(Bloomberg) -- Citigroup Inc. is weighing a deal to buy Deutsche Bank AG’s Mexican bank amid plans to set up a new local unit as it exits retail operations in the country, according to people familiar with the matter.

Talks for the German bank’s Mexican operations are in their early stages and may not result in a deal, the people said, asking not to be identified discussing a private matter. Any sale would require regulatory approval and Deutsche Bank would keep the brokerage it relaunched in the country earlier this year, the people said.

“Citi has operated in Mexico for more than a century and the country will remain among Citi’s top institutional markets outside of the US,” a spokesman for Citigroup said in an emailed statement. “As we have said, we intend to continue to operate a locally licensed banking business in Mexico through our institutional clients group, and our private banking franchise.”

A representative for Deutsche Bank declined to comment.

Citigroup Chief Executive Officer Jane Fraser said last month the company has begun the sales process for its consumer, small-business and middle-market banking divisions in Mexico, though an initial public offering remains on the table. The unit “is attracting a lot of attention,” and the company has begun fielding interest from buyers in preliminary sales talks, Fraser said at that time.

A deal with Deutsche Bank would make it easier for Citi to continue offering services to large corporations and wealthy clients after the sale, the people said. Obtaining a banking license in Mexico can take years, and the country’s banking regulator has been hobbled by an exodus of experienced officials during President Andres Manuel Lopez Obrador’s administration. 

Deutsche Bank had been winding down its Mexico operations since 2015, when it decided to pull out of 10 countries. Two years of talks to sell its operations to Mexico’s InvestaBank fell apart in late 2018 amid a dispute over the price and after a top shareholder in InvestaBank was convicted in the US of tax fraud. The German bank’s local unit now has only 1.6 billion pesos ($80 million) in assets of mostly government debt, and twelve employees, according to filings.

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