global consumer operation into a unified, cohesive business. He said he will name a replacement soon.
During Medina-Mora's tenure as head of global consumer banking, the unit's income from continuing operations rose 49 percent to $6.9 billion from $4.7 billion. The figures exclude income or losses from Citigroup's "bad bank" known as Citi Holdings.
In a separate securities filing on Friday, Citigroup indicated that Corbat's pay had been cut by about 10 percent in 2014, a year in which the company's profit fell by nearly half. Since last year, Citigroup has failed a crucial regulatory stress test needed to raise its dividend and had to deal with the loans scandal and other issues at Banamex.
BANAMEX UNDER A CLOUD
In a separate memo announcing his retirement, Medina-Mora said he made the decision "after careful consideration and with deep emotion." He will keep a non-executive chairman role at Banamex even after his retirement on June 1, according to the bank memorandum.
Although Medina-Mora has not had direct, day-to-day oversight of Banamex for years, the scandal there was a setback.
Citigroup fired 11 employees linked to the fraudulent loans to oil services company Oceanografia and later replaced Banamex's CEO. The matter has cost the bank more than $500 million before taxes.
In October, Citigroup said a security services company that Banamex operated had engaged in fraud.
The Mexican unit also fired two bond traders after uncovering rogue trading in 2013 and took writedowns related to bad loans extended to Mexican homebuilders in the last few years.
Banamex's business in the United States is also facing a U.S. criminal investigation involving possible violations of money-laundering laws, according to company disclosures. The bank last year cited "control issue" in Banamex USA as at least one reason for its cutting Medina-Mora's annual compensation for 2013 to $9.5 million from $11 million.
Citigroup said in the securities filing that Medina-Mora's 2014 pay had risen.