Citigroup said it would spin off the Mexican retail bank through an initial public offering, abandoning a plan laid out early last year to sell the unit.

The US lender plans to spin off its entire Banamex division, which employs 38,000 employees and is one of Mexico’s largest retail banking franchises, by the middle of next year. The bank said an initial public offering of the unit is likely by the end of 2025. Despite the spin-offs, Citi plans to keep much of its commercial and institutional businesses in Mexico.

Citi executives have previously said they were pursuing a dual process in order to exit Banamex. The bank said on Wednesday that it now believes an IPO would be a better course for investors than selling.

“After careful consideration, we have concluded that the optimal path to maximizing Banamex value for our shareholders and furthering our goal to streamline our company is to focus our dual-track approach to focus solely on the company’s initial public offering,” CEO Jane Fraser, who is leading Citi’s downsizing efforts, said in a statement. .

While it’s not certain what Banamex’s IPO would bring, the plan avoids any immediate hits to the bank’s bottom line and the capital it might have had to sign up if it completed a distressed sale. Citi also announced that it will resume share buybacks by the end of June, at least six months earlier than analysts expected.

Citi shares closed down 3.1 percent on Wednesday.

“It’s not an ideal solution,” said Mike Mayo, a banking analyst at Wells Fargo, who pushed Citi out of Banamex. But he said the IPO gave Citi the ability to go back into selling if it received a better offer in the future.

“They say the sale is off, but I don’t quite believe them. Maybe it’s a lack of buyers, maybe it’s a lack of franchise value, but I think Citi has made the right choice for now.”

The IPO plan marks the end of a months-long effort to sell the unit. In February, the Financial Times reported that Citi was in exclusive talks to sell Banamex to Grupo México, which is owned by billionaire Germán Larrea. The deal was expected to value the unit at up to $8 billion. It is not clear why or when those negotiations ended, or why the bank did not follow up on offers from other interested bidders.

Mexico’s government has complicated Citi’s sales by asking for concessions, including a concession that would largely protect workers from layoffs. President Andrés Manuel López Obrador said this week that the government is analyzing whether it makes sense to enter the bidding process for Banamex if no further deal goes through.

Lopez Obrador said on Wednesday that his government is still considering stepping in and buying part of the bank.

Citi bought Banamex, one of Mexico’s oldest and best-known banking brands, for largely $12.5 billion in 2001. Since then, it has fallen from the country’s second largest bank to fourth, after struggling to compete in a market dominated by other foreign lenders. Analysts and bankers said there was a host of reasons to blame, including poor management and inflated costs of restrictions imposed by US regulatory requirements.

However, Citi executives say the rationale for Banamex’s exit has more to do with Fraser’s broader strategic “modernization” than any difficulties it faced with that unit.

So far, Fraser’s efforts have largely focused on curtailing Citi’s retail banking privileges. However, the exit of consumer banking, and its retail operations in Mexico in particular, has taken longer than some analysts had hoped. Citi’s plans to exit the global consumer bank were announced more than two years ago, while Banamex’s planned exit in early 2021 was revealed.

“Citi is becoming a simpler company,” said Mayo of Wells Fargo. “Jane Fraser feeds the winners and starves the losers as she should.”