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UPDATE 3-Mexico's Banorte replaces CEO, chairman after power struggle
November 20, 2014 / 9:18 PM / 3 years ago

UPDATE 3-Mexico's Banorte replaces CEO, chairman after power struggle

(Updates with Gonzalez family details, paragraph 4)

By Michael O‘Boyle and Christine Murray

MEXICO CITY, Nov 20 (Reuters) - The leaders of Mexico’s fourth largest bank Banorte resigned on Wednesday after a power struggle, and the board named a new chairman who analysts believe could push through a merger with a smaller Mexican bank.

Grupo Financiero Banorte said on Thursday that its chairman and chief executive had resigned. The move followed a dispute between the two that had upset the bank’s largest shareholder, the Gonzalez family.

Banorte said CEO Alejandro Valenzuela was replaced by Jose Marcos Ramirez, who had run the wholesale bank and has been on the board since July 2011. Chairman Guillermo Ortiz, former governor of Mexico’s central bank, will step down at the end of the year.

He will be replaced by Carlos Hank Gonzalez, the grandson of the late Roberto Gonzalez who founded Grupo Financiero Banorte and whose family owns most of Banorte’s shares.

Gonzalez had recently joined the Banorte board from bank Grupo Interacciones where he was chief executive.

A source with knowledge of the matter said Ortiz and Valenzuela had been at odds over how to manage the bank, upsetting the shareholders from the Gonzalez family.

“The changes determined by the board today will contribute to the strengthening of corporate governance at Grupo Financiero Banorte,” Hank Gonzalez said in a statement. His powerful family is from the state of Mexico, home of Mexican President Enrique Pena Nieto.

Analysts at Banamex on Tuesday said in a research note that a move to make Hank Gonzalez chairman would feed speculation that Banorte and Interacciones could merge. Market players expect a tie-up could dilute Banorte profits in the short-term, Banamex said.

Banorte is the biggest bank still owned by Mexicans. Global giants like Spain’s BBVA Bancomer and Citigroup swept in to buy the country’s biggest banks as Mexico recovered from a devastating financial crisis in the mid-1990s.

Mexican media began speculating in August that Ortiz could leave the company. On Tuesday, the shares sank to a 16-month low due to worries over the possible shake-up. Shares rose after the news, and Banorte closed 2 percent firmer on Thursday.

Hank Gonzalez, whose appointment is still subject to shareholder approval, had asked Ortiz to stay on as chairman of the bank’s advisory committee, the bank said. (Additional reporting by Tomas Sarmiento, editing by Simon Gardner and David Gregorio)

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