Mexican bank hit by blasts

Mexicans are not all in favour of bank takeovers

Three branches of a Mexican banking group which has just been bought by US giant Citigroup have suffered minor explosions in what observers believe is a protest against the takeover.

Explosive devices at two other Mexico City branches of Banamex-Accival, Mexico's second biggest bank, were defused by the police.

One man is reported to have been slightly injured by flying glass, although Citgroup said no one was hurt.

Speculation over the identity of those responsible for the incidents - which took place on the 122nd anniversary of the birth of peasant revolutionary Emiliano Zapata - has centred on an obscure group calling itself the Revolutionary Armed Forces of the People.

The group's acronym, FARP, was spray-painted on walls near where the incidents occured.

Looking for attention

Banking sector watchers said the incidents were mainly an attempt to garner publicity.

"These were more big fireworks than bombs," said one, who preferred to remain anonymous. "There was a lot of noise and smoke and broken glass, not much more."

FARP is thought to be an offshoot of the larger and more well known Marxist-inspired Popular Revolutionary Army, and first came to light last year complaining about corruption, inequality and the effects of globalisation.

The action follows the purchase, for almost $12.5bn, of Banacci - as Banamex-Accival is generally known - by Citigroup unit Citibank.

Bailout

More than 80% of Mexico's banking sector has passed into foreign hands since the $81bn bailout of domestic banks when the peso crashed in 1995-96.

Banacci: Citibank's for $12.5bn

Since then Spanish groups including BBVA have taken over two of the other main banks.

The BBVA deal with Banomer - which Banacci tried to spoil with an offer of its own - knocked Banacci off the number one spot, a position which the Citigroup deal will help it regain.

The deals have been seen as one way of consigning to the past the old financial structures, which have been ridden with cronyism and helped cause the peso crisis.

But some have voiced anger over the takeovers, saying not only that Banacci's collection of native art should remain in Mexican hands, but that because taxpayers funded the bailout they should receive a cut of the proceeds from the sell-offs.

When the sale was first mooted in May, protesters pasted imitation dollar notes onto the windows of Banacci branches.

An independent report on the bailout, published in 1999, found that the cost - $800 for every man, woman and child in Mexico - could have been much less but for the botched privatisation of the banking sector in 1991, which raised - coincidentally - $12.5bn.

Of the 18 banks privatised, only four are still operating, and three are now in foreign hands.

Neither the Banacci deal nor the sale of Banomer resulted in any tax benefits for the Mexican state, as there is no capital gains tax on stock transactions of this kind.

No injuries

A Citigroup spokeswoman said: "Last night we learned that three explosives were detonated outside Banamex branches.

"Fortunately, there were no personal injuries and only minor damage to the Bank's installations was reported.

"We are cooperating fully with the Mexican authorities and are confident they will conduct an expeditious and thorough investigation.

"We want to reassure our personnel and customers that we have taken every necessary step to insure their continued convenience and safety."