Citi sees strong Mexican loan growth

By Robin Emmott and Armando Tovar

ACAPULCO, Mexico (Reuters) - Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) Mexican arm, which accounts for around 10 percent of the group's global operations, sees strong growth in its loan portfolio this year despite the U.S. credit crisis, the bank said on Friday.

Enrique Zorrilla, chief executive of the bank's Mexican unit Banamex, told the Reuters Latin America Investment Summit that he expected growth in loans to consumers to be similar to last year at around 24 percent.

Loans to medium-sized companies should increase by slightly more than last year's level of 27 percent, he said.

"The idea is that we maintain our growth in 2008, and in terms of company financing that we improve on last year," Zorrilla said during a banking conference in the Pacific resort of Acapulco.

"Credit across the Mexican financial system continues to expand, but now we are seeing the commercial portfolio growing, especially in small- and medium-sized companies," he added.

Lending by banks in Mexico is expected to increase up to 25 percent across the sector this year, slightly higher than last year, the country's banking association says.

In Mexico, Citigroup competes with global banks such as HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) (0005.HK: Quote, Profile, Research, Stock Buzz) and BBVA (BBVA.MC: Quote, Profile, Research, Stock Buzz).

Zorrilla said Banamex, which handles 9 million banking operations daily, expanded its total number of branches by 20 percent last year to 2,280, partly thanks to its tie-up with Mexico's No. 2 retailer, Soriana (SORIANAB.MX: Quote, Profile, Research, Stock Buzz), to launch bank services targeting poor Mexicans.

"With Soriana's purchase of (retailer) Gigante (last year), we could add 200 more branches in the near future," he said.

The Banamex-Soriana alliance is one of several such arrangements in Mexico as banks seek to sell more financial products to low-income customers. About 60 percent of Mexican adults do not have credit cards or bank accounts.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Robin Emmott and Armando Tovar; Editing by Gary Hill)